July 09, 2002
The Troubles of Harvey Pitt

Joshua Micah Marshall explains why it is that no politician can be found in Washington to back SEC Chair Harvey Pitt.


Talking Points Memo: by Joshua Micah Marshall

I don't have much sympathy for [SEC Chair Harvey] Pitt. But the calls for his resignation don't seem to have much to do with anything he's actually done. Or at least not anything he's done since the Senate (if I recall right, unanimously) confirmed him as head of the Securities and Exchange Commission.

The problem for Pitt is that his calling card was the proposition that the SEC was simply too harsh on corporate America and that anti-business busybodies like Pitt's predecessor Arthur Levitt needed to just give the CEOs a *$%#*%* break and let them get about the business of doing the right thing without so much un-fun big government oversight. Now of course we know that at just the time Pitt was parading these views corporate America was actually becoming a Hieronymus Bosch painting of fraud, skullduggery and 'aggressive accounting,' and that, if anything, the SEC hadn't done nearly enough to make folks behave.

That of course makes Harvey Pitt into something like the Neville Chamberlain of corporate governance. And when you consider that even Neville Chamberlain wasn't really quite Neville Chamberlain that's actually saying quite a lot.

(July 8th, 2002 -- 9:42 PM EDT // link)

Hi. I'm Harvey. And I was in the wrong place at the wrong time...

I don't know if Harvey Pitt has uttered these words in the last few days. But he should ... especially if he can find the meeting place of the DC twelve-step group for political appointees who through a mix of cruel fate and poetic justice are about to receive the Washington equivalent of a vicious melvin and a two-minute-plus swirly.

If you're harboring any doubts about whether the corporate corruption scandal has political legs, take a gander at Mr. Pitt and watch your doubts melt away. As nearly as I can tell Tom Daschle, Nancy Pelosi, John McCain and just about every other politician who can get a reporter on the phone is now calling for Pitt to resign. And even the administration's defenders are a bit tepid in their defenses.

Pitt is, in a word, toxic -- as welcome at your political fundraiser as a handfull of plutonium. He's the poster boy for the hot political evil of the day. And everyone and their uncle wants to call for his resignation because there's absolutely no political downside to it.

Got any names of politicians who called on Tom White to resign? Nope? I didn't think so.

Don't get me wrong. I don't have much sympathy for Pitt. But the calls for his resignation don't seem to have much to do with anything he's actually done. Or at least not anything he's done since the Senate (if I recall right, unanimously) confirmed him as head of the Securities and Exchange Commission.

The problem for Pitt is that his calling card was the proposition that the SEC was simply too harsh on corporate America and that anti-business busybodies like Pitt's predecessor Arthur Levitt needed to just give the CEOs a *$%#*%* break and let them get about the business of doing the right thing without so much un-fun big government oversight. Now of course we know that at just the time Pitt was parading these views corporate America was actually becoming a Hieronymus Bosch painting of fraud, skullduggery and 'aggressive accounting,' and that, if anything, the SEC hadn't done nearly enough to make folks behave.

That of course makes Harvey Pitt into something like the Neville Chamberlain of corporate governance. And when you consider that even Neville Chamberlain wasn't really quite Neville Chamberlain that's actually saying quite a lot.

In any case, Pitt is really no better or worse than the entire administration. He's a pretty good advocate of what was -- until a few weeks ago -- the administration's stance on corporate government and oversight. Watching Pitt accuse Arthur Levitt of going too easy on CEO shenanigans is more than a touch comic. But it's no more a case of ideological cross-dressing than what the president is going to try to pull off tomorrow. He's just first in line to get the treatment.

-- Josh Marshall
Posted by DeLong at July 09, 2002 08:05 AM

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Comments

Pitt was brought in by a corrupt administration for one purpose and one purpose only - to castrate the SEC. The Bush/Cheney crew wouldn't have picked him, unless they thought that they could trust him.

Now, he (and Bush) are talking tough about corporate crime. Then again, OJ promised to find the 'real killers'.

I like the idea of bringing in Giuliani.

Barry

Posted by: Barry on July 9, 2002 10:22 AM

Pitt is just a footsoldier. It wasn't Pitt who requested a zero-growth, personnel-cutting budget. It was Bush. Okay, maybe Pitt should resign in protest. But by going he becomes the scapegoat.

Posted by: Eric M on July 9, 2002 12:36 PM

Actually, Pitt wasn't a footsoldier - he was a lobbyist for the very forces who sought a zero-growth budget (and anything else that they could get).

And he might become a scapegoat, true. Or he might become the case which breaks the Bush II administration's aura of invincibility.

Barry

Posted by: Barry on July 10, 2002 05:51 AM

Quite right Barry,

He was, when practicing for his law firm, well able to overstep the bounds necessary to protect his corporate clients.
A little delving into the past reveals activity which made Enron et al, possible....
Foisted by his own pertard perhaps but at what cost to millions of investors.

The following quotes present an interesting comparison ....
Both were made with regard to one of Harveys Corporate clients and see a man who is quite prepared to condon and even protect fraudsters.

If such blatant greed had not been exhibited by Enron, Worldcom, etc executives, then would our Harvey just meerly have been happy to turn a blind eye?
It was not the SEC whose oversight exposed these financial scandals .......

Quote
"The Names (investors) are being asked to forego claims against Lloyd's insiders (for) one of the most far-reaching and serious insurance frauds of record anywhere," U.S. District Judge Robert Payne wrote in August 1996. In the alleged fraud, Lloyd's "knowingly" shifted risks from earlier policies to the new names, he said.


Quote
"These are rich people who are trying to renege on their obligations to millions of policyholders," said Lloyd's attorney, Harvey Pitt, co-chairman of the Fried, Frank, Harris, Shriver & Jacobson law firm in Washington and New York."

The Jury meanwhile has yet to deliberate on the case of Harvey...................

Posted by: Dave on August 25, 2002 06:10 AM
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