Bush urges harsher laws for corruption

? President Bush called for doubled prison terms and aggressive policing Tuesday to combat fraud and corruption in scandal-tarred corporate America, promising to do “everything in our power to end the days of cooking the books.”

Democrats faulted his proposals as inadequate, and Wall Street investors yawned.

By The Associated PressSome of President Bush’s proposals Tuesday for dealing with corporate scandals:Create, by executive order, a task force to provide direction for investigations, prosecutions and better coordination between agencies.Doubling to 10 years the maximum prison term for mail fraud and wire fraud.Longer prison time for corporate officers and directors convicted of criminal fraud.Strengthen laws that criminalize document shredding and other forms of obstruction of justice.

Bush traveled to the heart of Manhattan’s financial district to respond to the corporate accounting scandals that have shaken investor confidence, threatened an economy struggling to recover from recession and called into question his own decades-old transactions as a private businessman.

“At this moment, America’s greatest economic need is higher ethical standards standards enforced by strict laws and upheld by responsible business leaders,” Bush told a business-suited audience parsimonious with its applause.

“There is no capitalism without conscience, there is no wealth without character,” he said, offering a prescription of prosecution for individual cheats rather than an overhauling of the fundamental system of business regulation.

President’s proposals

Bush signed an executive order creating what he called a “financial crimes SWAT team” at the Justice Department, which had had no division charged solely with prosecuting corporate fraud. He proposed doubling the maximum prison terms for such fraud to 10 years and strengthening laws that criminalize document shredding and other forms of obstruction of justice.

He endorsed guidelines proposed by the New York Stock Exchange and Nasdaq to keep people with personal financial interests in a company off its board of directors or audit committee. And he sought a ban on private loans between chief executives and their companies.

He asked Congress for a stronger Securities and Exchange Commission one with 100 new enforcement officers plus more investigators and an extra $100 million to work with.

Stocks, whose indexes have dropped to five-year lows amid the scandals, continued to fall as Bush spoke.

‘Money, not jail’

“Investor sentiment and confidence in the market will only improve if they see some teeth behind some of these proposals,” said Will Braman, chief investment officer at John Hancock Funds. “It will take more than just one speech.”

On the other hand, Seth Taube, former SEC enforcement chief for the New York region, said increased prison terms would do nothing to deter misdeeds. “Businessmen care about money, not jail,” Taube said.

A onetime oil company executive and longtime opponent of government regulation of business, Bush was elected to the White House with overwhelming support from corporate America. That support has become a liability with the recent months’ cascade of business scandals: billions of dollars in hidden losses at Enron, a $4 billion discrepancy in the books at WorldCom, tens of thousands of workers out of jobs and retirement savings, CEOs refusing to testify to Congress.

Bush’s own transactions while a director at Harken Energy Corp. in the early 1990s have drawn new scrutiny.

Congress’ top Democrats Senate Majority Leader Tom Daschle and House Minority Leader Richard Gephardt appeared on Capitol Hill with out-of-work WorldCom and Enron employees to counter Bush’s speech with their own “investor’s bill of rights” announcement.

They insisted upon a new federal board to regulate the accounting industry.