- The Washington Times - Friday, July 12, 2002

Republicans mounted a more aggressive attack yesterday against Democrats over corporate wrongdoing, blaming them for opposing legislation to protect investors and accusing the Clinton administration of fostering a climate of deception in the 1990s.
House Speaker J. Dennis Hastert, Illinois Republican, opened his regular press conference by reminding reporters that the Republican-led chamber has already approved legislation to protect investors while top House Democrats voted against it and the Democrat-led Senate has yet to complete a bill.
"Some of the people who are trying to politicize the issue voted against corporate responsibility in April," Mr. Hastert said. "When you vote against a bill, you vote against progress."
As he was speaking, top Republican aides distributed newspaper reports from 1988 that detailed receipt of questionable loans to Rep. Richard A. Gephardt, Missouri Democrat, during his presidential campaign. The House minority leader, a likely presidential candidate, has been among the most vocal critics of the Republican Party on deregulation.
Gephardt spokeswoman Kori Bernards said the Republicans' action was "clearly an effort to distract from the president's political problems."
"All of Mr. Gephardt's financial records from the campaign have been examined and approved by the FEC, and the FEC determined the loans complied with all the legal requirements at that time," she said.
Senate Republicans delivered more rhetoric linking the corporate scandals to a climate of deception that they said was fostered by the Clinton administration. Staffers released to the media a report with timelines of corporate scandals under President Clinton, including Enron and WorldCom, whose fraudulent accounting practices date to the late 1990s.
Sen. Phil Gramm, Texas Republican, said the climate of wrongdoing began with the 1993 Clinton tax increase, which "gratuitously" limited the tax deductibility of corporate executives' salaries to $1 million and encouraged "massive use of stock options and loans."
"Now when people stand up screaming that stock options created this incentive to drive up stock prices, well, where did it come from?" Mr. Gramm said. "It came from the 1993 tax act, and not one Republican voted for it, I'm proud to say."
Sen. John McCain, Arizona Republican, delivered a speech at the National Press Club criticizing Democrats for using the crisis to scare the public away from Mr. Bush's plan to partially privatize Social Security.
"Some of my Democratic friends have exploited the occasion of these corporate scandals to ridicule yet again this necessary reform," Mr. McCain said.
A Senate Republican, speaking on the condition of anonymity, said there is a belief among some in the party that they were too timid earlier in the week, waiting for Mr. Bush's speech on Wall Street on Tuesday to defend them against Democratic accusations that the Republicans created the crisis through deregulation.
"We sat back. Now we're coming out strong," he said.
Sen. Lincoln Chafee, Rhode Island Republican, said he and many of his party colleagues have been on the defensive because of the public's perception that the party is one of big business.
"I'm a little concerned about that, and I don't think [the perception] is accurate," Mr. Chafee said. "The Democrats raise just as much money, if not more, from big business. Arthur Andersen and Enron doled it out on both sides of the aisle."
Senate Republicans have been voting overwhelmingly for amendments to the Democratic bill, calling for stiffer penalties for corporate executives who inflate stock prices and ruin pension funds. Mr. Gramm said Republicans have decided simply to go along with the bill and get to a conference with the House legislation, where lawmakers can try to work out a compromise.
"Everybody's trying to show they're tougher than anybody else," Mr. Gramm said.
He said lawmakers' "piling on" corporate executives this week will backfire against Democrats eventually.
"When this thing is all over, who do you think is going to remember?" Mr. Gramm asked. "I think business is going to remember. In Texas, if you're doing a campaign speech and you tell a mean-spirited Aggie joke, in a week everybody's forgotten it except Aggies. They don't ever forget it. And as a result, people who tell them don't get elected. The Democrats think they've got the big, fat hog here. They've never liked business very much. They love capitalism, but hate capitalists. It's wonderful, but it won't last."
For their part yesterday, Democrats continued their attacks on the Bush administration and Republicans as too close to business, citing Mr. Bush's trip to Minneapolis yesterday for a fund-raiser for Norm Coleman, the Republican in Minnesota's Senate race.
Jim Farrell, campaign spokesman for Sen. Paul Wellstone, Minnesota Democrat, told reporters that Republicans will be dogged by Mr. Bush's involvement with Harken Energy Corp. He also cited Mr. Coleman's returning donations this week from corporations plagued by accounting scandals: Global Crossing and WorldCom.
"This trip is ill-timed for" Mr. Coleman, the spokesman said. "This race may come down to a question of who will be a real watchdog for pensions and investors and consumers, in which case, appearing with Bush at this time may hurt him in the state."
In attacking Mr. Gephardt, House Republicans also pointed to his 1988 presidential campaign, during which he received questionable loans totaling $1.4 million, according to newspaper accounts at the time.
The New York Times reported then that the loans were unsecured. But Terry McAuliffe, who was chairman of the Federal City National Bank that gave some of the loans and was the finance director of Mr. Gephardt's campaign, defended the loans and accused rival campaigns of trying to discredit Mr. Gephardt. Mr. McAuliffe is now chairman of the Democratic National Committee.
Mr. Gephardt yesterday blamed the corporate misdeeds on Republicans and the Contract with America. The blueprint of conservative ideals was created by House Speaker Newt Gingrich in the 1990s, and much of it was passed by the House, but its only provision on corporate reform enacted into law was one barring frivolous lawsuits by stockholders.
Mr. Gephardt said the Contract with America nonetheless created a "business environment in which thousands of Americans have lost their retirement savings and millions more investors have seen their investment portfolios evaporate."

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