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

To: Mannie who wrote (3514)	7/30/2002 4:30:22 PM
From: stockman_scott	Respond to of 89467

Bush Signs Tough New Corporate Fraud Bill By Patricia Wilson Tuesday July 30, 3:05 pm Eastern Time WASHINGTON (Reuters) - Hoping to restore investor confidence after a wave of boardroom scandals, President Bush vowed "hard time" instead of "easy money" for corporate crooks on Tuesday as he signed a law that quadruples penalties for accounting fraud. The bill, largely written by Maryland Democratic Sen. Paul Sarbanes and designed to make it harder for company executives to deceive investors, was spurred by weak stock markets, voter anger and approaching congressional elections. The legislation was far tougher than measures proposed by Bush, who has been questioned about his own stock sales and a low-interest loan he accepted while he was an outside director at Harken Energy Corp more than a decade ago. Challenged by the perception that his administration is too close to big business, Bush was under pressure to sign the tougher law quickly amid public outrage at recent staggering stock market losses and fear that his fellow Republicans could face political repercussions at the ballot box on Nov. 5. "No more easy money for corporate criminals. Just hard time," Bush promised as he signed the measure in an elaborate White House East Room ceremony attended by about two dozen key Democrats and Republicans, but few corporate CEOs. The legislation creates a new oversight board for the accounting industry, until now a largely self-regulated profession implicated in a series of corporate meltdowns ranging from Enron Corp. (Other OTC:ENRNQ.PK - News) to WorldCom Inc.(Nasdaq:WCOEQ - News) WRATH OF VOTERS Only months ago, the drive to reform corporate America looked to be stymied, with industry successfully lobbying to block reforms in Congress and Bush insisting that a few bad apples among CEOs were to blame. But revelations of huge accounting errors at WorldCom in June and a 1,200-point plunge in the Dow Jones industrial average earlier this month galvanized lawmakers to pass a tough bill and forced Bush into embracing it. Both Congress and the White House feared the wrath of voters whose retirement savings were savaged by the market's decline. Maximum jail time for executives who commit mail or wire fraud is quadrupled to 20 years. The bill establishes a new crime of securities fraud with a maximum sentence of 25 years and increases funding for the Securities and Exchange Commission, the government's corporate watchdog. "In the aftermath of Sept. 11 we refused to allow fear to undermine our economy and we will not allow fraud to undermine it either," Bush said. "Tricking an investor into taking a risk is theft by another name." Democratic Party chairman Terry McAuliffe said as well as calling for more arrests, the president should call for greater disclosure by corporate executives and urged Bush to set an example by releasing all documents relating to the SEC's investigation of Harken. "Democrats will continue to stand with the American people and pursue an economic security agenda," McAuliffe said. Bush said corporate corruption had struck at investor confidence -- the sell-off in stocks has fueled fears of another economic downturn -- and offended "the conscience of our nation." Even as the president signed the law, the Senate was holding hearings into the role investment banks played in encouraging creative financing at Enron and whether accounting shenanigans in the communications sector might threaten telephone and Internet service. "This law says to corporate accountants the high standards of your profession will be enforced without exception," Bush said. "The auditors will be audited. The accountants will be held to account." ETHICAL STANDARDS Bush signed the bill a day after a new CNN/USA Today/Gallup poll showed Bush's economic approval rating slipping -- although his overall job approval rating remained strong -- amid a growing impression that the president values big corporations over ordinary Americans. The poll also showed Democrats gaining an edge over Republicans in handling of the economy and in voter preference for congressional seats -- key gauges ahead of November elections to determine control of both houses of Congress. "My administration pressed for greater corporate integrity, a united Congress has written it into law, Bush said. "There will not be a different ethical standard for corporate America than the standards that applies to everyone else ... No boardroom in America is above or beyond the law." With questions lingering over Bush's stock sales and loans while at Harken, and the SEC investigating accounting practices at the Halliburton oil-services firm during Vice President Dick Cheney's tenure as chief executive, Bush is in an awkward position in convincing voters he is serious about cracking down on abuses by big business. The legislation bans insider loans like the ones Bush received in 1986 and 1988 from Harken. The SEC in 1991 investigated Bush's 1990 sale of Harken shares, before the company reported large losses, and ended the probe without taking action.