Congress seeks harsher penalties for violations of accounting laws
Lawmakers hope to deter future Enron-style abuses
By Michael Schroeder
THE WALL STREET JOURNAL
msnbc.com
WASHINGTON, April 23 - Congress is moving to
impose tough new penalties to address future
securities and accounting-law violations similar to
those that allegedly surfaced in the collapse of
Enron Corp.
ALTHOUGH CONGRESS has been working for
months on new regulations to curb the kind of accounting
violations that contributed to Enron's failure, the Senate
Judiciary Committee this week is expected to vote on a
package of criminal penalties for such abuses. The Judiciary
Committee package would extend to five years from three
the time investors have to file securities-fraud lawsuits, and
would increase criminal penalties for destroying documents
under subpoena. The bill, sponsored by Sen. Patrick Leahy
(D., Vt.), the panel's chairman, also would offer new
protections to corporate whistle-blowers.
The proposal is
clearly aimed at
alleged wrongdoing
at Enron and its
auditor Arthur
Andersen LLP, but
the Constitution
rules out applying retroactively new penalties
to Enron-related violations. Andersen, for
instance, is under criminal indictment for
charges that it destroyed audit documents that
had been subpoenaed by the Securities and
Exchange Commission.
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The Senate bill's remedies go far beyond a measure
passed last week by the House Financial Services
Committee, which largely directs the SEC to overhaul
accounting-oversight and financial-disclosure rules. The
House measure, which is scheduled for a full floor vote no
later than Thursday, also may have competition from a rival
proposal by the Energy and Commerce Committee.
Whether a bill reaches President Bush's desk this year
is uncertain, as Democrats and Republicans vie to push
reforms for which they can claim credit.
The Judiciary Committee's bill has support from
members of both parties. Mr. Leahy postponed a committee
vote last week to allow committee members to negotiate
even stiffer penalties in some cases. Long a defender of
government and corporate whistle-blowers, Sen. Charles
Grassley (R., Iowa) wants to refine a part of the bill that
would shore up protections for employees who disclose
company wrongdoing to authorities. Other GOP committee
members have pressed to increase jail time to 10 years from
five years for illegal shredding of documents. |
