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American Morning
Interview with John Castellani
Aired July 09, 2002 - 09:09 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: The president is taking on the issue of corporate corruption this morning. It isn't pretty on Capitol Hill either as Congress takes on WorldCom executives. And from Wall Street to Main Street, employees and stockholders are waiting for more bad business news. Now even business leaders are saying enough is enough.
John Castellani is the president of The Business Roundtable, an association of CEOs. He joins us now from Washington to talk about what business needs to do to right itself.
Glad to have you with us, welcome.
JOHN J. CASTELLANI, THE BUSINESS ROUNDTABLE: Good morning. Thank you.
ZAHN: For starters, we're going to put up on the screen a copy of an ad that you are running. And for people who haven't seen it, help us understand what exactly it is you and your group is asking for.
CASTELLANI: Well in the ads that we ran both yesterday and today in the major newspapers around the country, The Business Roundtable is calling for both the Congress and the administration to move forward with fundamental reforms to our system of corporate governance so that we can restore faith in the American capital markets and in corporate governance in corporate America. The time to act is now. It's having a deleterious effect on the economy and obviously it's having a depressing effect on the stock market and values.
ZAHN: Do you have any confidence that a compromise will be reached soon? The administration making it pretty clear that at least the Senate bill, the Sarbanes bill that has some widespread report, the president is backing 100 percent.
CASTELLANI: Well we do. We're hopeful. We think it's time to put the politics aside and move to restore faith and to help the economy grow. There are many good things in what the president has proposed, what the House has passed with Chairman Oxley's bill and what the Senate is considering with Senator Sarbanes bill.
ZAHN: Let's talk about what The Business Roundtable thinks is the answer here. Specifically, point to the one significant change you think that has to be made incorporate governance. CASTELLANI: Well most importantly, we have to restore faith in the auditing function. It has to be creditable, it has to be independent and it has to be something that investors can trust and corporations can trust so that we can show that the financial statements that companies make truly represent the financial condition of the company.
ZAHN: How effective is it then that you think the president, John King has just confirmed, will announce on Wall Street today that the CEOs who are convicted of signing misleading financial statements will be thrown in the slammer, potentially?
CASTELLANI: Well the great tragedy here is loss of retirement savings from thousands and millions of people that have seen the value of their 401(k)s go down, the loss of confidence in the investment market, the loss of credibility with employees and communities. And when those people who have been found to have done things that are fraudulent, that are wrong, that have misled the investors, then we agree, they should be punished to the fullest extent of the law.
ZAHN: I know you say that you're hoping everybody rise above politics, but a new ad is being unleashed by a liberal Democratic group today basically assaulting the president for his Harken Energy trades. How badly does that compromise the president as he's trying to sell this broader look at fixing Wall Street today?
CASTELLANI: The president has spoken out about the need for both punishing wrongdoers and reforming the governance system since early this year. He issued his 10-point proposal in March. Two weeks ago, he spoke to our organization, The Business Roundtable's annual meeting, and talked about the same kinds of things he was talking about last night, the need to punish wrongdoers, the need to show true reform in corporate governance and the need to restore faith in the economy. So I don't think it has an impact on him. He has been consistent over the last six months.
ZAHN: We appreciate your insights this morning. John Castellani, thank you again for joining us on AMERICAN MORNING.
CASTELLANI: Thank you. You're welcome, Paula.
ZAHN: Appreciate your time.
Just a quick programming note, the president will address Wall Street at 11:30 this morning. Our special live coverage begins at 11:00.
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