Congresswoman Jan Schakowsky, Ninth District, IL
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Press Release
 
OCTOBER 31, 2002
 
SCHAKOWSKY SAYS INVESTORS DESERVE SEC CHAIR WHO WILL PREVENT CORPORATE ABUSE AND ENFORCE THE LAW

CALLS ON PRESIDENT BUSH TO DISMISS CHAIRMAN PITT

 
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

 
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