`Tough' Cop for Accounting Beat
THE SECURITIES AND Exchange Commission named William J. McDonough to head the new accounting oversight board, installing a veteran regulator with a reputation for integrity to shape up the battered accounting industry.</br></br>Mr. McDonough, currently president of the Federal Reserve Bank of New York, said he plans to step down from that post as soon as he passes a background check and is formally appointed by the SEC.</br></br>In choosing Mr. McDonough, the SEC has picked a Democrat who is known as a tough negotiator willing to push people to get them to come to consensus on issues. In 1998, Mr. McDonough helped to orchestrate the controversial Wall Street bailout of Long-Term Capital Management, a large hedge fund whose collapse threatened global financial stability. He has also been an outspoken critic of lavish executive pay packages.</br></br>Mr. McDonough will be paid handsomely in his new post, earning an annual salary of $556,000. That may be modest compared with the pay packages of many top accounting executives, but it's one of Washington's biggest salaries; Mr. McDonough's salary at the New York Fed was $313,300 in 2002. In exchange, Mr. McDonough must give up all ties to the public and private sectors, including his nomination to sit on the board of the New York Stock Exchange.</br></br>"Bill appreciates deeply the need to restore public confidence in our capital markets, and he's willing to take tough positions," said Peter Peterson, chairman of the Federal Reserve Bank of New York.