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FOR IMMEDIATE RELEASE
JULY 15, 2002
6:17 PM
CONTACT:  Common Cause
202/736-5770
Common Cause Applauds Expected Senate Passage of Sarbanes Accounting Reform Bill
 
WASHINGTON - July 15 -  America's investors, employees and pensioners can take heart that the Senate is starting to look out for their interests. The Sarbanes bill emerged from the Senate stronger than when it came in -- strengthened by amendments that would broaden the definition of corporate fraud and increase the penalties for fraud and document destruction.

The bill attempts to guarantee auditor independence, but leaves the SEC with too much discretion to define which consulting services accounting firms can offer their audit clients. We also regret a provision to keep disciplinary proceedings against accounting firms secret until their final phase.

But the real challenge now is to keep the Senate bill from being gutted in conference committee. We call on Senator Daschle and Speaker Hastert to name conferees who believe strong, swift reform is needed to answer the crisis of market confidence.

The House-passed bill is a relic of calmer markets. America can ill afford such a cynical move to protect campaign donors in the accounting industry from the consequences of their inaction. The House should pass a motion to instruct conferees to agree to stronger Senate language.

Unfortunately, House Financial Services Chairman Michael Oxley (R-OH) is expected to chair the conference committee, and he has not grasped the urgency of the crisis in financial markets. He has criticized the Senate for rushing to enact reforms, calling the debate a "feeding frenzy." Investors are more likely to view the accounting industry, not reformers, as the sharks taking a bite out of their portfolios.

Bacgkround: According to CQ Weekly, citing the value of U.S. stocks, as measured by the Wilshire 5000 stock index, since March 2000, the value of all U.S. stocks has plunged by $7 trillion.

For more information, please contact the Common Cause Press Office at 202/736-5770.

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