This is great. Securities and Exchange Commission Chairman Harvey Pitt, formerly a partner with the law firm of Fried Frank Harris Shriver & Jacobson and whose agency is investigating past accounting practices at America Online Inc. (Now AOL-Time Warner Inc.), “represented AOL as a private lawyer in two accounting fraud cases,” according to the New York Post.

“Pitt first denied this, but an America Online official confirmed Pitt’s involvement in representing AOL in the cases in the late 1990s, before its merger with Time Warner,” reports Tim Arango in yesterday’s Post (“AOL ‘Pitt-Falls’”).

“It is my understanding that Mr. Pitt’s law firm had done work for AOL in matters relating to SEC investigations relating to AOL twice in the 1990s, and that Mr. Pitt had been part of the team that advised AOL on these matters,” America Online spokesman John Buckley told the Post.

That wasn’t Pitt’s original story when contacted by the Post. Through a spokeswoman, Christi Harlan, Pitt said he never personally represented AOL and declined to say whether Fried Frank had done so. Pitt’s representative said the SEC chairman could not “talk about any work done for a former client.”

Pitt backed away from his earlier denial after learning that AOL had gone on record confirming that he did indeed perform legal work for the Internet service provider. Harlan, who earlier maintained Pitt couldn’t discuss his past business, said, “He did represent AOL in his previous life,” which I’m assuming refers to his tenure at Fried Frank and not to some prior existence, material or spiritual.

Harlan denied Pitt was involved in structuring any deals at AOL -- the issue under investigation at the SEC -- contradicting what other sources had told the Post, and emphasized that AOL’s relationship with Pitt and Fried Frank was disclosed during his confirmation hearings.

“The representation was years and years ago,” -- actually, it was as recently as five years ago -- “and AOL continued to be a client of the firm, as I understand, and he had the disclosure in publicly available documents that AOL was a client of the firm,” said the spinning Harlan.

Citing sources, the Post reports that Pitt in 1997 helped AOL settle a claim with the SEC that resulted in a $7 million reduction in reported earnings. “The case centered on shoddy bookkeeping, with AOL booking some revenue too early from a deal with long-distance provider Tel-Save,” writes Arango.

Pitt also apparently helped AOL reach a settlement with the SEC after the agency accused the company of improperly capitalizing certain advertising expenses in 1995 and 1996, an accounting maneuver that can boost reported earnings (or minimize losses). AOL paid a $3.5 million fine to settle this matter.

Oh, and today the Post is reporting that Pitt personally represented AOL Chairman Steve Case on certain legal matters. Repeating past practice, Pitt’s spokeswoman “would not describe the work the SEC chairman did for Case personally,” according to the Post, this time “citing attorney-client privilege.”

So what goes through the mind of someone like Harvey Pitt at a time like this? “This is nothing, just some piddley crap that they’ll forget about tomorrow.” Or, “They’ll never find out what really happened.” Or, “Nobody will understand the significance of this and I can just go back to business as usual.” Or, “Screw it, President Bush will protect my lying ass. He’s as much as said so already.”

Take your pick. I know none of them makes me particularly happy.