Former FBI chief to lead accounting board

Divided SEC votes to name Webster as head of group overseeing scandal-plagued industry

? Bitterly divided on party lines, the Securities and Exchange Commission voted Friday to name former FBI and CIA chief William Webster as head of a new board to oversee the scandal-plagued accounting industry.

The 3-2 vote for Webster at a public meeting came after rancorous discussion among the five SEC commissioners. The two Democrats were angry and disappointed because they had supported another candidate widely viewed as advocating tough regulation of the accounting industry.

The dispute split the SEC just when it is being called on to resolve a massive wave of accounting scandals in big companies that rattled Americans’ confidence in the stock market and corporate integrity.

Commissioner Roel Campos, one of the two Democrats, said the selection of Webster feeds the perception that the SEC has been influenced by the accounting industry. He said the new five-member oversight board was being “born with a scar” because it was “subjected to the approval of the accounting lobby.”

The board “will begin in a deep hole,” said Campos, who along with Commissioner Harvey Goldschmid had supported pension fund head John H. Biggs for the job.

Campos also raised the possibility of a legal challenge against the new board, which he said would hamstring it. He did not say who or what group might bring the legal action.

SEC Chairman Harvey Pitt, clearly feeling under attack, made an emotional defense of his choice of Webster.

He accused Campos of alleging a lobbying effort against Biggs by the accounting industry while he himself has made “an intense lobbying effort in favor of Mr. Biggs.”

“I am fiercely independent. I am beholden to no one,” Pitt insisted. No one from the accounting profession, the Republican Party or the Bush administration had sought to influence his judgment, he said.