"It appears that the accounting firms, the Republicans and now Chairman Pitt are trying to circumvent the Sarbanes legislation by making certain that the board does not include any reform-minded persons," said Lynn E. Turner, a former chief accountant at the commission during the 1990s who has been advising officials about implementing the new law. "If we lose Biggs, we lose a reform-minded board."
Biggs, who was described on Thursday by friends as still willing to serve, said through a spokesman that the commission had not offered him the job and declined to comment further. Despite the conversation with Pitt, his candidacy is not dead; Biggs continues to enjoy widespread support among the other commissioners and a number of lawmakers.
Goldschmid declined to comment about the selection process. Other officials said it was not clear whether Pitt's new stance was an effort to placate the accounting profession and its supporters in Congress or was simply a negotiating strategy to win the appointment of some candidates he prefers for the board who are opposed by other commissioners. As one example, officials say that Pitt strongly favors Donald J. Kirk, a Columbia Business School professor, for one board seat, while other commissioners think Kirk is too sympathetic to the industry.
The new oversight board is viewed as an important instrument to calm the roiled stock markets and restore credibility to the oversight of a profession that has lost one of its major firms, Arthur Andersen, due to its criminal involvement in the Enron scandal, and which is still faced with a steady stream of accusations involving conflicts of interest. With Biggs winning support for the job from top officials, the new board looked as if it would be off to a strong start.
But representatives from the accounting industry and its main lobbying organization, the American Institute of Certified Public Accountants, privately balked. They complained about the appointment to SEC and administration officials and Republican lawmakers, including Rep. Michael Oxley, the chairman of the House committee that has oversight responsibilities for the agency.
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