Bush Backs a 'SWAT Team' to Fight White Collar Crime ; BUSINESS FRAUD President Sends Tough Message on Financial Honesty That Threatens Scandal-Hit Fat Cats of Wall Street
Cornwell, Rupert, The Independent (London, England)
CALLING FOR a "new ethic of personal responsibility" for American business leaders, President George Bush yesterday urged tough new penalties for white-collar criminals, and announced a new task force to investigate and prosecute corporate wrongdoers.
With his keenly awaited speech, Mr Bush was trying to restore investor confidence in US markets after the string of major company scandals, and to tackle an issue which promises nothing but trouble for his Republican party.
"We will use the full weight of the law to expose and root out corruption," Mr Bush told an audience of financial and corporate executives in a hotel ballroom on Wall Street.
"When abuses like this begin to surface in the corporate world, it is time to reaffirm the basic values that make capitalism work. There can be no capitalism without conscience, no wealth without character."
Among his specific proposals, Mr Bush called for the maximum prison term for fraud to be doubled from five to 10 years, and for the watchdog Securities and Exchange Commission (SEC) to be empowered to freeze improper payments to executives while their company is being investigated.
The punishment, the President insisted, "must be as serious as the crime". Mr Bush urged Congress to approve $100m (pounds 65m) of extra funding for the SEC, for 100 new enforcement officers and enhanced technology to crack down on fraudsters.
That proposal alone is a sign of how far Mr Bush has been forced to move, driven by public outrage at the series of frauds, culminating in the $3.8bn of accounting irregularities uncovered at WorldCom last month.
Only a few months ago, the White House was proposing a zero- growth budget for the SEC, that would reduce the number of staff for fraud investigations. All that has now changed, as Mr Bush warned of "more scandals hiding in corporate America ... we must expose them now."
He demanded that chief executives and chief financial officers of companies be required to sign off personally on financial statements, and called for truly independent boards of directors, audit and compensation committees that would "ask the tough questions".
Any executive involved in fraud, should lose all the money he made from it, and business leaders found guilty of fraud should be banned for life …
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Bush Backs a 'SWAT Team' to Fight White Collar Crime ; BUSINESS FRAUD President Sends Tough Message on Financial Honesty That Threatens Scandal-Hit Fat Cats of Wall Street. Contributors: Cornwell, Rupert - Author. Newspaper title: The Independent (London, England). Publication date: July 1, 2002. Page number: 2. © 2009 The Independent - London. Provided by ProQuest LLC. All Rights Reserved.