-Caveat Lector- That's pretty rich, Bush
The President started the week trying to save corporate America. He ended it trying to save himself Oliver Morgan Sunday July 14, 2002 The Observer 'My friends are crooks. The companies they run look corrupt. The regulators I appoint are too soft. My colleagues in government face lawsuits for fraud. But I'm going to solve corporate crime with some ass-kicking laws. Hey, and trust me, I'm the President.' After a week in which markets globally were badly wounded by the Dow - which fell 700 points, dragging the FTSE down by nearly 400 - it is clear that not only Americans but people around the world are in no mood to take George W Bush and his promised crusade against corporate corruption on trust. In fact, the attempt to appear tough on WorldCom, Enron, Andersen and the rest ahead of mid-term elections in November turned out disastrously. Day 1: Bush held a rare press conference to gain the initiative ahead of his key Wall Street speech. Instead, he was rocked onto the defensive over allegations concerning his own financial dealings in the oil company Harken Energy. Day 2: In Tuesday's speech, Bush said 'too many corporations seem disconnected from the values of our country'. He listed measures, including a task force that would be a 'financial crimes Swat team', anti-shredding laws, a $100m boost for the Securities and Exchange Commission, the forfeiture of pay gained by deception, greater accountability for CEOs, and an increase in prison terms for fraud to ensure 'those who breach the trust of the American people are punished'. It read like a plea for credibility. It was snubbed. Democrats, led by the presidential hopeful Tom Daschle, ridiculed both the rhetoric and substance, highlighting Bush's refusal to endorse a tough package of laws being proposed by a Democrat, Senator Paul Sarbanes. Bush was the 'unconnected' one. As the Dow slid, a Democrat aide said: 'The markets clearly don't think he has gone far enough, and neither do we.' Then it got worse. Day 3: Vice-President Dick Cheney was named in a civil action against construction group Halliburton and its accountants Andersen. The details of the contested action, in which Halliburton directors are accused of colluding to inflate the company's earnings, read disturbingly like the Enron case and follow the opening of a separate SEC investigation in March. Day 4: It emerges that Bush received a low-interest loan from Harken - something that WorldCom chief executive Bernie Ebbers (currently under investigation) did, and which Bush said should be banned. Throughout all of this some critics made a direct link to Bush and his well- known connections with rich business men, particularly fellow Texans. Chuck Lewis of the Centre for Public Integrity, which investigates links between politics and business, says: 'The reason that he does not have credibility in trying to deal with big business is that in the public mind he is seen as in their pockets.' New York Representative John LaFalce, senior Democrat on the House of Representatives financial services committee, says: 'He denied debate for the past year and a half - especially since Enron - as the problems were beginning to surface, and did so very little. Then because of WorldCom and because of growing sentiment against corporate America and Wall Street, he felt compelled to do something. But neither his words nor his demeanour on Tuesday had any credibility.' Republicans retort that Bush's speech was tough. Several of Bush's proposals - forfeiting pay, preventing executives trading shares during closed periods, preventing analysts misleading markets - sound similar to the Sarbanes programme. But this, says LaFalce, is misleading. For example, the $100m SEC budget increase is dwarfed by more than $700m proposed by Democrats. The shredding proposals are a 'smokescreen' to keep attention on Andersen, not Bush's Texas friends at Enron. Instead of a catchy 'Swat team', Sarbanes proposes a prosaic but independent Public Company Accounting Oversight Board. This will have the power to inspect big accounting firms every year and investigate complaints about firms. Companies should not be able to offer consulting to firms they audit. He demands compulsory rotation of firms. The controversy is set to rumble on, to the delight of Democrats. Sarbanes's Bill is expected to clear the Senate next week, but it must then be combined with weaker measures proposed in the 'Oxley' Bill from the Republican-held House. LaFalce indicates Bush's support for Oxley will be used to beat him. 'He praised the House-passed Bill, which gave away everything. That revealed his true colours.' As a member of Sarbanes's staff said: 'My boss is not going to compromise on this. And he has support - many in the House have come to us after WorldCom, saying they now think we need tougher laws.' Whatever happens, Bush will be portrayed as wobbly on this issue - one where Democrats feel they can dent his gleaming post-9/11 popularity. And for those who want to believe that the reason for Bush's lack of conviction is chumminess with businesses that like to bend rules, the circumstantial evidence is well known and easily available. In the 2000 presidential election, WorldCom, for example, gave 70 per cent of its $1.9m political donations to the Republicans. For Andersen it was 71 per cent of $1.4m. Enron - led by 'Kenny Boy' Lay - gave their buddy $113,800 between 1989 and 2001, while Al Gore got $13,750. Enron gave $300,000 to the Bush inaugural fund in 2001, and helped out with the costs of the 2000 poll recount. There is also the criticism over Bush's sale of $849,000 of shares in Harken in 1991. Soon afterwards the company reported heavy losses and its shares nearly halved. The SEC found no wrongdoing on Bush's part, but did on the company's, of which Bush was a director. It is not just Bush. Harvey Pitt, his choice as SEC head, has been ridiculed for suggesting a 'kinder and gentler' approach to accounting issues last year, before the Enron scandal broke. Pitt formerly worked in accountancy. Then there is the Cheney lawsuit, dismissed as politicking by the White House. Tom Fitton, president of Judicial Watch, which is bringing the case, says: 'We believe Cheney ordered the change in accounting policy which allowed this to happen... as CEO he has responsibility for what went on. They should be taking these issues seriously but their response to our action shows they're not. 'That's why the speech did not work. It didn't distract attention from the issues at hand. He has got into it too late.' The President's men Thomas White: Army Secretary White, a former Enron executive, sold $12m of Enron shares between June and November last year. He was vice-chairman of Enron Energy Services, implicated in manipulating electricity costs in the California power crises. Paul O'Neill: Treasury Secretary As former chief executive of Alcoa, the world's biggest aluminium company, O'Neill receives an annual pension from the company of $926,000. Once in office, he delayed selling his Alcoa shares, until they rose steadily by 30 per cent. Larry Lindsey: White House economic adviser Was a paid Enron consultant still on payroll when devising Bush's economic policies for the election campaign. Lindsey conducted an investigation into the effect of the collapse of a major energy company on the economy just before Enron's difficulties became known. <A HREF="http://www.ctrl.org/";>www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! These are sordid matters and 'conspiracy theory'—with its many half-truths, mis- directions and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRLgives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credence to Holocaust denial and nazi's need not apply. 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