DEVELOPING: Harvey Pitt, the nation's chief regulator of financial markets, said Friday he 'absolutely' will not resign and that he has the full support of President Bush. Pitt also said he had no plans to release SEC documents involving Bush's controversial sale of Harken Energy Co. stock in 1990... MORE...
WASHINGTON - Harvey Pitt, chairman of the Securities and Exchange Commission, said Friday he ''absolutely'' will not resign and that he has the full support of President Bush.
''I have a big job to do,'' said Pitt, the nation's chief regulator of financial markets.
Pitt spoke in an exclusive interview with Cox Newspapers, his first since a growing number of accounting scandals sparked calls for his resignation from high-profile lawmakers of both political parties.
Pitt also said that he had no plans to release additional SEC documents involving Bush's sale of Harken Energy Co. stock in 1990.
Recently, critics have raised questions about whether Bush benefitted from inside information before selling the stock. The president has acknowledged that company lawyers belatedly filed SEC paperwork related to the sale.
Asked whether the release of all documents would help quiet questions about the president's business dealings at Harken, Pitt replied: ''I don't think so. The reason is, first of all, I don't think the president's credibility needs to be increased. And second, this was thoroughly investigated a decade ago. It was meticulously done ... so the issue at this juncture is political.''
Just before the interview at his SEC office, Pitt met with Bush at the White House to lay out strategies for a new anti-fraud task force, described by Bush as a SWAT team that will crack down on accounting fraud and other kinds of corporate wrongdoing.
The panel includes Pitt, Deputy Attorney General Larry Thompson, Attorney General John Ashcroft and FBI Director Robert Mueller.
Bush's support for him ''has been clear all along,'' Pitt said. ''It has never wavered.''
Pitt said Bush knows he will be a tough crime fighter because the president ''is aware of what we are actually doing'' at the SEC to enforce laws. ''I am enormously grateful for his support,'' he said.
In recent days, more critics have been demanding Pitt resign, saying he is the wrong man for the job because he spent 23 years representing the same accounting and securities firms he now must police.
On Thursday, Sen. John McCain, R-Ariz., said the agency needs a new leader ''whose background and record leave no question'' about ''the independence and authority of the SEC.''
Senate Majority Leader Tom Daschle, D-S.D., said Pitt's ''cozy relationship'' with accountants calls into question ''whether or not he has the credibility to be the independent regulator he needs to be.''
Pitt said such attacks are ''political diatribes'' that ignore facts, and that
he does not agree with those who say he has become a political liability to Bush and Republicans running for office in November.
''If you look at the people who criticize, you'll notice that all of their criticisms are generic - they're just sound bites,'' he said. ''No one who sees what we have done could doubt that this is the most effective SEC in history.''
Pitt said the SEC has stepped up its pace of enforcement actions and issued numerous new reporting rules and regulations.
''My obligation is to serve the public. After November, after all of the critics have moved on the next issue, I'm still going to be here cleaning up the mess'' in the accounting world, he said.
Pitt is not daunted by the scope of that task because he has ''the greatest job in the world,'' he said. ''This an historic period - I want to be part of the solution.''
Pitt said he was devastated to learn of the extent of the accounting irregularities at Enron Corp., WorldCom Inc., Xerox Corp. and many other major companies, which have led to the loss of tens of thousands of jobs and hundreds of billions in retirement savings.
''You look at an Enron or a WorldCom, and to me it's devastating,'' he said. ''I won't tolerate it. I will make certain that we do everything in our power to restore the integrity and quality of the accounting profession.''
Throughout his career, first as a young SEC attorney and then as a private-practice attorney, Pitt, 57, has been praised for his legal brilliance and diligent work habits.
But the events of his first year as SEC chair have been daunting. By his own count, he already has faced four crises: the economic fallout from the Sept. 11 terrorist attacks; the Enron Corp. accounting debacle; the felony conviction of the accounting firm Arthur Andersen and a stock market plunge tied to the loss of investor confidence.
Pitt may have set himself up for the criticism in October, just a month after taking office, when he made a speech to the American Institute of Certified Public Accountants. There, he promised a new era at the SEC, saying that the commission ''has not, of late, always been a kinder and gentler place for accountants.''
That phrase has been used time and again to suggest he is not going to be tough enough on crime.
''People are misconstruing what I said,'' he said.
Pitt said accountants used to be reluctant to call the SEC for advice. He was only suggesting that his staff would be more willing to sit down with companies and their auditors to explain the law, and be sure they are following it. Since then, he said, his words have been taken ''wholly out of context'' because some people want ''to make political capital.''
Critics also have said Pitt is not aggressive enough, noting that he asked for a budget increase of $100 million for more staff, while Congress since has made it clear it would give him about three times as much.
''I wasn't being too timid; I was being responsible'' in asking for a modest amount in his first year in office, Pitt said. ''I wanted to make a top-to-bottom study of our efficiency'' to determine exactly what the budget ought to be.
''We are doing that now. It will be done by the end of the summer, at which point we may well ask for additional people, but at least our request will be scientific - not this, 'Let's see who can outbid whom and who can come up with the largest number' '' just to impress voters, he said.
http://www.accessatlanta.com/ajc/business/0702/13pitt.html
Pitt doesn't need to resign, some of our congress critters do. Let me see if I have this right. Congress passes a few laws allowing for firms to perform both auditing and consulting. Chris Dodd pushes through legislation absolving the auditing firms of liability when their numbers don't add up. Pitt actually follows up on some of the audits and finds things out of whack. Companies start having their house of cards collapse and it's Pitt's fault. IMHO what's going on here is a bunch of pols are getting pissed at Pitt for cutting off their gravy train.
On Thursday, Sen. John McCain, R-Ariz., said the agency needs a new leader ''whose background and record leave no question''
I think Arizona needs a new Senator, whose background and record leave no question.