AMONG THE river of news on election night two months ago was the resignation of Harvey L. Pitt, President Bush's Securities and Exchange Commission chairman, who in just 15 months in office had lost credibility as the nation's financial watchdog.
Trouble is, Mr. Pitt didn't resign plain and simple. Instead, he wrote the White House that his departure would be "effective as soon as I can help your staff ensure a smooth transition of leadership."
So while the White House moves slowly to install a successor - its nominee, former Wall Street executive William H. Donaldson, hasn't even been sent to the Senate for confirmation - Mr. Pitt has very much remained SEC chairman. And that's unlikely to change until at least the first week in February, the earliest the Senate Banking Committee could take up Mr. Donaldson's appointment.
Therein lies a serious problem - one growing worse as each day brings new SEC decisions in which Mr. Pitt apparently continues to have a direct hand.
In particular, between now and Jan. 26, the SEC faces a deadline for putting in place new rules mandated by the Sarbanes-Oxley law, the sweeping corporate accountability legislation passed last summer by Congress to restore confidence in the nation's financial markets.
Among these key regulatory questions are how strictly to limit the scope of corporate auditing services and whether to require lawyers to blow the whistle on their corporate clients' wrongdoing - both matters with tremendous stakes.
Apart from Sarbanes-Oxley, the SEC this week slapped seven former officers of an online stock trader with a $70 million fine, one of the largest such settlements ever. Next week, the agency may vote on requiring mutual funds to disclose how fund managers cast corporate proxy votes on their investors' behalf.
Last year's string of corporate scandals demands SEC regulatory reforms and aggressive enforcement - but not with the continued involvement of a worse-than-lame-duck chairman. It's old news that Mr. Pitt was widely perceived as far too friendly to industries regulated by the SEC - industries in which he now may already be looking for his next job.
An SEC spokesman says that, among about 200 agency votes since Mr. Pitt ostensibly resigned, only one was decided by one vote - and that was a relatively minor mater. That's meant to show that Mr. Pitt's lingering hasn't made much of a difference.
But it does. In these times, the nation's financial markets need a tough watchdog, and as few mixed signals as possible. Mr. Pitt's continued presence is at best counterproductive - and perhaps planting the seeds of a terrible conflict of interest. It's hard to see how it's doing much good to have him holding an office he essentially was forced to resign.
As Mr. Pitt himself told Mr. Bush in his Nov. 5 resignation letter, "The turmoil surrounding my chairmanship and the agency makes it very difficult for the commissioners and dedicated SEC staffers to perform their critical assignments. Rather than be a burden to you or the agency, I feel it is in everyone's best interest if I step aside now."
It's long past time for that to happen.