Cost of corporate abuses estimated at $5 trillion
By Marcy Gordon
WASHINGTON The string of accounting failures at big companies in the last year has cost U.S. households nearly $60,000 on average as some $5 trillion in market value was lost, a member of the Securities and Exchange Commission said yesterday.
They were "spectacular failures," SEC Commissioner Paul Atkins noted in a speech, ticking off the high-profile cases of Enron, WorldCom, Adelphia and Tyco International.
Atkins did not say how the estimated cost to Americans of the accounting scandals was derived. An aide later said he did not know the origin of the figures.
The SEC whose chairman, Harvey Pitt, resigned under pressure last week is committed to protecting investors amid a crisis of public trust, Atkins said.
"We are working hard to be more vigorous, more aggressive," he told the Federalist Society, a conservative lawyers' group.
The White House, meanwhile, said it was pressing forward with its search for a successor to Pitt.
"The president said he wants to move as quickly as possible," spokesman Scott McClellan said.
Assistant Attorney General Michael Chertoff has been among those rumored as possible successors, but he signaled strongly yesterday that he is unlikely to take over the top SEC post.
"Michael Chertoff is happy in the job he currently holds," said his spokesman, Bryan Sierra.
A report issued last month by the "No More Enrons" coalition, partially paid for by consumer groups and labor unions, said the corporate scandals have cost Americans more than $200 billion in lost investment savings, jobs, pension losses and tax revenue.
Atkins voted with on Oct. 25 to appoint former FBI director William Webster as head of a special accounting oversight board. The two Democratic commissioners bitterly opposed Webster's selection.
An ensuing flap over Pitt's failure to tell his fellow commissioners before they voted that Webster had headed the audit committee of a company now facing fraud accusations led to Pitt's resignation on Election Day. Webster resigned as head of the oversight board on Tuesday.