I am sure glad we cleaned up "cronyism" in Thailand and the other SE Asia countries. Now maybe we can turn our attention a little closer to home!
arthur -----Original Message----- From: Tom Walker [mailto:timework@;vcn.bc.ca] Sent: Thursday, October 31, 2002 11:59 AM To: Cordell, Arthur: ECOM; [EMAIL PROTECTED]; [EMAIL PROTECTED] Subject: Re: Moral hazard (was Re: Or poorer More just posted on NYT about the Webster/SEC story. Mr. Webster's "crime" would appear to only be that he did not provide adequate oversight. This, I suppose, qualifies him for a position overseeing the accounting profession. Harvey Pitt chose not to pass on the information about fraud allegations to SEC board members voting on the nomination of Webster. Any chance that Webster and Pitt are gone before the end of the weekend? I doubt it. Any chance that this will trouble the markets? I doubt it. Any chance that this will affect the outcome of the midterm elections? I doubt it. These things are all too important to be perturbed by issues of competence and judgement. "Mr. Webster stepped down from the board of U.S. Technologies in July after he said he was told that it could no longer provide liability insurance for directors and officers against claims from investors. "The company invests in young Internet companies and runs a contract labor company using prison inmates. It has had a variety of legal and regulatory difficulties. While Mr. Webster headed the audit committee, it was delisted from trading on Nasdaq for failing to make timely filings with the S.E.C. "Lawyers involved in the criminal investigation said there was no evidence that Mr. Webster violated any laws and he was not the target of the inquiry. But critics of his selection to the oversight board said the audit committee's decision not to investigate thoroughly and make public its findings demonstrated that he lacked the qualifications to lead the board. ``Even if we find out that Webster was totally passive in this process, it is an indictment on his ability to run the accounting oversight board,'' said James D. Cox, a professor of securities and corporate law and author of a textbook on accounting who teaches at Duke. ``To let something like this go shows really bad judgment, and I think is automatically disqualifying. At a minimum, the audit committee had an obligation to investigate. This is exactly the kind of situation that the accounting oversight board is supposed to change, and that the new law creating the oversight board is supposed to fix.'' "Mr. Webster said he did not think his experience at U.S. Technologies ``would impair my ability to serve.'' Tom Walker
