WASHINGTON — The law that was supposed to restore corporate accountability after a wave of scandals, is being challenged on constitutional grounds by pro-business conservatives.

Their big-guns legal team includes Kenneth Starr, best known as the special prosecutor in the Monica Lewinsky affair during Bill Clinton’s presidency.

Bitterly opposed to the sweeping anti-fraud law, they are challenging the board it established to oversee the accounting industry and arguing that it violates the Constitution’s separation of powers among the three branches of government.

The Free Enterprise Fund, an anti-tax group that seeks limited government, filed suit last week in federal court in Washington against the accounting board, known as the Public Company Accounting Oversight Board.

The anti-fraud law, known as the Sarbanes-Oxley Act for its congressional sponsors, could be invalidated if any of its sections is found unconstitutional.

The 2002 law, among other things, required greater financial disclosures and made criminal penalties for securities fraud more severe.

Until now, the objections to the law have come mainly from publicly traded companies — especially smaller ones — focusing on one key section of it. They want to ease its requirements for reporting on the strength of internal financial controls, because of the costs they impose.

Federal regulators and lawmakers have been receptive to their complaints about the burden of complying, but the Sarbanes-Oxley law itself has not been called into question.

“We hope to drive a wedge into the gross abuse of bureaucracy,” the challenging group’s chairman, Mallory Factor, said in a telephone interview.

Factor called the law “a gross overreaction” by Congress to the wave of business scandals in 2002 that included Enron Corp., WorldCom Inc. and Tyco International Ltd. The five members of the Public Company Accounting Oversight Board “have massive unchecked power,” he said.

Factor, a merchant banker in New York who’s proud to say he grew up poor in Bridgeport, Conn., has been a prolific fundraiser for President Bush, serving as a “Ranger” and raising hundreds of thousands of dollars for Bush’s 2004 re-election campaign. Now he is taking on a law that the president signed.

Factor minces no words as he  calls another business-related law “Stalinist.” He said last spring that the “liberal media and government” had been unfairly attacking free-market principles and the embattled House majority leader at the time, Tom DeLay.

The Free Enterprise Fund paid for television ads comparing the media and their reporting on DeLay to sharks in a feeding frenzy.

Along with Starr, also litigating the case are Viet Dinh, a former assistant attorney general in the Justice Department in Bush’s first term, and Michael Carvin, a private attorney who was a member of the Bush legal team during the presidential vote recount in 2000.

They are arguing that the composition of the accounting board violates the separation of powers doctrine because its members aren’t appointed by the president and cannot be removed by him, and because Congress cannot control its budget.

The chairman of the oversight board and the other four directors are appointed by the Securities and Exchange Commission, an independent federal agency; the accounting board is financed by fees on publicly traded companies according to their size.

Congress gave the board subpoena power and the authority to discipline accountants. The corporate fiascos of 2001-2002 exposed inadequate internal financial controls and dmonstrated that auditors at some major companies had become too cozy with the corporations whose books they examined.

The way the Sarbanes-Oxley law is written, Carvin contends, it is difficult for the SEC to remove accounting board members and it has insufficient control over the board’s actions.

Peggy Peterson, spokeswoman for Rep. Michael Oxley, R-Ohio, chairman of the House Financial Services Committee, and one of the law’s two leading authors, said Oxley had no comment on the lawsuit. A spokesman for Sen. Paul Sarbanes, D-Md., couldn’t be reached.

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On the Net:

Free Enterprise Fund: www.freeenterprisefund.org

Public Company Accounting Oversight Board: http://pcaobus.org