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Accounting Board to Keep 1st Meeting Private

November 12, 2002|From Associated Press and Times Staff

The new board to oversee the accounting industry, steeped in controversy over the selection of former FBI and CIA Director William Webster as its chairman, plans to hold its first meeting behind closed doors Wednesday.

The controversy over Webster already has brought the resignations of Harvey L. Pitt, chairman of the Securities and Exchange Commission, and Robert Herdman, the SEC's chief accountant.

The five-member accounting oversight board plans to privately discuss in Washington administrative matters, such as office space and staff, several people close to the matter said Monday. They spoke on condition of anonymity.

The closed-meeting decision prompted an objection from Barbara Roper, director of investor protection at the Consumer Federation of America.

"The whole point of creating this board was to restore investor confidence," she said. "They will further the impression that the public interest isn't being served."

But one member of the board, speaking on condition of anonymity, said the first meeting was likely to be "as exciting as watching paint dry" because of the mundane nature of the board's first chores.

Unlike the SEC and other government regulatory agencies, the new oversight board -- created by Congress in summer -- isn't subject to so-called "sunshine" laws requiring that meetings be open to the public.

Webster was chosen to head the board over the objections of the SEC's two Democratic commissioners. After the 3-2 vote approving Webster on Oct. 25, it was revealed that Webster had served as a director of a company that had fired its accounting firm in 2001.

Webster told Pitt about his service on the board of U.S. Technologies, but Pitt apparently did not tell the other four SEC commissioners before the vote.

That sparked a firestorm in Washington, driving Pitt to resign last week. Herdman, whom Pitt had asked to look into Webster's record, also quit last week.

Webster said last week he will step aside if he decides he can't be effective heading the board because of the controversy.

President Bush, in comments last week, would not indicate whether he wanted Webster to remain, saying he wanted to see the results of an internal SEC investigation into the selection process for the new board.

Webster did not return a telephone call seeking comment Monday.

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