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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: pogbull who wrote (8655)	10/31/2002 3:29:45 PM
From: stockman_scott	Respond to of 89467

SEC Board Selection Process Examined By Kevin Drawbaugh 2 hours, 11 minutes ago (Reuters) WASHINGTON - The U.S. Securities and Exchange Commission (news - web sites), deeply split over the choice of ex-FBI (news - web sites) chief William Webster as chairman of a new national accounting oversight board, on Thursday said it called in its inspector general to investigate 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 Webster had headed the audit committee of a small, Washington-based company that was facing fraud accusations. The Times said that Pitt did not tell the other four commissioners of Webster's involvement with U.S. Technologies Inc. before they voted for the board's members. An SEC spokesman said that Pitt "has asked the inspector general to review the (Public Company Accounting Oversight Board) selection process." SEC Commissioner Roel Campos, who voted against Webster, said through a spokesman that he was unaware before the vote about Webster's role at U.S. Technologies. A divided SEC on Friday named five members to the board, with the Republican Webster as chairman. He edged out pension fund chief John Biggs in a 3-2 party-line vote that left Democrats on the losing end after a public struggle for the board's top job that involved intense lobbying campaigns. SEC Commissioner Harvey Goldschmid, who was not immediately available for comment, on Friday had called the process for selecting the chairman "inept." Campos, too, complained about the process and questioned Webster's qualifications. The 78-year-old Webster resigned from U.S. Technologies as a director, along with two other directors, in mid-July 2002, according to an SEC filing. The filing said the resignations left U.S. Technologies Chief Executive Gregory Earls as the only director of the company. Earls could not be reached for comment. The New York Times also reported White House officials told the paper they were not informed in advance of Friday's vote of Webster's involvement with U.S. Technologies. "This does shake one's confidence in Judge Webster ... as well as in the judgement, I'm afraid, of SEC Chairman Pitt," said Henry Hu, a professor of corporate and securities law at the University of Texas at Austin. Webster could not be reached for comment. Congress this summer ordered the SEC to set up the accounting board after a wave of corporate scandals that started last fall with the collapse of Enron Corp. and carried on this year with the bankruptcy of WorldCom Inc. and other companies. The board was included among dozens of corporate and accounting law reforms in the landmark Sarbanes-Oxley Act, the biggest shake-up of securities law since the 1930s. Friday's vote naming the board's five members came as Pitt, appointed SEC chief in summer 2001, came under further fire from Democrats in Congress who have demanded his ouster. For weeks now, speculation on Pitt's future has ranged from predictions he will stay in office for years, to talk that he may be swept out after the Nov. 5 elections in a house-cleaning of the Bush administration's economic team. Aides on Capitol Hill said they wondered how much political damage the White House was willing to take from the direction of the SEC, an agency they normally pay scant attention to. Many federal agencies have an internal inspector general's office, which conducts a variety of reviews, often simply involving audit processes and operations, lawyers said. The SEC inspector general has "a great deal of independence from anyone at the SEC. It's no different from the inspector general's office at other federal agencies," said Gregory Bruch, former SEC enforcement attorney and now a partner at the law firm of Foley & Lardner in Washington. (Additional reporting by John Poirier) story.news.yahoo.com