Barney's new pulpit: Rep. Barney Frank, the new chairman of the House Financial Services Committee, has a reputation as one of Congress' wittiest members. Observers say his rhetoric may be harsher than his strategy, but his approach to issues like executive compensation and Sarbanes-Oxley reform may not be welcomed by business executives.

• Author: Barlas, Stephen
• Position: CONGRESS/PROFILE

Rep. Barney Frank (D-Mass.), the new chairman of the House Financial Services Committee, is the Robin Williams of Capitol Hill. He piles witty quips on top of one another like some counterman at a kosher deli heaping sliced meat on rye. At the same time, though, Frank is a serious politician, in many ways the heart and mind of the liberal wing of the Democratic Party. So, his one-liners are often fortified with substantial intellectual protein. Sometimes, though, there is also a lot of ham between the bread.

When the Securities and Exchange Commission (SEC) quietly put out a news release a few days before Christmas last year announcing a change in its reporting rules for executive pay, Frank went into shtick mode. "I didn't even know they had a chimney at the SEC, and then all of sudden this came slipping down it," he complained.

The SEC's change to the pay reporting rules was done to align corporate disclosure requirements with disclosure requirements as laid out in FASB standard FAS 123(R). Soon after delivering his jibe, Frank spoke to SEC Chairman Christopher Cox, who allayed his concerns.

The Massachusetts Democrat, who is widely respected by both Democrats and Republicans as probably the smartest, quickest member of the House, immediately quieted down. But within days, he was off again, lampooning Republican economic theology positing that tax cuts result in a "rising tide that lifts all boats."

Frank, who represents the very liberal Fourth District in Massachusetts, just west of Boston, has always championed affordable housing above all else. At the National Press Club that day, he joked, "If you think about that analogy, the rising tide is a very good idea if you have a boat. But if you are too poor to afford a boat and you are standing tiptoe in the water, the rising tide goes up your nose."

Twenty-six years after taking a seat in the House, Frank is still a wise guy, in both senses of that word. His hair is gray these days, and his face is a touch jowly. But age has not cooled his passion. While the contemporary glasses which occasionally slide down his nose may make him look a touch professorial, his rhetorical style is anything but academic.

The openly gay Democrat is a dominating, combative verbal presence, his fingers twining and unfolding in front of him as he talks, hands slapping the table in front of him, karate-style, for emphasis. With the Democrats taking control of Congress, the 66-year-old Harvard-trained lawyer--who worked for former Boston Mayor Kevin White before coming to Washington, where he started as a Capitol Hill staffer--has real power. But as the 110th Congress gets underway, he faces the challenge of morphing from Robin Williams into Ted Williams, the laconic Red Sox great who always let his actions speak louder than his words.

Frank's performance over the next two years could have a big impact on corporate financial executives, even though corporate issues with SEC ramifications are not at the top of Frank's agenda. But they may rise quickly. Already, the Senate Finance Committee has begun to address the issue of executive compensation, one of Frank's big issues. He will not want to be left behind.

Frank, who was unavailable for an interview, now has the power, as committee chairman, to pass his pet bill from 2006, the Protection Against Executive Compensation Abuse Act, which would give shareholders a say on executive pay. Whether he has the legislative skill to ferry such legislation through the House is another question. Business groups have been highly critical of the bill, and some even refused to appear at a hearing Frank held last May. Other issues that could quickly appear on the Financial Services Committee's agenda include changes to Section 404 of the Sarbanes-Oxley Act, stock options accounting, hedge funds and terrorism insurance.

These kinds of issues hold a lower priority for Frank than some of the others over which his committee has jurisdiction: housing, banking and insurance. Rick Lazio, a former Republican congressman from New York who served with Frank on the...