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Bush Lectures Wall Street on Corporate Responsibility

Aired July 09, 2002 - 14:02   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: First up this hour, the president's pitch to boost corporate ethics and investor confidence. As you may have seen live here on CNN, Mr. Bush outlined a series of measures, including prison terms, aimed at turning up the heat on bosses and accountants who cook the books.

We get the details now from CNN's Suzanne Malveaux. She's at the White House -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hello, Kyra. The president is back here at the White House, but earlier today he was really in the heart of the symbol of corporate America. He was on Wall Street. He was calling for really a domestic war on corporate corruption.

This is the first time, the first big test for the administration since September 11 to get the American people to rally behind him, to believe in the economy and the stock market, that the government can crackdown on corporate corruption.

The fear, of course, is that recent revelations of these mega corporate scandals will cause people to fear, to lose confidence in the stock market, that this will cause the economy to slow down, and that this is happening, of course, politically, on the administration's watch. Both parties right now trying to distance themselves from the scandal and presenting competing legislation to get tough on these CEOs guilty of corporate abuse, and of course the president emphasizing two approaches, first of all, that CEOs -- the laws get tougher for CEOs, that they have more accountability but also that the government takes on more responsibility and greater ability to go ahead and regulate and enforce those laws.

Let's take a listen.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The business pages of American newspapers should not read like a scandal sheet.

The vast majority of business men and women are honest. They do right by their employees and their shareholders. They do not cut ethical corners, and their work helps create an economy which is the envy of the world. Yet high-profile acts of deception have taken people's trust. (END VIDEO CLIP)

MALVEAUX: The president is asking for bipartisan support on these get-tough measures. Some of those measures include the highlights and increase of prison time for fraud by corporate leaders, to strengthen penalties for mail fraud, document shredding. A $20 million increase now for the SEC, the Securities & Exchange Commission, to go ahead and hire 100 additional investigators, $100 million for the next year for greater technology, and also an independent board to police the accounting industry. The president asking for bipartisan support.

As you know, Kyra, this is very political issue as well. Democrats wasted no time in criticizing the president, saying he has no authority or credibility to lecture Wall Street. They point to his 1990 business dealings as director of Harken Energy Group, where he filed late a disclosure document as well as he was investigated by the SEC for insider trading.

The president was cleared on both counts. He was -- of both accusations. And as you know, mid-term election right around the corner. This is only going to heat up -- Kyra.

PHILLIPS: Suzanne Malveaux, live from the White House. Thanks, Suzanne.

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