No. 08-861~LED

FEB 9 - 2009O_FFICE OF THE CLERK

reme ourt o[ the lniteb tateg

FREE ENTERPRISE FUND ANDBECKSTEAD AND WATTS, LLP,

Petitioners,V.

PUBLIC COMPANY ACCOUNTING OVERSIGHTBOARD AND UNITED STATES OF AMERICA,

Respondents.

On Petition For A Writ Of CertiorariTo The United States Court Of AppealsFor The District Of Columbia Circuit

AMICUS CURIAE BRIEF INSUPPORT OF PETITIONERS’ PETITION

FOR WRIT OF CERTIORARI

WILLIAM PERRY PENDLEY, ESQ.**Counsel of Record

ELIZABETH GALLAWAYMOUNTAIN STATES LEGAL FOUNDATION

2596 South Lewis WayLakewood, Colorado 80227

(303) 292-2021

Attorneys for Amicus Curiae

Dated: February 9, 2009

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964OR CALL COLLECT [402~ 342-2831

QUESTION PRESENTED

Whether, assuming that PCAOB members are"inferior Officers" who must be appointed by a "Head"of a department according to the Appointments

Clause of the Constitution, the PCAOB’s collectiveappointment by five SEC Commissioners unconstitu-tional?

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TABLE OF CONTENTS

Page

QUESTION PRESENTED .....................................i

TABLE OF CONTENTS .........................................ii

TABLE OF AUTHORITIES ...................................iv

IDENTITY AND INTEREST OF AMICUS CU-

OPINIONS BELOW, JURISDICTION, AND STATE-MENT OF THE CASE ........................................2

SUMMARY OF THE ARGUMENT .......................2

ARGUMENT ...........................................................4

I. CONGRESS "VIOLATED THE CONSTI-TUTION WHEN IT VESTED THE AP-POINTMENT OF THE PCAOB IN THESEC COMMISSIONERS .............................4

II. THE SELECTION OF THE PCAOB VIO-LATED BOTH: THE LETTER AND SPIRITOF THE APPOINTMENTS CLAUSE ..........8

A. The PCAOB, by design, has massive,unchecked power ...................................

B.

Co

8

The appointment of the PCAOB vio-lated the text of the AppointmentsClause ....................................................10

The select;ion of the PCAOB violatedthe spirit of the Appointments Clausebecause appointment by a collectivebody is inherently corrupt .....................12

iii

TABLE OF CONTENTS - Continued

Page

III. THE PCAOB IS POLITICALLY UNAC-COUNTABLE TO BOTH THE LEGISLA-TIVE AND EXECUTIVE BRANCHES .......15

CONCLUSION .......................................................17

iv

TABLE OF AUTHORITIES

Page

CASES

Bowsher v. Synar, 478 U.S. 714 (1986) ........................3

Buckley v. Valeo, 424 U.S. 1 (1976) ..........................3, 7

Edmond v. United States, 520 U.S. 651 (1997) .......3, 4

Free Enter. Fund v. Pub. Co. Accounting Over-sight Bd., 2007 W[, 891675 (D.D.C. 2007) .............14

Freytag v. Comm’r of Internal Revenue, 501U.S. 868 (1991) ................................................. 7, 8, 12

SEC v. Blinder, Robinson & Co., 855 F.2d 677(10th Cir. 1988) ............. : ......................................... 11

CONSTITUTION AND STATUTES

U.S. Const. art. II, § 2, cl. 2 ................................passim

15 U.S.C. § 7202 ...........................................................8

15 U.S.C. §§ 7211-19 .....................................................8

15 U.S.C. § 7211(e) .....................................................10

15 U.S.C. § 7219 ...........................................................9

v

TABLE OF AUTHORITIES - Continued

LEGISLATIVE MATERIALS

Page

Accounting Reform and Investor Protection:Hearings on the Legislative History of theSarbanesoOxley Act of 2002: Accounting Re-form and Investor Protection Issues Raised byEnron and Other Public Companies Beforethe S. Comm. On Banking, Housing and Ur-ban Affairs, 107th Cong. 44 (2002) (testi-mony of Arthur Levitt, former Chairman ofthe SEC) ....................................................................9

148 Cong. Rec. $6334 (daily ed. July 8, 2002)(statement of Sen. Gramm) ....................................10

OTHER AUTHORITIES

The Federalist No. 76 (Alexander Hamilton) inThe Famous Papers on the Principles ofAmerican Government, 480-84 (BenjaminFletcher Wright, ed., 1961) ............................. passim

Michael J. Gerhardt, The Federal Appoint-ments Clause, 1-44 (2000) ............................. 5, 13, 14

Government Accountability Office, Securitiesand Exchange Commission, Actions Neededto Improve Public Company AccountingOversight Board Selection Process, 21 (Dec.2002) available at http://www.gao.gov/new.items/d03339.pdf (last visited Feb. 4. 2009) ....13, 14

TABLE OF AUTHORITIES - Continued

Page

Donna M. Nagy, Playing Peekaboo with Consti-tutional Law: The PCAOB And Its Public/Private Status, 80 NOTRE DAME L. REV. 975(2005) ...................................................................7, 10

PCAOB homepage available at ht-tp.’//www.pcaobus.org/Enforcement/index.aspx (last visited Feb-ruary 4, 2009) ........................................................8, 9

Securities and Exchange Commission website,available at http://sec.gov/about/whatwedo.shtml#org (last accessed Feb. 4, 2009) ...................11

Noah Webster, An American Dictionary of theEnglish Language (New York, S. Converse1828) .........................................................................10

Ross E. Weiner, Inter-Branch AppointmentsAfter the Independent Counsel: Court Ap-pointment of United States Attorneys, 86MINN. L. REV. 363, 395-96 (2001) .............................5

AMICUS CURIAE BRIEF OFMOUNTAIN STATES LEGAL FOUNDATION

IN SUPPORT OF PETITIONERS

Mountain States Legal Foundation ("MSLF")respectfully submits this amicus curiae brief insupport of the Petitioners. Pursuant to Supreme

Court Rule 37(2)(a), this amicus curiae brief is filedwith the written consent of all the parties.1

IDENTITY AND INTERESTOF AMICUS CURIAE

MSLF is a nonprofit, public-interest law firmorganized under the laws of the State of Colorado.MSLF is dedicated to bringing before the courts thoseissues vital to the defense and preservation of privateproperty rights, individual liberties, limited andethical government, and the free enterprise system.

Since its establishment in 1977, MSLF has beenactive in litigation aimed at ensuring that the UnitedStates Constitution is interpreted in accordance withthe intent of the Framers.

1 Copies of the consent letters have been filed with theClerk of the Court. In compliance with Supreme Court Rule37(6), MSLF represents that no counsel for any party authoredthis brief in whole or in part and that no person or entity, otherthan MSLF, made a monetary contribution to the preparation orsubmission of this brief. The parties were notified ten days priorto the due date of this brief of the intention to file.

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MSLF has over 5,000 members throughout the

United States. Hundreds of these members areshareholders in various public companies that aresubject to regulation by the Sarbanes-Oxley Act. Theoutcome of this case may have serious consequencesfor these members if the appointment method formembers of the Public Company Accounting Over-sight Board ("PCAOB") remains unlawful and uncon-stitutional.

MSLF believes that its members’ interest in theoutcome of this case, as well as its knowledge regard-ing various constitutional guarantees, and its com-mitment to preserving the Framers’ intent are suchthat its am icus curiae brief will assist this Court.

OPINIONS B:ELOW, JURISDICTION,AND STATEMENT OF THE CASE

Amicus hereby adopts Petitioners’ description ofthe opinions below, statement of jurisdiction, andstatement of the case;. See Pet’r Br. 1-6.

SUMMARY OF THE ARGUMENT

This lawsuit requires an evaluation of the Sepa-ration of Powers Doctrine as envisioned by the Fram-ers of the Constitution. It requires an analysis ofwhether "close enough" is good enough when evaluat-ing the appointment process established by Congress

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when creating the PCAOB, or whether the Appoint-ments Clause requires a strict interpretation thatheeds the Framers’ intent and imparts the plainmeaning of the words of the Constitution.

Amicus Curiae MSLF believes that the latterapproach is the only appropriate one. The Framerswent to exacting lengths to ensure that the Appoint-

ments Clause, and the Constitution as a whole,contained structural protections to prevent the abuseof power and thereby preserve liberty. Bowsher v.Synar, 478 U.S. 714, 730 (1986). The AppointmentsClause represents one of many meticulously-wordedsections of the Constitution, in which the meaning ofeach word is significant and represents an effort bythe Framers to preserve the separation of powers. SeeU.S. Const. art. II, § 2, cl. 2. In fact, the Separation ofPowers Doctrine has been described as "the heart" ofthe Constitution, Buckley v. Valeo, 424 U.S. 1, 119(1976), and the Appointments Clause has been la-beled as "among the most significant structuralsafeguards of the constitutional scheme." Edmond v.United States, 520 U.S. 651, 659 (1997).

Congress abdicated its responsibility to protectthese structural safeguards when drafting the ap-pointment methodology of the PCAOB. As a result,appointment of the PCAOB violated the text of theAppointments Clause as well as the Framers’ originalintent. Congress’s error created an all-powerful, self-funded and self-regulating entity that has no politicalaccountability and whose appointment establishes a

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legal precedent for cavalier interpretation of theAppointments Clause in the future.

ARGUMENT IN SUPPORT OF THE PETITION

I. CONGRESS VIOLATED THE CONSTITU-TION WHEN IT VESTED THE APPOINT-MENT OF THE PCAOB IN THE SECCOMMISSIONERS.

The Appointments Clause provides:

[The President] shall nominate, and by andwith the Advice and Consent of the Senate,shall appoint Ambassadors, other publicMinisters and Consuls, Judges of the su-preme Court, and all other Officers of theUnited States, whose Appointments are notherein otherwise provided for, and whichshall be established by law: but the Congressmay by law vest the Appointment of such in-ferior Officers, as they think proper, in thePresident alone, in the Courts of Law, or inthe Heads of Departments.

U.S. Const. art. II, § 2, cl. 2.

The Framers structuredthe Appointments

Clause to "preserve political accountability relative toimportant government assignments." Edmond, 520U.S. 659. See also The Federalist No. 76 (AlexanderHamilton) in The Famous Papers on the Principles ofAmerican Government, 480-84 (Benjamin FletcherWright, ed., 1961) ("The Federalist No. 76"). The

Framers sought to achieve this accountability byestablishing a preference for single-headed appoint-ment authority. See Michael J. Gerhardt, The FederalAppointments Clause, 1-44 (2000), The Federalist No.76, 480-84. As a result, the Constitution requires that"ambassadors, other public Ministers and Consuls,Judges of the supreme Court, and all other Officers ofthe United States" be appointed by the President,solely. U.S. Const. art. II, § 2, cl. 2. It also limitsCongress’s ability to vest appointment authority in

"the President alone, in the Courts of Law, or in theHeads of Departments." Id. (emphasis added). Thisemphasis on single-headed appointment authorityreflects the Framers’ confidence in the integrity of anappointment done by a single person, as well as theFramers’ doubt in the reliability of an appointmentmade by a group. The Federalist No. 76,480-89.

The Framers believed that a single person wasmore accountable than a group. See generally TheFederalist No. 76, 480-84. In The Federalist Papers,Hamilton explained that a single individual has a"livelier sense of duty and a more exact regard toreputation" than a group, and possesses "strongerobligations ... to investigate with care" a potentialappointee’s qualifications and reputation. Id. at 481.An individual also has "fewer personal attachmentsto gratify" and is "less liable to be misled by thesentiments of friendship [or] affection ... [or] dis-tracted and warped by [diversel views, feelings, andinterests which frequently distract and warp theresolutions of a collective body." Id. See also Ross E.

6

Weiner, Inter-Branch Appointments After the Inde-pendent Counsel: Court Appointment of United StatesAttorneys, 86 MINN. L. REV. 363, 395-96 (2001).

This confidence in appointment by a singleperson contrasts sharply with the Framers’ doubts inthe trustworthiness of any selection by a group. SeeThe Federalist No. ’76, 480-89. Hamilton explainedthat a collective body "[could not] be regulated"because of a "systematic spirit of cabal and intrigue"and cautioned that a group’s decision would alwaysbe the result of a "bargain" among the parties, in-stead of a selection based on the qualifications of theappointee. Id. at 481. He noted that "likings anddislikes, partialities and antipathies, attachmentsand animosities" would influence the decision-makingprocess and, ultimately, the appointment would comeonly from "a victory gained by one party over theother, or [from] a compromise between the parties."Id. Hamilton explained that a collective appointmentsprocess would ultimately devolve into a perversecompromise in which the qualifications that unite thevotes of the collective body would supersede thosethat qualified the candidate for the position. Id.Rarely will "the advancement of the public service...bet the primary object either of party victories orparty negotiations." Id. Instead, a collective appoint-ment process "would. be productive of an increase ofexpense, a multiplication of the evils which springfrom favoritism and. intrigue in the distribution ofpublic honors, a decrease in the stability of the ad-ministration of the government .... " Id. at 487-88.

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The Framers therefore sought to limit the nature andnumber of persons who could participate in theappointments process. In this way, they sought toprevent an unaccountable diffusion of power amongpolitical entities. Freytag, 501 U.S. at 884. See alsoDonna M. Nagy, Playing Peekaboo with Constitu-

tional Law: The PCAOB and Its Public~PrivateStatus, 80 NOTRE DAME L. REV. 975, 1049-59 (2005)

The Supreme Court has recognized this goal andnoted that:

[t]he Appointments Clause prevents Con-gress from distributing power too widely bylimiting the actors in whom Congress mayvest the power to appoint. The Clause re-flects our Framers’ conclusion that widelydistributed appointment power subverts de-mocratic government.

Freytag, 501 U.S. at 885. The Supreme Court hascharacterized the appointment power as "the mostinsidious and powerful weapon of eighteenth centurydespotism." Buckley v. Valeo, 424 U.S. 1, 143 (1976).The Court has also described the "manipulation ofofficial appointments" as "one of the American revolu-tionary generation’s greatest grievances againstexecutive power." Freytag, 501 U.S. at 883, citingBuckley, 424 U.S. at 96 (internal citation omitted).The Appointments Clause allows "Congress onlylimited authority to devolve appointment power onthe President, his heads of departments, and thecourts of law." Freytag, 501 U.S. at 884.

By constraining appointment power to a limitednumber of identifiable individuals, the Framerssought to preserve political oversight and democraticaccountability. Single-headed appointment authorityensures that the decision-making process is transpar-ent and focused on the qualifications of the appointee.

It also ensures that the individual who makes theappointment can be easily identified if the appointeefails in his duties or if the appointment processbecomes otherwise corrupted. The structure of the

Appointments Clause ultimately preserves the sepa-ration of powers of the federal system because itensures that democratic principles govern the selec-tion of non-elected officials. Id. at 878.

II. THE SELECTION OF THE PCAOB VIO-LATED BOTH THE LETTER AND THESPIRIT OF THE APPOINTMENTS CLAUSE.

A. The PCAOB, by design, has massive,unchecked power.

Created in 2002 as part of the Sarbanes-OxleyAct, the PCAOB is a self-funded and self-regulatingentity that can inspect, investigate, and punishaccounting firms for violations of PCAOB rules or

other federal laws. 15 U.S.C. §§ 7211-19. See alsoPCAOB homepage available at http://www.pcaobus.org/Enforcement/index.aspx (last accessed February

4, 2009). In addition to these investigative and puni-tive powers, the PCAOB can also promulgate bindingrules and auditing standards, 15 U.S.C. § 7202, and

provides for its own funding by levying a tax on thenation’s public companies. 15 U.S.C. § 7219.

Congress endowed the PCAOB with these signifi-cant powers after a series of high-profile accountingscandals shook public confidence in the accountingindustry. Congress sought to "protect investors andthe public interest by promoting informative, fair, andindependent audit reports." PCAOB homepage avail-able at http://www.pcaobus.org/Enforcement/index.aspx(last accessed February 4, 2009). In an effort to "crackdown" on the misleading accounting practices, audi-tor conflicts of interest, and other forms of accountingfraud that had plagued the accounting industry,Congress deliberately tried to insulate the PCAOBfrom outside political pressure to ensure its auton-omy. Accounting Reform and Investor Protection:Hearings on the Legislative History of the Sarbanes-Oxley Act of 2002: Accounting Reform and InvestorProtection Issues Raised by Enron and Other PublicCompanies Before the S. Comm. On Banking, Hous-ing and Urban Affairs, 107th Cong. 44 (2002) (testi-mony of Arthur Levitt, former Chairman of the SEC).As one Senator noted:

This board is going to have massive power,unchecked power, by design ... We are set-ting up a board with massive power that isgoing to make decisions that affect all ac-countants and everybody they work for,which directly or indirectly is every breath-ing person in this country. They are going tohave massive unchecked powers.

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Nagy, at 1003, quoting 148 Cong. Rec. $6334 (dailyed. July 8, 2002) (statement of Sen. Gramm).

B. The appointment of the PCAOB vio-lated the text of the AppointmentsClause.2

The first and perhaps most obvious defect in theappointment of the PCAOB is that the process vio-lates the plain meaning of the Appointments Clause.The Appointments Clause provides that inferiorofficers are to be appointed by the head of a depart-ment. U.S. Const. art.. II, § 2, cl. 2. The plain meaningof "head" is "[a] chief; a principal person; a leader, acommander; one who has the first rank or place, and

to whom others are subordinate; as the head of anarmy; the head of a s~ect or party." Noah Webster, AnAmerican Dictionary of the English Language (NewYork, S. Converse 1828). However, the PCAOB is notappointed by an individual head of a department.Instead, the PCAOB is appointed by the SEC Com-missioners, who must collectively select the PCAOBchairperson and initial members of the PCAOB. 15U.S.C. § 7211(e). Thi.s collective selection process iscontrary to the plain language of the AppointmentsClause because the five SEC Commissioners are not

2 Appellant’s brief dit~cusses at length whether the PCAOB’s

members are principal officers within the meaning of theAppointments Clause. See Pet’r Br. 27-35. This amicus curiaebrief will therefore only address the PCAOB’s appointment asinferior officers.

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the "Head" of the SEC. Likewise, the SEC Commis-si oners would not qualify as a "Head" according to theoriginal intent of the Framers. U.S. Const. art. II, § 2,cl. 2. See generally The Federalist No. 76.

The "Head" of the SEC is most appropriately theSEC Chairman. The Chairman is responsible for the

executive and administrative functions of the SEC,including appointment and supervision of personnelemployed by the Commission, internal business of theCommission, and the use and expenditure of funds.

See SEC v. Blinder, Robinson & Co., 855 F.2d 677,681 (10th Cir. 1988). Moreover, the SEC itself recog-nizes that the Chairman is the SEC’s chief executiveofficer. Securities and Exchange Commission website,available at http://sec.gov/about/whatwedo.shtml#org(last accessed Feb. 4, 2009).

In fact, viewing the Chairman as the head of theSEC makes sense given the Framers’ intent whendrafting the Appointments Clause. See The FederalistNo. 76. The SEC Chairman serves at the pleasure ofthe President and therefore has direct political ac-countability to the President for appointment ofPCAOB members. The President, in turn, is account-able to the public for his selection of the SEC Chair-man. If however, the SEC Commissioners cancollectively be considered the "Head" of the SEC, nosingle individual is answerable for his or her choice.The political accountability sought by the Framerscannot be achieved in this way. Id.

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Given the Framers’ original intent, it is illogicalthat the five SEC Commissioners are the "Head, ofthe SEC because the Framers would not have dif-fused the appointment power in such a way. The"Framers recognized the dangers posed by an exces-sively diffuse appointment power," and sought tolimit it to a single person. Freytag, 501 U.S. at 885.An individual has "fewer personal attachments togratify" and is "less ]liable to be misled by the senti-ments of friendship [or] affection ... [or] distractedand warped by [diverse] views, feelings, and interestswhich frequently distract and warp the resolutions ofa collective body." The Federalist No. 76, at 481. Ittherefore strains the imagination to think, that giventhe Framers’ deep distrust for appointment by com-mittee, they would have used the phrase "Heads ofDepartments" to enable appointment by group. Id.

C. The selection of the PCOAB violatedthe spirit of the Appointments Clausebecause appointment by a collectivebody is inherently corrupt.

Not surprisingly, the PCAOB’s appointmentprocess was a messy experiment in federal appoint-ment authority that bore out the problems antici-pated by the Framers. As the Framers would haveanticipated, the selection of the PCAOB was "warpedby [diverse] views, feelings, and interests ... of acollective body." Id.

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In 2002, the Government Accountability Office("GAO") investigated the PCAOB appointment proc-ess "amid allegations that the SEC Chairman with-

held relevant information from the other Commissionersconcerning the suitability of the newly appointedPCAOB chairman .... " Government AccountabilityOffice, Securities and Exchange Commission, ActionsNeeded to Improve Public Company AccountingOversight Board Selection Process, 21 (Dec. 2002)available at http://www.gao.gov/new.items/d03339.pdf(last accessed Feb. 4, 2009) ("GAO Report"). TheReport described a "breakdown" in the PCAOB selec-tion process due to a lack of consensus among theCommissioners. Id. at 2-3. It indicated that infightingamong the Commissioners resulted in delay, a hap-hazard selection process, and ultimately, inade-quately vetted appointees. Id. It concluded that "thebiggest impediment to the smooth functioning of theselection process was a lack of initial consensusamong the Commissioners and key SEC staff on theselection process." Id. at 20.

As the Framers anticipated, the collective ap-pointment of the PCAOB "had fallen easy prey todemagogues, provincialism and factions." Gerhardt,at 18. "[E]ach member [had] his friends and connec-tions to provide for, and the desire for mutual gratifi-cation [begat] a scandalous bartering for votes andbargaining for places." The Federalist No. 76, at 487. Asa group, the SEC was unable to "agree [upon a] processfor screening candidates before they were interviewedand appointed by the Commissioners." GAO Report,

14

at 5. Furthermore, the group was unable to "deter-mine how and what information would, and should,have been developed and passed along for theirconsideration as they" deliberated about candidates."Id.

This breakdown :in the appointment process wasnot a victimless no.-harm-no-foul technicality. Themulti-headed appointment procedures used by theSEC offended the plaiin language of the AppointmentsClause and ignored the elementary principles thatthe Framers sought to preserve. See Gerhardt, at 28.As a group, the SEC Commissioners had no individ-ual responsibility for the PCAOB appointments, or forthe chaotic and unreliable process through whichthey were selected. Perhaps most disturbingly, theSEC Commissioners bear no individual responsibilityfor the future actions of their appointees. When anindividual selects an appointee, his motives andmethodology, if not overtly clear, can be discoveredthrough investigation into that person’s background,motives, and history. See The Federalist No. 76, at480-84. But when a group, such as the SEC Commis-

sioners, selects a candidate, the individual motivesand methodology for ~heir selections are obscured.

The district court held that "since the SECChairman has voted for each PCAOB member" thePlaintiff-Appellees’ i:ajury was not traceable to theimproper PCAOB appointment process - essentiallythat the errors in the PCAOB appointment processwere a no-harm-no-foul technicality. Free Enter. Fundv. Pub. Co. Accour,~ting Oversight Bd., 2007 WL

15

891675 at *5 (D.D.C. 2007). It is impossible to know,however, what bargains were struck and/or whatpolitical favors were exchanged as the SEC Chairmanbargained, albeit unsuccessfully, with the otherCommissioners to reach a consensus on the makeupof the Board. Failure to follow the structure of theAppointments Clause rendered the selection processitself corrupt. In fact, no one, except perhaps the SECChairman, knows whether he would have voted forthe same individuals had he appointed them on hisown. This inability to dissect the appointments proc-

ess and hold one individual accountable for his choiceis exactly why the Framers placed appointmentauthority in one person - the "Head" of a department.

U.S. Const. art. II, § 2.

III. THE PCAOB IS POLITICALLY UNAC-COUNTABLE TO BOTH THE LEGISLA-TIVE AND EXECUTIVE BRANCHES.

The PCAOB is a powerful, self-funding and self-regu]ating entity that is not accountable either to theLegislative Branch or to the Executive Branch. Thepower of the PCAOB is limited only by the SECCommissioners, who themse]ves are one generationremoved from the democratically-elected office ofPresident. The PCAOB cannot be disciplined norcontrolled by the President, nor can the PCAOB bedisciplined or controlled by the SEC Chairmanthrough the President. Rather, the PCAOB isoverseen by a group of SEC Commissioners whose

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authority and accountability are buried in layers ofbureaucracy.

If the PCAOB were selected by the SEC Commis-sioner, the PCAOB would at least be responsive to thewishes of the Executive Branch. Bad behavior orcorruption by the PCAOB could be attributed directlyto the SEC Commissioner and his poor selection.Instead, mismanagement or corruption by thePCAOB can be ma~aaged only via a bureaucraticreview process invo].ving five SEC Commissioners.The horse-trading and lack of accountability thatoccurred with the selection of the PCAOB will occuragain if the PCAOB or its members must be investi-gated or fired.

Congress by failing to establish political account-ability for the PCAOB, has abdicated its responsibil-ity to preserve the separation of powers. WhileCongress has the aut~hority to enact powerful laws toaddress perceived national emergencies, Congresscannot exceed the powers granted to it in the Consti-tution. Although Con.gress’s efforts to ensure that thePCAOB is an autonomous entity insulated frompolitical pressure are perhaps laudable, in this case,Congress went too far. The selection of the PCAOB

violated the text of the Constitution and the originalintent of the Framers. The result of this mistakeremoves the PCAOB from any political accountabilityand offends the Separation of Powers Doctrine. See

U.S. Const. art. II, § 2, cl. 2.

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CONCLUSION

For the reasons set forth above, Amicus CuriaeMSLF respectfully requests that this Court grantPetitioners’ Petition for Writ of Certiorari.

Respectfully submitted,

WILLIAM PERRY PENDLEY, ESQ.*

*Counsel of RecordELIZABETH GALLAWAY

MOUNTAIN STATES LEGAL FOUNDATION

2596 South Lewis WayLakewood, Colorado 80227

(303) 292-2021

Attorneys for Amicus Curiae

Dated: February 9, 2009