- The Washington Times - Sunday, July 21, 2002

President Bush yesterday implored Congress to act "quickly and aggressively" and pass tough "corporate accountability" legislation before the August recess to help restore investor confidence shattered by recent high-profile business scandals.
Mr. Bush made his comments in his weekly radio address, the day after the Dow Jones Industrial Average plunged nearly 400 points in a sell-off that sent it to its lowest level since October 1998.
"Investors have lost money. Some in retirement have lost security. Workers have lost jobs, and the trust of the American people has been betrayed," the president said.
This loss is happening, Mr. Bush said, even though the economy is "expanding," through a combination of low inflation and low interest rates and increased productivity. "Confidence in our free enterprise system is being tested" as a result of the "unethical business conduct that is being uncovered," the president said.
"Unethical business practices by corporate leaders amount to theft and fraud," he said. "These practices are unacceptable, and we are fighting them with active prosecutions and tough enforcement by the SEC [Securities and Exchange Commission] we will not accept anything less than complete honesty."
Mr. Bush made it clear he is disturbed by predictions by some lawmakers "that it will take two months for the House and Senate" to work out differences in the respective bills they have passed to deal with corporate fraud. "There is no good reason for the legislative process to take that long," the president said.
Although Mr. Bush favors a House-passed measure, sponsored by Rep. Michael G. Oxley, Ohio Republican, the president said yesterday the House and Senate "have both passed strong corporate accountability bills that toughen penalties and provide transparency and hold corporate executives accountable for their behavior."
"I am confident that the differences between the House and Senate approaches can be bridged. I call again on Congress to pass a bill before the August recess," the president said. "It's time to act decisively to bring a new era of integrity to American business."
The Senate plans to begin its recess Aug. 5 and return in early September after the Labor Day holiday. The House wants to adjourn as early as July 29. House and Senate negotiators met for the first time Friday to try to arrive at a compromise measure.
In his radio address, Mr. Bush also appealed to Congress for quick passage of a trade promotion authority bill and a terrorism insurance bill. He urged lawmakers not to increase spending.
"Finally, we must promote economic security by enforcing fiscal restraint. Unless Congress controls its spending, we will face a decade of deficits. I will insist on and, if necessary, I will enforce discipline in federal spending," the president said.
The conference meeting Friday "got launched with a considerable degree of good feeling and also a commitment to try to get a bill done in the very near future," Sen. Paul S. Sarbanes, Maryland Democrat and chief sponsor of the Senate version of the corporate accountability bill, said in an interview yesterday on CNN's "Novak, Hunt and Shields."
Asked by co-host Mark Shields if he is confident Republican conferees "will accept the tougher bill that you wrote and the Senate passed" over the House version, Mr. Sarbanes said only that Republicans are "looking with better favor on what the Senate has done than they were earlier on." He called the bill "good, strong and balanced" and noted it passed the Senate by a vote of 97 to O.
In the CNN interview, Mr. Sarbanes reiterated his idea to create an independent accounting standards board, which would "promulgate the standards do the investigations [of the accounting industry] and mete out punishment" for wrongdoing.
Mr. Shields asked Mr. Sarbanes about a remark made by Washington lobbyist Fred Griffey, who said: "These [corporate] scandals have done more to hurt capitalism than Lenin, Stalin and Karl Marx put together."
Mr. Sarbanes, chairman of the Senate Committee on Banking, Housing and Urban Affairs, said he believes that concern has given his bill momentum. "We're out to restore capitalism. We want to get a system in place that'll provide assurances that these abuses won't happen again. Clearly, business has a bad name right now."
Mr. Oxley, chairman of the House Committee on Financial Services, has said that he believes Mr. Sarbanes' independent audit board is probably unconstitutional because a private entity would be empowered to oversee the markets.
When asked about that viewpoint, Mr. Sarbanes said: "We considered that very carefully, and we went outside and got some opinions from expert constitutional scholars. They all said they thought what we were doing would pass muster."
Mr. Sarbanes said an alternative to an independent accounting standards board would be to enlarge the jurisdiction of the SEC. "Of course, that would be an enormous expansion," he said.
He dismissed comments made Friday by Sen. Robert F. Bennett, Utah Republican, who is on the conference committee, that the Senate's tough bill might be spooking the stock market as much as the corruption of some corporate executives. "I doubt what we've done up to now has had much effect on the market, " Mr. Sarbanes said. "We're going through a very difficult time right now."
The "Senate bill and the House bill are not that far apart," House Majority Whip Tom DeLay, Texas Republican, said yesterday on CNN's "Saturday Edition."
"The House bill has some things in it that the Senate bill doesn't have. We'd like to see those things put in it," he said, without elaborating.


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