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Friday, 1 November, 2002, 17:03 GMT
White House backs SEC chief
SEC Chairman Harvey Pitt
Mr Pitt has received the President's backing
The chairman of the US Securities and Exchange Commission (SEC), Harvey Pitt, has received the support of the White House amid calls for his resignation.

Mr Pitt finds himself in hot water over a fiasco surrounding the appointment of a new auditing chief to supervise US accountancy firms.

He came under fire on Thursday for his failure to disclose to fellow SEC board members sensitive information about the man chosen to head the new Public Company Accounting Oversight Board - William Webster.


We continue to have confidence in his leadership

The White House
Mr Pitt has also been criticised for having launched an internal investigation into Mr Webster's appointment after the scandal broke - in effect an investigation into his own behaviour.

But the White House appeared to be undaunted and dismissed calls for an external investigation.

"We continue to have confidence in his leadership," said White House spokesman Scott McClellan. "Let's let the SEC look into it."

'Tin ear'

Prior to Mr Webster's appointment, the former head of FBI and CIA had also been the audit committee chairman of US Technologies, a company that has been taken to court on fraud charges.

Mr Webster had informed Mr Pitt about this during the appointment process, but the details were not passed on.

The White House's reaction has baffled Mr Pitt's critics, given that Mr Webster would be in charge of the body overseeing accounting reforms set in motion after the recent corporate scandals.

Mr Pitt's knowledge about Mr Webster's involvement with a company charged with fraud would have been particularly relevant, his critics insisted.

"Not to disclose relevant information is kind of unfathomable," says David Yellen, Hofstra University law school dean.

Mr Yellen also questioned whether Mr Pitt had "too much of a political tin ear to do his job".

Secure job

But Mr Pitt's critics are far less powerful than his backer, so his job appears secure, insisted one of his former colleagues, Ira Sorkin.

"It's only fatal if the President doesn't want him there anymore," Mr Sorkin said.

"Chairman Pitt has done a good job in cracking down on corporate wrongdoing and the SEC has a very strong record under his leadership," added White House spokeswoman Claire Buchan.

"We support him."


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FORUM
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