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Posted on 10/08/2002 5:20:45 AM PDT by Libloather
Qwest Exec Sought by Probers Again
Mon Oct 7, 6:28 PM ET
By MARK SHERMAN, Associated Press Writer
WASHINGTON (AP) - Congressional investigators plan to interview Qwest Communications founder and director Philip Anschutz a second time about his role in the company's day-to-day affairs, a congressional spokesman said Monday.
The renewed interest in Anschutz arose from public testimony last week from former Qwest chairman and CEO Joseph Nacchio, who said he talked to Anschutz about all major decisions, said Ken Johnson, spokesman for the House Energy and Commerce Committee.
At several points during Nacchio's testimony, he described Anschutz as a close friend and active partner in running Qwest. Anschutz, Nacchio's co-chairman, told investigators he was largely uninvolved, Johnson said.
"Every major decision I made in this firm I sought his counsel. Phil was very involved. He was helpful to me," said Nacchio, who resigned in June.
Johnson said investigators, who interviewed Anschutz by phone for 2 1/2 hours on Sept. 27, will talk to Anschutz again soon. Investigators initially questioned Anschutz about whether he had advance knowledge of the company's looming financial problems when he sold $213.5 million in Qwest stock last year. He said he did not, Johnson said.
"We're obliged to get to the bottom of this," Johnson said.
No date has been set and Anschutz is not expected to be asked to testify publicly since the committee has no more hearings scheduled this year, he said.
Anschutz, one of the nation's wealthiest men, has sold nearly $1.5 billion in Qwest stock. He is a major donor to the Republican Party. His company wrote a $100,000 check to the Republican National Committee in 1999, and he and his wife have donated thousands of dollars to the campaigns of President Bush, Sen. John McCain, R-Ariz., and former New York City Mayor Rudolph Giuliani.
The House committee is investigating whether swaps of network capacity between Qwest and Global Crossing Ltd. helped artificially boost revenues. Qwest has announced it is reversing $950 million in revenue from swaps and is examining sales worth another $531 million.
WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission, besieged by election-year politics and financial lobbyists, shot back at critics on Monday and said it was moving ahead on creation of a new public board to police corporate accountants and help restore investor confidence.
As stock markets plumbed five-year lows, the chief of the market-regulating SEC canceled a scheduled speaking engagement in London and defended his agency against a Senate report that hit the SEC's handling of the Enron Corp. scandal.
Released on Monday, the report from the Senate Governmental Affairs Committee found "systemic and catastrophic failure" by the SEC. The 127-page report blasted the agency for failing to detect dubious practices at Enron, for example, by failing to review any of the company's post-1997 annual reports.
Arguing that alleged accounting chicanery at the bankrupt energy trader predated his tenure as SEC chief by at least nine years, SEC Chairman Harvey Pitt said in a statement:
"Since I have taken on the leadership of the commission, we have been working hard to fix the problems that have created the current crisis of confidence, and we have been making enormous strides to correct mistakes and abuses of the past."
But a key part of the SEC's effort to shore up faith in U.S. stock markets -- setting up a new five-member accounting oversight panel -- was under political pressure and Pitt himself was again drawing fire from Democrats in Congress.
Ahead of the November elections, Democrats have targeted the economy and corporate responsibility as campaign issues, putting Pitt on the spot and worrying the White House.
Two Democratic lawmakers last week queried Pitt about a meeting he held recently with executives from Goldman Sachs , an investment bank under SEC scrutiny. They asked whether the meeting broke a Pitt pledge to avoid any appearance of conflict of interest. Pitt said it did not.
Days later, the White House said Bush administration aide Anne Womack will become a senior adviser to Pitt. "You wouldn't see one of (White House press secretary) Ari Fleischer's lieutenants going to the SEC if they didn't think there was a problem," said a source close to the commission.
NO AGREEMENT ON ACCOUNTING BOARD
Pitt and the SEC's four other commissioners have not agreed on naming the members of the Public Company Accounting Oversight Board, which was conceived this summer by Congress as part of landmark corporate and accounting reform legislation.
A source close to the process for choosing the PCAOB members said, "It's a big-time fight."
Progress toward choosing the members bogged down last week over controversy surrounding John Biggs, head of the TIAA-CREF pension fund in New York. He was viewed through much of September as the favorite to head the PCAOB. But sources said accounting lobbyists rallied opposition to him on Capitol Hill, throwing the selection process into uncertainty.
"It's moving along. What's important is we agree on a team of five outstanding individuals ... We're still considering a number of names," said SEC Commissioner Cynthia Glassman, adding the SEC's goal still was to name the board by Oct. 28.
A spokesman for Biggs declined to comment. One source said much was riding on whether he gets the nod, suggesting other so-called reformists leaning toward joining the board, such as former SEC Commissioner Bevis Longstreth and former SEC Chief Accountant Michael Sutton, might not do so without Biggs.
Separately, the Senate committee report on the Enron scandal said the SEC failed to pick up on frauds that have surfaced in numerous recent corporate scandals -- not just at Enron -- because it was not actively looking for them.
"The public filing review process is designed almost exclusively to assure compliance with the form of disclosure requirements, not to detect wrongdoing," the committee said in a letter summarizing the report to SEC Chairman Harvey Pitt.
"If the SEC is to play a role in detecting and rooting out financial fraud, it will need to make this an explicit goal and develop new processes to support it."
The committee is chaired by Sen. Joseph Lieberman, a Connecticut Democrat who's seen as a 2004 presidential contender. The panel sent the report and letter to Pitt. Much of the period covered by the report was before Pitt's arrival at the SEC in August 2001.
Arthur Levitt, who was SEC chairman from 1993 to 2000, could not be reached for comment.
Enron filed for bankruptcy protection in December 2001 after a spectacular collapse that wiped out billions of dollars in investments and hurt investor confidence worldwide.
...who has Citigroup on the very top of his donors list.
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Just like Reno's seeking Clinton's counsel before massacring 78 American citizens at Waco!!
FReegards...MUD
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