Rush On Toward Anti-Biz-Crime Reform

Amid the stock market nosedive, President Bush pressed Congress on Saturday to act quickly on a tough package of reforms to fight business fraud, saying "the trust of the American people has been betrayed" by recent corporate scandals.

A Democratic leader on the issue agreed on the urgent need for legislation, especially considering Wall Street's sharp drop. "We're out to restore capitalism," said Sen. Paul Sarbanes, D-Md.

Sarbanes said congressional negotiators "want to get a system in place that will provide some assurances that these abuses won't happen again." He repeated on television his idea to create an independent accounting standards board to inspect and investigate the accounting industry and punish wrongdoers.

Mr. Bush used his weekly radio address to keep pressure on lawmakers to complete work on a compromise bill before the August recess.

"I am confident that the differences between the House and Senate approaches can be bridged," he said.

CBS News correspondent Mark Knoller says the president taped the address before Friday's latest stock market plunge.

Sarbanes indicated efforts will be made to "try to get a bill done in the very near future."

Members of Congress didn't seem to need too much prodding, particularly in light of Friday's 400-point selloff that brought the Dow Jones industrial average to its lowest level in nearly four years.

House and Senate negotiators met for the first time Friday to begin writing a final version of the bill, and staff members from both sides were working through the weekend. The Senate plans to begin its recess Aug. 5 and return in early September. The House would like to leave as early as July 29.

Sen. Phil Gramm, R-Texas, said his fellow negotiators already had "unanimous agreement on about 90 percent of the issues." The panel is expected to resume its deliberations early next week.

"Unethical business practices by corporate leaders amount to theft and fraud," Mr. Bush said. "These practices are unacceptable, and we are fighting them with active prosecutions and tough enforcement" by the Securities and Exchange Commission, he said.

"We will not accept anything less than complete honesty," Mr. Bush said.

Both the Sarbanes-sponsored Senate bill and the Republican-sponsored House version would create new criminal penalties for business fraud and tighten oversight of the accounting industry but use divergent paths to get there. Advocates of the Senate bill contend it is the tougher and more effective version.

While most corporate leaders are honest, "clearly business has a very bad name right now," Sarbanes, chairman of the House Banking Committee, said on CNN. "Obviously we've had some very bad actors on the scene."

Sarbanes' solutions: Establish an independent oversight board for the accounting industry. Sever auditing from consulting services. Improve corporate governance. Tighten financial disclosure requirements. Strengthen the SEC.

Mr. Bush said both chambers' bills would "toughen penalties and provide transparency and hold corporate executives accountable for their behavior."

He said some members of Congress are suggesting it would take up to two months for a final bill to be on his desk, but "there is no good reason for the legislative process to take that long."

The president also said his administration "will do everything in its power to ensure business integrity and long-term growth."

In a Democratic response, Colorado Attorney General Ken Salazar said Mr. Bush and his administration "have only paid lip service" in calling for a corporate cleanup.

"With their hands-off regulatory approach, they are the ones who gave the green light for this kind of corporate excess," Salazar said in a Spanish language broadcast beamed to Hispanic audiences. "Democrats have taken the lead on this issue of corporate responsibility."

He said the Senate-passed bill is tougher than the House version, "but the president still hasn't embraced this bill - which gives one the impression he's unwilling to do anything substantive to address the problem."

Salazar's was one of two Democratic radio addresses. It was delivered in Spanish, but the Democratic National Committee distributed an English translation. The other address, in English, was by Sen. Paul Wellstone, D-Minn., and dealt with prescription drugs.

Several speeches by the president on the issue of corporate accountability have failed to stem the stock market losses.

After Friday's market sell-off, White House spokesman Scott McClellen said, "The fundamentals of the economy are strong and the president is continuing to work closely with Congress on the additional priorities he has outlined to strengthen the economy."

In his radio address, Mr. Bush said that fundamentals of the American economy are strong but that "our free enterprise system is being tested."

"Unethical business conduct that began in the in the boom of the 1990s is being uncovered. Investors have lost money. Some in retirement have lost security. Workers have lost jobs, and the trust of the American people has been betrayed," he said.

Mr. Bush also urged Congress to send him legislation to authorize the federal government to help subsidize terrorism insurance for commercial properties and to restore expired presidential authority to negotiate trade deals without congressional interference. Both chambers of Congress have passed versions of the trade bill, but a conference committee has not worked out a compromise final bill.

He also renewed a call for Congress to get a better handle on spending, hinting that he might veto measures that are too costly. "Unless Congress controls its spending, we will face a decade of deficits," he contended.