Monday, Oct. 28, 2002 | 9:04 a.m.
Accounting scandals helped spur the stock market's plunge this year, pointing out the need for new legislation to address accounting abuses. But several months ago President Bush and the Republican House leadership were blocking passage of tough reforms. Ultimately, fearing a voter backlash, Bush and the GOP House signed off on the Democratic Senate's reforms, which also included a long overdue infusion of money for the short-staffed Securities and Exchange Commission. The extra money was to hire more investigators and lawyers so that the agency could do its job.
But now that the political heat from the issue has died down, President Bush has reneged on his commitment to beef up the SEC, urging Congress to provide the agency with 27 percent less funding than what the new accounting reforms had authorized. Bush's failure to keep his word is a disgrace. It also is discouraging that the SEC has rejected the near-universal choice of reformers -- including many of those on Wall Street -- to head a new oversight board of the accounting industry. The SEC passed over John Biggs, the head of a large pension system, after pressure was placed on the agency by the White House, top Republicans and the accounting industry -- they all worried Biggs would be too tough. Instead the SEC voted for William Webster, the former head of the FBI and the CIA, to head the new accounting board. Webster is a fine man, but he doesn't have the same familiarity with accounting issues that Biggs does.
If another accounting scandal occurs, or the markets dip again because investors lose confidence in the SEC's ability to do its job, we know the central figure to blame for a lack of leadership: President Bush.
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