Bush Continues Fight Against Corporate Fraud
For Immediate Release
Office of the Press Secretary
September 26, 2002
President Continues Fight
Against Corporate Fraud and Abuse
Remarks by the President at Corporate Fraud Conference
Washington Hilton Hotel
11:19 A.M. EDT
THE PRESIDENT: Thanks for the warm welcome. Thank you for being here. This is an important meeting you're having. After all, over the past year, high-profile acts of deception in corporate America have shaken people's trust in corporations, the markets and the economy.
A few dishonest individuals have hurt the reputations of many good and honest companies, and their executives. They've hurt workers who committed their lives to building a company that hired them. They've hurt investors and retirees who placed their faith in the promise of growth and integrity. For the sake of our free market, corporate criminals must pay a price.
Today I want to thank all of you -- U.S. attorneys, senior prosecutors, FBI special agents, senior Treasury and IRS officials, and many others. I want to thank you for your efforts. And I want to thank you for the progress which is being made. Your mandate is to root out crime from corporate America's boardrooms and executive suites. Your mission is to protect the rights and interests of American workers and investors. And your work is essential to our mission.
I particularly want to thank Attorney General John Ashcroft, who is doing an excellent job as our Attorney General. I also want to thank Elaine Chao, the Secretary of Labor, for her hard work.
I appreciate Harvey Pitt, who's the Chairman of the Securities and the Exchange Commission. He's doing a fine job. As is Michael Powell, Chairman of the FCC; Jim Newsome, the Chairman of the Commodities Futures Trading Company -- Commission.
Larry Thompson is in charge of the President's task force to root out corporate fraud as the Deputy Attorney General. Michael Chertoff, the Assistant Attorney General for the Criminal Division of the Department of Justice. Jim Comey, U.S. Attorney, Southern District of New York; and Debra Yang, U.S. Attorney, Central District of California. I want to thank them for being up here on the stage with me. I want to thank them for their fabulous leadership, and doing what's right for America. (Applause.)
Since the exposure of recent corporate scandals, we have taken a series of strong measures. The American people need to know we're acting, we're moving, and we're moving fast. The Securities and Exchange Commission has hired 50 new personnel to support their efforts to ensure that business in America is open and honest -- and to confront it when it's not.
More help is on the way. I've signed the most far-reaching reform of American business practices since the time of Franklin D. Roosevelt. With this law, we're making sure that the numbers are honest, and the numbers are understandable. We're making sure the auditors are audited and the accountants are held to account.
And one of the most aggressive steps we've taken has been to create the new Corporate Fraud Task Force -- headed by Larry -- to investigate and prosecute financial crimes; to recover the proceeds of those crimes; and hold corporate criminals to account. This task force includes members of the Justice Department and the FBI, U.S. attorneys from around the country. It includes the SEC and the Treasury and Labor Departments, the Commodities Futures Trading Commission, the Federal Communications Commission and the Federal Energy Regulatory Commission.
This broad effort is sending a clear warning and a clear message to every dishonest corporate leader: You will be exposed and you will be punished. No boardroom in America is above or beyond the law.
I set this mandate, and today I want to give a report to the American people on the progress, the great progress which you all are making. Our law enforcement agencies are after them, they're after them. Since the task force was formed just two and a half months ago, the Department of Justice has opened more than 100 investigations into suspected corporate fraud. In two and a half months, 100 cases have been opened. Charges have been filed against more than 150 defendants. In two and a half months, 150 people have been charged. And more than 45 defendants have been convicted or intend to plead guilty. In two and a half months, 45 people have been brought to justice.
The Securities and Exchange Commission is also acting. In the past year, the SEC has filed a record 156 actions for financial fraud and disclosure violations, a 51 percent increase over fiscal year 2000. During the same period, the SEC has sought to throw 107 unfit officers and directors out of corporate boardrooms, almost three times the number the SEC sought to bar in fiscal 2000.
The SEC is aggressively using its enforcement powers to make corporate wrongdoers financially accountable for their actions. This fiscal year, the SEC has sought to recover compensation, bonuses, stock options from 25 corporate officers who betrayed the public trust, an almost 40 percent increase over last year.
By all these actions, we are making broad and dramatic progress against corporate fraud in America. We're defending our free enterprise system against corruption and crime. And we're beginning a new era of corporate integrity. Corporate responsibility is essential to America. It's essential to shareholders. It is essential to investors.
It matters greatly to employees. In February, I proposed important pension reforms. We must give our workers better access to investment advice, so they can manage their money wisely. And right now, too many workers are locked into plans that force them to hold a large portion of their accounts in the company's stock. Workers ought to be able to diversify after three years in the company's plan.
The House quickly passed these reforms. They moved swiftly. The Senate hasn't, and they need to act as well. It's good for American workers. It's good for job creation. It would be good for our economy.
Underlying everything we have done so far, and all the actions we will take in the future, is a basic conviction: the American economy depends on fairness and honesty. It's not a jungle in which only the unscrupulous survive, or a financial free-for-all guided only by greed. That's not the America we know.
The fundamentals of a free market -- buying and selling, saving and investing -- require clear rules, and confidence, and fairness. The vast majority of American businessmen and women obey the law and uphold the rules. The vast majority of our fellow citizens care deeply about employees and shareholders. They bring great credit to the system. And those who break the rules and betray the confidence of their employees and shareholders will be punished. The government cannot, and should not, try to remove risk from investment. But we will help ensure that the risks are honest, and the risks are clearly understood.
We will hold corporate criminals accountable for their misdeeds, and we will deter corporate crimes by enforcing tough penalties. By doing this work so well you are serving the American people. You are serving the American people with distinction. You are leaving a legacy of responsibility behind. You are making the country a better place. And for that I'm grateful, and so are the American people.
May God bless you all. May God bless your families. And may God bless America. (Applause.)
END 11:28 A.M. EDT