|FOR IMMEDIATE RELEASE:||
CONTACT: Jesse Jacobs - 202-224-4524
|Friday, October 25, 2002||
Craig Davis - 202-224-7391
Senator Paul S. Sarbanes (D-MD), Chairman of the Banking, Housing, and Urban Affairs Committee, released the following statement today reacting to the process to appoint the members to the Public Company Accounting Oversight Board by the members of the Securities and Exchange Commission.
"The primary mission of the Securities and Exchange Commission is the protection of investors. This has been fundamental to the health of our capital markets and economy.
"Critical to the achievement of the SEC's mission of investor protection is the appearance and reality of independence from political and industry pressures. The Canons of Ethics adopted by the SEC for its members in 1958 provides that, "under the law, this is an independent agency, and in performing their duties, members should exhibit a spirit of firm independence."
"Regrettably the process by which the members of the Public Company Accounting Oversight Board were selected fails to meet the standard of a "spirit of firm independence" from political and industry pressures.
"By appearing to bow to political and industry pressures with respect to selecting John Biggs, the head of TIAA-CREF, one of our country's largest pension funds, and an individual universally admired for his commitment to accounting reform and his expertise on auditing issues, Chairman Pitt missed the opportunity to put in place an Oversight Board with wide credibility.
"Chairman Pitt failed to build a consensus within the Commission, as he publicly promised he would do, for a strong Oversight Board that would command instant respect by the investing public. That the selection process appears to have been shaped by political and industry influences only compounds this failure. The country would be best served if Mr. Pitt stepped down as Chairman of the SEC."