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American Morning
This Morning, Bush Expected to Get Tough on Corporate Corruption
Aired July 09, 2002 - 08:04 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: This morning, the president, with a business degree, heads to the capital of business. He is expected to get tough on corporate corruption.
Early this morning, I spoke with Bush cabinet member and Commerce Secretary Donald Evans about how Democrats are making this a political issue and how they are raising questions about the president's credibility.
(BEGIN VIDEO CLIP)
DONALD EVANS, COMMERCE SECRETARY: That's just political garbage. I mean this president is very focused on this important issue of restoring investor confidence in the marketplace. He understands it's a serious issue. He understands how important it is to go after these people who have violated their trust with their shareholders and with their owners and he's going to do it.
(END VIDEO CLIP)
ZAHN: And we were talking about the question of the president's ability or credibility, what we were referring to, of course, is the controversy over some of the stock trades the president made 12 years ago when he was with Harken Energy.
Now, a short while ago, I spoke with New Jersey Democratic Senator John Corzine about what he hopes to hear from the president later this morning.
(BEGIN VIDEOTAPE)
ZAHN: Senator Corzine, good to see you.
Thank you very much for joining us this morning.
SEN. JON CORZINE (D), NEW JERSEY: Good to be here.
ZAHN: CNN has learned that the president in his speech on Wall Street later today is expected to call for jail time for CEOs convicted of deliberately falsifying financial statements. Do you think that will stop the kind of abuses that we saw at Enron and WorldCom? CORZINE: Well, first of all, that's a good idea. I think that most people who think we need to respond to the current situation think tougher penalties and sold enforcement is a strong step.
But I think it misses the point if you don't go beyond that and say we're going to have some rules, some oversight of the accounting industry, which has a responsibility to make sure that on a day to day basis in detail that the regulations are enforced, that there's true reporting going on.
So I think that it's a good first step, but it's limited. We need oversight and some legitimate rule making going on with regard to how the accounting industry works if we want to make sure that this problem doesn't evolve and come back at a later point in time.
ZAHN: The president has made it clear he has some reservations about the Senate form of the bill you support. Are you confident in the end that a compromise will be reached that both sides are going to find fair?
CORZINE: Well, I think there is good bipartisan support for the kind of approach that the Senate is talking about with regard to the oversight of the accounting industry, corporate governance and making sure the SEC has the resources to do the kind of cop on the corner financial enforcement that'll be necessary through time.
Seventeen to four was the vote out of the Banking Committee, Republicans and Democrats. I think we're going to get a strong voice for change with regard to oversight of corporate practices, accounting practices, coming out of the Senate. That, I think, will give us good momentum in discussions with the House and the president, ultimately.
So I think we are going to get good reform. Some of it will be enforcement, as the president's talking about. I don't think he's going far enough with regard to there's a fundamental, systematic problem in how our reporting, our accounting reports are showing up to investors. And that's one of the reasons we've lost almost $7 trillion in value in our stock markets in the last several years.
ZAHN: You've got the average investor out there increasingly frustrated. The latest poll that "USA Today"/Gallup poll did suggests that 54 percent of all Americans don't even want to invest of, in the stock market because their faith in the system has been eroded.
You were the chairman of Goldman Sachs for many, many years. What's going to change that picture? Are, these reforms are going to take a long time to put into effect.
CORZINE: Well, people are going to need to have confidence in the information that's provided that allows them to make reasonable judgments about where their investments go. And the fact is is that the first step in making that happen is have a credible oversight of the accounting industry, making sure that our accounting statements are true, that people are responsible for it, that if they commit fraud they will be dealt with sternly. I think those issues, if we bring them about along with some changes in corporate governance, with real oversight for the shareholders' behalf by the board of directors and the chairman doesn't have just sort of complete dictatorial powers in a corporation, then I think people will begin to feel better about the nature of corporate America. They'll feel better about the information that they're deciding on where they're going to invest and they'll come back in.
This is a real serious problem because we've raised the cost of capital, we've backed away from the kind of investment that'll make America strong in the future. And we need to take strong action. That's what the Senate Accounting Reform Bill is all about. And I hope we move very quickly and I hope the president will sign it.
ZAHN: Senator John Corzine, we're going to have to leave it there this morning.
Again, thanks for your time. Appreciate your dropping by.
CORZINE: Thank you.
(END VIDEOTAPE)
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