Bush Gets Down To Business

On the last morning of his holiday weekend at the family retreat in Kennebunkport, Maine, President Bush was up early for a round of golf, reports CBS News Correspondent Mark Knoller. But Tuesday he'll show he's teed off at corporate executives who scam their stockholders.

The president will use a speech on Wall Street to call for tough new punishments, including jail time, for business leaders who knowingly issue false financial statements.

Tuesday's address is aimed at restoring investor confidence shaken by scandals at telecom giant WorldCom Inc., and other once high-flying firms, which have laid off thousands of workers and seen their stock values plummet.

Mr. Bush wants to be seen taking a tough stand so Democrats can't use the issue against Republicans in this year's congressional elections.

The president told reporters his speech was "in pretty good shape." But he declined to reveal details as he, his father, former President George Bush, brother-in-law Bobby Koch and Cape Arundel golf pro Ken Raynor teed off at the crack of dawn.

"I'm focused on 18 holes of golf," Mr. Bush said.

The president was to meet his advisers when he returns to the White House later Monday to put the final touches on his speech. Republican sources said it would include calls for new criminal penalties for company officers who submit intentionally misleading financial statements. Currently, they can face fines and other civil penalties.

Mr. Bush is under pressure to act decisively after Republican Sen. John McCain joined Democratic lawmakers in calling for the resignation of Securities and Exchange Commission Chairman Harvey Pitt, a former Wall Street lawyer with prominent clients including major accounting firms.

"While Mr. Pitt may be a fine man, he has appeared slow and tepid in addressing accounting abuses, and concerns remain that he has not distanced himself enough from his former clients," McCain, an Arizona Republican, wrote in The New York Times.

On Sunday, Senate Majority Leader Tom Daschle, D-S.D., appearing on CBS' "Face the Nation," accused Pitt of having a "cozy, permissive relationship" with U.S. corporations – themes echoed by McCain – and called for his replacement.

With congressional hearings into the WorldCom controversy set to get under way, former Chief Executive Bernard Ebbers and former Chief Financial Officer Scott Sullivan told lawmakers they will refuse to testify to avoid incriminating themselves. Ebbers was appointed by Mr. Bush in July 2001 to serve on the administration's National Security Telecommunications Advisory Committee. The White House said WorldCom has been represented on the committee since 1997, and that Ebbers, as the former company's CEO, was the automatic designee.

By taking a harder line in public on corporate crime, the first U.S. president with a master's degree in business hoped to distance himself politically from boardroom bosses whose big donations helped finance his 2000 presidential campaign. Bankrupt energy trader Enron Corp. was one of Mr. Bush's biggest contributors.

In the run-up to the November congressional elections, Democrats have accused the president and his fellow Republicans of spearheading policies that have rewarded corporate greed while — devastating workers and investors.

Mr. Bush's own conduct as a businessman has been questioned since an internal Securities and Exchange Commission memo detailed his 34-week delay in reporting stock sales worth more than $1 million while serving as a director of Texas-based Harken Energy Corp. more than a decade ago.

The White House is also worried about political fallout from a probe of accounting practices at Halliburton Co., the energy company that Vice President Dick Cheney ran from 1995 to 2000. Army Secretary Thomas White is a former senior Enron executive, and other administration officials, including economic adviser Lawrence Lindsey, were Enron consultants.

Seeking to improve corporate America's image, the Business Roundtable launched a public relations campaign that included full-page advertisements in major newspapers declaring: "Enough is enough." The group said it would support a proposal by Maryland Sen. Paul Sarbanes to create a new oversight board for accountants, crack down on insider trading and take other steps to close regulatory loopholes.

The Business Roundtable said it would also support tougher penalties for CEOs guilty of wrongdoing. "The penalties should be real, they should be severe, they should be prompt," John Dillon, the chief executive of International Paper Co and the chairman of the Business Roundtable, told ABC's "This Week" program on Sunday.

White House officials were tight-lipped about the specifics of Bush's speech, but Mr. Bush has vowed that "executives who commit fraud will face financial penalties, and, when they are guilty of criminal wrongdoing, they will face jail time."

His renewed push for corporate accountability followed what he called "outrageous" accounting irregularities at WorldCom. Aides said the president had told them he was "mad as hell" about the lack of corporate responsibility in America.

In March, Mr. Bush proposed several measures aimed at cracking down on abuses by corporate executives. But he stopped short of backing the tougher reforms advocated by lawmakers and his own treasury secretary.