Spin watch 2002

This is from the transcript of yesterday's Meet the Press. Rep. Billy Tauzin is a wholly owned-subsidiary of corporate America, so we can see the spin taking shape -- blame it on Arthur Andersen, which is conveniently going out of business. Arthur Levitt is the former chair of the SEC, who's attempts to reform accounting practices were blocked by, uh, Tauzin.

Transcript for July 7 MR. LEVITT: Let me try to correct a point that Congressman Tauzin made that the Andersen situation was unique and peculiar to Andersen. I know in our experience during my eight years in Washington was that the problems at Andersen are not unique and similar problems have been found at every one of the other now big four firms, so...

REP. TAUZIN: Well, let me challenge you on that, Arthur. What we learned from the four other major firms was that every one of them had a quality review board that issued mandatory rulings upon its local auditors. Arthur Andersen was the only one that issued advisory rulings only. In the Enron case, Arthur, we found out that the local auditors were even responsible for getting people fired at the Chicago office who disagreed with them.

MR. LEVITT: Then you...

REP. TAUZIN: That didn't occur at any other major accounting firm.

MS. MITCHELL: Mr. Levitt.

MR. LEVITT: Look at the cases brought by the commission. You'll see an equal number of cases at KPMG where we brought...

MS. MITCHELL: One of the other big accounting firms.

MR. LEVITT: Yes, where we brought the very first case for an accounting firm acquiring a brokerage firm, a clear conflict of interest.

REP. TAUZIN: Well, Ar...

MR. LEVITT: Every one of those firms have had major, major scandals involved among their clients.

REP. TAUZIN: Arthur, look at that.

MR. LEVITT: Its irrelevant to say that it’s just Arthur Andersen. This problem is pervasive.

I'm not the only one who noticed the oleaginous hypocrisy of Tauzin:

The New Republic Online: Accounting Gimmicks You gotta admire Tauzin's audacity. Tauzin's longstanding ties to the accounting industry would seem to diminish his capacity for indignation when it comes to accounting scandals. (Arthur Andersen was his single biggest contributor in the last election cycle.) Even more embarrassing, Tauzin played a key role in derailing proposed regulations that might have prevented the whole Enron scandal from happening--or, at least, from getting so out of hand. In 2000, Arthur Levitt, then chairman of the Securities and Exchange Commission, proposed reforms that would have prevented accounting firms from providing both auditing and consulting services to the same company--the very thing that Arthur Andersen did for Enron. As Peter Beinart (among others) has recounted, Tauzin promptly swung into action, badgering Levitt with objections and, ultimately, threats that buried the reform. In his column, Peter suggested that Tauzin "should be a pariah." Instead, Tauzin is trotting around on national television, making himself look good.