Archive for Saturday, November 2, 2002

White House steers clear of controversial SEC chief

November 2, 2002


— White House officials carefully distanced themselves Friday from the beleaguered Securities and Exchange Commission chairman, Harvey Pitt, saying the administration was awaiting the outcome of inquiries into whether he withheld potentially damaging information about his choice for a top oversight job.

Away from the White House, senior Republicans focused on the potential political fallout of the flap, grumbling that Pitt had put President Bush in an awkward position just before Tuesday's election.

They complained that he had made it all the more difficult for Bush and Republican candidates to argue that the administration was responding effectively with the issues of corporate accountability and investor confidence.

Pitt, a target of attacks for several months, came under new fire for failing to disclose that William Webster whom Pitt chose to lead a new accounting oversight board had chaired the audit committee of a company accused of accounting irregularities.

Webster is a retired federal judge who served as director of the FBI and the CIA.

He was reported to have told Pitt about his role with the company, U.S. Technologies Inc. But Pitt did not pass on the information to the White House or other SEC members, who voted 3 to 2 last week to give him the job on the oversight panel.

Pitt's spokeswoman, Christi Harlan, said Friday that after Webster had informed Pitt about his service on the audit committee, "the (SEC) staff looked into it, found nothing of concern, so there was nothing to pass on."

She said Pitt would have no comment on the matter. He did not return a call to his office.

White House officials acknowledged they were in the dark about Webster's corporate past, and that they learned of the allegations from news reports.

One veteran of senior White House positions in previous GOP administrations, speaking on condition of anonymity, said Pitt had a "tin ear" for politics, and in its handling of the matter, the current White House was not doing much better.

Pitt has been a political lightning rod for months. Democrats have repeatedly called for his resignation, contending that he is too cozy with the accounting industry to crack down on corporate wrongdoers.

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