Return to Transcripts main page

Live From...

New Bill Before Congress Aims at Reforming Accounting Industry

Aired July 08, 2002 - 14:49   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: Now, as you may have gathered, there's a growing sentiment in Congress that when it comes to balance sheet shenanigans, enough is enough. CNN's Jonathan Karl joins us with one lawmaker's plans for keeping an eye on the corporate coffers. Hi, Jon.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: The WorldCom executives, former executives, over in the House taking the Fifth Amendment. Here in the Senate, Democrats and now joined by Republicans have put the reform of the accounting industry, especially putting new tough regulations on the accounting industry, on the fast track.

This is a bill, a Democratic-drafted bill, that was going nowhere before the WorldCom scandal. But now it has become literally issue No. 1 in the Senate. It's what they are considering right now. The author of that bill, Democrat Paul Sarbanes, the chairman of the Senate Banking Committee, said that he hopes that President Bush uses his speech in Wall Street tomorrow to endorse this Democratic bill.

(BEGIN VIDEO CLIP)

SEN. PAUL SARBANES (D-MD), BANKING CHAIRMAN: The president, of course, is going to New York tomorrow. We understand he is going to address punishing the wrongdoers. I am very supportive of that, the so-called bad apples.

But getting at the bad apples is not enough. We need to make changes in the system and in the framework. We need to set in place the kind of requirements and process and procedures which will give us some assurance that the gatekeepers are doing their job.

(END VIDEO CLIP)

KARL: Some Democrats are a lot harsher on this. They really think this is a political winner for them as they try to blame Republicans for deregulation that they say led to this scandal, and they say the Republican White House is simply too close to the big business to really reform it.

There is one group, an independent Democratic group called American Family Voices. This is a group that is associated with former Clinton advisers like James Carville and Joe Lockhart. They plan to unveil an ad tomorrow timed to coincide with the president's speech, an ad that will run on cable television in New York and in Washington that will say asking Republicans to -- asking the Republican White House to reform corporate America is like putting the fox in charge of guarding the hen house. This is an ad that will raise questions about Bush's behavior as a board member of the Harken Energy Corporation back in the 1990s, and also about Vice President Cheney's role as CEO of the Halliburton Corporation. Both corporations have had questions raised about their accounting procedures.

But as Democrats try to score some political points here, Kyra, what's interesting is Republicans have just jumped on the bandwagon. This one-time Democratic bill about reforming the accounting industry now has very, very solid support in the Senate. When this finally voted on, it may this week, expect to see virtually all of the Republicans, maybe except for a handful, supporting it -- Kyra.

PHILLIPS: All right, Jon. We'll be talking about it more. Jonathan Karl, thank you so much.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com