Jul 11, 2002 By Marcy Gordon Ap Business Writer 4 min read

WASHINGTON (AP) – As an accounting oversight bill moves toward Senate passage this week, President Bush expressed confidence to legislative leaders Wednesday “that Congress will be able to get this done,” White House spokesman Ari Fleischer said. Bush also stressed “the importance of working together to do it,” Fleischer told reporters as the Senate debated the legislation. However, he said, it is still too soon for Bush to commit to signing it.

Republicans want Democrats to attach penalties that Bush says are needed to fight corporate wrongdoing. Democrats say they want tougher penalties than those Bush proposed in a speech Tuesday.

“I don’t think the president or the administration gets what this is really about,” Sen. Paul Wellstone, D-Minn., said on the Senate floor. The need for the legislation “goes way beyond Enron, goes way beyond WorldCom,” he said. “The American investing public has lost its confidence in this corporate system.” Bush, who traveled to the heart of New York City’s financial district to deliver the speech, called for doubled prison terms and aggressive policing to stem fraud and corruption in scandal-tarred corporate America, promising to do “everything in our power to end the days of cooking the books.”

“We will use the full weight of the law to expose and root out corruption,” he pledged.

Bush has given only qualified support to the bipartisan accounting bill, which would create an independent private body with authority to discipline auditors and establish auditing and ethics rules.

The measure also would limit the consulting work that accounting firms can do for their audit clients – a step fiercely opposed by the accounting industry, a major contributor to lawmakers’ campaign funds. If the Senate passes the bill, it still has to be reconciled with a version that passed the Republican-led House in April. That bill has been criticized by consumer groups and some Democrats as too weak to bolster investor confidence.

The White House, in a statement Tuesday, said it supports the Senate bill’s goals but – among other objections – is concerned that it “rigidly defines accounting services boundaries by (law) without reference to the size and needs of public companies in a rapidly changing marketplace.”

Senate Minority Leader Trent Lott, R-Miss., meanwhile, asked Majority Leader Tom Daschle, D-S.D., to bundle into a bipartisan amendment Bush’s proposals that require legislation – including doubled sentences for mail and wire fraud, and increased penalties for document shredding. Most of Bush’s initiatives don’t call for new laws; many just urge companies and executives to adopt them.

Daschle has been working on just such an amendment bundling Bush’s proposals, provided they don’t weaken a Democratic measure that would create new criminal penalties for securities fraud, Daschle spokeswoman Ranit Schmelzer said.

Democrats were miffed at Bush’s lack of support for that measure, which they are seeking to attach to the accounting legislation.

And they scoffed at his proposal to give the Securities and Exchange Commission – pursuing civil investigations of several big corporations – an extra $100 million.

It “hardly puts a cop on the street,” said Sen. Christopher Dodd, D-Conn. The accounting bill, written by Senate Banking Committee Chairman Paul Sarbanes, D-Md., calls for an additional $300 million or so for the SEC to hire some 200 auditors and investigators. A relentless stream of revelations of accounting misdeeds at big corporations in recent months has eroded public confidence in corporate America. Tens of thousands have been laid off – 17,000 at WorldCom alone – and millions have lost retirement savings, handing Democrats a key issue just months before the congressional elections and putting Bush on the defensive.

As Bush spoke in New York, Democrats on Capitol Hill assailed his corporate responsibility address as long on rhetoric and short on action. They challenged the president to support the accounting bill.

“It is not enough to talk about accountability; you have to act to ensure it,” Daschle said at a news conference with House Minority Leader Dick Gephardt and laid-off employees from WorldCom and Enron.

Without support for the accounting oversight bill now before the Senate, Daschle said, Bush’s speech “will ring hollow.”

Dodd said, “The silence out of the White House has been deafening on this issue.” Sen. Jon Corzine, D-N.J., former head of Wall Street investment firm Goldman Sachs, called the speech “a grave disappointment.”