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CNN Live At Daybreak
Cries for Finance Reform Growing
Aired July 02, 2002 - 06:14 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Politics and money have always gone hand in hand. That now may be particularly true in light of the recent wave of corporate scandals and the escalating cries for reform. CNN's Tim O'Brien explains.
(BEGIN VIDEOTAPE)
TIM O'BRIEN, CNN CORRESPONDENT (voice-over): Over the years only a handful of industries have showered political candidates with more cash than has Wall Street, particularly in election years. But securities industry spokesmen insist it's entirely appropriate given the industry's stake in restoring investor confidence.
MARC LACKRITZ, PRESIDENT, SECURITIES INDUSTRY ASSOCIATION: Obviously it's helpful to us for our customers to get this stuff cleaned up as soon as possible, have the wrongdoers prosecuted as quickly and effectively as possible, and to make the reforms that are necessary to get better information to investors.
O'BRIEN: Critics say the securities industry is partly to blame for the recent scandals. With reform in the air, as rarely before, the need to have access in Washington may be greater now than ever.
LARRY NOBLE, EXECUTIVE DIRECTOR, CENTER FOR RESPONSIVE POLITICS: A lot of the firms that are sitting around now, thinking what's going to happen? What's our interests? Their lobbyists are going to them and saying, we'd better ramp up those contributions because we've got to try to stop whatever they're going to try to do, or we have to try to make it more reasonable.
O'BRIEN: In the last presidential election, George Bush received more from Wall Street than anyone, more than $4 million. Al Gore got just under $1.5 million. But overall, Democrats seem to do just about as well as Republicans. The top contributor in this current election year is Goldman Sachs, just under $1.5 million, more than 80 percent of that to Democrats.
The crises at Enron, Andersen and now WorldCom have been disastrous for their employees, their investors and many others.
(on camera): But not for everyone. As the cries for reform escalate, the recent corporate fiascoes could produce a windfall in campaign contributions for those charged with deciding what direction those reforms might take. Tim O'Brien, CNN Financial News, Washington.
(END VIDEOTAPE)
COSTELLO: Along with that financial windfall could come scandal, as well, the kind of scandal that sticks to a sitting president and does not let go.
To talk about that, we have Dr. John Orman, a professor of politics at Fairfield University in Connecticut. He joins us live by phone this morning.
Good morning.
JOHN ORMAN, PROFESSOR, FAIRFIELD UNIVERSITY: Good morning, Carol.
How are you?
COSTELLO: I'm fine.
Thanks for joining us.
Can President Bush escape the taint of scandal in this case?
ORMAN: Well, he's going to have to marshal all of his resources. He's going to give a major address, I believe, July 9 at Wall Street, and he's going to have to convince the American people that he can provide the leadership. He's going to have to use the same amount of energy that he's using in his war on terrorism, this is such a serious issue for the American people.
COSTELLO: I was just going to ask you that. How serious of a scandal is this?
ORMAN: Well, when we have one major firm having ethical problems like Enron, that might just be considered a blip. But when we have a number of companies starting to have, reporting irregularities, unethical practices, the American people now, in terms of confidence, many Americans believe that this is just the tip of the iceberg.
And so President George W. Bush is really going to have to try to provide the leadership. And there's some question that this is the issue that he could provide leadership on.
COSTELLO: He did talk about it in Cleveland yesterday. We want to play a bit of that speech for you right now. Let's listen.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I expect there to be responsibility at all levels in our society and I intend to fully enforce the law when people cheat on the balance sheets of corporate America.
(END VIDEO CLIP) COSTELLO: Pretty strong words from the president. Is it enough?
ORMAN: It's very similar to this March statement when he had his 10 point plan of corporate accountability. One of the things missing -- I think Secretary O'Neill wants to get it in there -- is the ability of citizens to sue quicker and get their money back that they've lost in their jobs and that they've lost from unfair practices.
So I think he needs to do much more, especially he has to convince the American people that he really wants to be involved in this new regulatory process.
You'll recall in the past that one of his main things is get government off the backs of the people, get government off the backs of businesses and let business be business. Well, in the past three months, we've seen what business can do when they're not really regulated.
COSTELLO: Do you think he really needs to make sure that someone is criminally indicted for this and that someone goes to jail?
ORMAN: Yes. The Justice Department and John Ashcroft, they are going to have to look at this instead of spending 99.9 percent of their time in fighting the war against terrorism, which we want them to spend a lot of time, they're also going to have to go after these major players who have been doing, at least according to media reports, just unbelievable things.
COSTELLO: That so many of his cabinet members are connected to big business, this is really hindering things, too, for the president, isn't it?
ORMAN: Yes. He has a number of close ties to multinational corporations, big business through campaign contributions. He also, before he was governor of Texas, was a major player in the stock market. So he has a lot of friends that he's going to have to look in the eye and make sure that they are acting ethically.
COSTELLO: Well, we'll see what happens on July 9 when the president outlines his plan to deal with the scandal on Wall Street.
Thank you for joining us this morning, Dr. John Orman, from Fairfield University in Connecticut.
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