On October 25th, at one of the SEC’s most contentious open meetings in recent memory, the Commission appointed the five members of the new Public Company Accounting Standards Board. Under Sarbanes-Oxley, the SEC was required to establish this board by October 28th.
In a 3-2 vote, the Republican majority on the Commission selected former FBI and CIA director William Webster to chair the new board, with a term until 2007. The SEC’s two Democratic Commissoners, Harvey Goldschmid and Roel Campos, claimed that Mr. Webster lacks the expertise to oversee the accounting industry. This followed earlier accusations by others that the accounting lobby effectively blocked former TIAA-CREF chairman John Biggs from being selected as chair.
The other board members appointed were:
• Daniel Goelzer, a partner at Baker & McKenzie who previously spent seven years as general counsel at the SEC (term expires 2006).
• Kayla Gillan, former general counsel of the California Public Employees’ Retirement system (term expires 2005).
• Willis Gradison Jr., a former Republican congressman who is Senior Public Policy Counselor at Patton Boggs (term expires 2004).
• Charles Niemeier, the SEC’s Chief Accountant in the Division of Enforcement and co-chairman of its financial-fraud task force. Mr. Niemeier previously worked at Williams & Connolly (term expires 2003).
Commissioner Goldschmid voted against all five board members to protest the selection process and said that as far as he knew none of the five board members approved yesterday was properly vetted – and that he was not told their names until the morning before the meeting. Commissioner Campos dissented only to the choice of Chairman Webster.
After the SEC’s appointments, according to the Washington Post, Senate Banking Committee Chairman, Paul S. Sarbanes (D-Md.) declared that “the country would be best served if Mr. Pitt stepped down.” Others in the Democratic congressional leadership and Sen. John McCain (R-Ariz.) had already recommended that Chairman Pitt resign or be fired.
The October 26th Washington Post article regarding the meeting is at http://www.washingtonpost.com/wp-dyn/articles/A19572-2002Oct25.html. The related SEC press release is at http://www.sec.gov/news/press/2002-153.htm.