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Wednesday, 13 November, 2002, 13:45 GMT
US accounting board chief quits
Former CIA and FBI chief William Webster
Webster: "It is not my intention to serve."

The newly elected chairman of the entity set up to oversee the US accounting industry has resigned following a heated controversy into his selection to the post last month.

The news comes on the heels of last week's twin resignations of stocks-watchdog chief Harvey Pitt and Securities and Exchange Commission (SEC) head accountant Robert Herdman.


Webster has demonstrated that he is the consummate public servant

Stephen Crimmins,
former SEC attorney
"It is not my intention to serve," William Webster wrote in his letter of resignation to Mr Pitt.

Mr Webster, who was chosen following a bitter vote to head the new Public Accounting Company Oversight Board, had been hinting at his resignation since Mr Pitt's Election-Day resignation.

"It was inevitable," said Stephen Crimmins, an attorney who formerly served in the SEC's Enforcement Division.

"Webster has demonstrated that he is the consummate public servant in that he has put what is clearly the public interest... above his personal desire to be the first chairman of this new important board," Mr Crimmins told BBC News Online.

It is now more important than ever for the Bush administration to move quickly in appointing a new SEC chief in order to nominate a new chairman of the oversight board, Mr Crimmins said.

He noted, however, Mr Webster's replacement could be named tomorrow given Chairman Pitt's decision to stay on until his own replacement is found.

Controversial appointment

Mr Webster's nomination drew fire after it was learned Chairman Pitt failed to disclose to his fellow SEC board members Mr Webster had served on the board of US Technologies, an insolvent firm that is now the subject of investor lawsuits.

SEC chairman Harvey Pitt, who resigned on 5 November
Harvey Pitt botched Mr Webster's nomination

Even his backers were mystified by Mr Pitt's decision, which sits squarely opposite the agency's support for full disclosure.

The choice to withhold such sensitive information was the final step in a series of political missteps that led to Mr Pitt's resignation on 5 November.

The SEC has begun an investigation into Chairman Pitt's actions, as has the General Accounting Office (GAO), the audit arm of Congress, and the Senate Banking Committee.

Congressional Democrats had been calling for his ouster for months in their belief that Mr Pitt was too closely aligned with the accounting industry.

In addition to Mr Pitt, SEC chief accountant Herdman - who also played a role in Mr Webster's selection - tendered his resignation on Friday.

Horseplay

Mr Webster relinquishes his role as head of the new Congressionally mandated accounting oversight board a mere two weeks after his selection to head the five-member panel.

SEC  chief accountant Robert Herdman
SEC chief accountant Herdman quit on Friday

The panel was set to convene its first meeting on Wednesday despite the departure of Mr Webster.

The new accounting-oversight board by is required by April to be up and running, as mandated by the Sarbanes-Oxley Act, which established the panel as well as other major reforms.

In an interview with the Wall Street Journal prior to Tuesday's resignation, Mr Webster said he was "terribly concerned about my value to the board at this point".

Asked if he intended to withdraw, Mr Webster told the Journal, "I think that's about right".

The 78-year-old Mr Webster said he reached his decision to quit during a weekend retreat in Virginia's Blue Ridge mountains, following a fall from his horse after it threw him.

The choice to have Mr Webster lead the new accounting board had been controversial from the start.

SEC Chairman Pitt initially backed John Biggs, a pension fund manager viewed as hawkish on the accounting industry.

But for reasons that have never been explained, Mr Pitt soon changed his mind and backed Mr Webster, the former head of the Central Intelligence Agency (CIA) and the Federal Bureau of Investigation (FBI).

 WATCH/LISTEN
 ON THIS STORY
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"He was not the right person for this board"

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FORUM
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