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| 2002 News and Press Releases |
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HEADLINE ARCHIVED:
S.E.C.'s Embattled Chief Resigns In Wake Of Latest Political
Storm
By: Stephen Labaton
New York Times. November 6, 2002
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EXCERPT: Harvey L. Pitt resigned tonight as the chairman of the Securities and Exchange Commission after a political firestorm over his selection of the head of a new board overseeing the accounting profession. Mr. Pitt announced his resignation just before 9 o'clock as polls were closing nationwide. For days, he had insisted he would continue to serve as long as he had the confidence of the president. At the same time, White House officials strained to try to keep the growing crisis at the agency from becoming a political issue that would remind voters of Washington's response to corporate scandals. The officials publicly voiced support for him but privately expressed deep anger about his stewardship. Administration officials said tonight that Mr. Bush had not requested Mr. Pitt's resignation but that White House officials welcomed it, particularly because Mr. Pitt had created a new round of political difficulties for Republicans in the days leading up to the election. Mr. Pitt's leadership of the agency had grown increasingly tenuous in recent months with a series of political missteps, including a widely ridiculed effort over the summer to insert a provision in the corporate antifraud legislation that would raise his pay and elevate his status to that of cabinet level. His hold over the agency cracked last Thursday with the disclosure that he had failed to tell either the White House or the four other commissioners at the S.E.C. that he had known that William H. Webster, the new accounting board chairman, had headed the audit committee of a company accused of fraud. Mr. Webster, who was recruited for the post by the White House, was approved by the commission 10 days ago in a bitterly divided vote in which two of the five commissioners said he was unqualified for the job. …"Unfortunately, the turmoil surrounding my chairmanship and the agency makes it very difficult for the commissioners and dedicated S.E.C. staffers to perform their critical assignments," Mr. Pitt said in a letter to President Bush. "Rather than be a burden to you or the agency, I feel it is in everyone's best interest if I step aside now, to allow the agency to continue the important efforts we have started…In his letter, Mr. Pitt said he would leave "as soon as I can help your staff ensure a smooth transition of leadership." Among the people being considered to succeed him are Richard C. Breeden, a former S.E.C. chairman under the first President Bush; Michael Chertoff, the assistant attorney general in charge of the criminal division at the Justice Department; James Doty, a securities lawyer who was S.E.C. general counsel under Mr. Breeden and represented George W. Bush before he became governor of Texas; Rudolph W. Giuliani, the former New York mayor; Joseph A. Grundfest, a former S.E.C. commissioner who now teaches at Stanford Law School; Gov. Frank Keating of Oklahoma; and Frank Zarb, the former chairman of Nasdaq.
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