The quote attributed to me in "The SEC can't guard the house alone" (Special Report, July 1)--on the Securities & Exchange Commission's proposal for a Public Accountability Board to regulate accounting--although accurate, makes it appear that I am critical of the proposal. In fact, I support the proposal in its essential features. The SEC's proposal [would have] regulatory action in place before the next audit season.
In light of the constant revelations of improper financial reporting that have sapped investor confidence, there is no doubt that strong action by the SEC to use its existing authority to restore that confidence is to be applauded.
Editor's note: The writer is a partner in the law firm Palmer & Dodge LLP and is chair of the American Bar Assn.'s Committee on Federal Regulation of Securities. "American draws a bead on JetBlue" (News: Analysis & Commentary, June 24) states that American Airlines Inc. is "pushing Long Beach [Calif.] authorities to revoke some of JetBlue's unused landing rights and award them to American." In fact, American has no objection to Long Beach allowing JetBlue to proceed as it agreed, so long as other carriers are allowed to introduce new service as well. The city's 41-slot cap is a local limit that Long Beach can amend at any time. American has made a modest request for only four additional permanent slots, and we have told the city it can meet its obligations under federal law by making the slots available to us either within Long Beach's 41-slot limit or by increasing that limit. We are not "gunning" for anyone. Our only interest is in operating two new routes.
Timothy J. Doke, Vice-President
American Airlines Inc.
Dallas Re "What to bet against" (BusinessWeek Investor, July 1, some editions): Cephalon Inc. has stated repeatedly at investor conferences and in media [reports] that it is completing clinical studies designed to demonstrate the potential effectiveness of a drug to treat the excessive sleepiness associated with a number of medical disorders. The drug currently is cleared for marketing in the U.S. to treat only excessive daytime sleepiness associated with narcolepsy. Cephalon is not seeking labeling for Provigil to treat depression.
Robert W. Grupp, Vice-President
West Chester, Pa. "The lingering lessons of Andersen's fall" (Special Report, July 1) states: "The government's decision to go for the jugular was overkill, but its win will have far-reaching beneficial effects." I strongly disagree. Uncovering fraud is never an easy task. As a result of this prosecution, the accounting profession will suffer from not being able to attract the best and brightest business school graduates. The prospect does not bode well for accounting and its ultimate clients: the millions of public-company stockholders in the world.
As an Andersen employee, I agree that the demise of our firm will bolster professionals in dealing with unethical clients. There is a darker lesson. Andersen cooperated with Congress and the Justice Dept. in getting to the root of Enron's problem. Acting in good faith, we gave the government its case and its star witness. The next firm in this situation will not make the same mistake.
John K. Dirlam
Wellesley, Mass. In "How green should the Hudson Valley be?" (Letter from New York, July 1, in some editions), Patrick Smith cites some excellent reasons why advocates of "smart growth" in the Hudson River Valley support a new power plant in Bethlehem, Pa., and a newsprint recycling plant in Albany, N.Y. These projects use existing brownfield sites, incorporate efficient technologies, and utilize pollution-control equipment. These are precisely the attributes of the St. Lawrence Cement proposal to build a replacement plant at Greenport, N.Y.
St. Lawrence plans to locate this new facility in an existing quarry and incorporate efficient technologies and emission controls. Although Smith conjures up images of 19th century factories, new 21st century technologies will make the St. Lawrence Greenport facility one of the most environmentally friendly cement plants in the world.
Phillip Lochbrunner, Vice-President
Major Capital Projects
St. Lawrence Cement