A recent GAO report, (No. 03-339), on the selection process of Public Company Accounting Oversight Board (PCAOB) members is a searing indictment of the SEC. Newspaper coverage at the time indicated some of the problems including the SEC Chief Accountant's failure to alert Commission members, other than Chairman Harvey Pitt, about William Webster's role as head of the audit committee for U.S. Technologies.

But a thorough reading of the report reveals that doesn't even begin to scratch the surface. The GAO concludes, "The overall process that emerged was neither consistent nor effective and changed and evolved over time." It finds that there was a breakdown of the selection and vetting (examining the suitability) process attributable to a number of factors including an inability to agree to a formal process, insufficient communications between SEC staff and the Commissioners, and a lack of articulated selection criteria. The final slate of candidates wasn't even chosen until the eve of the Commission's vote.

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