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Bush Targets Corporate Fraud in Weekly Radio Address - 2002-06-29

President Bush is calling for greater corporate responsibility amid a series of American business scandals. Democrats say the president is not doing enough to crack down on corporate misconduct.

Vowing to punish those who violate the public trust, President Bush said he wants new laws to restore faith in the integrity of American business.

"The government will fully investigate reports of corporate fraud, and hold the guilty parties accountable for misleading shareholders and employees," the president announced. " Executives who commit fraud will face financial penalties, and, when they are guilty of criminal wrongdoing, they will face jail time."

The president's call for stiffer penalties follows another week of corporate scandal in America. The nation's second-largest long distance telephone company admitted hiding nearly $4 billion in expenses to artificially inflate profits.

It is the fourth day in a row Mr. Bush has spoken out against corruption, as the issue becomes more politically-charged in this Congressional election year. He said executives who personally benefit from fraudulent accounting should lose all their illegal gains.

Mr. Bush also wants the Securities and Exchange Commission to punish corporate leaders who abuse their powers by banning them from serving as officers or directors of publicly-held corporations.

"Despite recent abuses of the public's trust, our economy remains fundamentally sound and strong, and the vast majority of business people are living by the rules," he said. " Yet, confidence is the cornerstone of our economic system, so a few bad actors can tarnish our entire free enterprise system. We must have rules and laws that restore faith in the integrity of American business."

Democrats say the president is not doing enough to back legislation to increase corporate accountability. Senate Majority Leader Tom Daschle says the desire for reform is not to be found in the approaches taken by the White House or the Republican-led House of Representatives.

In the Democratic response to the president's radio address, Maryland Senator Paul Sarbanes said the nation is facing a crisis of confidence that is eroding public trust in financial markets.

"We can't afford to wait for the next corporate deception, followed by the next round of lay-offs and the next collapse of a company's pension fund," said the senator. " We need to take action to restore public trust in our financial markets."

Senator Sarbanes said financial irresponsibility and dishonesty threaten economic recovery and the retirement security and investments of American families.

President Bush is promising to protect retirement savings and seize the illegal profits of corrupt executives. Officials say he will offer more plans for increased accountability in a speech on Wall Street next month.