[Congressional Record Volume 148, Number 93 (Thursday, July 11, 2002)]
[House]
[Pages H4522-H4523]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   SECURITIES AND EXCHANGE COMMISSION

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Oregon (Mr. DeFazio) is recognized for 5 minutes.

[[Page H4523]]

  Mr. DeFAZIO. Mr. Speaker, the President gave a stunning speech the 
other day and talked about corporate responsibility. This is the new 
face of corporate responsibility, the chief law enforcement officer of 
the Securities and Exchange Commission. His name is Harvey Pitt. He is 
a former lobbyist for securities firms and accounting firms, and as a 
lobbyist, he opposed all reforms and tightening of regulations.
  He was not there at the President's speech and some would say, well, 
the President's trying to kind of hide this guy because he is an 
embarrassment. Well, no, despite the fact that some of us think there 
is a crisis in corporate ethics and the meltdown and the bankruptcies 
and the pension losses and the tanking of the stock market and all the 
basic outright thievery that was going on, he was at the beach on 
vacation, but it really does not matter much because Harvey Pitt is so 
conflicted he cannot vote as the chief law enforcement officer of the 
Securities and Exchange Commission.
  They were recently undertaking an enforcement action against an 
accounting firm. There were three commissioners present. They heard the 
evidence of the staff. It was compelling. They wanted to prosecute that 
firm, but Mr. Pitt had to say, oh, excuse me, they are my former 
clients, I represent them, I cannot vote. The other woman commissioner 
there said, gee, actually, I represented them, too; I cannot vote. So 
there was one commissioner left who could vote, a Clinton appointee, 
who did not have a conflict of interest. He voted to prosecute them, 
but then they appealed to an administrative law judge and said, hey, 
you cannot convict us with one vote, and in fact, the administrative 
law judge said you are right.
  So here we have the new push for corporate accountability and 
responsibility, and we have a Securities and Exchange Commission that 
cannot prosecute anybody because two of the three sitting members named 
by President Bush are so conflicted because these are their former 
clients and their future clients when they leave their so-called public 
service they cannot vote.
  So this is wonderful. We can talk about getting tough, but nobody is 
going to be prosecuted, fined or go to jail. It is a very interesting 
sort of turn of events.
  Mr. Pitt has had and said some pretty interesting things. Here is his 
philosophy as the chief law enforcement officer of the Securities and 
Exchange Commission. In general, Mr. Pitt said in November, My 
preferred approach to any regulatory issue is one in which the 
government's participation is as limited as reasonably possible.
  Well, he is at the beach and he cannot vote so I guess he is 
following his own provisos here.
  Then we have his other famous statement when he was first sworn in. 
He went up to his buddies on Wall Street, had lunch, had a great time, 
lot of champagne and stuff. They are celebrating his becoming their 
regulator because they knew they would not have to worry much, and he 
said and promised, ``a kinder and gentler place for accountants.'' The 
crooks could come to Harvey, share lunch, and it would be a kinder and 
gentler SEC.
  If my colleagues saw the President's speech, there was this wonderful 
backdrop. Corporate responsibility, it said time and time and time 
again so one would not miss the message, even though, of course, the 
President was not advocating anything new or anything stringent or 
anything that might really jeopardize any of his corporate friends and 
contributors. Actually, what most people in the public do not know is 
actually that was the punishment. There was already very stiff 
punishment levied on those Wall Street tycoons. They had had to write 
1,000 times on the wall ``corporate responsibility'' before the 
President's speech. That was their punishment, and that is about the 
only punishment they are going to get out of this administration.

                          ____________________