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Pastimes : THE SLIGHTLY MODERATED BOXING RING -- Ignore unavailable to you. Want to Upgrade?

To: Bill who wrote (17600)	7/16/2002 4:02:40 PM
From: E	Respond to of 21057

This relates to our exchange, sort of: Mondo Washington by James Ridgeway July 17 - 23, 2002 ------------------------------------------------------------------------------- Pols and CEOs in Swindlers' Heaven Reform-School Congress Democrats may be looking to make hay off the Bush administration's embarrassing brushes with corporate scandal, but the record shows they have little to be proud of. One study comparing the first Bush White House with Clinton's asserts that under the Man From Hope, prosecutions of white-collar crime dropped by one-quarter and convictions by one-third. Perhaps most significantly, Clinton's Justice Department refused to act on cases referred by the EPA, the Interior Department, and other agencies. Written by Russell Mokhiber and Robert Weissman, the analysis makes clear that one business-friendly president after another set the table for today's cascading mess. With Wall Street reeling from disclosures of cooked books, ordinary Americans are taking the hit for decades of laissez-faire governing. It's their 401(k) plans that are tanking, even as politicians complain that it's really too hard to bring criminal fraud cases against big-deal CEOs. If the execs can't be held accountable now, that's partly because corporate lobbyists spent the 1990s pushing through laws to protect business and open the way for funny-money accounting. Measures enacted during the last Democratic administration denied investors the right to bring civil actions in state court and instead made them run a gauntlet of roadblocks at the federal level. True, Clinton did veto one egregiously pro-business measure. But by the end of his reign, the nation's statutes ensured that victims of corporations like Enron and WorldCom would struggle to get on the docket and have a much tougher time recovering damages if they ever won. Now Congress continues to discuss reforms that are hardly more than tepid. The accounting industry will continue to set the rules, and their yo-yo in residence, SEC chairman Harvey Pitt, will continue to unenforce them. It's no wonder the high-rolling crooks smugly invoking the Fifth at Capitol Hill hearings can barely contain their glee. The modest changes debated in Congress last week would lengthen prison terms in fraud cases, and make it somewhat easier for prosecutors to make felony charges stick. But prosecutors will still be stymied by having to meet narrow standards to keep the cases in court, and they'll face the unenviable job of convincing juries, often made up of unknowledgeable people who snooze through the complicated arguments. As a practical matter, criminal violations require investigation by the FBI, already stretched thin by the war on terror. After September 11, Bush actually shifted agents away from white-collar crime. The Justice Department can also take referrals from the underfunded and understaffed SEC. But Chairman Pitt, who made $3 million a year representing big firms like Merrill Lynch and such individuals as Ivan Boesky, is a free-market man who shies clear of regulation. The commission itself is stacked against even faintly resembling corporate crime busters. Two of its five posts are empty. In addition to Pitt, one other commissioner, Cynthia Glassman, is a former economist with Ernst & Young. "That means two-thirds of the agency's commissioners have ties to the accounting industry," writes Common Cause. Pitt himself has represented all five big accounting firms along with the accounting trade association. Pitt reportedly wanted New York attorney general Eliot Spitzer to back off his landmark investigation of Merrill Lynch. Spitzer had dug into the firm and discovered analysts cheerily promoting stocks that behind the scenes they characterized as dogs. The AG benefited from the Martin Act, a state measure that makes it easier for him to bring a successful criminal complaint than for the Justice Department to take action. He can issue subpoenas, undertake discovery proceedings, and hold hearings. This year, Spitzer forced Merrill Lynch to settle the case. While aggressive enforcement of state securities laws may turn out to be one avenue of real reform, another lies buried in a whistle-blower bill wending its way through Congress. According to Tom Devine of the Government Accountability Project, the Corporate Fraud and Criminal Accountability Act of 2002 extends whistle-blower protections to employees of publicly traded companies. This means that an employer can't harass or fire a worker like Sherron Watkins, who detailed the problems at Enron. Legal experts say that without people like Watkins, justice is hard to achieve. "Basically, white-collar cases mostly cannot get a conviction without a witness," John Coffee, a Columbia professor and expert on securities law, told the Voice. "You can't do it all with documentary evidence."