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Non-Tech : The Enron Scandal - Unmoderated -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (2531)	10/26/2002 8:52:25 AM
From: stockman_scott	Read Replies (1) \| Respond to of 3602

Judge Webster, Miscast Lead Editorial The New York Times October 26, 2002 So much for the idea that the fight to restore investor confidence is a bipartisan effort. In a bitter public session yesterday, the five commissioners of the Securities and Exchange Commission split along party lines in voting for a chairman of a new oversight board for the accounting profession. The three Republican commissioners, led by the chairman, Harvey Pitt, voted to appoint William Webster. Mr. Webster, the former federal judge and director of both the F.B.I. and the C.I.A., was the face-saving Beltway eminence that Republicans turned to after they had derailed the appointment of John Biggs as a favor to the powerful accounting lobby. Mr. Biggs, the respected head of a large teachers' pension fund, has long been a thoughtful critic of the accounting gimmicks and auditors' conflicts of interests. He was the perfect choice to police the profession, which is why industry lobbyists and their allies in Congress worked so hard to derail him. The two Democratic commissioners still voted for him yesterday. It's a wonder that the 78-year-old Mr. Webster, who has a distinguished record of public service but little engagement with these issues, is allowing himself to be used in such a manner. That the White House urged him to consider the job further tarnishes the process. The S.E.C. is an ostensibly independent agency. Mr. Webster would have been better off insisting that Mr. Pitt name Mr. Biggs, or someone else with a comparable record. Now he will lead a body hobbled at birth. It is not beyond redemption. But Mr. Webster has his work cut out for him. He must make sure that the board becomes more than a disengaged blue-ribbon commission, and he must move quickly to hire energetic regulators. Only in this way can he create an institution that will in time police the accounting lobbyists who are now cheering his appointment. The new board, which has broad powers to set and enforce accounting standards, is the centerpiece of the corporate reform passed by Congress in the wake of the Enron and WorldCom scandals. Despite the accounting profession's complicity in these scandals and its sorry track record of policing itself, the Bush administration and many Republicans initially opposed an independent board. They only succumbed when rising investor anxiety threatened opponents of meaningful reform. By derailing Mr. Biggs, the Republicans are seeking to undermine the effectiveness of a board they never wanted. By siding with his former clients in the accounting industry and with his Republican overseers, Mr. Pitt has again demonstrated that he is not suited to lead the S.E.C. Maybe Mr. Webster will surprise us, but so far investors are the losers. nytimes.com

To: Glenn Petersen who wrote (2531)	10/31/2002 11:53:03 AM
From: Glenn Petersen	Read Replies (1) \| Respond to of 3602

SEC Board Selection Process Examined 28 minutes ago rd.yahoo.com*http://story.news.yahoo.com/news?tmpl=story2&cid=568&ncid=749&e=1&u=/nm/20021031/bs_nm/accounting_board_dc WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission (news - web sites), deeply split over the choice of former FBI (news - web sites) chief William Webster as chairman of a U.S. accounting oversight board, on Thursday said it called in its inspector general to examine the selection process. The New York Times reported on Thursday that SEC Chairman Harvey Pitt learned shortly before Webster was selected for the job that he had headed the audit committee of a company that was facing fraud accusations. A commission spokesman said Pitt "has asked the inspector general to review the (Public Company Accounting Oversight Board) selection process." A bitterly divided SEC on Friday voted to name five members of the board, with Webster as chairman. Webster edged out pension fund chief John Biggs in a 3-2 party-line vote. The two Democratic members of the five-member SEC have complained that Pitt mishandled the selection process for the members of the new board, which Congress this summer ordered set up after a wave of corporate and accounting scandals. The Times reported that Webster, when he was still being reviewed as a possible chairman, told Pitt he had headed the auditing panel of a U.S. Technologies Inc. (OTC BB:USXX.OB - news), a small, publicly traded company facing fraud accusations and investor lawsuits. The Times said Pitt did not tell the other four commissioners of this conversation before they voted. Henry Hu, a corporate and securities law professor at the University of Texas, said, "This does shake one's confidence in Judge Webster ... as well as in the judgement, I'm afraid, of SEC Chairman Pitt." The Times reported that White House officials also told the paper they were not informed about the details of Webster's involvement with U.S. Technologies Inc. (USXX.OB), a Washington-based company involved in several businesses. Webster had headed the three-person auditing committee of the company, which is facing suits by investors who say they were defrauded of millions of dollars, the paper said. Webster resigned from U.S. Technologies as a director on July 19, according to an SEC filing.