Thursday, June 02, 2005

Removing Barriers to Fraud, Thievery and Flim-Flam Scams

In my course of MBA study, we were taught that the Securities and Exchange Commission was sacrosanct....above reproach. The SEC is the umpire of business, ensuring the reliability and accuracy of published financial statements, and thereby protecting the investing public from fraud, thievery and flim-flam scams.

The integrity of the markets is the essential linchpin of the US economy. Should that linchpin falter or be removed, the economy fails. And it all comes down.....All of it.

Yesterday, the Bush Administration forced the resignation of the Chairman of the SEC because he enforced with a heavy hand in the aftermath of the billion-dollar Enron and WorldCom financial scandals. It made the deep-pockets lobbyists and corporate world unhappy and uncomfortable.

Once again, Geroge Bush goes over the line of common sense and decency, of American history, to circumvent securities law enforcement to give his wealthy corporate buddies another big, fat break at the expense of the American public.

Just imagine.....he wants us to invest our Social Security in the public securities than will now be governed with a much laxer hand. Can a President get any greedier than George Bush on behalf of his corporate donors?

I can't wait to hear what Eliot Spitzer, New York's courageous attorney general who crusades against corporate thievery, has to say about this turn of events.
From the Center for American Progress....

Facing unrelenting assaults from corporate lobbyists, right-wing leaders, and the Bush White House, Securities and Exchange Commission chairman William Donaldson announced his resignation yesterday. His supposed offense? Being too tough on corrupt and unethical corporate behavior in the aftermath of the huge Enron and WorldCom scandals.

The White House forced out a Securities and Exchange commissioner who fought against shoddy accounting rules, investor fraud and corporate corruption. Donaldson is best known for aggressively implementing the Sarbanes-Oxley Act of 2002, including section 404 which requires CEOs to certify that their financial reporting is accurate. Donaldson's record also includes big fines for corporate wrongdoers, and before his resignation, he was moving towards addressing exorbitant CEO pay and was pushing for more power for shareholders to control corporate boards. All of these sensible protections of a true free market were too much for America’s corporate lobbyists and the White House to swallow.

The conservative-led Chamber of Commerce led the opposition to force his resignation. Donaldson's departure is the culmination of a sustained campaign by right-wing operatives seeking his ouster. CQ reported "recurring whisper that Donaldson’s approach to regulation is akin to 'Stalinist planning.'" The U.S. Chamber of Commerce president William Donahue called Sarbanes-Oxley a “runaway system of corporate destruction being run by...the people who work at the SEC." The Wall Street Journal reported that Donahue was "clearly relishing" Donaldson's departure.

Playing by the rules helps strengthen the American economy. As William Donaldson and NY Attorney General Eliot Spitzer constantly remind us, the government has a sworn duty to protect citizens and to ensure fair rules for corporations, investors, and the general public alike. When corporations engage in unethical or illegal behavior the economy suffers, investors lose money, and thousands of working Americans stand to lose their jobs. Playing by the rules protects everyone and ensures stability and real economic growth over time.

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