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Congress Passes Corporate Responsibility Bill

Aired July 24, 2002 - 14:13   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

KYRA PHILLIPS, CNN ANCHOR: On Capitol Hill today, key members of the House came to terms with one another and with the Senate on the issue of corporate responsibility. Now, that means a crackdown on accounting abuses and outright fraud could be on the president's desk within days now.
CNN's Jonathan Karl tells us what the new bill would do, and how it came about -- Jon.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, Kyra, there's been no official announcement yet, but people on all sides of this negotiation have told us the deal is, in fact, struck, and what this is is this is a bill that's actually tougher than either the bill passed by the House or the Senate. It would include provisions to strengthen the penalties against corporate fraud, specifically on mail and wire fraud. Those are two charges that are often leveled against corporate wrongdoers.

Those would go from current law, which is five years in prison, to 20 years in prison, and the bill creates a whole new law called -- new crime called "securities crime" which would be punishable by 25 years in prison.

In addition to that, the bill would create an oversight board. It would oversee the accounting industry. Right now, the accounting industry is self-regulated, and it would also put severe restrictions on the ability of accounting firms to also do consulting for the same firms that they are auditing the books for.

And this will also have a new requirement that, again, was not in either the House or the Senate bill which will require corporate executives to instantly declare stock sales when they sell stocks in their companies.

Now, both sides, Democrats and Republicans, House and Senate, are talking very positively about this agreement. They expect the president to sign it very quickly. They expect it to pass virtually unanimously here in the House and the Senate, but, Kyra, that does not mean an end to the finger pointing here on Capitol Hill. Listen to this from Tom DeLay, one of the top Republicans in the House just a few minutes ago.

(BEGIN VIDEO CLIP)

TOM DELAY (R-TX), MAJORITY WHIP: Democrat leaders have talked down the market. They have slow walked legislation to hold crooked CEOs accountable, and they have dragged their feet on legislation to protect America's -- Americans' retirement security, and they have opposed real economic growth legislation. Now they want to pursue political gain from other people's misery. There is a right and wrong in this world, and this is wrong.

(END VIDEO CLIP)

KARL: Now, DeLay actually presented a chart that was called "Democrats Versus the Dow" and blamed the Democrats, specifically the Democrats in the Senate, for the stock market slide. DeLay pointed out that it was the House Republicans that first passed the corporate responsibility bill way back in April, and it took the Senate until now to do so. Now senators, Democrats both in the House and the Senate are dismissing this argument, and say DeLay is just way out of bounds by blaming Democrats for the stock market slide -- Kyra.

PHILLIPS: Jon Karl. Thank you.

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