Bush signs corporate fraud bill
"No more easy money for corporate criminals. Just hard time,'' Bush said before signing the bill today as lawmakers of both parties and top administration officials looked on. Conspicuously absent were corporate CEOs.
"Free markets are not a jungle in which only the unscrupulous survive, or a financial free-for-all guided only by greed,'' said Bush at an East Room signing ceremony carried out with considerable fanfare.
"This law says to every dishonest corporate leader, you'll be exposed and punished. The era of low standards and false profits are over,'' he said.
A wave of corporate accounting scandals in an election year helped propel the reforms to approval in Congress with extraordinary speed.
The administration was eager to enact new laws after the scandals threatened to damage the White House politically, and drove markets down. The records of Bush and Vice President Dick Cheney, both former corporate executives, have come under intense scrutiny in recent weeks as well.
House Republicans last week accepted most of the stricter parts of a bill passed by the Democratic-controlled Senate to create the final version. The measure tightens regulation of companies' financial reporting and provides new oversight of independent auditors.
It does so by adding criminal penalties and prison terms for corporate fraud and document shredding, imposing restrictions on accounting firms that do consulting work for corporations whose books they audit, requiring top company executives to vouch personally for the accuracy of their companies' reports and creating new rules for financial analysts designed to prevent conflicts of interest. The measure also establishes an independent board, with subpoena power, to oversee the accounting industry.
It does not, however, require corporations to count as a business expense lucrative stock options they shower on top executives. Many analysts believe such a provision is necessary, but the administration has opposed it. Legislation to improve protections for employee pensions is pending in Congress.
In a speech yesterday, Bush also sought to allay worries about the economy, stressing that its solid foundation for long-term growth while reassuring Americans who are hurting that he is sympathetic.
"It's a concern of mine to know that there are Americans who are still looking for a job and can't find one, and we need to do something about it,'' Bush said.
But, he added: "I'm optimistic about our economic future.''