No, you're jumping to a political conclusion not taken. At least not by me. Former President Bill Clinton was attempting to affix blame for the legislation on Republicans. When it's clear from the record that the Democrat national committee chairmen led the charge to pass the legislation.
Further, the exemptions which applied to auditing firms were never objected to by Clinton. What he objected to was the limitations lawyers would have to deal with regarding law-suits.
Here's another interesting short piece from hotwire at the time which deals with the subject...
------------------------------------------------------------
------------------------------------------------------------
Overriding Concerns
Politech
by Cate C. Corcoran
Like a vintage, sci-fi comic book come to life, it was the lawyers vs. the computer executives in a titantic battle for the mind of the president.
Last December's clash over a seemingly obscure tort reform bill, the Private Securities Litigation Reform Act of 1995, could have serious repercussions this fall. The bill targeted a pernicious strain of shareholder lawsuits often directed against high-tech companies. Clinton's veto of the bill stands as the most serious blemish on his record with the computer industry.
Clinton won the endorsement of Silicon Valley execs in '92 on the basis of his high-tech-friendly rhetoric. But his veto of the Securities Litigation Act under heat from lawyers groups raises doubts about whether he can expect a similar level of support from the Valley this time around.
What jolted the computer industry out of its preferred isolation from Washington was an epidemic of frivolous lawsuits that targeted the dramatic stock fluctuations that are characteristic of high-tech firms.
Taking advantage of laws created in 1934 to protect shareholders from stock market losses in cases of recklessly managed companies, certain law firms began in the late-'80s to file frequent class-action suits against companies whose stocks suddenly decreased in value in the course of the market's volatile fluctuations.
Seeking damages ranging from US$10 million to $1 billion, the lawsuits were often filed within hours or days of stock price changes, and targeted small companies as well as industry leaders like Intel, Apple, Hewlett-Packard, and Adobe. While these companies considered the suits pure harassment, they nevertheless tended to settle rather than bear the substantial costs of gathering evidence and preparing a defense.
Steve Guttman, vice president of marketing at Fractal Corporation, said that when he was at Adobe Systems Inc., class-action securities lawsuits sometimes lost him whole days of work. "Lawyers came in and went through my office and copied half the stuff in my office. They took archives of email. It cost a tremendous amount of money and hardship."
The evidence suggests these suits are extremely lucrative for lawyers. Of the average $7.36 million settlement in class-action shareholder suits in the year ending in July 1993, $2.12 million - about 30 percent - went to lawyers, according to a study by the consulting firm National Economic Research Associates.
So when the Securities Litigation Act, which provided for a crackdown on frivolous shareholder lawsuits, comfortably passed both houses of Congress last December, high-tech firms breathed a collective sigh of relief. After all, Senator (and Chairman of the Democratic National Committee) Christopher Dodd (D-Connecticut) had run the bill by the White House before sending it up and was assured that it would be signed.
Then at 11:30 p.m. the day before the bill would have automatically become law, the president shocked Congress with a veto. Word was that Clinton had stayed up all night poring over lawbooks, trying to reconcile the pressures from the trial lawyers associations that bankrolled his campaign, and the high-tech industry that gave him one of the highest profile endorsements of '92. White House spokesman Michael McCurry neatly summed up the president's dilemma when he said, "Some of our friends support this [the bill] and some of our friends oppose it; and we will stand by our friends."
But in the end, it was the House and Senate that stood by their decision. Congress swiftly voted to override the veto, making the bill law. This transformed Clinton's lose-lose scenario into what the White House hoped would be a positive memory for both sides: the lawyers got their presidential favor and high-tech interests got their law.
Come this fall, we'll find out whether Silicon Valley execs, many of whom abandoned their Republican ties to back Clinton in '92, will be willing to overlook his betrayal and pledge their support again this year.
....
hotwired.lycos.com |
