VideoDoes anybody want this job?
On Thursday, Bloomberg reported that President Bush planned to ask assistant attorney general Michael Chertoff to replace Harvey Pitt as head of the Securities and Exchange Commission. But just hours after the report, the 48-year-old seemingly turned down the offer, saying he's "happy" to remain as head of the Justice Department's criminal division.
Observers say Chertoff would have brought instant credibility to the position. The former U.S. Attorney first made a reputation for himself as the lead prosecutor in the celebrated Mafia commission trial in 1986. Under the supervision of then—U.S. Attorney Rudolph Giuliani, Chertoff put away mob bosses Tony Salerno, Junior Persico, and Tony Ducks Corallo—all top members of the infamous Mafia commission.
"He would be a tough, aggressive head of the SEC, who will restore faith in its enforcement capabilities," Eric Holder, deputy attorney general in the Clinton Administration, told Bloomberg.
Chertoff has long been tough on corporate crime. As U.S. Attorney in the early '90s, he went after several companies in New Jersey that stole from their employee pension plans. He is also widely credited with playing a key role in the Bush Administration's crackdown on corporate crime, helping direct investigations into alleged fraud at Enron Corp. and WorldCom Inc.
But apparently the man who prosecuted the commission doesn't want to run the commission. "Michael Chertoff is happy in the job he currently holds," Justice Department spokesman Bryan Sierra told Bloomberg. "He looks forward to helping the President and the attorney general continue fighting the war against terrorism."
One reason why Chertoff would have been a good choice to succeed Pitt is that he has already passed the stringent FBI background checks for his current position. So he could have been approved by Congress pretty quickly.
What's more, observers say he's both nonpartisan and tough on corporate crime. Indeed, in an interview back in 1991—a decade before the Enron scandal—Chertoff said: "It demoralizes legitimate businessmen when they see their competitors cheating and getting away with it."
So when will the Administration find a replacement for Pitt? The SEC chairman "is an important position," White House spokesman Scott McClellan told the wire service. "We are moving as quickly as possible."
Other rumored candidates include former SEC commissioners Laura Unger and Joseph Grundfest, former U.S. District Judge Stanley Sporkin, and former SEC general counsel James Doty. In fact, Unger, a commentator for CNBC, has enthusiastically said on the air she would be glad to accept the position.
Peter Fisher, undersecretary of the Treasury for financial markets, is another candidate, according to Bloomberg, citing an Administration official. Fisher reportedly has called for rigorous disclosure to restore investor confidence.
However, he reportedly told Bloomberg Radio a week ago: "I'm not a candidate for that job. It's not my skill set."
It's not clear at this point why anybody—Unger notwithstanding—would want to head the SEC these days.
SEC Plans New Rules for Auditors
Next Tuesday the SEC plans to propose additional rules for auditors under the Sarbanes-Oxley Act.
The rules, which are to be proposed at an open meeting, would specify the kinds of information that must be retained by auditors for a five-year period after completing an audit or review of a company's financial statements.
The proposed rules would require auditors to retain work papers and other documents that form the basis of the audit or review, as well as memoranda, correspondence, communications, other documents, and records (including electronic records) that are created, sent, or received in connection with the audit or review and contain conclusions, opinions, analyses, or financial data related to the audit or review.
The commission also said it will consider amendments regarding auditor independence to enhance the independence of accountants who audit and review financial statements and prepare attestation reports filed with the commission.
In addition, the SEC plans to declare that an accountant would not be independent from an audit client if any partner, principal, or shareholder of the accounting firm who is a member of the engagement team received compensation based directly on any service provided or sold to that client other than audit, review, and attest services.
Former Adelphia Finance Exec Pleads Guilty
There may be no mistaking him for the Godfather of Soul. But James Brown, Adelphia Communications's former vice president of finance, apparently knows how to sing.
On Thursday Brown pleaded guilty to conspiracy, securities fraud, and bank fraud, thus becoming the first former Adelphia senior executive to admit to his role in the cable company's alleged scheme. Adelphia is currently operating under Chapter 11 bankruptcy protection.
Brown, who apparently is cooperating with federal investigators, pointed the finger at John Rigas, the company's founder and former head, and two of his sons, according to published accounts.
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