- The Washington Times - Sunday, November 3, 2002

President Bush and top aides are losing patience with Harvey Pitt but have not decided whether to seek his ouster as Securities and Exchange Commission chairman, a senior White House official said yesterday.
Support for Mr. Pitt among Republicans, who were steadfastly backing him as Democrats called for his resignation, eroded as Sen. Richard C. Shelby, Alabama Republican, criticized Mr. Pitt's handling of the selection of former FBI Director William Webster to lead a new accounting oversight board.
Mr. Pitt is facing an investigation by the SEC's inspector general into whether he concealed from his fellow commissioners information about Mr. Webster's watchdog role at a company facing fraud accusations before they named him to lead the new board.
"I find Chairman Pitt's decision not to share this information troubling," Mr. Shelby said yesterday. "It is vitally important right now that we restore confidence in the capital markets and to do that we must have disclosure, transparency and honesty in our oversight of the market."
Mr. Shelby will become the senior Republican on the Senate Banking Committee in January, after its chairman, Sen. Phil Gramm, Texas Republican, retires from the Senate. If the Republican Party regains control of the Senate after the elections Tuesday, Mr. Shelby will become the committee chairman.
Mr. Shelby said he supported calls by Democratic lawmakers last week for hearings by the committee on Mr. Webster's selection.
"I believe hearings to examine this matter are entirely appropriate," Mr. Shelby said. However, he added, "At the end of the day, I believe Judge Webster is still a good choice for this position."
Mr. Webster led the audit committee at U.S. Technologies Inc., which is being sued by investors who say they were defrauded of millions of dollars. The company is also reportedly under federal investigation. Last year, during Mr. Webster's tenure, the audit committee dismissed the company's outside accounting firm.
The White House official, speaking on the condition of anonymity, said Mr. Bush and Chief of Staff Andrew H. Card Jr. are angry that Mr. Pitt put Mr. Card in the situation of urging Mr. Webster to accept the new post without Mr. Card's knowing about Mr. Webster's affiliation with U.S. Technologies' audit committee. That anger is also part of a long-simmering frustration with Mr. Pitt's political judgment, the official said.
Despite increasing concerns, Mr. Bush still believes that Mr. Pitt has done a good job cracking down on corporate wrongdoers and that no decision has been made on whether the White House would seek his resignation, and none will come before the elections Tuesday, the White House official said.
"We want to see how the investigation plays out, and then we'll cross that bridge," the official said of the SEC investigation.
The official said Mr. Bush does not have the power to remove Mr. Pitt but that the White House expects he would resign if the president's advisers asked him to leave.
White House spokesman Ari Fleischer told reporters traveling with the president yesterday to a political stop in Tennessee that Mr. Bush "continues to have confidence in Harvey Pitt." Asked whether Mr. Bush and Mr. Pitt have spoken recently, Mr. Fleischer replied: "They have not. The president does not talk to everybody in his government every day."
The spokesman said the internal investigation should move ahead because "that's the appropriate place for everything to be looked at" in the Webster matter.

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