Congress passes corporate reform bill
Bush to sign measure into law
WASHINGTON (CNN) -- Prodded to action by a series of business scandals, the House and Senate Thursday approved a bill intended to rein in corporate wrongdoers and toughen oversight of the beleaguered accounting industry.
The House vote was 423-3. The Senate vote was 99-0. President Bush has said he will sign the bill into law.
Senate Minority Leader Trent Lott said he hopes the legislation will "send a strong signal" that corporate wrongdoing won't be tolerated.
"I hope that this will help to restore some confidence," Lott, R-Mississippi, referring to investors rattled by recent Wall Street scandals.
Final approval of the measure was accompanied by some partisan sniping as Democrats and Republicans argued over which party had taken the tougher stand over corporate chicanery.
The White House, pressured by falling stock prices and a public irate over the state of affairs in corporate America, had pushed Congress to approve a bill before it leaves for its August recess.
The GOP-controlled House passed a weaker bill in April, but daily disclosures about corporate malfeasance led lawmakers to toughen it and bring it more in line with a version passed by the Democratic-controlled Senate.
Under the bill, security fraud becomes a criminal offense. A chief executive officer or chief financial officer who certifies false financial reports could get 20 years in prison and be fined $5 million. Shredding of documents could result in a 20-year sentence.
The bill sets up an independent private-sector oversight board to watch over the industry and restricts the ability of accounting firms to perform consulting work for companies they are auditing.
In addition, the bill calls for the immediate disclosure of stock sales by company executives and prohibits companies from giving personal loans to top officials.
Thursday's votes came after House and Senate negotiators reached a deal on competing versions of the bill, deciding to proceed with legislation that largely mirrors what was crafted in the Senate. That version was widely seen as the tougher of the two.
But House Republicans, who last week followed up on their own original bill with one that called for stiffer penalties, said they added a few measures that strengthened the Senate bill further.
"I am proud of the bipartisan process that produced this legislation," said Rep. Michael Oxley, the Ohio Republican who chairs the House Financial Service Committee. "Corporate responsibility is an investor and retiree issue. It is not a partisan issue, and those who would attempt to make it so do a real disservice to all of us."
But Democrats criticized Republicans, saying they were slow to crack down on corporate abuse.
"It's certainly better than that creampuff legislation that was out here last April," said Rep. Maurice Hinchey, D-New York.
A key sticking point was the independence of a newly created accounting industry oversight board. Oxley said the senators agreed to a House demand that the board remain under the control and oversight of the Securities and Exchange Commission.
Senators also agreed to include stiffer criminal penalties for corporate malefactors that were passed by the House and to create a restitution fund for investors made up of the penalties paid by corporate wrongdoers. The Senate also agreed to require instant disclosure of stock sales by corporate executives, Oxley said.
-- CNN Congressional Correspondent Kate Snow and Producer Ted Barrett contributed to this report
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