Bush to push for corporate reforms
WASHINGTON (CNN) -- President Bush, who expressed outrage this week about the WorldCom financial scandal, vowed Friday to hold corporate executives accountable to a higher standard than "trying to fudge the numbers."
Democrats too are using the issue to garner political support, criticizing the Republican administration for allowing corporate malfeasance to take place on a grand scale.
Bush, who will use his Saturday radio address and a July 9 speech in New York to demand that corporate leaders live up to a "higher ethical standard" according to a senior administration, gave a preview of his views at a campaign appearance for Rep. Connie Morella, R-Maryland.
"Let me tell you how strongly I feel about this. I believe if somebody is running a corporation, if somebody has got responsibilities to shareholders and employees, they have the responsibility to be above board at all times, to be frank and honest with all the numbers," said Bush.
"We can have all kinds of rules, and we will. I mean, I laid out some initiatives in March of this year that will hold people accountable. And our Justice Department will hold people accountable.
"But corporate America has got to understand there's a higher calling than trying to fudge the numbers, kind of try to slip a billion here or a billion there and may hope nobody notices; that you have a responsibility in this country to always be above board.
"We expect high standards in our schools, we expect high standards in corporate America as well, and I intend to enforce the law to make sure that there are high standards."
The administration official said Bush would press lawmakers to pass his proposals to improve corporate responsibility. Last March, the president outlined a 10-point plan which included calling on CEO's to vouch for the veracity of their company's financial statements.
That plan was prompted by the scandal involving energy giant Enron, which filed for bankruptcy last year -- the largest such filing in American history. Thousands of Enron employees lost their retirement savings when the company went under. Its accounting practices are the focus of a Justice Department inquiry.
The senior official did not rule out the prospect of Bush offering additional proposals, but said Bush would also stress a "higher calling" beyond just new laws and new rules. The president, according to the official, will say there should be a "higher ethical standard" for individuals leading America's corporations.
After learning that WorldCom misaccounted for $3.8 billion, Bush sharply criticized the company, calling the revelations "outrageous."
"We will fully investigate and hold people accountable for misleading not only shareholders, but employees as well," Bush said during a photo opportunity with British Prime Minister Tony Blair at the Group of Eight summit, a gathering of the world's wealthiest nations plus Russia, in Canada.
"There is a need for a renewed corporate responsibility in America," the president added. "Those entrusted with shareholders' money must -- must -- strive for the highest of high standards."
Bush said most corporate leaders are "good, honest, open people who care about their shareholders and employees," but added that when the federal government discovers "egregious practices," his administration will "go after them."
The issue has taken on partisan overtones. Senate Majority Leader Tom Daschle, D-South Dakota, Friday joined the growing chorus blaming Republican policies of deregulation in part for corporate scandals.
"The Republicans came to Congress saying there is too much government regulation, there is too much government involvement in the corporate sector. And what we need now is to remove government and all its presence from any oversight responsibilities," said Daschle.
"Piece by piece, they dismantled the regulatory environment that we had and, in large measure, created this sense of laissez-faire, of just total unwillingness on the part of regulatory or enforcement agencies to play a role."
Daschle singled out the Bush administration as having an attitude that companies should self-police and not be required to submit to oversight.
With congressional elections four months away, Democrats are using the WorldCom debacle to adopt a message that they, not Republicans, are the party Americans can trust to monitor corporate America to protect their investments.
Daschle said it is a message that plays well "in all the states," that this issue has "skyrocketed" to top the issues he hears about when he travels the country.
"I think the American people are very concerned about it, and they should be. And I think they are going to be asking, 'So, what is the position of either party?' And I would think that they could clearly discern a significant difference," said Daschle.
"We're not in favor of government intrusion, but we are in favor of a regulatory environment that assures confidence, that assures that when laws are broken, they are enforced and people go to jail. I think that's what's been missing over the last couple of years."
The Senate will take up Democratic-sponsored accounting regulation legislation after the July 4 recess.
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