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McCain Backs Leahy Amendment Against Corporate and Criminal Fraud
PHXnews - Arizona's Conservative News Site ^ | 07-10-02 | McCain

Posted on 07/10/2002 10:29:01 AM PDT by AZ Righty

Washington, DC – U.S. Senator John McCain (R-AZ) today continued his fight against corporate corruption in the marketplace by supporting the “Corporate and Criminal Fraud Accountability Act of 2002" sponsored by Sen. Patrick Leahy (D-VT). His floor statement follows:

“Our publicly owned companies are an essential component to the economic health of our country. As we have seen over the past few months, the continued lapses of our corporate leaders, whether they are ethical, criminal or just plain ignorant, have a significant, sometimes crippling, effect on the welfare of our nation. We must make some fundamental changes in the current system of corporate oversight to protect Americans from avarice, greed, ignorance and criminal behavior.

Now is the time for Congress to restore investor confidence and take the necessary action to protect the interests of the public shareholders and place those interests above the personal interests of those entrusted with managing and advising those companies. The deterioration of the checks and balances that safeguard the public against corporate abuses must be reversed.

“We have to address the shortcomings in federal law and send the message that prosecutors now have the tools to incarcerate persons who defraud investors or alter or destroy evidence in certain Federal investigations. This amendment is a step in the right direction. It creates two new criminal statutes that would clarify current criminal laws relating to the destruction or fabrication of evidence and the preservation of financial and audit records. The Enron debacle clearly indicated that there were gaping holes in the current framework. There will be a 10 year criminal penalty for the destruction or creation of evidence with the intent to obstruct a federal investigation. There will be a new 5 year criminal penalty for the willful failure to preserve, for a minimum of five years, audit papers of companies that issue securities.

“The amendment also provides for the review and enhancement of criminal penalties in cases involving obstruction of justice and serious fraud cases. All of these actions are necessary to deter future criminal action. Until somebody responsible goes to jail for a significant amount of time, I am not sure that these people are going to get the message. Defrauding the shareholder has to carry a penalty of more than a fine. Many corporate decision-makers are making millions of dollars a year. A relatively small fine is not a deterrent; it’s a slap on the wrist. The threat of jail is a deterrent that will make people pay attention.

“This amendment also creates a new securities fraud offense. This provision makes it easier, in a limited class of cases, to prove securities fraud. Currently prosecutors are forced to resort to a patchwork of technical offenses and regulations that criminalize particular violations of securities law, or to treat the cases as generic mail or wire fraud that results in a five-year maximum penalty. This new provision would criminalize any scheme or artifice to defraud persons in connection with securities of publicly traded companies or to obtain their money or property. This new ten-year felony is comparable to existing bank and health care fraud statutes. To those who'd say that it's hard to define a scheme or artifice to defraud, I'd say that full and honest disclosure of material dealings and accounting treatments is the best way for the officers who run America’s corporations to protect themselves and those who invest in their companies. There are plenty of felony laws on the books that provide long prison terms for crimes that cause less damage than the losses to shareholders in Enron or WorldCom.

“It is important to emphasize that when criminal charges are pursued, it is not necessarily the firm that should be charged but the individuals at the helm of the corporate ship who should be prosecuted. If they are the ones making the decisions out of self-interest, they are the ones that should be held accountable. I also believe that we must protect the “corporate whistleblower” from being punished for having the moral courage to break the corporate code of silence. This amendment does that.

“This amendment also extends the current statute of limitations for matters concerning securities fraud, deceit or manipulation. The current statute of limitations for securities fraud cases is unfairly short given the complexity of many of these matters. Innocent, defrauded investors may be wrongly stopped short in their attempts to recoup their losses under current law. The existing statute of limitations for most securities fraud cases is one year after the fraud was discovered but no more than three years from the date of the fraud regardless of when it was discovered. Because this statute of limitations is so short, the worst offenders may avoid accountability and be rewarded if they can successfully cover up their misconduct for merely three years. The more complex the case, the easier it will be for these wrongdoers to get away with fraud. According to at least one state Attorney General, the current short statute of limitations has forced some states to forgo claims against Enron based on alleged securities fraud in 1997 and 1998.

“This situation essentially encourages offenders to attempt to cover up their misdeeds however they can, including by using questionable accounting procedures and financial shell games. Furthermore, in some cases, the facts of a case simply do not come to light until years after the fraud. If a person does not and cannot know they have been defrauded, it is unfair to bar them from the courthouse.

“These limitations are even more unfair when considered in light of the obstacles that current law can place between a victim and the courthouse in securities fraud cases. By the time a victim learns enough facts to file a complaint, survives a motion to dismiss, begins discovery, and learns that an additional wrongdoer or theory should be added to the case, that claim may be barred and the wrongdoer is able to avoid liability. Thus, current law sets up a perverse incentive for victims to race into court, so as not to be barred by time. Indeed, the short statute of limitations may even encourage frivolous cases, as a plaintiff operating in bad faith would have little trouble meeting the one-year deadline simply by naming every possible defendant and asserting every possible claim. We need to recognize the sophistication and complexity of modern-day schemes designed to defraud investors. It is long past time to give innocent victims a more reasonable chance to recover their losses.

“Finally, this provision amends the federal bankruptcy code to prevent the corporate wrongdoer, the CEO or CFO, from sheltering their assets under the umbrella of bankruptcy and protecting them from judgments and settlements arising from federal and state securities law violations. Too many of these highly paid corporate officers are using bankruptcy laws to protect their assets while maintaining their high-rise penthouses and ski chalets. It is time to force accountability and punish the person, not the institution, who is not willing to abide by the moral and legal codes that accompany leadership and public trust.”


TOPICS: Activism/Chapters; Breaking News; Business/Economy; Constitution/Conservatism; Crime/Corruption; Culture/Society; Government; News/Current Events
KEYWORDS: mccain
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21 posted on 07/10/2002 11:20:13 AM PDT by Mo1
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To: AZ Righty
Is anyone really surprised he chose to support Leahy over Bush?
22 posted on 07/10/2002 11:23:15 AM PDT by rintense
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To: AZ Righty
For the fascist, public or government control is just that-control, rather than nationalized ownership, via complete bureaucratic regulation of ostensibly private business.

McCain has revealed his true colors. He has more in common with Mussolini than with George Washington.

23 posted on 07/10/2002 11:25:03 AM PDT by jimkress
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To: AZ Righty
RINOs and RATs...not a dimes difference between them.
24 posted on 07/10/2002 11:25:09 AM PDT by evad
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To: AZ Righty
McCain's Achilles heel and carries the reminder of the scandal that threatened his political career.

In the picture, which was taken in the Bahamas, McCain is seated on a bandstand while wearing an outrageous, straw party hat. Next to him on the dais, a bottle tipped to his lips, sits Charles Keating III, son of developer Charles H Keating Jr.

It all started in March 1987. Charles H Keating Jr., the flamboyant developer and anti-porn crusader, needed help. The government was poised to seize Lincoln Savings and Loan, a freewheeling subsidiary of Keating's American Continental Corp.

25 posted on 07/10/2002 11:33:04 AM PDT by kcvl
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To: kcvl
I am dying to see this photo, but nowhere can it be found.

If you know where I can find it please let me know.

Thx

AZ Righty
26 posted on 07/10/2002 11:37:16 AM PDT by AZ Righty
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To: evad
McCain is deeply loved by the press. As Silverman puts it, "As long as he's the noble outsider, McCain can get away with anything it seems - the Keating Five, a drug stealing wife, nasty jokes about Chelsea Clinton - and the pundits will gurgle and coo."

Indeed they will. William Safire, Maureen Dowd, Russell Baker, the New Yorker, the New York Times Magazine, Vanity Fair, have all slobbered over McCain in empurpled prose. The culmination was a love poem from Mike Wallace in 60 Minutes, who managed to avoid any inconvenient mention of McCain's close relationship with S & L fraudster Charles Keating, with whom the senator and his kids romped on Bahamian beaches. McCain was similarly spared scrutiny for his astonishing claim that he knew nothing of his wife's scandalous dealings. His vicious temper has escaped rebuke.

McCain's escape from the Keating debacle was nothing short of miraculous, probably the activity for which he most deserves a medal. After all, he took more than $100,000 in campaign contributions from the swindler Keating between 1982 and 1988, while simultaneously log-rolling for Keating on Captitol Hill. In the same period McCain took nine trips to Keating's place in the Bahamas. When the muck began to rise, McCain threw Keating over the side, hastily reimbursed him for the trips and suddenly developed a profound interest in campaign finance reform.
27 posted on 07/10/2002 11:37:24 AM PDT by kcvl
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To: AZ Righty
McCain backs Leahy.

Birds fly.

Big woop.

28 posted on 07/10/2002 11:38:24 AM PDT by Freedom'sWorthIt
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To: My2Cents
Wouldnt you just love to see one of the people who are brought before these committees to just let them have it? Coupled with the billions of tax payer dollars that are lost/misspent and the fools on the Hill, it would make quite a scene.
29 posted on 07/10/2002 11:40:52 AM PDT by capydick
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To: AZ Righty
Mark Levin, Landmark Legal Foundation

"The John McCain of old should be thankful that his political fate wasn't determined by John McCain the reformer".

30 posted on 07/10/2002 11:43:41 AM PDT by kcvl
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To: Republic
"What in the heck is WRONG with McVain?"

McInsane is a bitter...bitter...bitter...little man.

And a loser.

31 posted on 07/10/2002 11:51:45 AM PDT by Right_in_Virginia
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To: Mo1
If I recall .. the Senate STILL has not passed the funding needed for our military

Yeah, but they were Johnny on the Spot, the very picture of legislative efficiency, when it came to voting for THEIR OWN raises.

32 posted on 07/10/2002 11:52:02 AM PDT by McGavin999
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To: capydick
Everyone who goes before any committee in Washington should take the fifth. Let them sit their and bitch until they get tired. BIG DEAL!
33 posted on 07/10/2002 11:52:06 AM PDT by kcvl
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To: capydick
Yeah, I would love that. Unfortunately, Ross Perot is the only one in recent years who might come close to such action, and we all know he's nuts.
34 posted on 07/10/2002 11:52:44 AM PDT by My2Cents
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To: AZ Righty
or just plain ignorant

That's rich...a U.S. Senator calling someone else ignorant. There is (nor ever has been) anything more ignorant (or useless) on the face of the plant than a U.S. Senator. Of all forms of humanity, U.S. Senators are the most ignorant ever seen.

35 posted on 07/10/2002 12:11:50 PM PDT by Scott from the Left Coast
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To: AZ Righty
Senator John McCain (R-AZ) today continued his fight

Senator McVain keeps on running!

36 posted on 07/10/2002 12:18:06 PM PDT by A. Pole
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To: kcvl
You forgot to mention McCain's reference to "gooks," a slur that probably would have ended Bush's career. And although many have cited the Harken stock sale as reason to doubt Bush's sincerety on this issue, none have suggested McCain's role in the Keating Five has undermined his credibility.
37 posted on 07/10/2002 12:19:53 PM PDT by Steve_Seattle
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To: jimkress
He has more in common with Mussolini than with George Washington.

Come on! It is not fair to Mussolini. What about Big Man Bokassa ?

38 posted on 07/10/2002 12:27:00 PM PDT by A. Pole
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To: Steve_Seattle
McCain Relatives Kept Stake

The irony about all of this testosterone over campaign finance reform is that John McCain himself is a most unlikely political reformer. The last surviving senator from the infamous “Keating Five” scandal a decade ago, McCain received $112,000 from Charles Keating (including his family and employees) of the failed Lincoln Savings and Loan, who flew McCain and his family on his corporate jet nine times, including three times to his vacation estate in the Bahamas. McCain and four Democratic senators met with federal regulators at Keating’s request. In the wake of the national scandal, McCain admitted he had made a mistake and contributed $112,000 to the U.S. Treasury.

However, it is not well known that his wife and father-in-law held onto their lucrative stake in a real estate deal Keating had cut them in on, selling their share of the Fountain Square Shopping Center just two years ago for a profit that McCain reported as between $100,000 and $1 million.

McCain certainly is no Washington outsider, with his campaign assisted by such big-name lobbyists as former White House chief of staff Ken Duberstein and former Rep. Vin Weber, R-Minn., and dozens of others. It has been well reported in recent weeks that McCain, as Senate Commerce Committee chairman, has sought and received hundreds of thousands of dollars from companies with business before his committee, and he has done favors for them. For example, besides Keating, his top career patrons have been employees of U S West, who have given $107,520 to McCain. Last May, he introduced the “Internet Regulatory Freedom Act,” which would boost the company’s efforts to offer high-speed Internet service over long-distance phone lines. The same day McCain introduced his bill, U.S. West chairman Solomon Trujillo, a top McCain fund-raiser, crowed, “U S West will be able to provide high-speed Internet service to an additional two million households and businesses throughout our region during the first year alone.”


39 posted on 07/10/2002 12:30:01 PM PDT by kcvl
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To: AZ Righty
McCain backs Leahy's plan? Let me feign surprise:
OH MY GAAAAAAAAAWWWD!

40 posted on 07/10/2002 12:41:20 PM PDT by Recovering_Democrat
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