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American Morning

WorldCom Executives Testify on Capitol Hill Today

Aired July 08, 2002 - 08:02   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.
PAULA ZAHN, CNN ANCHOR: Up front this morning, attacking corporate misconduct. WorldCom executives testify on Capitol Hill today, a day after the Senate released its report on Enron, very critical of its board of directors. And a published report this morning raises questions about accounting practices at Merck.

With investor confidence in a tailspin, President Bush heads to Wall Street tomorrow to unveil new measures to crack down on corporate fraud.

White House correspondent Kelly Wallace is traveling with the president. She joins us now from Kennebunkport, Maine -- good morning, Kelly.

KELLY WALLACE, CNN CORRESPONDENT: Good morning, Paula.

Well, the president is expected to say in that speech that everyone is accountable. Aides say he will call for tougher measures to punish, in his words, the bad apples of corporate America. This is a move that Democrats and Republicans say is necessary to boost investor confidence.

Now, in that speech, the president is expected to call for criminal penalties, including jail time, for corporate leaders who knowingly misrepresent their company's earnings. He's also expected to highlight proposals he's already unveiled, including giving the Securities and Exchange Commission expanded authority to ban corporate officers who engage in wrongdoing from serving on other company boards and also highlight something the SEC is already doing, according to White House aides, and that is collecting any financial gains that corporate leaders might have achieved through fraudulent information.

Now, the president was up bright and early enjoying one final morning in Kennebunkport before heading back to the White House. He was out on the golf course with his father, the former president.

Asked if his speech is completed, the president said he was focusing on these 18 holes of golf. But then he offered a hint to reporters, saying the speech is in pretty good shape. He has been fine tuning it over the weekend.

Meantime, though, Democrats are really sensing a political advantage here, hoping this can be an issue to use in the November elections. Democrats are accusing the Bush team of being too cozy with big business. And on Sunday, the Senate Democratic leader Tom Daschle stopping just short of calling for the resignation of Harvey Pitt.

He is the former securities industry lawyer who is now the head of the Securities and Exchange Commission. But now it's not just Democrats. Senator John McCain, a Republican, in today's "New York Times" in an op-ed also calling for Pitt's resignation.

Paula, I can tell you the White House is vigorously defending Harvey Pitt, saying he is someone who has strongly been enforcing and going against corporate wrongdoing over his watch -- Paula.

ZAHN: Well, it will be interesting to hear what the president finally has to say, because I understand, Kelly, he's getting a lot of conflicting advice about how pointed some of his comments should between tomorrow. So you will keep us posted. Look forward to seeing you tomorrow.

Thanks, Kelly.

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