Defiant Pitt Won't Go

The market watchdog Harvey Pitt came out fighting Sunday as both democrats and republicans called for his resignation. But, as CBS News reports, a defiant Pitt said he would not step down as Securities and Exchange Commission chairman, despite criticism he has been a lax regulator.

"I have absolutely no intention of stepping down," he said. "I believe I enjoy the confidence of the president and I'm certain if I don't, he'll let me know."

Pitt also said the SEC will vigorously investigate Vice President Dick Cheney's former company and take enforcement action if needed.

Even his critics concede Pitt is especially well-qualified. As a lawyer, he was dubbed the "dean of securities fraud cases." His big money clients included notorious trader Ivan Boesky and AOL-Timewarner's Steve Case.

He gave up the lucrative legal work nearly a year ago to take on the SEC job, but detractors say he's still too close to his former clients, and at least gives the impression that he's soft on corporate crime

Seth Amgott, of Common Cause. "We are facing a crisis in market confidence and also in people's confidence in the government's ability to look out for our interests. Harvey Pitt is part of that problem."

But Mr. Bush has so far stood by him. Pitt was at the president's side on Friday, at the first meeting of Mr. Bush's new anti-fraud task force.

Mr. Bush defended Pitt's performance by saying "he has taken 30 CEOs and directors to task by … not allowing them to serve again on a board or serve in a CEO capacity of a company."

But as lawmakers jockey to stake out tough political positions in the fight against corporate wrong-doing, Pitt won't find much support on Capitol Hill. Lawmakers said that his previous work for big accounting firms and corporations as a private securities lawyer create too much potential for a conflict of interest.

"I'm the right person for the job," said Pitt, appointed by Bush last year as the top market watchdog. "This guilt by occupation is really a needless diversion."

Pitt insisted that under his leadership, the SEC has been more effective and aggressive than ever in investigating and punishing companies, executives and accountants.

He said the agency will take that stance if needed with the oil services company Cheney headed, Halliburton Co. It is under SEC scrutiny for the way it accounted for cost overruns on construction jobs during Cheney's tenure.

"If there's a problem with Halliburton or any other company, we will investigate it and we will take whatever action is appropriate," Pitt said on NBC's "Meet the Press."

"No one in this country gets a pass. ... No one gets special treatment," he told CBS' "Face the Nation."

Pitt stressed that he would not personally decide whether the SEC should act against Halliburton.

Normally the agency's enforcement attorneys make such a recommendation to the SEC commissioners, including the chairman, who then vote on whether to proceed. Beside Pitt, there are currently only two commissioners — a Republican and a Democrat — of the full complement of five.

"We'll review it carefully to see what they have and we'll make certain that whatever decisions are reached ... are done with the utmost of care and the utmost of circumspection," Pitt said.

But House Minority Leader Dick Gephardt said Pitt should remove himself from any action whatever related to Halliburton.

"I think it would be best .... because he was selected by a transition team that was headed by Dick Cheney," said Gephardt, D-Mo.

"What we need to do is establish credibility and get through these investigations and get the right rules in place so we can get this economy moving again. That's really what's at stake here, people's 401(k) plans and pension plans," Gephardt said on CBS' "Face the Nation."

He was voicing a theme that Democrats are making the top political issue in this congressional election year as corporate accounting scandals have shaken Americans' confidence and the stock market has plunged.

Bush traveled to Wall Street last week to deliver a speech on corporate responsibility. The Senate pushed ahead with legislation creating stiff penalties and jail terms for company fraud and tightening oversight of the accounting industry.

Partisan bickering continued over President Bush's sale of Harken Energy Corp. stock for $848,000 in June 1990, two months before Harken reported millions of dollars in losses. Bush was a director of the company.

The SEC's insider-trading inquiry into the sale, made when Bush's father was president, was closed with no action against Bush.

"I think this is ancient history, and the president should do whatever he thinks is appropriate," Pitt said when asked whether the president should call on the SEC to release the complete file of the investigation.

"But unless there's a reason to reopen ancient history, we should move on with the future and start helping today's investors," Pitt said.

If President Bush asked him to release the file, Pitt said he would do so.

Sen. Joseph Lieberman, D-Conn., said that because of the stock sale, "There is a large cloud hanging over (Bush's) head, which I am afraid if he doesn't eliminate it soon, by giving full disclosure, will diminish his moral authority — his presidential authority to lead the critical effort to restore confidence in the market."

Lieberman, who challenged Mr. Bush in the 2000 election as Al Gore's running mate, said on ABC's "This Week": "I don't know that anything illegal happened. But there are a lot of things you can do that are legal, but very wrong. And right now it is critically important that the president of the United States ... open up the files and let the American people see what was there."

Commerce Secretary Donald Evans defended President Bush on the documents issue, saying he has "fully cooperated in every kind of way." He dismissed the calls for their release as "nothing but politics."