Congress Moves On Corporate Crime

Scrambling to restore confidence in American business, the Senate adopted a ban Friday on personal loans from companies to their top officials, a practice that benefited executives from Enron to WorldCom — and President Bush as a Texas oilman.

The Senate move, on a voice vote, would prohibit such loans as a way to prevent conflicts of interest. The measure was approved as Mr. Bush met at the White House with his new financial crimes task force.

Though the president calls his task force a financial crimes "SWAT" team, its members look like mild-mannered lawyers, reports CBS News Correspondent Mark Knoller. As for special weapons and tactics, the task force chairman, Deputy Aattorney General Larry Thompson, says his group would go after corporate criminals "with vigor and an aggressive manner."

He said hundreds of prosecutors have already opened an unspecified number of investigations across the country.

With Republicans and Democrats vying to outdo each in the crackdown on corporate crime, Thompson emphasized that his was no witchhunt.

"I also want to assure everyone that in doing our work, we're going to be professional, we're going to be fair and we're going to be just," he said.

On Capitol Hill, a voice vote by senators was all it took to approve an amendment by Sen. Charles Schumer, D-N.Y., prohibiting companies from making personal loans to their top officials and directors. The ban was first proposed by Mr. Bush on Tuesday and cast as a means of preventing conflicts of interest.

"Time after time, cheating CEOs received no-interest loans from their companies, often to the tune of millions of dollars. And when the companies went broke or when the CEOs resigned, the money is often never paid back," Schumer said. "Why do executives at Adelphia, Enron and WorldCom need to borrow money from their stockholders? Why can't they go to the bank like everyone else?"

Other Senate votes on Friday cleared the way for passage early next week of legislation to impose new sanctions on corporate wrongdoing and tighten oversight of the accounting industry.

Initially resistant to the Senate bill and favoring House legislation instead, the White House has sounded increasingly eager to see Mr. Bush's signature on whatever emerges from Congress.

"The House bill is a tough bill. The Senate bill is a tough bill and he's looking forward to signing a tough bill into law," White House press secretary Ari Fleischer said Friday.

Senate approval of the Schumer amendment followed suggestions of hypocrisy that had the White House on the defensive about Bush himself benefiting from $180,000 in low-interest loans when he was a director of Harken Energy Corp. more than a decade ago.

Mr. Bush, dogged in recent days by scrutiny of many of his transactions while at Harken, ignored reporters' questions as he toured a disabled children's retreat near Camp David. All he would say was that his inaugural task force meeting went well.

Thompson, Securities and Exchange Commission Chairman Harvey Pitt, Attorney General John Ashcroft and FBI Director Robert Mueller briefed Bush for 30 minutes at the White House after the task force convened its first meeting at the Justice Department.

Asked how widespread prosecutions might be, Pitt said officials won't know until after the nation's 1,000 biggest corporations respond to an SEC order to have chief executives and chief financial officers certify the validity of financial statements already on file.

"That will happen in the next few weeks and when that does, that will give us a very clear picture of what's around," said Pitt, himself the subject of criticism as being too cozy with the businesses he regulates.

The task force, which Mr. Bush has described as a corporate fraud "SWAT team" includes representatives from the FBI, SEC, U.S. attorneys, Treasury Department and Commodity Futures Trading Commission.

"This is a SWAT team in the sense that if you've engaged in corporate fraud, if you've engaged in wrongdoing, this task force is going to swat you," Fleischer said.

There appeared to be some confusion on the task force's role, however, with Fleischer saying it's job was to prosecute and imprison corporate criminals "not to write law."

However, Thompson said his group would recommend to Bush and Ashcroft "corrective and remedial action," including new rules, regulations and legislation it may deem necessary.

Other Cabinet members fanned out beyond Washington to spread the administration's get-tough message and try to defuse the issue's election-year liability to a White House closely allied with the business community.

Commerce Secretary Don Evans, speaking at the Cleveland City Club in Ohio, accused Mr. Bush's critics of "cheap shots."

"Harken is garbage. It's political garbage." Evans said. "It's an election year, so people start saying, 'Hey, how can I get some political advantage here?"'

Meanwhile, Rep. Henry Waxman, ranking Democrat on the House Committee on Government Reform, sent Mr. Bush a letter urging him to donate to charity the profits from his $848,000 sale of Harken stock, a transaction that drew an insider-trading investigation by the SEC but no subsequent enforcement action.

Waxman similarly suggested that Vice President Dick Cheney donate his stock-option profits from Halliburton Co. and that Army Secretary Thomas White give away some of his Enron-related income.

As part of the president's campaign to bolster investor confidence, which has sagged under the weight of accounting scandals, he will give a speech in Birmingham, Ala., Monday on what Fleischer called the "fundamental strengths in the American economy."