The bill, HR 3763, establishes a new accounting oversight board, replacing the current system of largely self-regulation and tightens rules requiring the disclosure of corporate information, according to an Associated Press report.
For their part, GOP leaders say their bill, scheduled for a possible Wednesday evening vote, would bolster investor confidence without creating more hassles for businesses or generating frivolous lawsuits.
Dems Unhappy With GOP Bill
As far as the Democrats and liberal lobbyists are concerned, the proposal is altogether too weak and will not prohibit corporate bigwigs from keeping critical information from shareholders. Corporate secrets have been a key issue in the Enron situation as well as a half-dozen other controversies focusing on other companies.
“The Republican leadership, once again, is selling out to special interests. It is refusing to hold executives accountable for their actions,” House Minority Leader Dick Gephardt, D-Missouri, said at a news conference as the measure was debated, according to the AP.
A Democratic alternative to the bill would slap tough criminal penalties on corporate wrongdoers and prevent them “from running away with millions of dollars in bonuses,” Gephardt said at the news conference.
Consumers Union is calling the measure the “Ken Lay Protection Act,” after bankrupt Enron’s former chairman.
Critics say the House bill doesn’t go far enough. It “offers only the appearance of reform, not the reality,” Consumers Union, Consumer Federation of America and Public Interest Research Group told lawmakers in a letter Tuesday.
The White House Position
The White House supports the accounting bill, but says it would prefer that some of the changes, such as requiring companies to file financial reports more quickly, be made by the Securities and Exchange Commission rather than by Congress.
Bush last month proposed his own 10-point plan in the wake of Enron’s collapse to make company officials more accountable, provide better information to investors and develop a stronger audit system. It rests mostly on administrative changes rather than Congressional action.
Earlier this month the House voted to add more worker protections to the nation’s pension laws.
The earlier bill and the proposal on the House floor Wednesday are only a small part of a firestorm of post-Enron activity.
Not only has a handful of lawmakers from both houses taken up pension reform as a cause, but a variety of state and federal financial regulators have also weighed in with proposals designed to curb Enron-like corporate misdeeds.
The Enron firestorm blew up late last year when the one-time giant energy trader financially crashed and burned, filing for federal bankruptcy protection in early December.
Enron workers complained they had been improperly pressured into buying large blocks of company stock for their 401(k) accounts and then kept from selling shares even as their share price was plummeting.
While that was going on, top Enron executives sold hundreds of millions of dollars worth of company stock.