Posted on 02/20/2005 11:13:56 AM PST by anymouse
Sensing public outrage over business corruption in America is waning, some in the corporate community are seizing on the shift in mood to try to roll back reforms, say top U.S. officials and academics.
"There's clearly a rearguard action going on," said Maryland Democratic Sen. Paul Sarbanes in an interview three years after the Enron debacle that led to his co-authoring of landmark corporate governance and accounting reforms in 2002.
Business scandals are now daily fare for Americans, from the prison sentencing on Friday of a former top Boeing Co. executive to revelations of abusive trading in the mutual fund industry and the continuing trial of the former chief executive officer of WorldCom Inc.
Public concern about white-collar wrongdoing and dissatisfaction over soaring executive pay is being tempered by stock market gains and official assurances that reforms are taking hold.
That shift in perception, combined with November election gains by pro-business Republicans, has emboldened corporate lobbyists and, in at least one way, has already paid off.
In a long-sought win for business, President Bush on Friday signed legislation curbing class-action lawsuits, shifting many to less sympathetic federal courts from state jurisdictions.
Other initiatives to block or reshape regulations -- some contained in 2002's Sarbanes-Oxley reforms and some that came later -- are under way, but their outcomes are undecided.
An SEC rule mandated by Sarbanes-Oxley that requires more vigilance on corporate internal financial controls is under attack, especially from small businesses. The Securities and Exchange Commission has agreed to hold a forum on the rule.
The U.S. Chamber of Commerce is suing the SEC over new rules adopted after Sarbanes-Oxley to make mutual funds more accountable by requiring more independence among fund directors.
"That's an example of post-Sarbanes-Oxley overreach," said David Hirschmann, the chamber's senior vice president.
Hirschmann said the chamber was for aggressive pursuit of any corporate leader that had broken the law, but wanted to protect risk-taking and innocent companies. "It's that balance we have to get right."
Business interests are also pressuring the SEC to back away from a project to give shareholders more power by letting them nominate board candidates on company proxy ballots.
The Business Roundtable, which represents big-company CEOs, opposes the SEC's "proxy access" project. Roundtable Director of Public Policy Thomas Lehner said the proposal might let special interest groups hijack the board election process.
On another front, the high-technology industry is battling new accounting rules requiring companies to count the cost of stock options against profits.
"There is an effort to roll back reforms," said John Coffee, professor of law at Columbia University in New York. But Coffee sees a sweeping roll back as unlikely.
In a September survey by public relations firm GolinHarris found. about 44 percent of 2,770 Americans surveyed said corporate citizenship is "heading in the wrong direction," up from 41 percent a year earlier.
In 1991, the average big-company CEO got 140 times the pay of an average worker; in 2003, that ratio was about 500 to 1.
"Americans still believe in the American dream and would very much like to see corporate leaders live up to the ideals of that dream," said William McDonough, chairman of the new Public Company Accounting Oversight Board.
"But the people's dissatisfaction is going to continue as long as they are subjected to daily stories of extremely high levels of executive compensation," said McDonough, who formerly was president of the Federal Reserve Bank of New York.
Sarbanes says enlightened business leaders understand they've taken a hard hit from various scandals and have to raise standards and restore public confidence. "But there are elements of that community who refuse to recognize that. I think they're making a great mistake," he said.
Comments?
You are very likely correct.
This article is nothing more that the tired old "class envy" theme dressed up as "noble reforms being undone". That Reuters is pumping it out now is probably an attack on the real reforms being attempted by President Bush.
Bottom line, Rueters is socialist and hates anything smacking of capitalism/free-enterprise.
They took an even bigger hit from Alan Greenspan and a big government, big spending Republican president.
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