Bush Makes 2 Recess Appointments to SEC

President Bush on Tuesday made recess appointments of a Republican and Democrat to the Securities and Exchange Commission, permitting them to serve temporarily without the approval of the Senate.

Republican Cynthia Glassman, a principal at the Ernst & Young accounting firm, and Democrat Isaac Hunt Jr., who was an SEC member from 1996 to last month, received the appointments.

They can serve until the Senate adjourns at the end of the year.

Bush used his constitutional authority to install executive agency officials while Congress is in recess. The legislative body returns today.

Glassman and Hunt will join Chairman Harvey Pitt, a Republican, on the five-member commission. The other member, Republican Laura Unger, has said she intends to leave as soon as a replacement can be named.

Including Unger’s seat, the SEC now has two openings for commissioners.

Bush in December announced plans to nominate Glassman as well as another accounting executive, PricewaterhouseCoopers lawyer Paul Atkins.

Bush hasn’t announced plans for the fifth slot, which by law must be filled by a non-Republican.

The naming of Glassman and nomination of Atkins, both from Big Five accounting firms, may stir controversy: Accounting issues have taken center stage at the SEC with the collapse of Enron Corp.

It isn’t clear whether some in Congress might oppose naming accounting executives to the SEC, under the circumstances.

The White House said Bush used the recess loophole because of the SEC vacancies and the need for it to be well-staffed to grapple with issues related to Enron.

“There are obviously some very critical issues that will be coming before the SEC in the near future,” said White House spokeswoman Anne Womack. “The president wanted to ensure that the SEC had the manpower to handle the issues as well as a balanced perspective while doing it.”

Meanwhile, the SEC reminded companies as they prepare their 2001 annual reports that better disclosure is needed for off-balance-sheet deals and other accounting methods associated with Enron.

Robert Herdman, chief accountant at the agency, said, “Our hope is that public companies will go beyond the minimum legal requirements and serve investors with the very best possible discussion of the company’s financial position and operating results.”

Bloomberg News and Reuters