Bush Taps 2 Big Five Execs for SEC

President Bush said Thursday he intends to nominate two Republican accounting firm executives to the Securities and Exchange Commission.

Bush tapped PricewaterhouseCoopers partner Paul Atkins, 43, of Virginia, for one commission seat and Ernst & Young principal Cynthia Glassman, 54, also of Virginia, for another, the White House said.

The planned nominations of two executives from Big Five accounting firms come as accounting issues are taking center stage at the SEC with the recent financial collapse of Enron Corp. Federal investigations are examining whether accounting irregularities contributed to the bankruptcy of what was the nation’s largest energy trader.

“It’s a risky set of nominations,” said Georgetown University law professor Donald Langevoort. “At a time when questions of [auditor] independence and backbone are going to be front and center what with Enron and other matters, it takes some degree of courage to nominate two people from two of the Big Five firms.”

Earlier this year Bush named Harvey Pitt, a Republican lawyer who had represented top players in the accounting and securities industries, as the new SEC chairman.

Bush’s intended nominees would fill two vacant seats. He also must fill two more seats in 2002: Commissioner Isaac Hunt, a Democrat, has stayed on the commission though his term has expired, and Commissioner Laura Unger, a Republican, has announced plans to step down.

The agency has five commission seats in all. If the two nominees announced Thursday are confirmed by the Senate, the Republican Party would have a three-seat majority on the panel, including Pitt.

By law, Bush would have to select Democrats or independents for the remaining two seats.

Atkins, a lawyer, worked at the SEC in the early 1990s. At Pricewaterhouse, Atkins’ clients are financial services firms. He helps them with regulatory compliance.

Glassman is an economist who previously worked for the Federal Reserve Board of Governors.

Glassman works in the quantitative economics and statistics practice at Ernst & Young. Atkins and Glassman, with their financial experience, “should be a big plus” for Pitt as he presses ahead with his agenda items, such as more frequent corporate disclosures, said John Olson, a Washington lawyer who heads an American Bar Assn. corporate-governance panel.

Olson, a senior partner with Gibson Dunn & Crutcher, said the Senate Banking Committee, which is chaired by Maryland Democrat Paul S. Sarbanes, may insist that Bush name two Democrats to the SEC before confirming Atkins and Glassman.