HARVEY PITT'S comedy of errors at the Securities and Exchange Commission would be really funny if it didn't have such potentially dire consequences for the feeble economy.
What a plot line!
A top attorney for accounting firms takes over as chief watchdog of the accounting and securities industry just as corporate America erupts in a series of scandals over fraudulent bookkeeping practices that rob millions of wealth, jobs and pension savings. Said watchdog then works to impede or weaken congressional efforts to impose reforms -- and allows his agency to be starved of critical resources while seeking a raise for himself.
Pressure mounts on our hero as President Bush joins with Congress to create a new accounting oversight board to end the web of conflicts that encouraged many auditors to ignore signs of trouble with the books. Undaunted, Mr. Pitt passes over the reformers' favorite candidate to lead the oversight board and backs instead former FBI Director William Webster, who has almost no experience in the accounting or securities industry.
In the saga's latest twist, it turns out that the little experience Mr. Webster did have in the field was in connection with a company now charged with the same fraudulent behavior the oversight board he would lead is supposed to end. Our hero knew this, so the story goes, but failed to inform his fellow SEC commissioners before winning an acrimonious 3-2 vote in favor of Mr. Webster.
And now with clamor for Mr. Pitt's resignation growing -- and even the White House starting to signal its annoyance -- the SEC chairman has ordered an inspector general investigation of himself.
He's a regular laugh riot. His next gig should be in the Catskills. Starting today.
What's sad, though, is that Mr. Pitt has been given chance after chance to do what the nation needed from him far more than comic relief.
His job was to restore confidence in the equity markets that has been badly shaken by the debacles of Enron, WorldCom, Arthur Andersen and all of the other companies that have imploded over the past year.
Instead, Mr. Pitt's actions are undermining investor and consumer confidence at a time when the economy is teetering on the brink of recession.
"This whole process is enough to make you weep," observed Sen. Paul Sarbanes, the Maryland Democrat who wrote the reform legislation creating the oversight board.
Senator Sarbanes has asked for an independent investigation of Mr. Pitt's behavior, and plans to hold hearings before the Senate Banking Committee he chairs.
But it's long past time for President Bush to put an end to this farce. He should fire Mr. Pitt and find new leaders both for the SEC and the new accounting oversight board who are true watchdogs -- not lapdogs for the industry.