Numbers Game
Editorial by Rick Reiff
THE STATE ASSEMBLY’S BUSINESS AND PROFESSIONS COMMITTEE IS
jumping into Enron’s book-cooking this week with a hearing on “Accounting Practices: Corporate Audits: Protection of Consumers, Employees and Shareholders.”
Who’s the lead witness? Why, trial lawyer Bill Lerach. This is akin to having Johnnie Cochran kick off a hearing on reforming the LAPD,it tends to skew the debate.
Committee chairman Lou Correa, D-Santa Ana, defends his leadoff hitter, who happens to be a big contributor to the Democratic Party. Correa sent out a press release touting Lerach as “the leading securities lawyer in the United States.” In some other circles he’s known less flatteringly as “king of the strike suits” and a corporate ambulance chaser.
Correa says he’s showcasing Lerach partly to draw attention to the hearing: “The intent is not to use him as the blueprint (for reform) but to let people know we mean business.”
Clever, perhaps. Correa, who has a reputation as a moderate among the liberal crazies in Sacramento, insists he wants to hear from all sides. But while the hearing will include consumer advocates and plaintiffs’ experts, as of press time Correa said no representative of a Big Five accounting firm had accepted his invitation to speak.
That in itself is no reason for Correa not to press ahead. He argues plausibly that he has a public responsibility to stay on top of the issue.
Still, exactly what do state lawmakers think they can constructively do about the Enron accounting situation that Congress and the SEC aren’t already considering? And whatever his motivation for doing so, Correa, by making the partisan Lerach the poster boy for the inquiry, has already damaged his committee’s credibility.
, Rick Reiff
