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(11/7/02) - The most overdue concession statement on election night came not from a candidate but from Harvey Pitt, the beleaguered chairman of the Securities and Exchange Commission. Under cover of the election returns, Mr. Pitt tendered his letter of resignation, advising President Bush that "the turmoil surrounding my chairmanship" was impeding the work of the S.E.C.

That's an understatement. His stewardship of the S.E.C., the key regulator of the stock market and of publicly traded companies, was nothing short of disastrous. The White House played a role in this debacle. It allowed Mr. Pitt to stay on the job just when the country most desperately needed strong leadership to restore investor confidence. In addition, the timing of the resignation was totally cynical. Not until the polls closed was Mr. Bush prepared to concede that he had put the wrong man in the job.

What sealed Mr. Pitt's fate was his hasty and ill-considered appointment of William Webster to run the new accounting oversight board, instead of a plausible watchdog over the industry. He failed to disclose to either the White House or the other S.E.C. commissioners that Mr. Webster had headed the audit committee of a company accused of serious improprieties. This could not have been appreciated by Andrew Card, the White House chief of staff, who had unwittingly urged Mr. Webster to take the job.

President Bush must now hasten to appoint someone of stature — preferably someone with a strong record regulating financial markets or prosecuting malfeasance — to lead the S.E.C. The embattled agency's mission has never been more critical to the nation's well-being. For those needing a reminder of just how vital it is to restore confidence in the integrity of financial markets, Election Day also brought news that WorldCom's fraudulent accounting is now estimated to have exceeded an astonishing $9 billion.

The void created by Mr. Pitt's lack of credibility as a regulator empowered officials like New York's attorney general, Eliot Spitzer, to pursue inquiries into Wall Street's tainted research. But the country is even better served if a stronger S.E.C. takes the lead in protecting investors. We hope the new auditing oversight board will also play an important role in preventing future Enrons and WorldComs. Mr. Webster is clearly not the right person to lead the board. He should resign, along with the S.E.C.'s chief accountant, Robert Herdman, who was involved in Mr. Webster's appointment.

The economy is in a frail state, as evidenced by yesterday's aggressive half-point interest rate cut by the Federal Reserve. A crisis of confidence in the fairness of the financial system has contributed to the economy's woes. The S.E.C. now has to become a part of the solution.

(11/5/02) - WASHINGTON (Reuters) - Harvey Pitt, the embattled chairman of the U.S. Securities and Exchange Commission, resigned on Tuesday, citing the turmoil surrounding his tenure.

Pitt had come under heavy fire for not informing SEC commissioners and the White House that the new chairman of a U.S. accounting oversight board, William Webster, had headed the audit committee of a company facing accusations of fraud.

White House spokeswoman Claire Buchan said President George W. Bush accepted Pitt's resignation.

"Unfortunately 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," Pitt said in a letter to Bush.

(11/1/02) – A correction is in order here. Last week we mistakenly wrote that William Webster lacked any relevant experience to serve as chairman of the new oversight board for the accounting profession. It turns out that Judge Webster has some very relevant experience, but of the kind that should have automatically disqualified him from being considered for the post, to which he was appointed last Friday.

From April 2000 until last July, Mr. Webster, a former C.I.A. and F.B.I. director, headed the audit committee of the board of U.S. Technologies, a company that is now nearly insolvent. The company and its former chief executive officer are being sued and investigated for possible fraud. Mr. Webster's committee fired the company's auditors in the summer of 2001 when they raised concerns about internal financial controls. Mr. Webster has not been accused of any wrongdoing, but even the most generous reading of his performance would disqualify him from heading a body whose mandate is to establish and police tough new auditing standards.

It gets worse, as do most things that Harvey Pitt, chairman of the Securities and Exchange Commission, involves himself with these days. As Stephen Labaton reported in yesterday's Times, Mr. Pitt actually knew of Mr. Webster's disastrous stint on U.S. Technologies' board, even while pushing for his appointment. Mr. Pitt knew this because Mr. Webster, to his credit, had told him. "I even said if this is a problem, then maybe we shouldn't go forward," Mr. Webster recalled, though one wonders why he himself didn't conclude that this was indeed a problem.

In his desperation to use the 78-year-old Mr. Webster to derail the appointment of John Biggs, an accomplished pension fund manager and longtime critic of accounting practices whom the industry opposed, Mr. Pitt did what any manipulative proponent of the indefensible would have done. He hid the facts from his fellow commissioners before last Friday's vote. When another commissioner complained that the selection process was tainted, he didn't know the half of it. Now the cleanest way out of this mess is for Judge Webster to step down from the post he never should have accepted, and for the S.E.C. to appoint Mr. Biggs in his stead.

As for Mr. Pitt, there appears to be no bottom to the hole he keeps digging for himself and the S.E.C. The new accounting oversight board was the centerpiece of the corporate reforms Congress passed this summer in the wake of the Enron and WorldCom scandals. Mr. Pitt, knowing full well that the spotlight was trained on him, has managed to bungle its creation. Democrats are lining up to call for Mr. Pitt's resignation, but the outrage must come from both parties. President Bush's continued loyalty to Mr. Pitt mocks his administration's promise to restore investor confidence.

(10/26/02) - PARIS The 21st-century destiny of the United States has proved to be global hegemony, but is this to be an hegemony well assumed and acknowledged as legitimate, or is it to be illegitimate, resented, resisted and short-lived?

The question is urgent because of the decision made early in the Bush administration to break with the traditional multilateralism of American policy.

George W. Bush's government from the start was deliberately and provocatively hostile to treaties constraining American freedom of action, arms limitation and environmental agreements, and the rest of the apparatus of international constraint, cooperation and international law that previous American administrations had helped to construct since 1945.

The hawkish coven of neoconservatives who supply the administration's thinking seems to have believed collaboration in any of this an unmanly stance for the nation they now led. They preferred unilateral action, and against Iraq, war.

Yet no one elected this war party. The country elected George W. Bush, who promised that the United States would conduct a "humble" foreign policy that would respect the good opinion of mankind.

Had he offered the electorate a platform incorporating the views of the leading figures of the neoconservative camp, who now make foreign policy for him, one may think that he would have lost in more states than Florida.

The crucial element being ignored is that any hegemonic power must be perceived as legitimate if it is to succeed in the long term.

After World War II, U.S. leadership of the West was consensual. Not everyone agreed with all that the United States did, but even those hostile to specific U.S. initiatives or policies acknowledged that the American position was defensible and principled, and they respected its overall stance.

The much-cited example of this was General Charles de Gaulle, who ousted NATO bases from France and opposed the United States on many issues but stood with it in such crises as the Cuban missile confrontation.

Today's leadership in Washington appears to believe that the legitimacy of its power will be established by making war on rogue and failed states, and by bullying the rest. The opinions of America's allies of the past half century are dismissed as those of societies whose nerve has failed and who have abandoned a responsible and effective role in international affairs and can be ignored.

Washington has just given an ultimatum to the United Nations Security Council to approve its resolution on disarming Iraq or make itself "irrelevant." Its logic is that relevance for the Security Council exists in conforming to what the United States demands.

A clear theme in this administration's policy is that the United States neither needs nor particularly wants the good opinion of the states it dominates.

It is indifferent to the legitimacy provided by the respect of other peoples. It is content to rest its claim to international leadership on the exercise of its power.

That certainly is not what the electorate voted for two years ago. It is why Bush will almost certainly be a one-term president.

So Harvey Pitt decided not to tell other members of the Securities and Exchange Commission a small detail about the man he had chosen to head a crucial new accounting oversight board, after turning his back on a far more qualified candidate. William Webster, reports Stephen Labaton of The Times, headed the audit committee at U.S. Technologies. Now that company is being sued by investors who claim that management defrauded them of millions.

And what did Mr. Webster's committee do after an outside auditor raised concerns about the company's financial controls? That's right: It fired the auditor.

Mr. Pitt's response when this story broke beats anything a satirist could have imagined. "Pitt seeks probe of himself," read one headline. Honest: Mr. Pitt's own agency will investigate how he chose Mr. Webster.

Meanwhile, what was Mr. Webster thinking? Nobody thinks he's corrupt; but having failed so spectacularly to police executives at a single, small company, how could he imagine himself qualified to enforce honest accounting for all of corporate America?

Yet it's no accident that Mr. Pitt picked the wrong man. Mr. Webster was chosen over better candidates precisely because accounting industry lobbyists — a group that clearly still includes Mr. Pitt — believed he would be ineffectual.

Let's call it the Pitt Principle. The famous Peter Principle said that managers fail because they rise to their level of incompetence. The Pitt Principle tells us that sometimes incompetence is exactly what the people in charge want.

In this particular case, ordinary investors demanded a crackdown on corporate malfeasance — and Mr. Pitt pretended to comply. But this administration is run by and for people who have profited handsomely from their insider connections. (Remember Harken and Halliburton? And why won't the administration come clean about that energy task force?) So he picked someone with an impressive but irrelevant background, whom he could count on not to get the job done.

This principle explains a lot. For example, the Treasury secretary's job is to pursue sound fiscal and economic policies. So if you don't want that job done, you appoint a prominent manufacturing executive with little understanding either of federal budgets or of macroeconomics. He'll be just the man to preside over a lightning-fast transition from record budget surpluses to huge deficits. He'll even cheerily declare that "the latest indicators look good" just days before consumer confidence plunges to a nine-year low.

The attorney general's job is to uphold the Constitution and enforce the rule of law. So if you don't want that job done, you pick a former senator who doesn't have much respect either for the law or for the Constitution — particularly silly stuff about due process, separation of church and state, and all that. He'll be just the man to respond to a national crisis by imprisoning more than 1,000 people without charges, while catching not a single person who has committed an act of terrorism — not even the anthrax mailer.

The same principle can be applied at lower levels. Intelligence and defense experts should realistically assess threats to national security, and the consequences of U.S. military action. So if you don't want that job done, you place it in the hands of prominent neoconservative intellectuals, with no real-world experience. They can be counted on to perceive terrorist links where the C.I.A. says they don't exist, and to offer blithe assurances about fighting a war in a densely populated urban area when the military itself is very nervous.

But the most important application of the Pitt Principle comes at the top. The president's job is to unify the nation, and lead it through difficult times. If you don't want that job done, you appoint an affable fellow from a famous family who has led a charmed business and political life thanks to his insider advantage. He'll be the kind of guy who sees nothing wrong in seeking partisan advantage from a national crisis, even going so far as to declare that members of the other party don't care about the nation's security.

That way, a great surge of national unity and good feeling can be converted, in little more than a year, into a growing sense of dismay, with more and more Americans saying that the country is going in the wrong direction.

(10/31/01) - NEW YORK - The phrase "stunned silence" is not often relevant in Washington, where politicians are trained to sputter their outrage on cue.

But it's hard to sputter when your jaw has dropped to the floor in utter amazement, which may explain the lack of an immediate reaction this morning to the astonishing New York Times report about Harvey Pitt and his new accounting board czar, William Webster.

Webster is the all-purpose Mr. Clean whom Pitt, chairman of the U.S. Securities and Exchange Commission (SEC), brought in to head the new Public Company Accounting Oversight Board, created in the wake of the accounting scandals that began with Enron and Arthur Andersen. Pitt took considerable heat for choosing Webster, a former FBI director who was said to have little experience in accounting.

Unfortunately for Pitt, it now turns out that Webster does indeed have some relevant accounting oversight experience. The Times reports that Webster, as a director of U.S. Technologies, headed the board's audit committee, which voted to dismiss the firm's outside auditors in the summer of 2001 "after those auditors raised concerns about internal financial controls."

Subsequently, according to the Times, U.S. Technologies and its chief executive, C. Gregory Earls, were sued by some investors who claim they were defrauded. Webster resigned from the firm's board in July 2002 "after he said he was told that it could no longer provide liability insurance for directors and officers against claims for investors," the story says. U.S. Technologies, which is based in Washington, D.C., did not immediately return a phone call this morning seeking comment.

Webster told the Times that he had informed Pitt about the U.S. Technologies audit-committee situation "shortly before" he was appointed last week by a bitterly divided SEC. "I told them that people are making accusations," Webster was quoted as saying. "I said that if this is a problem, then maybe we shouldn't go forward. I raised it because I didn't want it to become an issue."

Pitt's response? No problem, full speed ahead. According to Webster, Pitt said the SEC staff had investigated the matter and did not see it as an obstacle. Remarkably, Pitt chose not to pass on the information to the other commissioners before last week's vote. Webster was installed as the head of the oversight board on a 3-2 vote after a very contentious debate.

Then over the weekend, Webster learned that federal investigators in Manhattan have launched a probe into alleged fraud by Earls. Webster reportedly is not a target of this probe, but on Monday he told Pitt what he had learned. Again, according to the Times, Pitt declined to share this information with the other commissioners.

Today, after the Times story appeared, the SEC released a statement that Pitt "this morning has asked the inspector general to review the Public Company Accounting Oversight Board selection process." No other comment was offered on the story.

Hmm. Let's get this straight. If the Times account is correct--and no objections to it have been offered--then Webster revealed some of these problems to Pitt, who sat on the information and let the vote proceed on Webster's nomination. And now Pitt is calling for an investigation of the selection process.

One can summon a bit of sympathy for Pitt. Having backed away from his support of the reformers' darling, John H. Biggs, Pitt desperately needed a substitute for the oversight board who would be above reproach. Who better than Webster, who has made an entire Washington career out of being above reproach? After publicly committing himself to Webster, Pitt learned at the 11th hour that his nominee was carrying some baggage loaded with dynamite.

We don't know exactly what Pitt was told, and it must be noted that investor lawsuits against publicly held companies are filed all the time, without necessarily being valid. Perhaps last week the U.S. Technologies situation did not strike Pitt as especially problematic. This morning, however, it looks very bad indeed.

Webster told the Times that his audit committee at U.S. Technologies did not even look into some of the problems reported by the firm's auditor, BDO Seidman. The board did hire a more experienced chief financial officer, but it also fired the auditor. Paraphrasing Webster, the Times story said that "executives at U.S. Technologies had been concerned about the auditing bills of BDO Seidman and about the lengthy time it had taken to perform the audits."

These may have been legitimate concerns. It does not matter. Webster's experience at U.S. Technologies renders him spectacularly ill-suited to run the new accounting oversight board. And the way the information was brought to light guarantees that the political repercussions will be severe. It seems likely that the SEC soon will be seeking a replacement--first for Webster, and then for Pitt.

(10/31/02) - The New York Times reported this morning that Public Company Accounting Oversight Board's new chairman, William Webster, told them he headed the audit committee of US Technologies, now pennies from destitution and drowning in lawsuits, when it "voted to dismiss the outside auditors ... after those auditors raised concerns about internal financial controls."

Webster further said he told SEC Chairman Harvey Pitt twice during the pre-vote process. Pitt did not tell the four other SEC commissioners who would vote on Webster's appointment and assured Webster it would "not pose a problem." Last Friday, the commissioners appointed Webster in a 3-2 vote along party lines.

Three days later, Webster called Pitt to say he had heard of a governmental investigation into possible fraud by the CEO. Still no problem for Chairman Pitt.

The Times article appeared in this morning's paper. At 10:00 a.m., the Times reported that Pitt asked the inspector general to review the Webster appointment.

There are possible explanations for Pitt's astonishing behavior:

1. He honestly believed there was no issue and that Webster was qualified to serve, despite his being in charge of an audit committee doing, what the textbooks will call, the signature act of the Enron era.

2. He thought it would never come out.

3. He thought it would come out, but it wouldn't make a difference, either because the public wouldn't care or it would be after the election, and perhaps Congress would be in Republican hands.

   Now, you can call me paranoid, but this is a very real possibility, too:

4. Pitt knew it would come out and that he and/or Webster would have to go. Then he would never have to appoint someone who's really qualified, like John Biggs, and further preserve his future earnings power and collegial relations when he returns to representing accountants as a private-sector lawyer (which may now be sooner, rather than later).

How would that work? Remember President Nixon's Supreme Court nominees Haynsworth, Carswell, and -- finally, when everyone was tired out --Rehnquist, who altered the face of American law (for better or worse, depending on your view) more than any of the others ever would've? Or President Reagan with Bork, Ginsburg, and then Kennedy. We'll just keep sending you people until you give up and give us someone worse, either politically or intellectually (sorry for the stab at Kennedy, but that's the verdict of legal minds on both sides).

In this cynical view, Pitt -- and anyone above him calling the shots, if any -- figures: What's the risk? They (meaning we individual investors) will never get John Biggs, so let everyone exhaust themselves.

For all four possibilities, the conclusion is the same: Pitt lacks the ethical standards and judgment to serve as the leader of the governmental body charged by law to "protect investors and maintain the integrity of the securities markets" (taken from the SEC's website, by the way). He is either incompetent or evil. This is far, far beyond politics.

He must go. Immediately. Sooner would be better.

Webster deserves some credit for coming forward, but not much. It all seems a bit too disingenuous for the former federal judge and FBI and CIA director. He, too, must go. That he could think, for one moment, that he's qualified to exercise this responsibility, given his role at US Technologies, shows a capacity for ethical and judgmental lapses that do not serve the American investing public. The fact that he did not take himself out of the running, but rather thought disclosure to Pitt was enough, reveals he has spent too much time in the high-level, public-private revolving door club, where it's all about faulty discretion and mutual protection.

At the very least, it shows why his ignorance of accounting matters far more than his law-enforcement experience.

If investors don't rise up in anger and demand Pitt's head and Webster's speedy exit, then we are complicit in this crime against the public. Call or write your congresspersons immediately, and tell your neighbors.

(10/31/02) - WASHINGTON (CBS.MW) -- Under pressure from his fellow commissioners, Chairman Harvey Pitt asked for an internal investigation Thursday into the Securities and Exchange Commission's selection of William Webster to run the new accounting watchdog group.

The probe -- to be lead by the SEC's Inspector General Walter Stachnik -- will examine Pitt's own role in the process following word that the besieged chairman had concealed information from the other four commissioners about Webster's role as head of U.S. Technology's audit committee.

The investigation is yet another blemish on Pitt's reputation as SEC chairman. Pitt, who used to represent all Big 5 accounting firms, urged Webster to take the accounting job after he backed away from nominating a tough critic of the accounting industry.

It also is a setback not only for the reputation, but also potentially the creation of the much-touted watchdog to police the accounting industry after the spate of corporate scandals undermined investor confidence. The board is the centerpiece of the Sarbanes-Oxley Act, the sweeping business-reform legislation signed into law three months ago.

Reactions to the internal investigation came fast and furious Thursday, with renewed calls for Pitt's resignation and an outside investigation by the General Accounting Office.

Sen. Paul Sarbanes, the Maryland Democrat who spearheaded the creation of the audit oversight board, said: "Pitt lacks the credibility now to do the job . . . this whole process is enough to make you weep."

Webster, the former FBI and CIA chief as well as a onetime federal judge, was selected last Friday over the vehement objections of the SEC's two Democratic commissioners who said the 78-year-old lacked the financial expertise to head the board despite his law-enforcement experience.

They said the SEC fumbled a brilliant opportunity to demonstrate that the agency wasn't wedded to the accounting industry.

The new review comes after the New York Times reported Thursday that Webster formerly headed the audit committee of U.S. Technologies, which is facing shareholder lawsuits for alleged fraud over accounting miscues. Pitt didn't relay that information to the other commissioners before last week's vote.

According to the SEC, Webster informed SEC staff, including Pitt and SEC Chief Accountant Robert Herdman, of his board position at U.S. Technologies and the investor lawsuits ahead of his selection to ensure it wouldn't create any problems.

"In reviewing the situation with respect to Judge Webster's service on the audit committee of U.S. Technologies, the commission's staff identified nothing of concern regarding that service," an SEC spokesman said Thursday.

Neither the SEC commissioners nor the White House were informed of the questions regarding Webster.

"Based on the facts as I know them, Webster is well-qualified to be on this accounting board," said SEC Commissioner Paul Atkins, the Republican who originally proposed Webster as chairman of the oversight board in late August.

The other SEC commissioners declined comment Thursday.

The SEC commissioners voted last week for Webster's selection in a 3 to 2 vote along party lines. Webster was pushed to take the spot by the White House and Pitt, who had backed away from offering the job to John Biggs a few weeks before the vote. See full story.

Biggs is an outspoken critic of the accounting industry who will soon retire as chief executive of pension fund TIAA-CREF. He was the favorite of leading Senate and House Democrats and consumer groups.

Biggs couldn't be reached for comment Thursday. In a PBS interview set to air Friday, Biggs said Pitt should consider resigning. He also raised concerns about Webster's appointment in light of recent developments after publicly praising him last week.

"I think he (Pitt) has lost the confidence of the commission and the American public," Biggs said.

At last week's tumultuous open meeting to pick the oversight board's five members, SEC Commissioner Harvey Goldschmid lamented that the selection process was inept and the board members had not been properly vetted.

The commission's other Democrat, Roel Campos, said he feared the selection of Webster might be legally contested and that he told Webster when he met him this month that the oversight board would begin in a "deep hole" if he was picked.

On Thursday, others called for Webster to step down because he reportedly failed to investigate accounting problems at U.S. Technologies.

"It's terribly unfortunate that Mr. Webster followed Pitt's judgment that his experience at U.S. Technologies would not be an issue," said Nancy Smith, the SEC's former director of investor education who runs the investor advocacy site RestoreTheTrust.com. "With every passing hour more damage is being done to investor confidence."

Inspector General Stachnik will lead the investigation into circumstances surrounding the selection of Webster. He will also have the right to investigate "any other issues" related to the probe, the SEC said.

Stachnik said Thursday he doesn't know how long the review would take because he hasn't "determined the scope." Ultimately, his report will make recommendations to the SEC commissioners.

The SEC said the investigation is not a review of Webster's credentials but an investigation into the overall selection process.

The White House continued to back Pitt on Thursday despite calls for his resignation.

Pitt was not the Bush administration's top choice to run the SEC. Other candidates considered included former SEC general counsel James Doty, former SEC commissioner Joseph Grundfest and William Steere Jr., formerly chairman of Pfizer.

(10/26/02) - WASHINGTON (Reuters) - Tens of thousands of anti-war protesters marched peacefully on the White House on Saturday to express opposition to a possible U.S. attack on Iraq, some chanting slogans accusing President Bush of planning genocide.

"This is going to be an ugly, unnecessary fight. Most of the world is saying 'no' to it," civil rights leader the Rev. Jesse Jackson (news - web sites) told the crowd at the Vietnam Veterans Memorial in Washington. "Pre-emptive, one-bullet diplomacy, we cannot resort to that."

In Washington, actress Susan Sarandon, who supports numerous liberal causes, accused Bush of having "hijacked our losses and our fears." Sarandon said terrorism could not be fought with violence and that most Americans did not want a conflict.

"Let us resist this war," Sarandon told the cheering crowd. "Let us hate war in all its forms, whether the weapon used is a missile or an airplane."

Demonstrators of all ages, many religions and many nationalities gathered at the Vietnam Veterans Memorial before marching behind Jackson to the White House. Bush, however, was in Mexico for a summit of Pacific Rim leaders.

The protesters brandished signs reading: "No Proof, No War," "Bush Sucks" and "Pre-emptive Impeachment." Some protesters carried Iraqi flags. "No war, no way," shouted a protester wearing a mask of Bush with horns and a pitchfork.

"George Bush, you can't hide. We charge you with genocide!" chanted the demonstrators, who were escorted by mounted U.S. Park Police and watched by 600 police officers along the route in the heart of the nation's capital.

Bush has made "regime change" in Iraq -- ousting President Saddam Hussein (news - web sites) -- a policy of his administration. Bush has said that if the United Nations (news - web sites) fails to compel Iraq to give up any weapons of mass destruction -- chemical, biological or nuclear arms -- it possesses, the United States would do so by force if necessary. Congress has given Bush the authorization he sought to carry out a possible attack.

Police did not give an official estimate of the size of the crowd in Washington. Tony Murphy, an organizer of the event, told Reuters 150,000 people participated. Other observers put the figure between 40,000 and 50,000.

42,000 PROTEST IN SAN FRANCISCO

In San Francisco, known for its liberal politics and history of activism, a crowd that police estimated at about 42,000 marched near the city's historic Ferry Building to its Civic Center.

A group of about 20 children led the parade as protesters carried signs bearing pictures of Bush, Vice President Dick Cheney (news - web sites) and Secretary of Defense Donald Rumsfeld beneath the words "weapons of mass destruction." Other signs read: "No blood for oil" and "Regime change begins at home. Vote on Nov. 5," referring to the U.S. congressional elections.

In Germany, demonstrations were staged in about 70 towns and cities. The largest was in Berlin, where almost 10,000 people marched. In Amsterdam, some 4,000 people rallied in heavy rain to protest against U.S. policy.

In Washington, protesters called on Bush to spend the tens of billions of dollars that a war against Iraq could cost on social programs in the United States. They also argued that sanctions imposed on Iraq after its invasion of Kuwait in 1990 and the 1991 Gulf War (news - web sites) should be lifted, blaming them for the deaths of hundreds of thousands of Iraqi civilians.

About 500 Iraqi exiles came to Washington to show support for efforts to remove Saddam from power.

Tamir Musa, an Iraqi who has lived in Michigan for 10 years, said, "The war is good if it goes to kill Saddam Hussein. He has a lot of bombs. He's terrorist number one."

"If violence fixed the problem, then Israel should be at peace," countered Rick Blumhorst of Kansas, a U.S. Gulf War veteran wearing his Army dress uniform. "Acting unilaterally, we're going to inflame the Muslim community."

ST. PAUL, Oct. 25 — Senator Paul Wellstone, a two-term Democrat locked in one of the tightest campaigns in the nation, was killed this morning when his campaign plane crashed in freezing rain near Eveleth, Minn., a small town in the northeastern part of the state.

Mr. Wellstone's high school sweetheart and wife of 39 years, Sheila, 58; their 33-year-old daughter, Marcia Markuson; three campaign aides; and two pilots also died in the fiery crash, which obliterated their 11-seat turboprop among the pine trees.

Senator Wellstone, 58, a former political science professor, was an unabashed liberal who often landed on the short end of 99-1 votes. He remained a vigorous spokesman for the traditional brand of Democratic New Deal liberalism at a time when his party's mainstream was moving to the right, putting him at the center of a complicated political year.

Mr. Wellstone was one of just 23 senators — the only one in a close re-election fight — to vote this month against a resolution authorizing President Bush to take unilateral action against Iraq.

While Mr. Wellstone's death was mourned across the political spectrum, it produced an immediate partisan reaction, here and in Washington, because his race is seen as so critical to the balance of power in the Senate, where the Democrats hold a 50-to-49 edge.

With the election only 11 days away, Democrats realized they needed a strong, recognizable candidate to take his spot on the ballot. Many in the party were pushing former Vice President Walter F. Mondale, 74, who represented Minnesota in the Senate from 1964 to 1976, to take over if Senator Wellstone's sons agreed.

The plane crash was a shocking echo of the crash that killed Gov. Mel Carnahan of Missouri, the Democratic Senate nominee, shortly before Election Day in 2000. In that race Mr. Carnahan's name remained on the ballot. He was elected posthumously, and his wife, Jean, was appointed to the seat.

Mr. Wellstone's Republican opponent, Norm Coleman, the former mayor of St. Paul, as well as the three candidates for governor immediately suspended campaign activities, while Gov. Jesse Ventura, an independent, ordered flags to half-staff through Election Day.

The cause of the crash was unknown. Officials said they lost track of the plane, which was supposed to land at 10 a.m. at the Eveleth-Virginia airport, at around 10:50. Ten minutes later they confirmed that the plane, a King Air A100 manufactured by Raytheon, had crashed a few miles from the runway there.

Mr. Wellstone and the others were flying from St. Paul to Eveleth to attend the funeral of Martin Rukavina, a longtime steelworker whose son, Tom, is in the Minnesota House of Representatives. He had decided to skip a rally and fundraiser with Mr. Mondale and Senator Edward M. Kennedy here in the Twin Cities this morning so he could be there. He was scheduled to meet Mr. Coleman tonight for a debate in Duluth.

"He was a man of principle and conviction, in a world that has too little of either," Mr. Wellstone's campaign manager, Jeff Blodgett, said as he stood outside campaign headquarters here, where scores of weeping supporters gathered as the news spread. "He was dedicated to helping the little guy, in a business dominated by the big guys."

Unlike the situation in Missouri two years ago, where Governor Carnahan's name remained on the ballot, Minnesota law demands that Mr. Wellstone's name be removed, according to State Attorney General Mike Hatch. It gives the Democratic-Farmer-Labor party until Thursday to nominate a replacement. The death gives Mr. Coleman an advantage, since absentee ballots already cast count.

In addition to Mr. Mondale, Democrats were discussing as possible replacements Alan Page, a state Supreme Court justice and former Minnesota Vikings player; Mr. Hatch; Ted Mondale, the son of the former vice president; and Hubert H. Humphrey III, known as Skip, a former state attorney general and also the son of a former vice president.

Mike Erlandson, the state Democratic chairman, refused today to discuss possible candidates or whether he would try to assemble the party's 500-member central committee or let the 40-member executive committee choose a replacement.

"I wouldn't even venture a thought today," Mr. Erlandson said. "We have to make sure we do everything in our power — Senator Wellstone would want us to — to make sure that on November 5th it's a Democrat that's elected to the United States Senate from Minnesota."

Mr. Ventura could appoint someone to fill out the remainder of Mr. Wellstone's term, though that person would be replaced by whoever wins the Nov. 5 election.

The Wellstone campaign decided to keep broadcasting one 30-second television spot, which the senator himself had helped write. "You always know where he stands and who he stands up for," the announcer says. "He's fearless about challenging even the most powerful interests to do what's right for people, for Minnesota, and that's pretty rare these days."

Then the senator appears, saying he does not represent oil companies, pharmaceutical companies or "the Enrons of this world."

"But you know what? They already have great representation in Washington," he says. It's the rest of the people that need it."

Messages of sympathy and admiration poured in from across the political spectrum. President Bush called him "a man of deep convictions" and "a plain-spoken fellow who did the best for his state and for his country," while the Rev. Jesse Jackson, whose presidential campaigns Mr. Wellstone supported, described him as "the voice of conscience in the U.S. Senate and the catalyst of the coalition of hope."

Tom Harkin, the Democratic Senator from Iowa, could barely keep his composure as he tried to read a statement. He mumbled, "I can't do it," and an aide urged him to take a breath before he began. He spoke of "my best friend in the Senate," his voice breaking several times.

"Bobby Kennedy did not know Paul Wellstone," he said. "But he spoke of him in Cape Town, South Africa, when he said, `Each time a person stands up for an idea, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope.' "

John J. Sweeney, president of the A.F.L.-C.I.O., called Mr. Wellstone "tireless and unapologetic for championing the rights of working men and women — even when he stood alone."

Ralph Nader said the loss of the three Wellstones "deprives our country of courageous and steadfast fighters for a more just society and a peaceful world."

As national leaders mourned, grief spilled from the sidewalk outside Mr. Wellstone's headquarters here, where people on their lunch breaks flocked to place a bouquet under the trademark green campaign signs, grab a Wellstone button, light a candle or just cry. By 2 p.m., 100 people had crowded into the adjacent parking lot, where the dilapidated green school bus Wellstone had long used to travel the state when not hopping around it in small planes was adorned with American flags.

"This is the only place to be," said Dan Dobson, a lawyer who owns several office buildings in the area. "It's a dark moment for the state of Minnesota and it's a dark moment for our country, because I fear the forces of darkness will take over."

Janna Dethmers, 33, tears spilling down her cheeks, said, "He was one of my personal heroes."

Ms. Dethmers said she regretted that when she saw Mr. Wellstone out for a walk in her neighborhood recently, she left him alone rather than telling him herself. "He represented everything I believed in, and everything good."

Besides the Wellstones, those killed on the plane include Mary McEvoy, 49, a professor of early childhood education, associate director of the state Democratic Party and mother of three; Tom Lapic, who had worked in the senator's Minnesota office for 10 years; and Will McLaughlin, 22, who had spent the last six months as Mr. Wellstone's driver and logistics coordinator on the campaign trail. A local television station reported tonight that the pilots had been identified as Richard Conry and Michael Guess.

The Wellstones, who lived in a St. Paul town house, are survived by two sons, David, 37, and Mark, 30, and six grandchildren. Ms. Markuson leaves her husband, Todd, a 6-year-old son and three stepchildren.

A former wrestler who stood about 5 foot 5, Mr. Wellstone was recently found to have multiple sclerosis, which worsened a limp in his left leg. Still, he held records at the Capitol Police gym in Washington for the most pushups (91 in a minute) and pullups (28).

He disliked flying, especially in small planes, and often teased the pilots about frightening him with rough landings.

Even political opponents recalled warm encounters with the senator. Mr. Ventura said he always ran into Mr. Wellstone on Veterans Day, and Mr. Coleman said that despite the venom of the campaign, he never forgot a phone call he received from the senator when two St. Paul police officers were killed early in Mr. Coleman's tenure as mayor.

"Paul was a wrestler and we fought this out," Mr. Coleman said on the steps of his St. Paul home, where a neighbor's Wellstone lawn sign was draped with a black cloth. "If you ever watch prizefighting, at the end, the two fighters give a hug. This was never about personal stuff. I had the greatest respect for his passion."

Mr. Ventura, speaking at the Capitol hours before people gathered there for a candlelight vigil, urged Minnesotans to "be strong," adding, "And to be strong, we only need to remember Paul Wellstone's energy, Paul Wellstone's integrity, Paul Wellstone's absolute love of his country, the people he represented, his friends and most of all his family."

Mr. Mondale, who was a senator for eight years before becoming vice president in 1976 and is seen as the Democrats' elder statesman here, said Mr. Wellstone "was one of the most valiant public servants and leaders I've ever known.

"He had a very good mind, but he also had an honest mind," Mr. Mondale said. "He also had a good heart. He fought all of those years, right up until this morning, to change this country."

EVELETH, Minn. (AP) - A team of federal investigators is beginning the search for clues to the plane crash that killed Sen. Paul Wellstone, as the state and political colleagues mourn the liberal Democratic lawmaker.

A 16-member team from the National Transportation Safety Board arrived Friday night, and acting chairwoman Carol Carmody said the first priority was finding the cockpit voice recorder.

Carmody said the team might spend up to six days at the site where the small plane crashed Friday, killing Wellstone, his wife and daughter, and five others. But she said the team was prepared to stay as long as it took to establish the cause.

"This is a serious accident," Carmody said. "Eight people were killed. Sen. Wellstone was a very important national figure. Of course we want to send a full team to do everything we can to find out what happened."

The senator was on his way to attend the funeral of a state representative's father when the twin-engine private plane went down about 10 a.m. in freezing rain and light snow near the Eveleth-Virginia Municipal Airport, about 175 miles north of Minneapolis. A pilot in the area said the plane seemed to have veered away from the usual approach to the airport.

"It's just terrible. Say a prayer," said Lisa Pattni, an aide at the crash site.

The wreckage was still smoldering several hours after the crash in a wooded, swampy area two miles from the airport and several hundred yards from the closest paved road.

The death brought an outpouring of grief from both supporters and opponents of the 58-year-old Wellstone, one of the foremost liberals on Capitol Hill. In St. Paul, thousands of mourners stood in a cold rain to pay tribute at the Capitol and outside the senator's headquarters. Many wept.

"It doesn't seem real," said Tom Collins, who had done volunteer work for the Wellstone campaign. "It's a nightmare."

All eight people aboard the 11-seat King Air A-100 were killed, said Greg Martin, spokesman for the Federal Aviation Administration. Campaign officials confirmed the victims included Wellstone's wife, Sheila, 58, and daughter, Marcia, 33; three campaign staff members; and two pilots.

The last senator to die in office was Sen. Paul Coverdell, a 61-year-old Georgia Republican who died of a stroke two years ago.

"Today the state of Minnesota has suffered a deep and penetrating loss," Gov. Jesse Ventura said. "With all of us suffering from the numbing experiences of our nation's recent tragedies, this loss seems especially cruel."

Wellstone's death threw the battle for the Senate into uncharted territory. Before Friday, Democrats held control by a single seat.

Minnesota law allows the governor to fill a vacant Senate seat, but it also allows a political party to pick a replacement if a nominee dies. In this case, the name must be offered by next Thursday.

Ventura wouldn't say what he would do, saying only that he would not appoint himself to serve the rest of Wellstone's term in the lame-duck session of Congress between Election Day and the arrival of new members.

Shaken Democratic officials wouldn't comment on possible replacements. Rebecca Yanisch, the state trade commissioner who ran for Senate in 2000, indicated she might be interested, while former Sen. Walter Mondale didn't take questions at an appearance and didn't return a call seeking comment.

"I just want to spend today mourning," Mondale, who will turn 75 in January, told The Washington Post for its Saturday edition.

Two years ago, Missouri Gov. Mel Carnahan, his son and an aide were killed in a crash three weeks before Election Day as he campaigned for the Senate. His name remained on the ballot and he beat Republican Sen. John Ashcroft. Carnahan's widow, Jean, was appointed to serve in his place and is now running in a special election against Republican Jim Talent, with the winner completing the six-year term originally won by Mel Carnahan.

Mrs. Carnahan canceled campaign appearances Friday and called Wellstone's death "heartbreaking news."

Wellstone was up against Republican Norm Coleman, a former mayor of St. Paul and President Bush's choice to challenge the two-term incumbent.

"The people of Minnesota have experienced a terrible, unimaginable tragedy," Coleman said.

At the site, FBI spokesman Paul McCabe said there was no indication the crash was related to terrorism. He also said it would take time to recover the bodies, which remained in the wreckage late Friday.

Ventura said flags at state buildings would be flown at half-staff through Nov. 5.

In Texas, Bush called Wellstone "a man of deep convictions."

"He was a plainspoken fellow who did his best for his state and for his country," the president said. "May the good Lord bless those who grieve."

Before running for office, Wellstone was a professor and community organizer who fused the two passions in a course he taught at Carleton College in Northfield called "Social Movements and Grassroots Organizing."

He stunned the political establishment by upsetting Republican Sen. Rudy Boschwitz in 1990. Afterward, left-leaning Mother Jones magazine called him "the first 1960s radical elected to the U.S. Senate."

Wellstone pledged to stay for no more than two terms, but last year announced he would be running again. In February, he said he had been diagnosed with a mild form of multiple sclerosis but didn't stop campaigning.

"For me, no stress would be stress," Wellstone said at the time. "The stress of this campaign is what I want to do, to be perfectly honest. And the stress of being a senator is what I want to do."

Wellstone also had two sons, David, 37, and Mark, 30, and six grandchildren. Funeral arrangements were incomplete.