Washington ? President Bush and Senate Democrats are both toying with a dramatic lay-down-the-law response to the growing pile-up of corporate accounting scandals. They want to jail executives who knowingly report phony performance numbers for their companies.

Despite the populist appeal of locking up wayward chief executives, any such proposal will be difficult to craft and enforce, legal experts and investor advocates say.

Some of them also worry that the issue diverts attention from what they consider a more important step in the wake of WorldCom, Enron and other scandals: imposing reforms on the accounting profession.

“If you want to prevent problems, the question is: Are you going to clean up the mess after it happens or are you going to strengthen the system before it makes a mess in the first place?” said Barbara Roper, director of investor protection for the Consumer Federation of America. “I’d like to do both, but billions of dollars of shareholder money is gone by the time you put people in jail, and it doesn’t get their money back.”

Bush is considering including the idea in a speech on Wall Street this week, and Senate leaders plan to offer a variant of the proposal in an accounting reform bill they’re due to vote on this month.

The debate over the idea is colored by a basic difference of opinion between Bush, a Republican, and the leaders of the Democratic-controlled Senate. The president is pushing tougher enforcement of securities laws, stressing that most executives are honest and blaming a few bad apples who need to be punished.

Though Bush has proposed accounting reforms as well, Democrats say his steps wouldn’t go far enough. They view the problem as widespread and requiring an overhaul of the accounting profession.

White House officials wouldn’t comment on the specifics of what Bush may say this week, but spokeswoman Claire Buchan said, “You can expect him to continue to talk about the importance of business leaders living up to the highest of high standards.”

Stopping deception

All reform proposals share the same goal: to end deceptive accounting practices that have allowed companies to mask losses and pump up profits. When the deception is revealed, the stock price inevitably plummets, and investors bear the loss.

Advocates of tougher laws for executives argue that the sight of a chief executive officer being locked up would deter others from similar behavior.

Linda Trevino, an expert on business ethics at Pennsylvania State University, supports such efforts, at least in principle.

“CEOs are just people, and what we know about adults in our culture is that most of them are not morally developed enough to be what I call ethical leaders,” she said. “Basically, they are responding to what everyone else is doing, and in some cases only responding to punishment. They do what they can get away with.”

But Trevino acknowledged that imposing criminal penalties on senior executives faces practical challenges.

Prosecuting securities fraud is notoriously difficult. Executives can deflect blame to underlings or to the company’s outside accountants or lawyers. In many cases, the offense is in a gray area that is more a question of the proper interpretation of a rule than an outright violation of a law.

“The criminal law is an awkward tool to use for this,” said Franklin Velie, a former federal prosecutor who’s now in private practice in New York.

CEOs undecided

The Business Roundtable, a group of chief executives of major companies, has not taken a position on whether criminal penalties should be expanded for accounting violations.

However, the group does recognize that a chief executive should take some responsibility for the fairness and accuracy of a company’s financial reports, said spokeswoman Johanna Schneider.

“Our CEO’s were appalled when (former Enron CEO) Ken Lay said, ‘I didn’t know what was going on,’ ” she said.

While the threat of incarceration can play a role in preventing accounting problems, many legal experts say a broader and more effective solution should be fixing the system of auditing corporate financial reports.

Proposed reforms range from regulating auditors better to eliminating conflicts of interest that discourage a company’s board of directors from questioning management, said Mark Sargent, dean of the Villanova University law school.

“You may get a few heads of CEO’s on spikes,” he said, “but until you address the fundamental problems of the auditing profession and the lack of strong independent directors, you’re not going to change things.”