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Bush
Vows Tougher Fraud Penalties, Democrats Call for Action
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Corporate failure tarnished Bush's image in the U.S |
NEW
YORK, July 9 (IslamOnline & News Agencies) – U.S. President
George W. Bush Tuesday proposed tough new criminal penalties for
wayward executives, vowing to root out corruption and "cooking
the books". Whereas top Congressional Democrats called for action
not just words from Bush on the wave of corporate and accounting
scandals shaking the U.S. economy, news agencies reported.
In
a speech to Wall Street, Bush said new legislation would double the
maximum prison terms for those convicted of financial fraud from five
to ten years. He also said he was creating a new corporate fraud task
force by executive order, reported Agence France-Presse (AFP).
"We
will use the full weight of the law to expose and root out
corruption," Bush said. "My administration will do
everything in our power to end the days of cooking the books, shading
the truth and breaking our laws."
Bush
told a Wall Street crowd that the United States "must usher in a
new era of integrity in corporate America" in the wake of
"abuses and excesses" he blamed on the "lure of heady
profits in the late 1990s”, reported CNN International.
"At
this moment, America's greatest economic need is higher ethical
standards, enforced by strict laws and upheld by responsible business
leaders," Bush said in a speech delivered to the Association For
a Better New York.
In
Washington, however, House Minority Leader Democratic Dick Gephardt,
just minutes before Bush’s speech, said, “What is important is
what is done, not what is said". He was referring to the need for
increased corporate integrity.
"To
us, it is not enough to talk about accountability, you have to act to
ensure it," Senate Majority Leader Tom Daschle agreed with
Gephardt.
"The
test for the President today is not whether he shares the outrage that
the workers and shareholders in these companies feel; I'm sure he
does.
"The
question is whether he is willing to take action on that outrage and
support the legislation which will actually solve the problem,"
Daschle said.
Democrats
call on Bush to sign into law two pieces of legislation they
introduced in the Senate to reform the U.S. accounting industry and
create criminal penalties for corporate fraud.
The
legislation results from an avalanche of corporate scandals that began
last year with the fall of Texas-based energy giant Enron. The group's
auditor Arthur Andersen was found guilty of obstruction of justice for
destroying documents.
Outrage
against corporate misdeeds reached a peak last month when
telecommunications giant WorldCom revealed a 3.8-billion-dollar black
hole in its accounts.
Bush,
embattled SEC Chairman Harvey Pitt and others in the administration
toughened up their rhetoric about making companies toe the line in the
wake of almost daily revelations of corporate accounting scandals.
Treasury
Secretary Paul O'Neill joined the chorus Tuesday morning, offering a
hint of the tone of Bush's speech.
"We're
going to put people who abuse their authority and hurt shareholders
and employees in jail where they belong," he said on NBC's
"Today" show.
Bush
also offered a long list of his administration's accomplishments in
fighting corporate fraud and reforming corporate accounting, likely an
effort to defend himself and Pitt against charges that they are overly
permissive to corporations.
Bush
has been hounded by fresh reports of his activities with Harken Energy
Corp. in the late 1980s and early 1990s. In a hastily arranged Press
Conference Monday evening, Bush said his activities were fully vetted
by the SEC, that no wrongdoing was found and that his political
opponents were simply trying to drag up old news to make hay in a
congressional election year.
In
fact, Bush's calls to crack down on corporate evildoers could drown
out such charges and end up being a political windfall for him, even
if it distracts him from some of his pet projects, according to a CNN
report.
"What
else would he be talking about? Education? Social Security? A trade
bill nobody cares about?" asked Les Alperstein, a political
analyst with Washington Analysis. "This is an opportunity for him
to get out in front on a big issue and lead. It could be a plus for
him," reported CNN.
Pitt,
meanwhile, has been criticized for his employment, earlier in his
career, by lobbyists for the accounting industry. Sens. Tom Daschle,
D-S.D., and John McCain, R-Ariz., called recently for Pitt's removal,
saying he responded too slowly to a flood of corporate accounting
scandals that began with the collapse of Enron.
Bush
refuted those claims Monday and Tuesday, saying Pitt had responded
quickly to circumstances and would stay on as SEC chairman.
In
a sign of political danger motivated by economic failures, a recent,
reliable poll showed Bush had high overall approval. But there is with
a sizeable expression of doubt about his handling of the economy and
of his dealings with business.
Only
a third of Americans believed he was "doing all he can" on
the economy.
On
top of that, the Vice-President, Dick Cheney, ran an energy company
before coming to power, and that company's accounting methods are now
under scrutiny.
Corporate
failure on a grand scale does not necessarily imply political damage,
in the U.S., unlike Europe and Asia.
However,
the wave of corporate failure, in the U.S., caused substantial
economic damage. Many of the big pension funds for state employees,
for example, invested heavily in - and lost heavily from - Enron
shares, according to a BBC analysis published Tuesday.
Their
impoverishment is accompanied by huge enrichment of the people at the
top of the companies, like Enron and WorldCom, which tumbled. The two
sides of the collapse may feed resentment.
Bush
is the first U.S. President to have earned a Master's degree in
Business Administration, an MBA. He comes with a natural resistance to
more regulation.
His
critics, however, seem to be gaining strength with each new scandal -
and they are proposing much tougher change than Bush likes.
Two
weeks ago - before the WorldCom scandal - the chances of this tougher
proposal for reform becoming law would have seemed slim.
Today,
things have changed dramatically. The danger for Bush is that he may
seem in the minds of voters like a businessman sticking by his friends
when his friends have behaved badly, BBC reported.
It
is a real political danger, one to which he was alert as he traveled
to Wall Street to deliver a message it is hard to imagine a President,
least of all this one, having to make even six months ago.
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