Top Democrat seeks Pitt's resignation; White House aides defend chairman's anti-fraud record

WASHINGTON (AP) _ Harvey Pitt is undermining public confidence in the Securities and Exchange Commission and should quit as chairman, succeeded by someone who can ``clean this mess up,'' the House's

Sunday, November 3rd 2002, 12:00 am

By: News On 6

WASHINGTON (AP) _ Harvey Pitt is undermining public confidence in the Securities and Exchange Commission and should quit as chairman, succeeded by someone who can ``clean this mess up,'' the House's top Democrat said Sunday.

White House advisers publicly praised Pitt's record as a corporate fraud fighter but offered no defense of his handling of the selection of former FBI Director William Webster to head a new accounting oversight board.

As a result of the latest controversy, President Bush and top aides are losing patience with Pitt but have not decided whether to seek his ouster, a senior White House official said over the weekend.

``People are wanting to regain their confidence in the way corporations are run and the way their stocks are handled. And he is doing everything but giving them confidence,'' said House Minority Leader Richard Gephardt, D-Mo. ``In fact, the way he's acting is tearing down confidence.''

Pitt is facing an investigation by the SEC's inspector general into whether he concealed from his fellow commissioners information about Webster's watchdog role at a company facing fraud accusations before they named him to head the new board.

Bush and his chief of staff, Andrew Card, are angry that Pitt put Card in the situation of urging Webster to accept the new post without Card's knowing about Webster's affiliation with U.S. Technologies' audit committee, said the White House official, who spoke on condition of anonymity. That anger also is part of long-simmering frustration with Pitt's political judgment, the official said.

The official said Bush does not have the power to remove Pitt but that the White House expects that he would resign at some future date if the president's advisers asked him to leave.

Gephardt and Senate Majority Leader Tom Daschle, D-S.D., have made clear their preference that Pitt resign, and GOP support has begun to erode with criticism over the weekend from Sen. Richard Shelby, R-Ala.

``I hope that he will do that so we can get somebody in there to clean this mess up,'' Gephardt said on ABC's ``This Week.''

White House advisers said on the Sunday talk shows that Pitt has performed well in leading the SEC's fight against business fraud. ``If you look at the record, the record is one of a tough crackdown against excesses and abuses in corporate America,'' adviser Karen Hughes said on ABC.

But when it came to the Webster matter, Hughes said: ``The White House was not involved in the vetting process, that's correct. ... We need to learn all the facts and see the results of the (SEC's) investigation.''

Aide Mary Matalin, asked whether Bush and Vice President Dick Cheney still have confidence in Pitt, said, ``No judgment is going to made about what the vetting process was until that investigation is cleared.''

Gephardt was asked whether there were mixed signals coming for the White House about Pitt.

``I'm not sure what they're doing, but they're destroying the public's confidence in our whole corporate investment financial system,'' he said.