Nevertheless, the FASB is not without friends. The AICPA wrote a letter to Congressman Jim Leach (R-Iowa), chairman of the House Committee on Banking and Financial Services, advising Congress to keep the FASB independent of government. Specifically, the letter denounced the Accurate Accounting Standards Certification Act of 1997 (S 1560), which essentially absolves banks from any FASB statement on derivatives in many circumstances. (At Journal press time, Congress had not yet voted on the act and the FASB was still deliberating its derivatives statement.) The letter said that although S 1560 does not propose the "wholesale relocation" of standard setting to government, "a single significant legislative interference in the objective process followed by the FASB is a major step down a slippery slope to that very result." The letter was also sent to the bill's sponsor, Senator Lauch Faircloth (R-N.C.).
The Boston Security Analysts Society (BSAS), a 2,400-member association composed primarily of chartered financial analysts, also wrote to Senator Faircloth, saying, "We have read with dismay S 1560....When it comes to accounting, it is always best to pursue truth and to disclose it fully." The BSAS also criticized Greenspan's derivatives proposal, which differs from the FASB's. The BSAS is a chapter of the Association for Investment Management and Research, which names one member to the Financial Accounting Foundation, the FASB's parent body.
Meanwhile, not to be outdone by his colleagues in the Senate, Richard Baker (R-La.), chairman of the House Banking Capital Markets and Securities Subcommittee, introduced the Financial Accounting Fairness Act of 1998 (HR 3165). (Congress has not yet voted on it, either.) The bill calls for judicial review of FASB statements and increased involvement of federal banking agencies. As expected, the FASB responded quickly: Chairman Edmund Jenkins called the bill "a direct broadside against private-sector standard setting," showing himself perfectly comfortable with martial metaphors.