Accessibility links

Breaking News

White House Backs Arrest of Adelphia Execs in Corruption Crackdown - 2002-07-24

The White House says the arrest of executives Wednesday, from a bankrupt cable TV firm show that the Bush administration is making progress in cracking down on corporate corruption. Mr. Bush is ready to sign a compromise plan in Congress that would increase penalties for corporate fraud.

White House spokesman Ari Fleischer said Wednesday's arrest of former top executives from Adelphia Communications is a "clear sign" of the administration's "commitment to enforce the laws."

"Today marks a day of action and accomplishment in the president's fight against corporate corruption and his effort to vigorously enforce the laws and protect employees and investors against corporate wrongdoing," he said.

U.S. officials accuse three former Adelphia executives of stealing hundreds of millions of dollars from company shareholders. The nation's sixth-largest cable TV provider filed for bankruptcy protection in June at a cost of some $60 billion.

The fifth-largest bankruptcy in U.S. history adds to a string of business failures and accounting scandals that have shaken investor confidence and contributed to a nine-week slide in the stock market.

President Bush has tried to reassure investors that the U.S. economy is fundamentally strong. He has called for longer jail terms for fraudulent executives and appointed a corporate corruption task force to go after business misconduct.

The president says federal investigators are going after corporate fraud with active prosecutions and tough enforcement to defend what he calls the "rights and interests of every American worker and shareholder.

Among those corporations under investigation for accounting practices is an oil firm that was led by Vice President Dick Cheney. Mr. Bush says he is confident investigators will find Mr. Cheney has done nothing wrong.

With Congress approaching its August recess, the president has been meeting with Senate Democrats and House Republicans to push legislation tightening oversight of the accounting industry.

Congressional leaders Wednesday announced they have reached an agreement that Mr. Fleischer said the president is ready to sign.

"The legislation includes the president's proposals to crack down on corporate wrongdoing and establishes an independent oversight board to police the accounting industry," the spokesman said. "The president calls on the House and the Senate to pass this plan so that he can sign it into law."

U.S. Treasury Secretary Paul O'Neill has postponed a planned trip to South America to work on the administration's economic agenda.

Republicans want to put the issue of corporate corruption behind them before campaigning for November's legislative elections. Democrats want to take advantage of the scandals by portraying Republicans as the party of big business.