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<?xml:namespace prefix = st1 ns = “urn:schemas-microsoft-com:office:smarttags” />Jody Clarke, 202.331.2252
Washington, D.C., December 20, 2006—Tomorrow the U.S. District Court of the District of Columbia will hear arguments in a lawsuit brought by the Free Enterprise Fund and the Competitive Enterprise Institute to have the Public Company Accounting Oversight Board declared unconstitutional. The Board was created under the Sarbanes-Oxley Act of 2002 to regulate the auditing of American businesses.
The Fund and CEI, along with a small accounting firm nearly forced out of business by the Board, are asking the Court to declare it unconstitutional under the Appointments Clause of the Constitution. That clause requires major government officials to be appointed by the President and confirmed by the Senate. However, the five-member accounting oversight board is virtually a quasi-private organization with no accountability to the President or the Congress that created it. It has the power to micro-manage companies’ accounting procedures, impose taxes, and fine companies up to $2 million. Complying with the Board’s rules cost the economy more than $35 billion in its first year alone.
Financial Regulation and Legal Experts Available for Interviews
Director, Center for Entrepreneurship, a project of the Competitive Enterprise Institute
Counsel for Special Projects at the Competitive Enterprise Institute