Risk & Compliance

House, Senate Strike Deal on Corporate Accountability Legislation

Full Congressional approval -- and the bill's addition to President Bush's agenda -- is expected by the end of the week.
Erin P. BillingsJuly 24, 2002

House and Senate conferees announced Wednesday a deal on corporate accountability, with the much-politicized legislation likely to gain full Congressional approval and reach President Bush’s desk by week’s end.

Conferees announced the agreement early in the day and planned to meet formally later in the afternoon to sign off on it. The House could approve the measure as early as Thursday, one day before it is scheduled to adjourn for the month-long August recess.

The deal puts to rest an earlier stalemate, which came to a head in recent weeks with the latest corporate scandal surrounding telecommunications giant WorldCom. Both Democrats and Republicans, including the president, have hoped to capitalize politically on the topic by showing voters they are more concerned than the other side about investor confidence and corporate wrongdoing.

The House first passed a bill in April, but many Members deemed that version to be weaker than the Senate bill approved this month. Under the agreement announced Wednesday, the legislation largely mirrors the Senate version with the exception of four key House provisions.

House Financial Services Chairman Mike Oxley (R-Ohio) said he was pleased with the deal, explaining that together the two chambers crafted a better, stronger bill to crack down on corporate malfeasance. The Senate measure, he said, wasn’t strong enough on its own.

Among the House provisions placed in the Senate bill were: stronger Securities and Exchange Commission oversight of corporate wrongdoing, stiffer penalties for corporate executives, restitution for defrauded investors and real time disclosure of any information changing the financial health of a company. “It’s not the total answer, but I think we’ve made excellent progress,” Oxley said.

Democrats agreed, but also took the opportunity to claim victory for the deal. They charged Republicans gave in to the Senate proposal and ideals promoted by Democrats for years.

House Minority Leader Richard Gephardt (D-Mo.) called it an “unconditional surrender” to what Democrats have been seeking. He added that he hopes Members can work quickly to complete the deal. “By now, it ought to be clear that it is long past time for this Congress to take strong action to address the crisis of confidence and to get our economy moving in the right direction again,” Gephardt said. “We have an obligation, a responsibility, to restore people’s faith.”

“I think we’re at a point where this afternoon we will meet and accept the surrender by the Republicans,” added Rep. John LaFalce (D-N.Y.), ranking member on the Financial Services panel.

House Republicans, however, defused those accusations. They argued that the Senate and House versions were nearly identical. And, they added, the House voted for a corporate responsibility bill three months before the Senate did.

“Our perspective is: Irrespective of which party we’re talking about, it’s a win for investment confidence in America,” said Greg Crist, spokesman for House Majority Leader Dick Armey (R-Texas).

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