A partisan fury erupted on Capitol Hill against SEC Chairman Harvey Pitt, casting more doubts over the future of the nation’s top securitites watchdog.
Democratic senators and congressmen sang a chorus of calls for Pitt’s resignation and proposed holding hearings to investigate the nomination of William Webster to head a new accounting oversight panel after lawmakers return on Nov. 12.
Leading the charge, Senator Paul Sarbanes (D-Md.) called for Pitt’s ouster as the chairman of the Securities and Exchange Commission and requested that the General Accounting office investigate events surrounding Webster’s election.
Pitt – whose ties to the accounting industry have made him the target of criiticism since his appointment by President Bush in August 2001, chose Webster over Democrats who wanted John Biggs, former head of TIAA-CREF pension fund.
“I have reached the conclusion that the country would be best served if Mr. Pitt would step down as chairman of the SEC,” Sarbanes said. At issue is Webster’s role on the audit committee of U.S. Technologies, a company under a fraud investigation by the SEC.
Pitt admitted Webster told him of the potential conflict in the days just before last week’s vote. But Pitt said he did not inform the other commissioners about Webster’s admission, sparking outrage and dragging Pitt into another political brouhaha.
Pitt and the four other commissioners voted yesterday to approve a rare probe by the Inspector General Walter Stachnick into the process behind Webster’s election.
Commission spokeswoman Christi Harlan denied Stanchnik’s investigation was anything other than “the normal route” for such inquiries.
White House officials yesterday voiced support for Pitt.