Bush urges tougher penalties to deal with corporate scandals
NEW YORK -- President Bush called for doubled prison terms and aggressive policing Tuesday to combat fraud and corruption in scandal-tarred corporate America, promising to do "everything in our power to end the days of cooking the books."
Democrats faulted his proposals as inadequate, and Wall Street investors yawned.
Bush, wearing a Big Apple lapel pin, traveled to the heart of Manhattan's financial district to respond to the corporate accounting scandals that have shaken investor confidence, threatened an economy struggling to recover from recession and called into question his own decades-old transactions as a private businessman.
"At this moment, America's greatest economic need is higher ethical standards -- standards enforced by strict laws and upheld by responsible business leaders," Bush told a business-suited audience parsimonious with its applause.
"There is no capitalism without conscience, there is no wealth without character," he said, offering a prescription of prosecution for individual cheats rather than an overhauling of the fundamental system of business regulation.
Financial SWAT team
Bush signed an executive order creating what he called a "financial crimes SWAT team" at the Justice Department, which had had no division charged solely with prosecuting corporate fraud. He proposed doubling the maximum prison terms for such fraud to 10 years and strengthening laws that criminalize document shredding and other forms of obstruction of justice.
He endorsed guidelines proposed by the New York Stock Exchange and Nasdaq to keep people with personal financial interests in a company off its board of directors or audit committee. And he sought a ban on private loans between chief executives and their companies.
He asked Congress for a stronger Securities and Exchange Commission -- one with 100 new enforcement officers plus more investigators and an extra $100 million to work with.
Congress' top Democrats -- Senate Majority Leader Tom Daschle and House Minority Leader Richard Gephardt -- appeared on Capitol Hill with out-of-work WorldCom and Enron employees to counter Bush's speech with their own "investor's bill of rights" announcement.
They insisted upon a new federal board to regulate the accounting industry.
Bush no doubt shares public outrage over corporate corruption, said Daschle, D-S.D. "The question is whether he is willing to take action on that outrage and support the legislation which will actually help solve the problem."