Bush to Give Speech (and radio address) on Corporate Reforms

Reuters Business Report ^ | 6-28-02 | Steve Holland

[GraniteStateConservative]

Reuters Business Report

Bush to Give Speech on Corporate Reforms

By Steve Holland

WASHINGTON (Reuters) - President Bush, angered at relentless scandals in U.S. boardrooms, will use his Saturday radio address and a July 9 speech in New York to urge Congress to approve his plan for corporate responsibility, a senior administration official said on Friday.

Bush has already proposed plans that if enacted, would ban corporate executives from profiting from erroneous financial statements. That was in response to the implosion last year of the Texas-based Enron Corp. (NasdaqNM:WCOME - News), one in what has become a string of recent corporate scandals.

WorldCom, the telecommunications giant, revealed $3.8 billion in accounting irregularities this week and Xerox Corp. (NYSE:XRX - News) on Friday discovered a $2 billion revenue gap in its books.

Bush will devote his Saturday radio address to the subject of corporate responsibility and will travel to New York on July 9 to stress the need for better governing at the top level of American businesses. He will also emphasize the importance of Congress approving better enforcement and rules to protect pensions, shareholders and employees.

"But it's also a higher calling than just new laws and new rules," said a senior official, speaking on condition of anonymity. "He's going to call on corporate America to live up to the standards that's has made our economic system the envy of the world. He will stress that fundamentally our economy is strong," the official said.

In recent months the ex-businessman Bush, as he reads the headlines detailing corporate scandals, has told friends and aides that he is "mad as hell at corporate America.

"The president is not only very interested in this issue but increasingly outraged," the official said.

The WorldCom scandal, rivaling last year's collapse of Enron, has reignited legislative efforts to tighten accounting standards and hold top company executives and investment houses accountable.

Lawmakers said they were angered and dismayed by the ever-lengthening parade of corporate scandals and the impact on the U.S. stock markets, consumer confidence and the economy.

10-POINT PLAN

In March, Bush outlined a 10-point plan that would require chief executives to attest personally each quarter to the accuracy of their financial statements and disclosures.

To punish accounting-related abuses, top executives would be forced to forfeit their bonuses and other compensation. In extreme cases, they could be barred from serving as officers or directors for other publicly held corporations.

And, under Bush's proposal, accounting firms would be subject to unprecedented oversight.

His plan would require top executives to disclose when they buy or sell company stock within two days of the transaction. Currently, executives can wait a year or more without disclosing personal transactions.

And he would also create a regulatory board to oversee accounting firms. It would be supervised by the Securities and Exchange Commission and dominated by members outside the accounting profession to ensure its independence.

"The president has been frustrated that the Congress has not acted on his proposal he outlined weeks ago. And the types of authority he has requested for the Securities and Exchange Commission is exactly what they need to pursue these cases that are under way right now," the official said.

"The president believes it is important they move quickly in enacting these things," the official said.

[rintense]

Oh I'm sure Al Gore will slam the speech. Funny how Gore blames Bush for all the corporate scandals, yet it is the Senate holding up his proposed plan for corporate responsibility.

[anniegetyourgun]

""The president has been frustrated that the Congress has not acted...."

As usual.....

[GraniteStateConservative]

The thing is that having the bully pulpit makes all the difference. No one is listening to Gore or Gephardt or Daschle. If the networks carry the speech, then people will hear that he is serious about this and won't listen to claims by the Axis of Weasels that he isn't.

[ReaganRevolution]

Funny how Gore blames Bush for all the corporate scandals

News bulletin to Gore, these companies didn't become corrupt on January 20, 2001.

[KC Burke]

This is the stealth issue for the Democrats. If Bush fails to rein in corporate and finacial criminality that goes below the SEC radar, it will be a huge mistake. It is Arbitrary Power that would turn a blind eye to cash-register fraud in the millions, while prosecuting it fairly when it is in the hundreds.

[mystery-ak]

I wish Bush would give the speech earlier than the 9th.
It gives the Rats more time to *accuse* Bush of favoring big business and it will look like Bush is on the defensive.....How many people will know then, that he scheduled the speech over a week in advance?

[konijn]

Let the war on dirty business begin!

[GraniteStateConservative]

The thinking is that people won't pay attention until after the holiday.

[mystery-ak]

That's true, but that gives the Rats 10 days to slam Bush(not that they wouldn't do it anyway)...I just thought today or Monday would be good.

[Rodm]

Oh come on congress! Corporate American just is following your great example. Lying, inflating numbers and robbing social security funds. Looks to me like paddy wagon should make a stop at Capitol after it picks up the corporate scammers.

[Wyatt's Torch]

Oh come on congress! Corporate American just is following your great example. Lying, inflating numbers and robbing social security funds. Looks to me like paddy wagon should make a stop at Capitol after it picks up the corporate scammers.

Bingo! The irony is too much.

On a side note, the "responsible media" is getting this WCOM terribly wrong. They keep saying that the books were fudged to make their cash flow look higher than it was by capitalizing expenses. Hate to berak it to them but cash flow statements deduct capital expenditures. This action by WCOM had a major impact on EBIT/EBITDA but zero impact on cash flow. That is why more and more analysts are focusing on firms free cash flows (FCF) and FCF Return on Investment. Extremely difficult to fudge those numbers.

[Wphile]

I missed it. Just what did Al Gore say?

[GraniteStateConservative]

Here.

[Youngblood]

Bush has already proposed plans that if enacted, would ban corporate executives from profiting from erroneous financial statements.

This is currently legal?

[onedoug]

It's tempting to believe that having Bush lead America in these times is Providential. I don't, and won't always agree with him. But his sincerity seems like the real thing to me.

Values and Principle. Drive them home, Mr President.

We are at war. We will win!

[hchutch]

This is a good start. We have to put the criminals away, big-time, and we have to put some measures in to keep would-be crook honest. The fact is, we also ought to put up numbers: How long this went on, and how many were prosecuted by Clinton/Gore/Reno. I bet the numbers will not be very flattering to the Dems.

[sheltonmac]

This is all very interesting, but could someone (especially those praising the president) please explain how this falls under federal congressional jurisdiction? Constitutionally, I would think this kind of thing would be better handled by the state legislatures. If not, employees who feel they have been harmed by the shenanigans of these corporate executives could file a lawsuit. More federal interference won't solve anything. Besides, Washington politicians are hardly in a position to judge others for lack of financial responsibility.

[Bessellieu]

"The fact is, we also ought to put up numbers: How long this went on, and how many were prosecuted by Clinton/Gore/Reno."

I say it went on for 8 years. How else do you think Clinton (the most corrupted POTUS ever) managed to preside over the best and longest lasting expansion of the economy in history.

I think the truth of how Clinton/Gore/Reno did it is starting to come to light.

[ClearasaBell]

I respect the intelligence i see in this website , however,
the politics of mud slinging is something i never bought into, where are concepts of what is right or what is wrong.
As far as i can tell, neither party is legitimate these days..but rather corporate puppets all bought and paid for sellin the TRUE AMERICA Concept down the toilet, then there are those who like to play ping pong with politics , while Real Money is corrupted by both parties. think out of the box applies to the individual more than ever these days