Thursday, May 04, 2006

Monicagate Prosecutor Goes After PCAOB

Kenneth Starr, prosecuting attorney for the impeachment of President Clinton eight years ago, is poised to represent the Free Enterprise Fund in a suit challenging the constitutionality of the Public Company Accounting Oversight Board. The legal theories set forth by Starr include excessive governmental enforcement power, violation of the separation of powers (too much power exercized by the executive branch) doctrine and insufficient accountability (no provision for executive discharge or legislative budgetary control). Not surprisingly, the PCOAB plans a vigorous defense as the AP believes that partial unconstitutionality could lead to the entire law being voided. The PCAOB announced plans to examine nine large CPA firms (including one Canadian firm) and review (on a three-year cycle) numerous smaller firms.

Starr's presence in the case will attract attention. Though I am far from a legal expert, my perception is that US Courts have not generally looked favorably on technical arguments for voiding federal intervention in recent years. Does Starr have a valid theoretical point? Perhaps, but I believe that the theoretical point, even if valid, will carry little weight in court here and that PCAOB will survive the challenge.


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