In 1993, a watchdog panel sought to require that stock options be listed as operating expenses, just like salaries, so that overall earnings would be accurately reported. This effort was thwarted by 88 senators, led by Connecticut Democrat Joseph Lieberman. Experts say this episode inspired accountants to devise ever more creative ways to measure profits.
In 1995, nearly half of Senate Democrats and 89 House Democrats helped enact a law (over Clinton's veto) that hindered aggrieved investors' efforts to win lawsuits against firms and auditors that may have misled them. The law also eased penalties on misbehaving CEOs. A prime backer was Connecticut Democratic Sen. Christopher Dodd, an accounting industry favorite and cochairman of the national party.
In 2000, many key Democrats inveighed against Securities and Exchange Commission Chairman Arthur Levitt when he sought to end the big accounting firms' practice of consulting for lucrative fees with companies on business strategy while auditing their books in a supposedly objective manner. Levitt saw this as a conflict of interest. But prominent Democrats - among them, New Jersey Sen. Robert Torricelli - helped the GOP erect roadblocks, including threats to slash Levitt's budget. Levitt finally gave up. But at a hearing last winter after Arthur Andersen's conflicts with Enron were exposed, Torricelli told Levitt: "We were wrong, you were right."
In 2002, the Democratic chairman is a former corporate insider. McAuliffe acquired his Global Crossing stock before the firm went public, with an assist from founder Gary Winnick. Even Joe Conasan, a pro-Democratic commentator, believes that McAuliffe (a party fund-raiser at the time) was granted this perk because of his ties to President Clinton - thus making chairman McAuliffe "an odd spokesman these days for little people screwed over by big bad business."
Lieberman, at least, was responsible for passing the law that changed the way stock options were handled and reported. See the Scott Burns article posted on FR yesterday. (thanks to my bud, Dog Gone!)