WASHINGTON – President Bush and top aides are losing patience with Harvey Pitt but have not decided whether to seek his ouster as Securities and Exchange Commission chairman, a senior White House official said Saturday.
Pitt is facing an investigation by the SEC's inspector general into whether he concealed from his fellow commissioners information about former FBI Director William Webster before they named him to head a new accounting oversight board.
Webster headed the audit committee at U.S. Technologies, which is being sued by investors who say they were defrauded of millions of dollars. The company also reportedly is under federal investigation. Last year, during Webster's tenure, the audit committee dismissed the company's outside accounting firm.
The White House official, speaking on condition of anonymity, said Bush and his chief of staff, Andrew Card, are angry that Pitt put Card in the situation of urging Webster to accept the new post without Card's knowing about Webster's affiliation with U.S. Technologies' audit committee. That anger also is part of long-simmering frustration with Pitt's political judgment, the official said.
Pitt, who first worked at the SEC in the late 1960s and built his career as an attorney in appearance-conscious Washington, has been criticized for meeting with the heads of companies under SEC investigation and for his close ties to the accounting industry -- at a time when the SEC is investigating major accounting fraud at big corporations. Pitt represented the Big Five accounting firms while in private practice.
In July, Pitt asked that the SEC be elevated to Cabinet-level status with a corresponding pay raise for the chairman. Senate Majority Leader Tom Daschle, D-S.D., responded that the request, which never was acted upon, demonstrated that Pitt was "not qualified to serve in that position."
Despite increasing concerns, Bush still believes Pitt has done a good job cracking down on corporate wrongdoers and that no decision has been made on whether the White House would seek his resignation -- and none will come before Tuesday's elections, said the White House official.
"We want to see how the [SEC] investigation plays out and then we'll cross that bridge," the official said.
The official said Bush does not have the power to remove Pitt but that the White House expects that he would resign at some future date if the president's advisers asked him to leave.
White House spokesman Ari Fleischer told reporters traveling with the president to a political stop in Tennessee on Saturday that Bush "continues to have confidence in Harvey Pitt."
Asked if Bush and Pitt have spoken recently, Fleischer replied: "They have not. ... The president does not talk to everybody in his government every day."
Fleischer said the internal investigation should move ahead because "that's the appropriate place for everything to be looked at" in the Webster matter.
Fleischer said he had not spoken Saturday to Card, but that Card thinks the inspector general is the right person to handle the situation.