- The Washington Times - Sunday, June 30, 2002

ASSOCIATED PRESS
President Bush, bearing down on corporate America's "deeply troubling" accounting scandal, vowed yesterday that no violation of the public's trust will be tolerated.
Mr. Bush said in his weekly radio address that his administration would not allow the acts of what he called an unethical minority in corporate boardrooms to "tarnish our entire free-enterprise system."
"The federal government will be vigilant in prosecuting wrongdoers to ensure that investors and workers maintain the highest confidence in America's business," Mr. Bush said.
Internal Republican polling has found Mr. Bush and the Republican Party vulnerable on the issue of corporate fraud. Democrats sense it may open a chance for gains in elections this November that will decide who controls the House and Senate during the second half of the president's term.
Senate Majority Leader Tom Daschle, South Dakota Democrat, opened Friday's business on the Senate floor with a denunciation of "a deregulatory, permissive atmosphere that has relied too much on corporate America to police itself." He listed companies that have been in trouble, including Halliburton, where Vice President Richard B. Cheney was chief executive before accepting Mr. Bush's offer to be his vice president.
Maryland Sen. Paul S. Sarbanes, chairman of the Senate banking committee, used the Democrats' weekly radio address to censure corporate misconduct.
"We are facing a crisis of confidence that is eroding the public's trust in our markets and poses a real threat to our economic health," Mr. Sarbanes said. "We ignore it at our peril."
Mr. Sarbanes urged passage of his bill to tighten oversight of the accounting industry with a new private-sector body. White House spokesman Ari Fleischer said the president might support the legislation when it reaches the Senate floor next month if it is changed to give the Securities and Exchange Commission greater administrative authority.
The president plans to deal with the issue more fully in a speech on July 9. A senior administration official said Mr. Bush's advisers are prepared to recommend that he propose new criminal penalties for corporate executives who certify misleading financial statements.
Under current practice, the SEC must get court approval to bar executives from serving as officers or directors of publicly held corporations if they have engaged in serious misconduct. Mr. Bush already has proposed allowing the commission to act on its own; senior advisers plan to recommend that business leaders who lie on financial statements be prosecuted by the Justice Department.


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