An investigation into possible accounting irregularities at a Dallas energy company formerly run by Vice President Cheney would continue no matter where it might lead, Securities and Exchange Commission Chairman Harvey Pitt promised yesterday.
"If anybody violates the law, we go after them," Pitt said in an interview on ABC-TV's "This Week."
Pitt was responding to a question about Halliburton Co., an oil company for which Cheney was chairman and chief executive for several years until August 2000, when he resigned to be George Bush's running mate. A month ago Halliburton said the SEC, the nation's top watchdog of securities markets and publicly traded companies, had begun a probe into how the company booked cost overruns on energy-related construction jobs.
ABC interviewer Sam Donaldson noted that President Bush has vowed that all chief executives "who have mismanaged their company in some fraudulent way will have to pay." He asked Pitt, "Will that be the case in Halliburton if you find wrongdoing under Mr. Cheney's reign?"
Pitt responded, "I head an independent regulatory agency. We don't give anyone a pass."
Halliburton has said the company believes its bookkeeping methods comply with the law and that it will cooperate fully with government investigators.
Pitt, a Bush appointee who has been in office 11 months, has been under fire from critics who say the agency has been slow to react to the crisis in investor confidence that began last fall with the Enron Corp. scandal and has grown since with a steady stream of disclosures about illegal accounting or other wrongdoing at some of America's best known companies, including WorldCom Corp., Xerox Corp., Rite-Aid Corp., Tyco International Ltd.
WorldCom, which has been charged by the SEC with defrauding investors by improperly accounting for $3.9 billion in expenses, has until today to disclose how it accounted for the expenses.
The SEC's critics have included shareholder and consumer groups, members of Congress such as Sen. John McCain (R-Ariz.) and former Vice President Al Gore.
"They picked the principal lawyer and lobbyist for the Big Five accounting firms who, before coming to the government, went and pleaded with the SEC to open up loopholes for the accounting companies," Gore said in a speech Saturday.
Pitt, as a lawyer in private practice until taking the SEC helm last year, represented the big accounting firms and most major Wall Street investment firms, often in proceedings before the SEC. Pitt took exception, however, at Gore's characterization that the list of former clients makes Pitt biased in their favor, thus preventing him from doing his job as SEC chief.
"I took an oath of office and I'm proud of what we're achieving and there's more to come," Pitt said, adding that he "absolutely" believes the criticism against him and the SEC is political.
Pitt's television interview yesterday came as the Senate prepares to vote as early as next week on a bill sponsored by Senate Banking Committee Chairman Paul Sarbanes (D-Md.) to toughen federal oversight of the accounting industry. The accounting industry, which opposes the proposal, views the bill as much tougher than similar legislation the House passed earlier this year.
The SEC has proposed its own plan for better oversight, but the plan, largely thought up and championed by Pitt, has been criticized for essentially letting the accounting industry have the same level of influence it now has in setting auditing standards.
