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SEC chairman says he won't step down

SEC Chairman Harvey Pitt says he won't resign because he's
SEC Chairman Harvey Pitt says he won't resign because he's "the right person for the job."  

WASHINGTON (CNN) -- Embattled Securities and Exchange Commission Chairman Harvey Pitt on Sunday denied having conflicts of interest with corporate wrongdoers and said he won't yield to pressures to resign.

"Absolutely not," he said on NBC's "Meet the Press" when asked if he would leave his post. "Because I'm the right person for the job. And the American public expects me to be there, pitching in for them and making sure they get a fair deal."

Several lawmakers, including U.S. Sen. John McCain, R-Arizona, have voiced unhappiness with Pitt following a string of accounting debacles at such firms as WorldCom, Xerox, Enron and Arthur Andersen.

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Pitt's critics suggest he's too close to the financial industry to be an effective regulator.

McCain noted that Pitt had to recuse himself from overseeing 29 cases in less than a year because of his past relationships with leading accounting firms, which he once represented as a lawyer.

Pitt told CBS' "Face the Nation" on Sunday that he will recuse himself on a case-by-case basis.

"I don't want to do anything that gives our critics an opportunity to raise issues, but the SEC needs my leadership," Pitt said. "Public investors need my leadership. And we are going to do our utmost to make sure we serve them."

McCain has said Pitt's response to corporate scandals "appeared slow and tepid."

"Confidence can only be restored by those without any record that's tainted," the senator said on "Meet the Press."

The public interest group Common Cause reports that on at least three occasions, Pitt had contact with executives of companies under SEC investigation "reportedly against the advice of agency attorneys."

Common Cause said Pitt met last year -- after being appointed SEC chairman -- with Xerox Chairwoman and Chief Executive Officer Anne Mulcahy.

Xerox Corp. announced an adjusted first-quarter loss this month after restating more than $6 billion in revenue over 1997 to 2001. The SEC had charged Xerox with inflating earlier revenues and defrauding investors.

Pitt defended his meeting with Mulcahy.

"The chairman of the SEC has to know what's going on in the real world," he said.

"We meet with lots of people ... we meet with representatives of many investment groups," Pitt said, adding that Xerox was fined heavily for its accounting practices.

"We don't compromise any matters that are ongoing. The SEC chairman has absolutely no role in the day-to-day investigation."

McCain contended Pitt doesn't believe in a separation between consulting for a company and auditing its books.

"He still doesn't get it in my view," McCain said.

Pitt: 'No one gets a pass'

The Senate is preparing to vote on a bill sponsored by U.S. Sen. Paul Sarbanes, D-Maryland, that would create an independent accounting oversight board for corporate auditors and replace a system of self-regulation.

House Minority Leader Dick Gephardt, D-Missouri, told "Face the Nation" that Pitt lacked credibility when it comes to reform.

"He lobbied for and worked for many of the top accounting firms, and he probably lobbied against some of the very rules that are now contained in the Sarbanes bill and that Arthur Levitt, the prior secretary of that department [in the Clinton Administration], put forward," Gephardt said.

Asked about the SEC probe into the Halliburton Co., the oil field services firm that Vice President Dick Cheney ran before the 2000 election, Pitt told "Face the Nation" there was no need for him to recuse himself.

The agency's investigators will "follow the trail wherever it leads," he said, adding that "no one gets a pass."

Pitt said he supports the Corporate Fraud Task Force appointed last week by President Bush to coordinate the government's investigation and prosecution of major financial crimes. Pitt is part of the group.

"I frankly think every one of them who's responsible ... should do hard time for their crimes," Pitt told NBC.

Asked whether the SEC should make public its file on Bush's 1990 sale of Harken Energy Corp. stock two months before the company restated its earnings and its stock tanked, Pitt called the issue "ancient history."

The SEC investigated the matter, which took place while Bush was a director of the company, and took no action. "Absolutely nothing was wrong" with the transaction, Pitt said.


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