U.S. President George W. Bush has signed into law anti-fraud legislation designed to curb corporate corruption. The measure mandates tougher penalties for business fraud and gives the government new tools to investigate and prosecute corporate wrongdoings.
The bill was enacted by Congress and signed by the president in record time a strong indication of the impact a series of recent corporate scandals has had on the American public.
Starting with the collapse of the giant energy corporation Enron late last year, consumers have witnessed one revelation after another of business fraud and abuse. There were hidden profits and losses, sudden bankruptcies, and accusations of wrongdoing at the very top of some of the biggest firms in America, most notably the global telecommunications company WorldCom.
Politicians scrambled to respond, and the president found himself signing legislation that might have been unthinkable just one year ago. He said there will be no more "easy money" for corrupt corporate executives, just "hard time" in jail.
"This law says to every dishonest corporate leader, 'you will be exposed and punished,'" said Mr. Bush.
President Bush signed the bill at a White House ceremony packed with congressional leaders and administration officials. There were few corporate executives in attendance, although a group of investors was invited.
The president assured them that he has heard the public cries of outrage, and he called on the business sector to listen as well. "Corporate executives must set an ethical tone for their companies," he said. "They must understand the skepticism Americans feel and take action to set clear standards of right and wrong. Those who break the rules tarnish a great economic system that provides opportunity for all."
As he does from time to time in his domestic policy speeches, Mr. Bush referred back to the September 11 attacks on the United States. He said the terrorists targeted the American economy. But he said they failed to do lasting damage, and predicted the business sector will also rebound from the harm it has inflicted on itself. "In the aftermath of September 11th, we refused to allow fear to undermine our economy and we will not allow fraud to undermine it either," the president pledged.
The president said the new law puts into place the most far-reaching reforms of American business practices since the 1930s. They couldn't have come at a better time. A new report issued just minutes before the bill signing showed a sharp decline in consumer confidence in July.
The report was issued by a highly respected New York-based research group. The Conference Board said its survey of 5000 American households showed worries about the stock market and corporate scandals have taken a toll. The group's regular reports are closely watched because consumer confidence drives consumer spending, which accounts for most of the nation's economic activity.