WASHINGTON,
D.C. – U.S. Representative Jan Schakowsky (D-IL) called on President Bush
to dismiss Securities and Exchange Commission (SEC) Chairman Harvey
Pitt because the “public deserves to have regulators in place that will
vigorously enforce the law.”
Schakowsky,
in a letter to the President, added, “I also respectfully request that
you dismiss Chairman William Webster as the newly-appointed chairman of
the Public Accounting Oversight Board. Both actions are necessary
to restore investor confidence that there will be independent, aggressive,
and experienced regulators in place to prevent corporate misconduct and
criminal behavior.”
Below
is Schakowsky’s letter to President Bush:
October
31, 2002
The
Honorable George W. Bush
President
of the United States
1600
Pennsylvania Avenue, N.W
Washington,
DC 20500
Dear
Mr. President:
I
am writing to renew my request that you dismiss Chairman Pitt from his
post as the Chairman of the Security and Exchange Commission. I also
respectfully request that you dismiss Chairman William Webster as the newly-appointed
chairman of the Public Accounting Oversight Board. Both actions are
necessary to restore investor confidence that there will be independent,
aggressive, and experienced regulators in place to prevent corporate misconduct
and criminal behavior.
Chairman
Pitt has a pattern of reluctance in responding to widespread corporate
fraud and abuse. On March 20, 2002 Chairman Pitt testified before the Financial
Services Committee on which I serve that he favored a private sector regulatory
board instead of the public sector board that was eventually adopted as
part of the Sarbanes-Oxley Act. He has not demonstrated the strong,
proactive leadership that circumstances demand. He is hardly the kind of
watchdog who will restore confidence in our financial markets.
Chairman
Pitt has repeatedly trampled on the interests of investors, pension holder
and workers. The public deserves to have regulators in place that
will vigorously enforce the law. Chairman Pitt has repeatedly failed
to serve as the strong watchdog the public deserves. If we needed
any further evidence of his unfitness to serve as head of the SEC, we now
have Chairman Pitt’s decision to nominate Judge Webster, the former chairman
of the audit committee for a company accused of defrauding investors by
millions of dollars. The fact that Chairman Pitt knowingly and deliberately
withheld this information from his fellow commissioners provides even more
grounds for his immediate dismissal. Chairman Pitt’s decision to
conceal this information sabotages the Board’s mission to prevent corporate
wrongdoing and assure the accuracy and reliability of corporate disclosures.
Before
selecting Judge Webster to chair the Board, Chairman Pitt rejected the
nomination of John H. Biggs, who was opposed by the accounting industry
but widely supported by consumer and investor groups as someone who would
aggressively and independently head the Board. As the CEO of
the teacher’s pension fund TIAA-CREF, Mr. Biggs demonstrated a commitment
to protecting investors’ interests. Instead, Chairman Pitt selected
Judge Webster, someone who lacks the accounting expertise necessary for
this critical appointment. Now, it has been disclosed that Chairman
Pitt was aware the Judge Webster carries with him at least the appearance
of impropriety because of his involvement in a firm that has been charged
with fraud. Yet, he still chose him over the substantially more qualified
Mr. Biggs.
Mr.
President, I commend you for signing the Sarbanes-Oxley Act into law.
If vigorously implemented and adequately funded, the new law will help
stop corporate fraud and conflicts of interest. However, I am concerned
that investors will remain vulnerable to fraud and abuse as long as Chairman
Pitt remains in office and until he is replaced by an effective and independent
regulator who will put the interests of investors first. Thank you
for your time and consideration of this matter.
Sincerely,
Jan Schakowsky
Member of Congress |