Talent and Carnahan play up strengths on security, economy

WASHINGTON -- Missouri's economy was already struggling when Enron Corp. plummeted to failure last year, triggering a series of corporate scandals that sent stocks tumbling and erased millions of dollars from retirement funds nationwide.

With the still-reeling economy lagging behind that of the state's neighbors, Democratic Sen. Jean Carnahan has focused heavily on the economy, and particularly on accounting abuses, in her campaign for election Nov. 5.

Polls show her supporters care most about the economy, followed by health care and prescription drugs. The economy also is important to backers of Republican challenger Jim Talent, but they place it behind national security on their priority list.

Talent and Carnahan played up these strengths in their first television commercials: She called for prison time for CEOs who commit fraud, while he urged support for strengthening national defense in the face of terrorist threats.

Enron's collapse was the first in a series of scandals in which companies were revealed to have purposely made their earnings look better than they really were.

Congressional response to corporate abuses involved Carnahan from the beginning. Like dozens of her colleagues, she had received a campaign contribution from Enron; unlike most, she returned the check long before the scandal, citing allegations of profiteering during the California energy crisis. She sent back money from WorldCom, too.

With lawmakers moving swiftly to draft and pass new corporate accountability laws -- a rare success amid partisan bickering on Capitol Hill -- Carnahan inserted stricter disclosure provisions for the Securities and Exchange Commission to keep executives from secretly selling off company stock when a corporation falters.

"With the economy being so weak, there are things that have happened in our corporate world that have caused a lack of confidence. I think we're going to have to strengthen the SEC so that they can carry out and implement some of the rules we've already laid out for them," Carnahan said in an interview.

She criticized Talent for voting while he was in the U.S. House to cut funding to the SEC: "What we need to be doing is strengthening the SEC, because it's the watchdog out there for investors."

Accountability, not money

Talent points out the goal of reducing spending in the 1990s was to balance the budget.

"Money is not the issue. I'd like to know what they were doing with the money they were getting. It's a question of accountability, not money," Talent said in an interview.

The SEC was "just nowhere in all of this," he added. "I would like to have asked them, 'Where were you? Enron was only the seventh-largest company in the country. Did you have anybody watching Enron?"'

In the corporate accountability bill that became law, lawmakers created criminal penalties and prison terms for fraud and document shredding, and set up a new independent, private-sector board to oversee the accounting industry.

Talent says he would have voted for the bill, but that it could have been tougher and included forfeiture of executives' property as another penalty.