Every once and awhile after I finish reading something, I do a double take, and read it over and over again not quite believing what I am seeing. The last time it happened was when Joe Berardino, the managing partner and CEO of Andersen, wrote an op-ed column for the Wall Street Journal on the broad lessons to be learned from Enron with regard to financial reporting. Well, it happened again and it also has an Enron connection.
As you probably saw in the newspapers last week, Former SEC Chairman Harvey Pitt is forming Kalorama Partners LLC, a consulting firm that will specialize in crisis management and corporate governance issues. Jeff Stimpson, an associate of mine, asked me if it wasn't crisis creation instead based on Pitt's record as SEC Chair.
Let's see, there was his meeting with KPMG when the firm was under SEC investigation, then there was his request for a raise and the elevation of the SEC to cabinet status, and my favorite, the complete mishandling of the PCAOB chair selection process involving former FBI Director William Webster.
I guess PItt expects that his brief tenure at the SEC not to be a concern for potential clients that his firm is now targeting. Maybe he thinks they will view it as a "temporary" glitch in an illustrious career or they will see his extensive lobbying experience and knowledge of the SEC as the reason for hiring him.
But I just don't see it. How can "crisis management" and Harvey Pitt's name be used in the same sentence? Arguably, he violated every rule for effective crisis management in his time as SEC chair. It appeared that Pitt acted dictatorially, failed to see problems as they arose, paid virtually no attention to public perceptions, didn't recognize obvious political realities, and saw no need for damage control.
Do you believe for a second that a company experiencing a professional crisis would even consider hiring Pitt as an advisor?
Despite saying that, no doubt I might be proven wrong and yet amazed once again when Pitt's firm signs up a couple of big clients.
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