The SEC goes AWOL

Chairman Harvey Pitt is as bold a Wall Street watchdog as Scooby Doo.

Topics:

You know things have really gotten out of hand when the most scathing attacks on corporate greed and Wall Street malfeasance are being launched not by knee-jerk business haters and anti-globalization Jeremiahs but from the glittering towers of corporate America.

Surveying the view from his No. 2 perch on the Forbes 400, Warren Buffett, the grand pooh-bah of American capitalism, opened fire with both barrels this month when he told an audience of more than 10,000 Berkshire Hathaway shareholders that Wall Street loves a crook, investment bankers don’t care about investors, stock-option-engorged CEOs are shameless, and American business is teeming with fraud. Come on, Warren, tell us how you really feel.

With big business in such a sorry state, what we need more than ever is a courageous crusader at the helm of the Securities and Exchange Commission, someone who will do everything in his power as America’s top securities cop to root out corporate corruption and restore the public’s trust.

Instead, we have Harvey Pitt, a chairman so ineffectual and compromised that immediately after his commission adopted a set of feeble, industry-generated ethics rules for stock analysts last week, he turned around and said: “One of the questions we must ask ourselves is whether these proposals have teeth and bite.” Isn’t that a question he should have asked before rubber-stamping the toothless, biteless regulations?

Pitt is the wishy-washiest watchdog since Scooby-Doo.

Now I really hate to say I told you so (actually I don’t hate it; I love it — after all, honesty should begin at home), but back in December this column called for Harvey Pitt to resign before the year was out on the grounds that naming as the SEC chairman a person who had made a career out of butting heads with it was a little like naming Osama bin Laden to run the Office of Homeland Security.

Since then Pitt has done everything in his power to prove me right. He spinelessly coddled his old pals in the accounting industry, allowing them to continue to double-dip as highly paid consultants, took halfhearted sloppy seconds on the New York attorney general’s probe of Wall Street stock shenanigans, and raised the red flag on conflicts of interest by holding meetings with former clients currently under investigation by the SEC.

Forget corporate watchdog: How about corporate lapdog?



Pitt’s mishandling of the job comes at the very moment when the average shareholder desperately needs a champion. In a recent letter to his shareholders, Buffett described himself as “disgusted by the situation, so common in the last few years, in which shareholders have suffered billions in losses while the CEOs, promoters and other higher-ups who fathered these disasters have walked away with extraordinary wealth. To their shame, these business leaders view shareholders as patsies, not partners.”

Last week, the recognition that the SEC was failing in its “primary mission” — which is, as its own Web site boasts, to “protect investors” — led even the Wall Street Journal and London’s Financial Times to finally join this solitary Greek chorus and call for Pitt’s ouster.

The Journal ended its biting editorial by deriding the White House’s ludicrous claim that Pitt was doing “a great job getting tough on corporate misconduct”: “We doubt,” read the editorial, “anyone at the White House really believes that. At least we hope they don’t; because no one anywhere else does.”

I’m not even sure that Pitt believes it. Indeed, when I saw him 10 days ago at the White House Correspondents’ Dinner, I asked him what he thought of the latest wave of corporate misconduct stories. “There is no doubt,” he told me with confidence, “that we need to find out if some companies went too far.” Find out if some companies went too far? Gee, Harvey, are you sure you want to go out on a limb like that?

Talking to Pitt about corporate greed is a lot like talking to Cardinal Law about pedophile priests. It’s crystal clear that these guys just don’t get it.

Let’s hope that Washington proves more responsive than the Catholic hierarchy. Perhaps the outrage coming from Buffett and the other holy fathers of the free-market faith will serve as a wake-up call to those charged with cleaning up post-Enron America.

But I wouldn’t count on it. It’s really not in Harvey Pitt’s DNA to even notice the stink wafting up from the corporate sewer, let alone get down into the muck and clean it up.

Arianna Huffington is a nationally syndicated columnist, the co-host of the National Public Radio program "Left, Right, and Center," and the author of 10 books. Her latest is "Fanatics and Fools: The Game Plan for Winning Back America."

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 11
  • Close
  • Fullscreen
  • Thumbnails
    Burger King Japan

    2014's fast food atrocities

    Burger King's black cheeseburger: Made with squid ink and bamboo charcoal, arguably a symbol of meat's destructive effect on the planet. Only available in Japan.

    Elite Daily/Twitter

    2014's fast food atrocities

    McDonald's Black Burger: Because the laws of competition say that once Burger King introduces a black cheeseburger, it's only a matter of time before McDonald's follows suit. You still don't have to eat it.

    Domino's

    2014's fast food atrocities

    Domino's Specialty Chicken: It's like regular pizza, except instead of a crust, there's fried chicken. The company's marketing officer calls it "one of the most creative, innovative menu items we have ever had” -- brain power put to good use.

    Arby's/Facebook

    2014's fast food atrocities

    Arby's Meat Mountain: The viral off-menu product containing eight different types of meat that, on second read, was probably engineered by Arby's all along. Horrific, regardless.

    KFC

    2014's fast food atrocities

    KFC'S ZINGER DOUBLE DOWN KING: A sandwich made by adding a burger patty to the infamous chicken-instead-of-buns creation can only be described using all caps. NO BUN ALL MEAT. Only available in South Korea.

    Taco Bell

    2014's fast food atrocities

    Taco Bell's Waffle Taco: It took two years for Taco Bell to develop this waffle folded in the shape of a taco, the stand-out star of its new breakfast menu.

    Michele Parente/Twitter

    2014's fast food atrocities

    Krispy Kreme Triple Cheeseburger: Only attendees at the San Diego County Fair were given the opportunity to taste the official version of this donut-hamburger-heart attack combo. The rest of America has reasonable odds of not dropping dead tomorrow.

    Taco Bell

    2014's fast food atrocities

    Taco Bell's Quesarito: A burrito wrapped in a quesadilla inside an enigma. Quarantined to one store in Oklahoma City.

    Pizzagamechangers.com

    2014's fast food atrocities

    Boston Pizza's Pizza Cake: The people's choice winner of a Canadian pizza chain's contest whose real aim, we'd imagine, is to prove that there's no such thing as "too far." Currently in development.

    7-Eleven

    2014's fast food atrocities

    7-Eleven's Doritos Loaded: "For something decadent and artificial by design," wrote one impassioned reviewer, "it only tasted of the latter."

  • Recent Slide Shows

Comments

0 Comments

Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>