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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Mannie who wrote (1721)	7/10/2002 1:25:04 PM
From: stockman_scott	Respond to of 89467

The Corporate Scandals: Cleaning Up The New York Times Editorial July 10, 2002 Reacting belatedly to the continual reports of malfeasance undermining investor confidence and threatening the economic recovery, President Bush came to Wall Street yesterday to deliver his "clean up your act or else" message to corporate America. He sounded at times like a sheriff, warning of jail time for crooks, and at other times like a preacher admonishing business executives to look deep into their souls before issuing their next quarterly reports. At its core, however, the president's address was disappointingly devoid of tough proposals to remedy underlying problems in accounting, corporate governance and the safety net of federal laws and regulations that is supposed to prevent abuses. It was one of those speeches that promise more than they can deliver, which is probably why expectant markets found no reason to rally after Mr. Bush left the lectern. For instance, his call to strengthen enforcement resources at the Securities and Exchange Commission by $100 million sounded good at first blush, but it falls far short of what is needed to revive a critical agency — one that his administration was merrily weakening until the business scandals hit the headlines. Mr. Bush rightly condemned the glaring conflicts of interest at Wall Street firms whose ostensibly independent research analysts have touted stocks solely because they were investment-banking clients. But it was New York State's attorney general, Eliot Spitzer, not the Bush administration, who cracked down on these conflicts. Mr. Bush missed an ideal opportunity yesterday to vault ahead of the pack and seize command of the reform campaign. He embraced sensible proposals that have already been introduced by others, such as the New York Stock Exchange, and that have already gained traction in response to the accounting scandals at Enron, WorldCom and elsewhere. Mr. Bush's endorsement of the stock exchange's new guidelines calling for independent directors and shareholder approval of stock-option plans allowed him to appear bold while actually remaining on the sidelines in the fight to restore the integrity of financial markets and public trust in them. The president was right in urging companies to ban outrageous loans to executives — an easy call. But he should also have pushed for re-examining the more complicated issue of how corporations handle executive stock-option grants and finding ways to reflect them realistically as an expense. The biggest disappointment was Mr. Bush's failure to insist on a forceful reform of the accounting industry. Auditors are the primary guardians of business integrity, and in the recent boom they lost sight of their mandate to serve the public, not company officers. The House passed a weak reform bill in the spring. But the president at best appeared to be equating it with the more meaningful proposal the Senate is currently considering. The Senate bill, proposed by Paul Sarbanes, would establish an independent oversight board for the industry, and place limits on the consulting work auditors can perform for companies. Mr. Bush would have best served the interests of the tens of millions of Americans who want to continue entrusting their retirement savings to the stock market if he had transcended partisanship on this one issue and directed his party's leadership in the House to adopt the Senate's version of accounting reform. Establishing a Justice Department task force on corporate fraud is a fine idea, as is Mr. Bush's effort to make corporate insiders personally liable for their misrepresentations, and to make them return ill-gotten gains. Americans no doubt appreciated the president's tough talk about punishing executives who commit crimes. But what they really wanted to hear from Mr. Bush was how he intended to prevent corporate fraud from occurring in the first place. He had little to offer on that score. nytimes.com

To: Mannie who wrote (1721)	7/10/2002 2:08:02 PM
From: Jim Willie CB	Read Replies (3) \| Respond to of 89467

concluding Pitt of SEC must go he comes from the accounting firm world he has a history of not pursuing accounting firms he has a vacant seat on his team, left unfilled he has talked tough he has not revealed a single firm whose filings are suspect or did he bring Xerox to light? he is a pussycat who growls like a dog it is not credible his past speaks volumes regarding inactivity, asleep at switch he does have a real defense with real low budget every time the SEC has requested more funding, and higher salary to remain competitive, Congress turned SEC down so Congress has two black eyes one for not passing Conflict of Interest laws back 4-5 years ago for accounting/ consulting one for refusing greater SEC funding / jim

To: Mannie who wrote (1721)	7/10/2002 9:55:01 PM
From: stockman_scott	Respond to of 89467

Just send scoundrels to jail By Lawrence J. McQuillan USA Today 7/10/2002 usatoday.com With each new corporate accounting confession, the response from politicians has been predictable: Blame the other political party for creating a ''climate of abuse'' and advance regulations to ''fix the problem.'' Democrats want to create a new government agency, the Public Company Accounting Oversight Board, to regulate auditors of publicly traded companies. President Bush and the Republicans want to strengthen the Securities and Exchange Commission by hiring 100 new enforcement officers and expanding its budget by $120 million. Creating more layers of bureaucracy and pages of regulations, however, will only give corporate scoundrels more places to hide and more opportunities to change the rules in their favor. What's needed is prosecution, and lots of it, not more regulation. The government has three functions in the marketplace: enforce contracts, secure private property rights and prevent fraud. Recent accounting scandals have essentially been schemes by corporate officers, directors and their auditors to transfer wealth from one group of investors to another -- especially themselves -- by fraudulently misrepresenting the financial condition of their firms in order to deceive investors. Quite simply, this is criminal fraud and it's the government's responsibility to jail those responsible. Thousands of companies are participating in this culture of deceit because crooked businessmen have little to fear. Before Enron there was Sunbeam, Waste Management, Bankers Trust, Citigroup and others. Each case involved financial crimes. Fines were paid, shareholders took their hit, the government took its cut, but not one executive spent one day in the hoosegow. In 2000, federal prosecutors charged 8,766 people with white-collar crimes, but only 226 involved securities or commodities fraud. From 1992 to 2001, SEC attorneys referred 609 cases to the Justice Department for possible criminal charges. Only 87 execs went to jail. The government has failed to protect investors and workers from corporate fraud, corruption and obstruction of justice by not putting the country-club boys behind bars to serve real jail time. Markets did their job in response to accounting improprieties by quickly re-valuing America's 17,000 publicly traded companies. Now the government must do its job by punishing those who cooked the books. A sound financial system requires clear accounting principles and strict enforcement by the Justice Department of existing fraud and corruption laws. Doubling jail time for corporate fraud, as President Bush proposed Tuesday, without enforcement, will have little effect. Americans deserve a government that treats Wall Street crime as seriously as Main Street theft. American investors deserve financial statements that reflect fact, not fantasy. Politicians should stop building bureaucratic fiefdoms and start jailing corporate criminals. Lawrence J. McQuillan is director of the Center for Entrepreneurship at the California-based Pacific Research Institute. Tougher enforcement, not more rules, will send proper message.

To: Mannie who wrote (1721)	7/11/2002 10:32:59 PM
From: stockman_scott	Respond to of 89467

WHO IS DICK CHENEY? Message 17724341

To: Mannie who wrote (1721)	7/12/2002 12:18:37 AM
From: stockman_scott	Respond to of 89467

Who Will Win on Corporate Villainy? Now that Bush is calling for a crackdown on executive misdeeds, Democrats may have lost a key issue. But Republicans are still vulnerable. By Jeffrey H. Birnbaum FORTUNE Thursday, July 11, 2002 After months of struggling, Democrats finally found an issue to beat Republicans on: corporate villainy. Almost every hour, on the hour this week, a Democrat found a camera and complained how soft on business Republicans are. The argument struck a chord. A whopping 76% of Americans think Big Business has too much influence on Republicans in Congress, according to a new Gallup poll. But here's the strange part: The Democrats might have succeeded too well. With so many accounting scandals, now everyone in Washington wants a crackdown. President Bush went to Wall Street to demand stiffer penalties for white-collar crimes. And Congress is moving at lightning speed to pass what the President wanted, and more. The result will be tough new rules for auditors and executives, passed by Democrats and Republicans, then signed with great fanfare by the Republican president. That's good news for anyone who believes, like I do, that Washington has to do whatever it can to restore investor confidence. But it's not such good news for Democrats who hoped to reap an electoral advantage in November. When an issue becomes a law, neither party gets a political victory. They share the kudos, or the blame. Democrats may have won a battle, but they've lost the partisan war. This isn't to say that the Bush administration hasn't suffered some serious dings along the way. Both the President and Vice President Dick Cheney have gotten whacked. Both appear to have played loose with the rules while they were in the corporate world. And that undermines their credibility on the issue of corporate misconduct. Cheney was CEO of Halliburton when the Dallas-based oil-services giant changed its accounting practices in ways that are now being probed by the SEC and are the subject of a shareholder lawsuit. Halliburton began in 1998 to list as revenue payments for cost overruns on construction projects that were anticipated but not yet received. Halliburton says that was okay. And it may have been. But as a political matter, it's a liability for the vice president. That political liability would increase many-fold if the SEC admonishes the company in any way. President Bush has two separate problems--also from his past. And both are political distractions rather than serious scandals. One involves the late filing of a form to the SEC about the sale of some stock in Harken Energy, a company for which Bush was a director. The second is about $180,000 in sweet-deal loans Bush got from Harken to buy company stock. Nothing is wrong with those loans, except Bush went to Wall Street this week to ask companies to stop giving such loans to their executives. A little hypocrisy goes a long way in Washington. If the corporate scandals get worse, watch for both of these to weigh down Republican prospects at election time. fortune.com