Still Needed: Corporate Reform

It is becoming increasingly apparent these days that corporate reform isn't really happening in Washington. In the last few weeks, we've witnessed a below-the-radar rollback of the Sarbanes-Oxley Act, continued corporate earnings restatements, foot-dragging by a Congress unwilling to move ahead on the next round of critical corporate reforms, and the continuation of brazen Bush administration policies to further deregulate the energy and telecom sectors.

Chances are, though, most people didn't really notice. That's because they've probably been paying attention to the latest developments on Iraq. How cleverly Bush has been able to change the subject.
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Pitt Under Fire for Not Telling All He Knew About Webster

Three investigations began today into the Securities and Exchange Commission's choice of William H. Webster to head a new board overseeing the accounting profession. House and Senate Democrats called for the resignations of both Mr. Webster and Harvey L. Pitt, the commission's chairman.
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The Pitt Principle
By Paul Krugman

So Harvey Pitt decided not to tell other members of the Securities and Exchange Commission a small detail about the man he had chosen to head a crucial new accounting oversight board, after turning his back on a far more qualified candidate. William Webster, reports Stephen Labaton of The Times, headed the audit committee at U.S. Technologies. Now that company is being sued by investors who claim that management defrauded them of millions.

And what did Mr. Webster's committee do after an outside auditor raised concerns about the company's financial controls? That's right: It fired the auditor.

Mr. Pitt's response when this story broke beats anything a satirist could have imagined. "Pitt seeks probe of himself," read one headline. Honest: Mr. Pitt's own agency will investigate how he chose Mr. Webster.
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