SEC Expected to Select Webster to Head New Oversight Panel
Former FBI and CIA Director William H. Webster has been tapped to lead the new accounting oversight board designed to clean up the epidemic of accounting scandals, sources said.
With the selection of Webster, Securities and Exchange Commission Chairman Harvey L. Pitt hopes to close a clumsy selection process that already has brought criticism over the public consideration, then rejection, of retiring TIAA-CREF Chairman John Biggs.
Webster’s appointment will be confirmed today when SEC commissioners are scheduled to vote publicly on the new five-member Public Corporation Accounting Board, people familiar with the process said.
SEC Commissioner Harvey Goldschmid requested the public vote so the selection of the board’s other members would be held in open session, officials said. Pitt, criticized for his handling of the selection process, had said he expected the vote to be in private.
Pitt earlier this week asked Webster, 78, to consider taking the accounting job. Democratic commission members Goldschmid and Roel Campos -- who have been pushing Biggs for chairman -- are outnumbered by the SEC’s three Republicans, who are backing Webster, sources say.
New York-based TIAA-CREF is a big pension and mutual fund company that has been a leading voice in the corporate reform movement, which is pushing for tighter controls over the relationship between accountants and the companies they audit.
The choice of chairman became a political battleground as Democrats backed Biggs, 66, an advocate of stricter accounting rules, while the accounting industry and some Republicans said he would burden the industry with too many rules.
Congress created the accounting board to restore investor confidence after financial scandals at Enron Corp. and other firms. It will have the power to discipline accountants, inspect accounting firms and consider new rules.
Some Democrats say disarray over the accounting board shows that Pitt and the Republicans are wavering on the crackdown on corporate malfeasance.
In an interview Thursday with The Times, Sen. Paul S. Sarbanes (D-Md.) said the vote was a big test for Pitt because it would show whether he wants real reform. Voting for Webster would indicate that Pitt has caved in to the accounting industry, said Sarbanes, chief architect of the legislation that created the oversight board.
Choosing Webster over Biggs would be a “big blow” to investors, he added. Though well-respected, Webster lacks accounting expertise, the senator said.
“I like Bill Webster,” Sarbanes said.
“But he’s certainly not an expert in this field.”
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Times staff writer Walter Hamilton contributed to this report.
