After the agency in charge of regulating big banks spent more than $500 million to lease a large office space in downtown Washington, the non-voting delegate representing the nation's capital says she wants to cut off the Security and Exchange Commission's authority to lease space.

Rep. Eleanor Holmes Norton, the top Democrat on the Subcommittee on Economic Development, Public Buildings and Emergency Management, introduced a bill last week that would revoke the SEC's leasing authority. She argues that authority not only takes time away from the SEC’s mission to investigate fraud, but employees may have committed their own criminal actions by violating federal rules and standards for making deals with building owners.

"There is a reason that one agency, the General Services Administration, does all the leasing and building for most federal civilian agencies," Norton said in a written statement. "It should not be surprising that the SEC's expertise in securities and financial matters did not extend to real estate management."

The SEC declined to comment on Norton's legislation.

An investigation by the SEC inspector general found in May that the agency's 10-year lease of 900,000 square feet of space in an upscale building, signed last July, was "another in a long history of missteps and misguided leasing decisions" since 1990.

The SEC leased the space without a competitive bidding process and before it received funds from Congress -- an "irresponsible" decision by the agency, said Inspector General David Kotz, who recommended disciplinary action against administrative officials involved in the leasing decision.

The report on the lease at Constitution Center found that between last June and July the SEC's Office of Administrative Services made a "deeply flawed and unsound analysis" to justify the need for 900,000 square feet, and "grossly overestimated" the amount of space needed. The analysis was based on estimates of increased funding from Congress to meet new duties for the SEC under the financial overhaul law that Congress enacted in July, the report said.

The administrative office "made grandiose plans to lease an upscale facility at Constitution Center," it said.

However, it noted, Congress authorizing funding for a federal agency doesn't guarantee that the agency will receive the money under the congressional budget process. In this case, the SEC's administrative office inflated its estimate of how many newly created staff positions would need space by also including the number of contractors, interns and temporary staff.

The SEC isn't funded by taxpayers. Its funding comes from fees paid by public companies and other entities that register stock with the agency. However, a portion of the revenue it collects goes to the Treasury Department for the government's coffers. And Congress must approve the SEC's annual budgets.

Last fall, when it became apparent that the SEC wouldn't get sufficient funds from Congress for the current fiscal year for the additional staff, the agency told the owner of Constitution Center that it didn't need about 600,000 square feet of the total it had leased. In January, the owner signed leases with two other federal agencies for 588,000 square feet of the total. In March, the SEC said it was trying to sub-lease the remaining 342,000 square feet; those efforts continue, according to the report.

Now the SEC is in a dispute with the owner, who is seeking $93.9 million in damages from the agency, the report said. The SEC denies that it owes any compensation. The agency maintains that its agreement enabling the owner to lease space to the two other agencies released it from any obligations for the space.

Nester told FoxNews.com that agency is already implementing some of the IG's recommendations but added that no rent has been paid and no rent is due.

"No money has been spent," he said.

The Associated Press contributed to this report.