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William Webster, the Securities and Exchange Commission’s choice to lead its new accounting oversight panel, is expected to be long on enforcement but short on accounting expertise. The commission on Friday split 3-2 in the vote to appoint Webster, former head of the Central Intelligence Agency and Federal Bureau of Investigation. SEC Chairman Harvey Pitt and Republican commissioners backed Webster, while the panel’s two Democrats opposed him. The accounting panel is charged with setting standards for auditors, ensuring accountants obey federal securities law and investigating violations. Critics said Webster’s selection indicates that the audit board intends to shield the accounting industry from aggressive reform in wake of the Sarbanes-Oxley Act, enacted in August to fight corporate fraud. Harvey Goldschmid, one of the Democrats on the five-member commission, harshly condemned Webster’s appointment. “For me, this is a tragedy,” he said. “The board will begin life under a very dark cloud.” John Bogle, founder of mutual fund company The Vanguard Group of Valley Forge, Pa., said the appointment will shake “investor confidence in any reform we hope to have.” Webster, 78, a former judge and prosecutor, is a partner at Milbank, Tweed, Hadley & McCloy in Washington, D.C. Despite an extensive legal background, Webster lacks accounting and financial expertise, said Paul Lapides, director of the Corporate Governance Center in Kennesaw, Ga. “The leader of this organization needs to have an intimate knowledge of the subject matter,” Lapides said. “Accounting is complicated, and there is concern major problems will go over his head.” But others said Webster’s experience in law enforcement and intelligence make him a strong choice to uphold the audit board’s investigative function. “The board is going to be dealing with the heads of all the accounting firms in the country, and you’re going to need someone who is looked up to as an enforcer. Webster has that quality,” said Ven Palmer, counsel at Bingham McCutchen in San Francisco.

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