- The Washington Times - Wednesday, November 13, 2002

Former FBI Director William Webster resigned yesterday as head of a special accounting-oversight board, saying he wanted to avert "new distractions" as the congressionally created agency seeks to rebuild public confidence after a series of business scandals.
The move capped weeks of speculation regarding Mr. Webster's future in a debacle that already has brought the resignations of Bush administration appointee Harvey Pitt, chairman of the Securities and Exchange Commission, and the SEC's head accountant.
"I now believe my continued presence on the board will only generate more distractions which will not be helpful to the important mission of the board," Mr. Webster said in his resignation letter.
"Those who know me will appreciate that I do not abandon duty lightly. It is time to clear the air," he said.
Mr. Webster, who also once headed the CIA, announced his resignation in a letter to Mr. Pitt, who has remained in office pending the naming of a replacement. Mr. Pitt quit earlier after a flap about his apparent failure to inform fellow SEC commissioners that Mr. Webster had headed the audit committee of a company under investigation for fraud.
President Bush last week voiced confidence in Mr. Webster's integrity, although Mr. Bush also said he wanted to see the outcome of an investigation of the circumstances surrounding Mr. Webster's selection.
Mr. Pitt is facing investigations into whether he concealed from other SEC members Mr. Webster's role for a company that is under investigation. The SEC voted 3-2, along party lines, to appoint him on Oct. 25. Mr. Pitt and the other two Republicans approved Mr. Webster, and the two Democrats opposed.
In a statement accepting the resignation, Mr. Pitt made no mention of the controversy surrounding Mr. Webster's appointment. "I continue to believe that investors would have benefited from Judge Webster's dedication to the best interest of the American people," he said.
News of Mr. Webster's resignation came a day before the oversight board was scheduled to have its first meeting. His letter to Mr. Pitt was dated Monday and released yesterday afternoon.
The turmoil comes at a time when the government is trying to bolster the confidence of investors and consumers shaken by corporate scandals during the past year, and the SEC is investigating questionable accounting at dozens of big companies.
Mr. Webster's appointment was pushed by Mr. Pitt and endorsed by the White House. Democrats preferred John Biggs, head of the largest teachers' pension fund, who they believed would be tough on the accounting industry.
Creation of the oversight board was mandated by Congress during the summer in legislation responding to the wave of accounting scandals at Enron, WorldCom and other big companies. The five-member board, to be independent of the accounting industry, will be armed with subpoena authority and disciplinary powers and financed by fees from publicly traded companies.
The SEC inspector general and Congress' auditing arm, the General Accounting Office, are investigating the circumstances surrounding Mr. Webster's appointment, and the Senate Banking, Housing and Urban Affairs Committee plans hearings.
Mr. Webster has said he told Mr. Pitt that he headed the audit committee at U.S. Technologies, which is considered insolvent and has been sued for fraud. The office of the chief accountant, Robert Herdman, then told Mr. Pitt that information did not create a problem for Mr. Webster's selection.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide