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News > Companies
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Congress asks KPMG, Pitt for info
Democrats in Commerce and Energy Committee ask for information on meeting between KPMG, Pitt.
May 7, 2002: 7:56 PM EDT

NEW YORK (CNN/Money) - Ranking Democrats from the House Energy and Commerce Commission have asked the Securities and Exchange Commissioner and KPMG LLP's chairman to provide accounts of a meeting last week that triggered ethics concerns.

KPMG Chairman and CEO Eugene O'Kelly and SEC Harvey Pitt held what O'Kelly described as an "introductory" meeting on April 26. But the private meeting has drawn criticism because KPMG is reportedly under investigation by the SEC for its role as auditor of Xerox. Corp.

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KPMG is a client of Pitt's former law firm, Fried, Frank, Harris, Shriver & Jacobson.

KPMG has come under scrutiny for its auditing of former client Xerox. In April, Xerox agreed to pay $10 million to the SEC to settle fraud charges against the company. Regulators filed a civil complaint in federal district court alleging that between 1997 and 2000, Xerox used a variety of "accounting actions" and "accounting opportunities" to meet or exceed Wall Street expectations and hide its true performance.

The SEC has issued "Wells" notices to KPMG and several employees, indicating that the regulator will recommend that civil charges be filed against the firm and its staff, the Wall Street Journal reported Monday.

In a letter to Pitt and O'Kelly, Rep. John Dingell, D-Mich., Rep. Edward Markey, D-Mass., and Rep. Edolphus Towns, D-N.Y. requested information about the circumstances of the meeting, all parties present and what was discussed.

The representatives also requested a report from the SEC's general counsel "as to the controls that have been put in place to ensure compliance with relevant ethics, conflict-of-interest, and recusal rules, including to ensure that there are no inappropriate contacts between Chairman Pitt and his former clients, and how those controls were applied and actually operated in the context of the meeting."

The information is due by close of business Friday, May 17.

Pitt has denied that the meeting with O'Kelly was intended to discuss Xerox. "Upon becoming CEO of KPMG, Mr. O'Kelly asked to introduce himself to me, and we met briefly for that purpose," Pitt said in a statement Monday. "Neither Mr. O'Kelly nor I discussed any enforcement matter, including Xerox."  Top of page






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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.