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CNN Live Today

President Signs Corporate Accountability Into Law

Aired July 30, 2002 - 12:01   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.
KYRA PHILLIPS, CNN ANCHOR: As for that new corporate accounting law, today's signing ceremony came as some unhappy CEOs braced for some unpleasant questions on Capitol Hill. Top executives of WorldCom, Global Crossing and Qwest Communications are appearing today before the Senate Commerce Committee. Members are looking for guarantees that those ailing telecoms will be able to serve their millions of customers. Two of the three are in bankruptcy; all are being investigated by Washington. Back at the White House, President Bush vowed to expose corruption, punish wrongdoers and defend the interests of American workers and investors, all with a stroke of his pen.

CNN's Kelly Wallace gives us the bottom line on that.

Hi -- Kelly.

KELLY WALLACE, CNN CORRESPONDENT: Hello, Kyra.

Well, the president using very tough talk, he said that no more easy money for corporate criminals, just quote hard time. The president hoping that the strong words combined with a very high profile and elaborate signing ceremony in the East Room, today, will bolster investor confidence and, also, bolster confidence in the GOP's handling of the economy before the crucial November congressional elections. You see the president, there, surrounded by Democrats and Republicans and members of his cabinet, but no individual company CEOs are on hand. The president spending most of the time directing a message to corporate America and to those corporate leaders who might knowingly deceive investors and shareholders.

(BEGIN VIDEO CLIP)

PRESIDENT GEORGE W. BUSH: This new law sends a very clear messages that all concerned must heed. This law says to every dishonest corporate leader, you will be exposed and punished. The error of low standards and false profits is over. No board room in America is above or beyond the law.

(END VIDEO CLIP)

WALLACE: And here is look at some of the key provisions. Number one: An independent oversight board for the accounting industry; number two: Tough new criminal penalties for corporate wrong doers, including up 25 years in prison for anyone convicted securities fraud, and number three, CEOs, and CFOs, chief financial officers, will, now, have to certify that their earnings reports and financial statements are correct.

And interesting side note, here. This bill, a lot tougher than the original proposal put forth by President Bush, but Mr. Bush and lawmakers reacting to a string of corporate scandals and sagging investor corporate confidence, also, concerns about the November elections. Kyra, that is why this Bill moved with unprecedented speed through the Congress to get to today's signing ceremony -- Kyra.

PHILLIPS: So, Kelly, what's the strategy behind all this?

WALLACE: Well, the strategy is for both sides, Democrats and Republicans, to say they are doing something about investor confidence, and for the president, again, to embrace a bill a little bit stronger than he originally proposed to claim some of the credit and, also, to try to prevent Democrats from having an issue to use against Republicans in November. Very important for this administration, and for Republicans to get consumer confidence up. This president knows very well, just looking at the experience of his father, if the economy is sagging, voters could take that out on his party in November -- Kyra.

PHILLIPS: Kelly Wallace live from the White House. Thanks, Kelly.

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