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CNN Live Sunday

Senate to Debate Corporate Accounting Reform Bill

Aired July 07, 2002 - 18:04   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.
CAROL LIN, CNN ANCHOR: Now a bill is expected to hit the Senate floor this week that would toughen up the way corporations do their accounting, but will it prevent another Enron or WorldCom scandal? More now from CNN White House Correspondent Kelly Wallace.

(BEGIN VIDEOTAPE)

KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT (voice-over): In between family outings at Kennebunkport, President Bush puts the finishing touches on his upcoming Wall Street speech. The first president with an MBA expected to call for jail time for corporate leaders who knowingly misstate company earnings; a move both parties say is a must to calm jittery investors.

REP. BILLY TAUZIN (R), LOUISIANA: I mean as soon as one or more of these major corporate figures is indicted and convicted for the thievery that occurred at the expense of the American investor, I think confidence will gradually come back.

WALLACE: Some Democrats, though, accuse the president's team of being too close to big business, singling out Harvey Pitt a former securities industry lawyer, now the head of the Securities and Exchange Commission.

SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: I have to say at this point that we could do a lot better than Harvey Pitt in that position today. That cozy, permissive relationship has to end and he in large measure has orchestrated that over the last 18 months.

WALLACE: But the White House and many Republicans vigorously defend Pitt.

REP. MICHAEL OXLEY (R-OH), FINANCIAL SERVICES CHAIRMAN: I think that he has been very aggressive. He moved very quickly on this WorldCom situation, the fastest really in history that the SEC jumped in.

WALLACE: Democrats have seized on the issue and here's why. In a CNN-"USA Today"-Gallup Poll 62 percent said that Republicans were more interested in large corporations than ordinary Americans, compared with 41 percent who thought so of the president, and 36 percent who did of Democrats.

Sensing a political advantage, Democrats are raising questions again about Mr. Bush's controversial 1990 sale of Harken Energy stock when he served on the company's board of directors, the sale coming just two months before the company disclosed a major loss. The White House said the SEC took no action against Mr. Bush and accused Democrats of playing politics.

(END VIDEOTAPE)

WALLACE: So far the president's approval rating remains sky high but his party might have cause for concern heading into the November elections as more Americans in CNN's recent poll say they believe Democrats would do a better job than Republicans insuring corporate responsibility -- Carol.

LIN: Kelly, has President Bush stated a position on what he thinks of the Securities and Exchange commissioner, whether he's still qualified to carry out this job?

WALLACE: Well, the White House as we were saying strongly defending Harvey Pitt. Mr. Bush's spokesman Ari Fleischer, in fact, telling reporters today that the charges against Pitt lack merit and that they are politically motivated; Fleischer saying again that the SEC under Pitt has done more to stop corporate officers who have engaged in corporate wrongdoing from serving on boards of other companies than the SEC in years past -- Carol.

LIN: All right, thank you very much, Kelly Wallace reporting live covering the president there in Kennebunkport, Maine.

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