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CNN Live At Daybreak

Pitt Proposes Private Agency To Oversee Accounting Profession

Aired January 18, 2002 - 05:33   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Securities and Exchange Commission Chairman Harvey Pitt says the accounting industry's failures happened long before Enron's collapse though. He has unveiled a plan to create a new private sector agency to regulate the accounting profession.

CNN's Tim O'Brien takes a look.

(BEGIN VIDEOTAPE)

TIM O'BRIEN, CNN CORRESPONDENT (voice-over): In a rare news conference, SEC Chairman Harvey Pitt proposed a watchdog agency that resembles the state bar associations that regulate the conduct of lawyers with the power to disbar those who misbehave.

HARVEY PITT, SECURITY & EXCHANGE COMM. CHAIRMAN: The body should be empowered to perform investigations, bring disciplinary proceedings, publicize results, restrict individuals and firms who have failed to meet ethical or competence standards from auditing public companies.

O'BRIEN: Pitt said disciplinary proceedings would be expeditious and subject to SEC oversight. Meanwhile, investigators of the House Energy and Commerce Committee continue to sift through thousands of documents provided by Enron and Arthur Andersen. An e-mail from last February has now surfaced, indicating Andersen decided to retain Enron as a client only after a significant discussion of what it called "Enron's earnings" and the fact that it was "intelligent gambling."

Committee staffers are in Houston Thursday and Friday interviewing former and present Enron officials. It's not clear if Chairman Kenneth Lay would be among them.

The political side of the conflict is also heating up with Henry Waxman, the ranking Democrat on the House Government Reform Committee, issuing a report claiming that at least 17 policies from the president's energy plan were advocated by Enron or benefit Enron. Nonsense, says the White House.

ARI FLEISCHER, WHITE HOUSE SPOKESMAN: The allegation by Congressman Waxman that anything was put in that plan for political purposes is of itself a partisan waste of taxpayer money.

O'BRIEN: Fleischer said the White House will not explain to Congress or the media details of the meetings that it has had with Enron officials. There have been at least six, absent a showing of some wrongdoing, and said Fleischer, there has been no such showing.

(on camera): To many, perhaps most, this scandal is and may always be more about business than about politics, unless of course, you happen to live in Washington, where business and just about everything else, is politics.

Tim O'Brien, CNN Financial News, Washington.

(END VIDEOTAPE)

COSTELLO: That's certainly true.

Another footnote to the Enron story now. The chairman of the bankrupt energy giant is selling three of the four multimillion dollar properties he owns in Aspen, Colorado.

Two houses and one undeveloped lot went on the market after Enron posted third quarter losses of more than $1 billion. Interested? Kenneth Lay's broker said Lay is seeking about $15 million for the properties, just in case you are.

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