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. Last Updated: 07/27/2016

Political Brawl Erupts Over SEC Chairman

WASHINGTON -- The search led by U.S. Securities and Exchange Commission chief Harvey Pitt for a new top accounting regulator turned into a political brawl Wednesday as administration officials defended him against prominent Democrats who called for Pitt's removal.

The Democratic leaders of the Senate and House urged President George W. Bush in a letter to oust Pitt, who has become a lightning rod for renewed criticism of the administration's handling of the economy and what some see as its inability to overcome declining confidence among stock market investors.

They said Pitt's decision to back away from an earlier commitment to support John Biggs, a widely endorsed critic of the accounting profession, to lead a new accounting oversight board "represents the culmination of a pattern of behavior by Pitt that is steadily eroding the credibility of the SEC."

At a news conference on Capitol Hill, the Senate majority leader, Tom Daschle of South Dakota, said Pitt had "given the accounting industry a veto over who will head the new board."

But the letter from the Democrats seemed only to solidify -- at least for now -- White House support for Pitt.

"That's an old, tired cry," said White House spokesman Ari Fleischer, citing what he said was the agency's record number of enforcement actions and its confiscation of corrupt executives' illicitly earned money. "I think it's a political charge that has no merit and substance."

The criticism of Pitt comes as Democrats try to open a debate on the competence of the administration's economic team. The Democrats have been frustrated as the White House has drowned out their theme of economic mismanagement by focusing on growing concerns over Iraq.

Pitt has denied accusations that he has been too slow to respond to the wave of corporate corruption, saying that the agency has brought a record number of cases. But he has testified that significant provisions of the legislation that was signed by Bush were unnecessary. And he was attacked for holding private meetings with executives of companies that were former clients and are now under investigation.

He irritated some White House officials when he went to Congress without their knowledge three months ago and proposed unsuccessfully to have his position elevated to the status of Cabinet level, outranking such officials as the director of central intelligence, the head of the Environmental Protection Agency, and all the civilian heads of the various branches of the armed services.

Pitt, who left belatedly Wednesday for a brief trip to Brussels to meet with European regulators and talk before a group of accountants, could not be reached for comment. Christi Harlan, a spokeswoman at the SEC., said the president "has said nothing but good things about Harvey Pitt's tenure."