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Advocacy groups want SEC chair out of vote for auditor watchdog

NEW YORK (Reuters) – Fourteen advocacy groups have asked U.S. Securities and Exchange Commission Chair Mary Jo White to disqualify herself from selecting the government’s top audit regulatory official, saying she has a potential conflict of interest involving her husband.

In a letter on Thursday, groups including MoveOn.org, Public Citizens and the Center for Effective Government said a decision on who will head the Public Company Accounting Oversight Board creates at least the appearance of a conflict because her husband John White, a partner with law firm Cravath, Swaine & Moore, serves on a PCAOB advisory group.

Thursday’s letter adds to a growing controversy over the selection of the head of the PCAOB, created in 2002 to police public company auditors in the wake of accounting scandals at Enron and WorldCom.

Current chairman Jim Doty, whose term expires this month, is backed for reappointment by a number of investor advocates but has drawn criticism from business groups after pushing for major auditing reforms.

An SEC spokesperson said an SEC ethics officer approved White’s participation in selecting a PCAOB chair after determining it did not pose a conflict. John White could not immediately be reached for comment.

Doty is eligible for another four-year term but the SEC has also been considering two replacements, current PCAOB board member Lewis Ferguson and William Duhnke, Republican staff director and general counsel for the Senate Banking Committee.

Thursday’s letter said John White’s position on the PCAOB’s standing advisory group has helped his role as a lawyer with Cravath, where he heads the corporate governance and board advisory practice. He was director of the SEC’s division of corporation finance from 2006 to 2008, prior to his wife’s appointment as commissioner in 2013.

Members of the PCAOB advisory group are not paid, but the letter said the position could affect the Whites’ family income because Cravath benefits from access to the audit regulator. The firm referred to John White’s PCAOB position in its marketing materials, and its clients could include businesses that want Doty pushed aside, the letter said.

A spokesman for Cravath could not immediately be reached for comment. A spokeswoman for the PCAOB declined comment. (Reporting by Dena Aubin; Editing by James Dalgleish)

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