Still struggling to regain their good name after a string of well-publicized accounting scandals, accountants around the nation were smeared with yet another round of unfavorable publicity. The media accused accountants of lobbying to gain control of appointments to the new accounting oversight board, fueling a sense of public outrage so strong the White House felt obliged to step in with an unusual offer of help and support for U.S. Securities and Exchange Commission (SEC) Chairman Harvey Pitt.
Sample quotes from the press:
"Most American businesses are dumb about politics," wrote the Wall Street Journal, "but the accounting trade seems positively obtuse. Earlier this year, its resistance to any reform bill all but invited Congress to intrude with harsher new legislation. Now the geniuses are back again, trying to shoot down a sensible choice to lead the new accounting standards board. . . You'd think the bean counters would realize that a respected cleanup man is exactly what they need to restore some public trust in their trade." ("Fighting Mr. Biggs," October 4, 2002.)
"It is especially shameful that the accounting industry is trying to derail the appointment of John H. Biggs, the chairman of the TIAA-CREF pension plan and someone who could clean up the industry," wrote the New York Times. "It would be a disgrace if Harvey L. Pitt, the chairman of the Securities and Exchange Commission, caved in to pressure from his former clients on Mr. Biggs. Investors have learned the hard way to trust their eyes, not their ears. And they are watching." ("On Reform, It's Time to Walk The Walk," October 6, 2002.)
With stock prices plunging to five- and six-year lows, the White House announced it is sending Anne Womack, an assistant press secretary, to the SEC as a senior adviser to Chairman Pitt. The Financial Times said the move was designed to help the reputation of the chief U.S. financial regulator, which is threatened by the Biggs affair. ("SEC Chief in Political Mire Over Watchdog," October 4, 2002.) The FT later reported that Chairman Pitt vigorously defended prior communications, saying, "Any criticism of SEC communications has absolutely no validity in my view, and certainly no application to my seeking Anne out." ("SEC chief says critics planted false stories," October 6, 2002.) The outrage against accountants' shameful lobbying was not addressed.