- The Washington Times - Wednesday, July 17, 2002

A courageous and imaginative Republican president, Theodore Roosevelt, successfully launched, led and triumphed in breaking up the trusts that at the turn of the 20th century were stifling competition and beating down employees.
President Bush has an opportunity to update and apply the masterful TR approach. Big-time corporate crooks sometimes lawfully, sometimes not, but never ethically are gutting the publicly owned corporations they control, pounding upon helpless employees and eviscerating the value of shares, while in fact, if not necessarily in law, stealing millions of dollars individually and billions in the aggregate.
The basic remedy is uncomplicated. It requires political guts. A Republican president can do it because many voters think the Republicans are the party of big business even though demonstrably big business has no loyalty. If a Democratic president tried it, too many people would fancy labor union machinations and anti-business vengeance. As with Richard Nixon's recognizing Communist China, a Republican president sometimes can achieve what a Democrat could not.
As Gertrude Stein might have said, a corporation that is not a bank is not a bank. No corporate officer or director should be allowed to borrow from the corporation whether it's Ebbers' almost half a billion or somebody else's mere millions.
Every officer and director should pay full income tax on the market value of stock options in the year issued, whether or not the option is exercised. If he or she makes or loses money when exercising the option, like every other taxpayer, there may be more tax on more gain or an offset on a capital loss.
Signing-on bonuses should be payable only after the officer has served three years no quick cash and run. Golden parachutes in all forms, whether or not disguised as necessary to facilitate a merger, are inherently iniquitous, should be carefully defined by SEC and outlawed.
Shareholders and thereby, employees and the investing public should be told, annually and in writing, the total gross compensation of officers and directors.
Real gross compensation: salary, bonuses, cost of insurance, cost of retirement contributions, cost of private aircraft and hunting lodges and yachts and all the rest. To the extent an officer or director uses any of these for business, like any other taxpayer a business deduction is available.
Mutual officer director back-scratching is fatal to ethics. The Constitution and respectable restraint preclude the Congress from raising its own compensation except for a future Congress. Directors should be forbidden to raise their own compensation except to apply to future directors. They also should be eight-year term-limited, with no stock option, insurance, retirement or other benies.
A majority of directors should be "outside," thereby increasing, if not guaranteeing, independence. No director should be allowed to serve simultaneously on more than two public-company boards. Too many directors, collecting in the aggregate hundreds of thousands of dollars annually in various benefits, make a career of serving on as many high-paying boards as they can jam into a busy schedule. A few friends won't like this, so let's forgo names, but obviously these people spend precious little time preparing for a meeting: The key is to zero in on the latest benefit for management, go along with it, pat management on the back and modestly decline to oppose the quid pro quo that management offers the directors. Too many directors are chosen because they are "names," friends or belong to some minority. Knowledge of the industry is no prerequisite.
"Toxic" and other bizarre stock, designed to feather nests rather than facilitate markets, should be outlawed. Unlike the foregoing recommendations, this area is complex and would require extensive Securities and Exchange Commission study.
President Bush can help the economy, employees, shareholders, ethics and his own re-election in one swoop. He even would help many corporate lobbyists watch them charge the matador like the tortured bull in the bullring. There are, of course, many manifestations of bull in Washington.

Paul M. Weyrich is president of the Free Congress Foundation. Marion Edwyn Harrison is a Washington lawyer, former member of the board of governors of the American Bar Association and, by presidential appointment, a member of the Council of the Administrative Conference of the United States.

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