US President George W. Bush today called for rules and laws to "restore faith in the integrity of American business" in the fallout over a series of corporate scandals shaking the US economy.
"No violation of the public's trust will be tolerated. The federal government will be vigilant in prosecuting wrongdoers to ensure investors and workers maintain the highest confidence in American business," Bush said in his weekly radio address.
Democrats joined the president in calling for quick action to stem "the crisis of confidence," but urged passage of their own legislation approved last week by the Senate Banking Committee on a bi-partisan vote of 17-4.
The panel's chairman, Sen. Paul Sarbanes of Maryland, said in his party's radio response that the bill he sponsored "strengthens corporate accountability and auditor integrity, addresses conflicts of interest, and protects employees, pension holders and investors against fraud and deception."
Bush expressed outrage this week when WorldCom Inc., the telecommunications giant, revealed $3.8 billion in accounting irregularities and Xerox Corp. on Friday disclosed a $2 billion revenue gap in its books.
Bush vowed that those responsible for these and other corporate scandals will be held accountable, and that "executives who commit fraud will face financial penalties, and, when they are guilty of criminal wrongdoing, they will face jail time."
"We must have rules and laws that restore faith in the integrity of American business," he said.
The issue of how to clean up corporate America has become a dominant topic at both the White House and on Capitol Hill. Republicans and Democrats agree something must be done, but differ on the details.
Bush's political fortunes could depend on his stewardship of the U.S. economy, which he said today remained fundamentally strong "despite recent abuses of the public trust." Democrats would like to blame Republicans for creating a deregulatory atmosphere conducive to corporate greed.
Senate Majority Leader Tom Daschle, a South Dakota Democrat, yesterday said that "unfortunately, the desire for reform is not to be found" in approaches favored by the White House, the Republican-controlled House of Representatives and the Securities and Exchange Commission.
The Sarbanes bill is seen as providing tougher enforcement. It would create a regulatory board that Democrats see as more independent. Under the Republican plan, the regulatory board would be supervised by the Securities and Exchange Commission.
White House spokesman Claire Buchan said the administration was working with Congress and hoped to resolve the differences "so that the president can sign good legislation."