CNN LIVE EVENT/SPECIAL
Sen. Daschle and Rep. Dick Gephardt Conduct a Press Conference
Aired July 9, 2002 - 10:42 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: The Senate Majority leader Tom Daschle has stepped up to the podium, so let's let him speak for the Senate and for Congress. The Democrats -- let's listen in.
(JOINED IN PROGRESS)
SEN. THOMAS DASCHLE (D), SAN DIEGO: ... a few minutes late. We were on the floor just now with a number of developments.
Dick and I just had the opportunity to meet with Debbie Perada (ph), who lost her job at Enron, and Cara Alcantar, who was recently let go from WorldCom. Sadly, Debbie (ph) and Cara are not alone. They represent thousands of Americans who have lost their jobs, not because of any fault of their own, but because of corporate mismanagement. Their experiences serve as a stark reminder that when corporate fraud leads to corporate failure, people get hurt.
It's not just the thousands of WorldCom and Enron employees, it's the millions of investors and retirees who have seen their savings and pensions reduced by billions of dollars. And it's our economy as a whole. The string of recent disclosures undermines investor confidence, scares off foreign investment and slows an already shaky recovery.
That's why I'm hopeful that today's speech by the president will endorse what the Senate Democrats have already passed out of committee: tough new penalties for corporate fraud, real accounting reform and strong new measures to protect investors and pensions.
To us, it's not enough to talk about accountability, you have to act to ensure it. The test for the president today is not whether he shares the outrage that the workers and shareholders in these companies feel. I have no doubt that he does.
The question is whether he is willing to take action on that outrage and support the legislation which will actually help solve the problem.
The most recent statements form the administration are not encouraging. We believe that to truly take on corporate fraud, you need to do two things: a strong independent oversight board to audit the auditors and real restrictions on auditor conflict of interest. If you don't support those, you don't support real reform. For all of the corporate scandals we have seen, the thousands of workers hurt, the millions of investors and retirees who have seen their 401(k)s gutted, this can still be a hopeful moment. We have a bill that protects workers, protects shareholders and protects pensions.
In fact, I think we should take even further-reaching efforts to protect pensions. And I am announcing this morning that the second half of this effort will take place later on this year. We will protect pensions. And that will be the focus of our legislative effort soon after we address this important issue today and this week.
But with many foot-draggers starting to sound more like reformers, I believe we have an opportunity to pass these measures now. All we need is one thing: We need the president's support.
Without support for Senator Sarbanes' bipartisan corporate responsibility bill, the president's words today will ring hollow. Without support for Senator Leahy's bill to create criminal penalties for corporate fraud, white collar criminals will continue to be treated with kid's gloves.
Senator Leahy's bill passed out of committee four months ago. Senator Sarbanes' bill passed last month. Each had a strong bipartisan vote. The president simply needs to say, "I will sign them." And we can have them on his desk in short order. If he does not, it will be far more difficult to protect workers, protect investors, reform accounting and strengthen our economy in the process. economy in the process.
I hope the president uses his speech today to do the right thing for Debbie (ph) and for Cara and for America's economic security.
It is now my pleasure to introduce Cara Alcantar.
CARA ALCANTAR, FORMER WORLDCOM EMPLOYEE: My name is Cara Alcantar, and I'm a laid-off WorldCom employee from Phoenix, Arizona.
On June 28, WorldCom announced a mass layoff that included everyone in my department. I can't say I was surprised by the announcement, for reasons I'll talk about later, but I was still in a state of shock. What happened? What went wrong? Was it our fault?
I've never endured a layoff before. It was probably stage one right after I was laid off when I felt like I did something wrong, like I was being held responsible for WorldCom falling apart.
Stage two is depression. I feel like what's the point of getting another job, look what happened to this one.
All of my coworkers are nervous about taking new jobs at big corporations. We worked hard for a big company that said it was an innovative leader and promised tremendous growth. Instead, we lost everything.
Things started to look bad for us at the beginning of the year when WorldCom announced that we would not receive any raises or pay increases. Our free long distance was taken away, and our free coffee and cups at work were taken away. Also, upper management and executives started resigning and jumping ship.
We were told that WorldCom needed to take these cost-cutting measures in the best interests of the company, so we carried on. Yet it almost felt that I had done something wrong, since I was the one being punished.
Last Wednesday was my department's final day at WorldCom. We turned in our badges, exchanged hugs, and we went our separate ways. Again, we believed that cutting our department was in the best interest of the business, but it was hard to shake off the feeling of being punished.
As if being laid off wasn't enough, I also have to deal with losing my 401(k) investment. Our 401(k) was the only retirement plan we had at WorldCom.
For two years, I invested 100 percent of my contribution, plus 100 percent of my employers match in WorldCom stock. Even to this day, I never sold a share of WorldCom stock.
I thought this was the right thing to do. I didn't have to put so much of my money in WorldCom. Unlike Enron, I had a choice between stock or cash. When my colleagues asked me why I put so much money in WorldCom, I told them, why wouldn't I invest in the company that I based my career on.
Yes, I had choices, and there are no guarantees. But I believed it was important to place value in my company and its growth. That was the problem. All this growth was based on amounts and projections based on false information.
That is a huge problem. It's not just my problem, because I am out of a job and a 401(k), but it's also the thousands of other employees who invested many more years than myself and thousands more dollars into the company. And it's a problem for their families and the integrity of corporate America.
When I mention the word families, five families come to mind. Five of the women in my department are single mothers who are now out of a job. I know families that have just purchased homes. One person in particular who just bought a home in the last year is also expecting her baby, and is willing to take any job she can get right now. But it's tough to get a job when you're pregnant.
These are just a few of the reasons that I came out here today. I am in strong support of the Sarbanes, Leahy, McCain and Kennedy bills. In fact, I can't believe these laws don't exist already. Companies need honest accountants and boards of directors. White collar crimes need to be taken just as seriously as other crimes like robbery. And we need 401(k) protection so that when your employer has trouble, your retirement security doesn't go with it.
I've read that the people in the House of Representatives who oppose these reforms say that businesses need more flexibility, not more laws. But the flexibility that exists now is proven to allow serious breaches of integrity and has cost billions of dollars that bleed out of essentially every American's pocketbook.
There is plenty of evidence that some people, when given the opportunity, will take great advantage of the leniency now in place, and that when this happens on a large corporate scale, we all lose. We need to remember that these bills are preventative measures. It seems obvious where there is no crime committed, there should be little resistance to these bills being applied. This is so important to me.
If they have nothing to hide, then they should have nothing to oppose. Perhaps if we already had these reforms, I wouldn't be here and we wouldn't be in this situation to begin with. If WorldCom isn't the last company that has something to hide, and the fact that I'm here seven months after the Enron workers were standing here, makes me think that there could be more, then we need to enforce new rules and new reforms right away.
This is a serious situation. Thousands are being laid off, losing part or all of their retirement investments -- and feeling another loss altogether, feeling the loss of faith in corporate America.
I am looking forward to change. I understand the president is speaking later this morning and I am planning to listen closely to what he has to say.
If you are listening to us now, Mr. President, I challenge you to help make that change, to truly clean up corporate America by helping to pass these bills so that the next company cannot misclassify $3.8 billion to inflate its profits.
Finally, I just want to say, I believed in my company. I believed in the encouraging e-mails and videos and positive news and the constant message that WorldCom's growing. If the real reform doesn't happen, I'll never be able to believe in a large corporation again.
GEPHARDT: Thank you, Cara, very much for that outstanding statement. And I thank Debbie (ph), who I'll introduce in a moment, who is from Enron, for being here and sharing their experiences and their feelings with us.
In our view, Cara and Debbie (ph) represent literally thousands of men and women across this country. They worked hard, they lived by the rules, yet because of corporate executives who mismanaged the companies and abused the public trust, Cara and Debbie (ph), like countless others, are today feeling hardships in their day- to-day life.
And this is nothing to say about the millions of investors who've watched their 401(k)s drop in the past 12 months, due to the recent corporate scandals and abuses.
In our country today we face a debate that is not a dispute between Washington and Wall Street. We know that many thoughtful business leaders, from Warren Buffett to Dick Grasso, are among those championing change and understanding that change and reform is the best friend of business and the best friend of capitalism.
Instead, this is a debate between those who are opposed to real reform and those who believe that strong initiatives are the appropriate response to the current crisis.
The opportunity for bipartisan reform is being met by special interests, Republicans in Congress and an administration that offers tough talk without offering or supporting meaningful, real legislative action.
So far the administration's approach has been a familiar strategy: use harsh rhetoric to condemn wrongdoers while delaying and watering down whatever reforms might come out of Congress.
Yesterday, the president said, and I quote, "that some things are not exactly black and white when it comes to accounting procedures."
Mr. President, with all due respect, accounting should be black and white; clear, precise and easy, for every employee and every investor to understand.
We got to get rid of the gray areas that exist today by eliminating conflicts of interest and ending corporate abuse once and for all. And Democrats, and some Republicans have proposals that get the job done.
As we have in the past, Democrats plan to offer our hand to work with the president and others to ensure the necessary follow-through. Words alone will only raise the expectations of reform and dash the hopes of millions of people who are seeking real, effective action.
Today we urge the president to provide leadership driven by deeds and defined by results. The solution to this crisis is the American value of being open to the search for truth and the search for change.
Now is the right time to apply this lesson to corporate reform and go beyond rhetoric to actually passing strong legislation to protect Americans and improve corporate responsibility and accountability.
Now it's my honor to introduce Debbie Perada (ph). I first met Debbie (ph) in January...
KAGAN: We're listening to House minority leader Dick Gephardt. He's having his say after already hearing from Tom Daschle, the Senate majority leader.
The Democrats speaking out in anticipation of what we should hear from the president in the next half hour. The president speaking from Wall Street. Not surprisingly, the Democrats using this as an opportunity to call for some strong reforms. We heard Senator Daschle talk about a strong oversight board for auditors. Also saying that in the future, the Democrats can be calling on legislation that would be strong effort to protect pensions, and perhaps most movingly, hearing from a woman, a young woman from Phoenix, Arizona who lost her job as a WorldCom employee, talking about what this corporate irresponsibility means just to the average working person.
Once again, we are standing by. We will hear the president from Wall Street. Also beginning some special coverage, welcoming Aaron Brown and Lou Dobbs at the top of the hour.
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