D.C. Donnybrook
June 11, 2002
The result of all the jousting and political maneuvering won't become clear until November, when voters decide who will control the House and the Senate.
Democrats are moving quickly to exploit the corporate scandals and stock market meltdown that have shaken the U.S. economy.
With control of Congress at stake in the fall elections, the Democrats have rolled out the big guns in the bid to tie the GOP and the White House to the nation's economic woes.
Top Democrats have come out swinging with attacks on the GOP.
"We fought for legislation imposing tough new criminal penalties on corporate lawbreakers. Republicans blocked it," complained House Minority Leader Dick Gephardt, D-Mo.
"For all of its expressed concerns about the public's loss of confidence in corporate America, this administration seems to have given little, if any, consideration to the loss of the public's trust in government. And sooner or later, high poll numbers will tumble, as they always do," said Sen. Robert Byrd, a West Virginia Democrat.
The Democrats are trying to tar the White House with the scandal by exploiting these recent developments:
* President Bush received two low-interest loans in the 1980s from Harken Energy, a Texas oil company where he was a director - the same kind of loan he asked companies to end as part of his proposal to discourage corporate wrongdoing, according to published reports.
* The public ethics group Judicial Watch sued Vice President Dick Cheney and the Halliburton oil services company he once ran, alleging they defrauded shareholders through misleading financial statements. Cheney and Halliburton separately said the lawsuit was without merit.
American Family Voices, a group with ties to labor unions, has been running a TV ad that goes to the heart of the Democratic attack on the White House.
"Bush and his economic team promising to crack down on corporate America is like letting the fox guard the hen house," the ad says.
The Democrats are trying to tap voter unhappiness with the mess in the boardrooms. A new CBS News poll shows that just one in four Americans believes most corporate executives are honest. A solid majority also thinks that illegal practices like insider trading and accounting fraud are widespread.
The public also thinks that the Bush administration is too cozy with big business. None of this, however, necessarily translates into gains for the Democrats.
The same poll found that most Americans trust President Bush to make the right decisions about regulating business. And most Americans described Bush administration officials as honest.
The GOP is hardly taking the Democratic onslaught lying down.
"The president is taking strong steps," White House spokesman Scott McClellan said Thursday, referring to Mr. Bush's calls for tougher sentencing guidelines for criminal fraud by executives and company directors and stronger laws to criminalize document shredding and other forms of obstruction of justice.
Mr. Bush announced his proposals on Tuesday in a speech in the heart of New York City's financial district. He said his administration would do "everything in our power to end the days of cooking the books."
The White House also defended Mr. Bush's Harken loans Thursday, saying they were "entirely appropriate and fully disclosed" to the Securities and Exchange Commission.
Meanwhile on Capitol Hill, congressional Republicans seem to be vying with their Democratic rivals to see who can be tougher on corporate crime.
The Senate threw the book at corporate criminals on Wednesday, responding to multiple white-collar scandals with multiple measures to try to put the culprits in jail on any number of charges.
While debating an accounting reform bill, Republicans and Democrats united to pass amendments to create a new crime of securities fraud and raising to up to 10 years the jail time for existing corporate crimes, including proposals made by Mr. Bush in his Wall Street address.
For example, the Senate approved a proposal favored by Mr. Bush and introduced by Senate Republican Leader Trent Lott that gives the Securities and Exchange Commission the authority to freeze excessive payments to corporate officers, and bar them from serving if they have committed a securities law violation and their conduct demonstrates "unfitness" to serve.
"The Senate has moved one step closer to providing America more confidence knowing that when corporate executives commit crimes and mislead investors, they will be brought to justice," said Lott.
Senators are competing to out-tough each other with their proposals, which were aimed at restoring investor confidence in the wake of scandals from Enron Corp. to WorldCom Inc. - as well as limiting the political fallout on their respective parties.
The result of all the jousting and political maneuvering won't become clear until November, when voters decide who will control the House and the Senate.
http://www.cbsnews.com/stories/2002/07/11/politics/main514882.shtml