- The Washington Times - Friday, September 27, 2002

Democrats' efforts to blame Republicans for this year's spate of corporate scandals appear to be fizzling as the Bush administration announces nearly daily enforcement actions against dishonest executives.
Yesterday, a top WorldCom Inc. executive pleaded guilty to a massive accounting fraud first disclosed in June, in one of the quickest corporate prosecutions in history, while the Justice Department appeared close to bringing an insider-trading case against homemaking mogul Martha Stewart for her sale of ImClone stock.
Even higher-profile prosecutions lie ahead during the height of the campaign season, including the likely indictment of the Enron Corp. executive behind the questionable accounting maneuvers that brought the energy-trading giant down and shook the financial markets: former Chief Financial Officer Andrew Fastow.
President Bush, himself a former corporate executive whom Democrats tried to tar as similar to today's crop of corporate criminals, instead has been seen leading the charge against former allies, helping to defang the notion that Republicans cannot be trusted to be tough on white-collar crime.
"Over the past year, high-profile acts of deception in corporate America have shaken the people's trust in corporations, the markets and in the economy," Mr. Bush said yesterday in a speech touting the hundreds of enforcement actions undertaken by the Justice Department and Securities and Exchange Commission this year.
"The American people need to know we're acting, we're moving, and we're moving fast," he said, noting that many of this year's actions have broken records for speed and severity. "For the sake of our free market, corporate criminals must pay a price."
While Democrats take credit for pushing through a strict new law on financial reporting this past summer, Republicans took the lead in inaugurating a popular new strategy to disgorge ill-gotten profits executives reaped from illegal accounting maneuvers using asset-seizure techniques previously aimed primarily at drug dealers.
The Bush administration has created a fund for reimbursing defrauded investors and employees using the seized assets.
Mr. Bush portrays his tough campaign against corporate criminals as part and parcel of his belief in free markets, saying corruption and deceit undermine the smooth functioning of the markets and threaten to turn people against the system.
"The American economy depends on fairness and honesty," he said. "Government cannot and should not try to remove risk from investment, but we will help ensure that the risks are honest, the risks are clearly understood."
Political analysts say the president is tapping into public sentiment that while it has turned negative toward corporate executives and business this year remains even more suspicious of big government and attempts to enlarge bureaucratic powers.
"Americans want to punish corporate wrongdoers, but their skepticism of the federal government makes them wary of new federal government agencies or even of new laws," said Karen Bowman, researcher at the American Enterprise Institute.
"They want laws already on the books enforced, and they want to get tough on wrongdoers and lawbreakers."
Ms. Bowman said surveys show that Americans have held corporate executives in low esteem for decades and they suspect that shenanigans such as those at Enron and WorldCom are widespread.
Yet most Americans still view their own employers positively and continue to believe that business, not government, is more responsible for America's success as a nation, she said.
The faith Americans continue to have in the enterprise system has led them to favor the Republican approach to cracking down on white-collar crime, analysts say. This has shown up on the campaign trail in races in which Democrats have sought to taint their opponents by association with the scandals.
Ads sponsored by the Democratic Congressional Campaign Committee and the AFL-CIO labor federation seeking to brand Republicans for voting for tax breaks helpful to Enron have been pulled off the air in five states after television stations determined they were misleading, said Steve Schmidt, spokesman for the National Republican Campaign Committee.
"The Democrat strategy of talking down the economy and exploiting business scandals has turned into an unprecedented political disaster," he said. "Democrat allies are attempting to use falsehoods and deception to score cheap political points, and they are being systematically rebuffed by station managers across the country."
A recent poll conducted by Princeton University for the Pew Research Center found that Americans give a 36 percent-to-31 percent edge to Republicans over Democrats for dealing with corporate scandals, he noted.
"Democrats have forgotten that voters want problems solved, not talked about," said Tom Davis, chairman of the Republican committee. "This public support is reflective of the real progress Republicans have made in addressing the issues."
Democrat campaigners have not entirely abandoned attempts to use corporate scandals against Republicans, but their attacks in recent weeks have shifted subtly toward related issues where they have found more sympathy among voters: the struggling economy and Social Security privatization.
Democrats also cite polls showing that Americans continue to overwhelmingly believe Republicans are more interested in protecting the interests of large corporations than ordinary Americans.
"The American people are holding Republicans accountable for failed leadership on corporate accountability and the economy," said Kim Rubey, spokesman for the Democratic committee.


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