How can we expect Bush to clean up corporate America when his own corporate history is a bit murky?!!
____________________________________________________________
NEW YORK TIMES
Bush Defends Sale of Stock and Vows to Enhance S.E.C.
By ELISABETH BUMILLER and RICHARD A. OPPEL Jr.
ASHINGTON, July 8 — President Bush defended himself today against a barrage of questions about his own corporate stock dealings even as he vowed to take a tougher line in a speech in New York on Tuesday against corrupt corporate executives.
As pressures mounted today from Democrats in Congress, Mr. Bush repeatedly dismissed assertions that he had failed to properly disclose a 1990 stock sale, saying the criticism was nothing more than a political attack, although he acknowledged that he still did not know why the sale had not been disclosed as promptly as required by law.
"I still haven't figured it out completely," Mr. Bush said in a late afternoon White House news conference hastily announced after his return from a three-day vacation at his parents' summer home in Maine, and only 18 hours before what the White House has billed as a major presidential speech about corporate responsibility.
Asserting that a central element of his proposal is to strengthen the Securities and Exchange Commission, Mr. Bush said, "I'll call for a stronger S.E.C., more investigators and more budget."
As Mr. Bush and Senate Democrats vied to seize political advantage on the corporate responsibility issue today, former top executives of WorldCom invoked their Fifth Amendment rights against self-incrimination rather than answer questions on Capitol Hill about a $4 billion discrepancy in the company's books.
At his news conference, the president was also vague and dismissive about the accounting procedures at a company on whose board he served, the Harken Energy Corporation. Harken was subsequently required by the S.E.C. to restate its earnings.
"In the corporate world, sometimes things aren't exactly black and white when it comes to accounting procedures," Mr. Bush said, referring to Harken.
Seeking to upstage Mr. Bush before his speech on Wall Street — and emboldened by momentum created by fresh scandals at WorldCom and other companies — Congressional Democrats moved to gain the upper hand by trying to broaden significantly the corporate reform legislation that is to be taken up by the Senate on Tuesday.
While the current focus of the legislation is on accounting-related changes, Democrats want to expand the measure to make it simpler to prosecute securities fraud, aid plaintiffs who want to bring private securities fraud lawsuits against corporations, and make it easier for securities regulators to levy fines and impose other penalties on executives and directors who commit wrongdoing.
Mr. Bush also said at his news conference that he wanted to strengthen enforcement powers of the S.E.C. and expressed confidence in Harvey L. Pitt, the chairman of the regulatory agency, whose resignation has been called for by Democratic Congressional leaders in recent days.
The curious timing of the news conference, in the White House press briefing room, appeared intended to distract attention from a day that would have been dominated by news coverage of the beleaguered WorldCom executives. The event also seemed an attempt to place Mr. Bush back in command at the White House after three days of television and newspaper pictures of him fishing and golfing in Maine, many of them accompanied by reports of the president's own corporate stock dealings.
White House officials also seemed intent on getting questions about Mr. Bush's stock dealings out of the way before his speech, which his advisers hope will clear the way for a more straightforward handling by the media of his remarks on Tuesday. But they probably did not anticipate that Mr. Bush's meeting with reporters would be so dominated by questions about Harken.
The scandals in recent weeks at WorldCom, Tyco International and other companies have added so much energy to the drive for corporate reform that the Senate accounting bill, which was struggling just a month ago, is now expected to pass by a wide margin.
Democrats are trying to take greater advantage of that favorable political momentum by adding significant amendments to the bill — proposed by Senator Paul S. Sarbanes, Democrat of Maryland — that may not have had enough support to pass the Senate just weeks ago. Many of these provisions have the support of the Senate majority leader, Tom Daschle of South Dakota, aides said today.
"The Sarbanes bill is a strong bill and a great starting point, but there are a number of areas where it can be strengthened," said Senator Carl Levin, a Michigan Democrat who plans to offer several amendments.
Asked today about the Sarbanes bill, Mr. Bush said, "We share the same goals, and I'm confident we can get a good piece of legislation out of the Congress."
Mr. Bush added, "My concern on the Sarbanes bill is that there's overlapping jurisdiction, which will make it harder to enforce rules and regulations, not easier."
Mr. Bush insisted that the procedures at Harken were not similar to those at the bankrupt Enron Corporation, and that there was no malfeasance, saying, "There was an honest difference of opinion as how to account for a complicated transaction."
The most sweeping amendment to the Democrats' plan is a proposal by Senator Patrick Leahy, Democrat of Vermont. That proposal creates a new felony for any "scheme or artifice" used to defraud shareholders; increases penalties for shredding or other destruction of evidence; offers new protections to corporate whistle-blowers; and prevents executives who lose securities fraud lawsuits from using bankruptcy to escape fraud-related verdicts and settlements. Mr. Leahy, the chairman of the Judiciary Committee, has the strong support of Mr. Daschle; many Republicans are also backing most provisions of the measure.
The proposal would, however, also lengthen the amount of time plaintiffs have to file securities fraud lawsuits, a provision many Republicans have objected to. Also, Senator Richard C. Shelby, Republican of Alabama, is expected to offer another plaintiff-friendly amendment that would make it easier for investors to sue accountants, lawyers, investment banks and others who "aid or abet" securities fraud.
In another important amendment, three senators want to write into the law strict responsibilities for corporate lawyers. This proposal, by Mike Enzi, Republican of Wyoming, and Democrats Jon S. Corzine of New Jersey and John Edwards of North Carolina, requires corporate lawyers for publicly traded companies who receive credible evidence of material legal violations to bring the matter to the attention of management and, if ignored, the board.
[Continued on next post] |
