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Wednesday, 20 November, 2002, 21:07 GMT
Bush eyes Democrats for SEC post
Erskine Bowles (left) served as chief of staff for former President Clinton
Clinton staffer Erskine Bowles is one possible candidate

The US's Republican president, George W Bush, has broadened his search to include Democrats as possible candidates to lead the Securities and Exchange Commission (SEC).


[Mr Bush] needs to get somebody who looks like they're going to implement Sarbanes-Oxley in the way it was intended

Dan Boyd, attorney
"The president is casting a wide net in terms of who the person would be to head the SEC," White House spokesman Ari Fleischer said.

"I don't rule out that the person could be a Democrat - or Republican or independent," he told reporters covering Mr Bush's visit to Prague for a Nato summit.

The White House has already approached former President Bill Clinton's chief of staff Erskine Bowles and other prominent Democrats about the position, the Wall Street Journal reported on Wednesday.

The leadership role has been left vacant by the 5 November resignation of embattled Harvey Pitt as chairman.

Possible pitfalls

After the many political missteps of Mr Pitt, Mr Bush is seen as eager to find a candidate who strikes a balance between political savvy and accounting reform, and who will not be a lightning rod for criticism by the accounting industry.

SEC Chairman Harvey Pitt
Mr Pitt resigned after a botched nomination

"[Mr Bush] needs to get somebody who looks like they're going to implement Sarbanes-Oxley in the way it was intended," said corporate litigation attorney Dan Boyd, referring to the law which established SEC reforms including an accounting industry oversight board.

"That helps the investment community and helps him politically," Mr Boyd told BBC News Online.

But appointing a Democrat also has it pitfalls.

Under the leadership of Mr Pitt, the president did not have to concern himself with the investigation into his sale of Harken Energy stock in the early 1990s.

Mr Pitt refused to open files into the case.

"The papers in that investigation have not been fully revealed," Mr Boyd says, adding the SEC chairman had the power to reveal them.

"I would think [the president] would at least want somebody who would continue not to reveal those papers."

Conflicts of interest

Many analysts believe Mr Bush must appear non-partisan in his selection of the next leader of the SEC, the US stock market regulator.


Getting someone in sooner rather than later is really a priority

Paul Maco, former SEC attorney

"The point is this is an agency that's supposed to be independent to begin with," said Paul Maco, a corporate governance attorney who served under former SEC chief Arthur Levitt.

Current chairman Mr Pitt, who has agreed to stay on while a successor is found, was accused not only of partisanship but failing to fully disclose information regarding his nominee for the accounting-oversight board, William Webster.

The embattled Mr Pitt was also accused of being deferential to the accounting industry, which the SEC is supposed to police.

Putting partisanship aside

Two weeks have passed since Mr Pitt's election-day resignation, which followed heated responses to his handling of Mr Webster's nomination.

Analysts said then that the president needed to act quickly to find a replacement in order to bolster volatile markets.

US President George W Bush
Mr Bush needs someone to enforce reforms

"Getting someone in sooner rather than later is really a priority in terms of assuring the markets that the Bush administration is serious about corporate governance reform," Mr Maco told BBC News Online.

Considering Democrat candidates is an indication White House officials may succeed in sending a signal the president is serious about corporate reform and putting partisanship aside, Mr Maco added.

Naming candidates

Several other Democrats names have been put forward, including Robert Pozen, who has worked for the SEC and served on the board of Fidelity Investments, the nation's largest mutual-fund company.

Another is Christopher Cox, who as a former congressman has deep knowledge of the SEC.

Former SEC commissioner Steven Wallman, who served under Arthur Levitt, might also surface as a candidate, a source told BBC News Online.

Although a Democrat, Mr Wallman is a centrist who is independent and frequently battled Mr Levitt, seeking to have the former chairman's proposals clarified or modified.

Despite the musings over Democratic candidates, analysts believe the conservative Mr Bush would have fewer concerns about picking someone from his own party.

That nearly assures a Republican will fill Harvey Pitt's well-worn - if ill-fitted - shoes.


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