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CNN Live Today

President to Address Wall Street

Aired July 09, 2002 - 10:01   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.
DARYN KAGAN, CNN ANCHOR: Right now, let's get a preview of Mr. Bush's speech on Wall Street and his message to the corporate world, and for that, we turn to our senior White House Correspondent John King, who is traveling with the president -- John, good morning.

JOHN KING, SENIOR WHITE HOUSE CORRESPONDENT: Good morning to you, Daryn. Here on Wall Street, the president will tell corporate America, especially any leaders who think they might be able to get away in the future with cooking the books, that corporate America must have a more morale, ethical, code of responsibility to restore investor confidence in the stock market, and the overall U.S. economy.

The president will also, though, make the case that because of the Enron accounting scandal, because of the WorldCom accounting scandal that the federal government can, and must, do more immediately. Mr. Bush, in his speech here on Wall Street will outline a number of proposed reforms.

Number one, he will propose tougher jail sentences for any corporate leaders, who are involved in any fraud. He'll also call for tougher sentences for mail fraud, or shredding documents, any steps taken by corporate officials to obstruct investigations.

To help the federal government investigate these fraud cases, Mr. Bush will ask Congress to give him $20 million for the Securities and Exchange Commission now, to hire 100 new investigators, and $100 million next year, to help the government hire even more investigators and new computers, and other technology, to help with investigations.

And, Mr. Bush will also call for an independent board to police the accounting industry. One theme of this speech, we are told, is that Mr. Bush will say it is time to take corporate accounting, "out of the shadow," so that investors have confidence, when they read a company's financial statement, that the numbers in those reports are true.

Now, as Mr. Bush lays out his policy proposals, he does so in a highly-charged political atmosphere. Some Democrats back in Washington say this president does not have the standing to lead the charge for corporate reform. They're referring to a case back in 1991, when Mr. Bush was investigated for possible insider trading.

The Securities and Exchange Commission said there was no evidence to go forward. Mr. Bush bristled when he was asked so many questions about it at a White House news conference yesterday. This morning, his Secretary of Commerce Donald Evans out making the case that Democrats are trying to undermine the president at this critical moment.

(BEGIN VIDEO CLIP)

DON EVANS, COMMERCE SECRETARY: I think the American people want to focus on the issue of the moment, the principal issue, which is restoring investor confidence in these public markets, and that's what this president is focused on, and that's what the American people want this president to be focused on, and want this town to be focused on. They don't want this town focused on a bunch of political garbage.

(END VIDEO CLIP)

KING: And, as the president lays out his policy proposals, though, he also will defend his administration against charges that it's too cozy with big business, not aggressive enough in enforcing existing laws.

Mr. Bush will say the Securities and Exchange Commission has had a very aggressive enforcement year, including once the Enron scandal hit the newspapers, going back to more than 900 of the largest companies across the United States and telling them to go back and recheck your financial statements, and to recertify to the federal government that those accounting practices are in shape at all the other big companies -- Daryn.

KAGAN: John, you mentioned the high-charged political atmosphere. As we were saying at the bottom of the hour, we expect to hear from Tom Daschle and Dick Gephardt, the two leading Democrats in Congress.

It does seem like there's a struggle to own this, in terms of trying to take advantage of it. What should our viewers be listening for, as they listen to the Democrats, and then to President Bush, to sort through the political aspects, and get right to what these politicians plan to do about this huge problem here in the U.S.?

KING: Well, I think it is without a question, one piece of legislation has already passed the House. Another piece that the Democrats and some Republicans say is even tougher is making its way through the Senate.

There is no question that there will be corporate reform legislation passed by the Congress in the coming weeks and months, before Congress adjourns. This is a congressional election year. Members of Congress are just as nervous about the president. If you are an incumbent, you do not want the voters angry about the economy. When the voters are angry and uncertain about the economy, they tend to take it out on the incumbents.

Now, that rule applies even more so to the president's party, which is why Republicans are even more nervous. Look for a lot of pointing back and forth. Look for a lot of charges back and forth. Look for the president, as he has said throughout this debate, to say I like this, I don't like that, but also look for this to move very much like the campaign finance debate.

If a piece of legislation passes Congress, with significant bipartisan support, even if there are one or two things in it the president doesn't like, he will sign the legislation -- Daryn.

KAGAN: John King on Wall Street, thank you very much.

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