Senators bail out on Bush

July 17, 2002|By Jules Witcover

WASHINGTON -- If President Bush still has any reservations about how irate average investors are about the revelations of corporate corruption and greed, the Republican members of the U.S. Senate clearly don't share them.

They voted in lockstep with all Democratic senators for the tough reforms crafted by Democratic Sen. Paul Sarbanes of Maryland, which the president had declined to embrace in his news conference and Wall Street speech on corporate misdeeds.

After the 97-0 vote Monday, Mr. Bush put the best face on the breaking of GOP ranks. "I am pleased the Senate has now acted on a tough bill that shares my goals and includes all of the accounting and criminal reforms I proposed," he said."

It's true that the bill does incorporate some of Mr. Bush's proposals, but it goes well beyond what he called for in requiring the independence of auditors, a full-time oversight board not dominated by accountants and independent funding, among other things.

The much softer version passed earlier by the Republican-controlled House was more to the president's liking. But in light of the GOP cave-in behind the Senate bill, House conferees will be playing a weak hand in negotiations with their Senate counterparts in shaping the final version.

Indeed, Mr. Bush's expressed if tardy pleasure over the Sarbanes bill appears to be a signal to House Republicans to go along lest they make it all the easier for the Democrats to paint the GOP as the protector of the worst of the corporate offenders.

With this fall's congressional elections on the horizon, the Democratic leaders in Congress are looking to the corporate scandals to focus voters' attentions away from the president's leadership on the war on terrorism to his failure to lead ambitious corporate reform.

The regurgitation of the Securities and Exchange Commission's investigation of Mr. Bush's sale of Harken energy stock years ago has had political traction -- even though the SEC dropped the case -- because it has given the Democrats a hook for casting him as part of the same corporate culture he now vows to change.

The same is true concerning the continuing SEC investigation of Vice President Dick Cheney's former energy services firm, Halliburton Co., over accounting practices during his leadership.

Although the SEC has not charged him with wrongdoing, Mr. Cheney's own highly profitable sale of Halliburton stock when he left the company to become Mr. Bush's running mate in 2000 has also been seized upon by the Democrats. Only two months later, the stock price plunged amid an investigation of the company.

In the wake of the president's stern lecture to corporate America to get its house in order, the stock market fell even more, reflecting a continued lack of consumer confidence and the ineffectiveness of his words in calming widespread apprehension in the business community.

All this has been fodder for a Democratic Party that earlier feared it was heading for political defeat in the fall elections, with Republican congressional candidates riding the popular president's coattails. Now they see the Wall Street debacle as a lifeline.

The Democrats' revived interest in tagging the GOP as the party of big business comes even as they have been striving with some success to cast themselves as more friendly toward entrepreneurship.

As more and more Americans have become investors, New Democrats of the Bill Clinton stripe have pointedly put aside the old New Deal concept of "class warfare" in favor of courting business and the millions of workers, white collar and blue collar, who don't see it as the enemy.

But now that corporate America is experiencing trying times, the Democrats are showing no reluctance in putting Wall Street on the back of the Republican Party again. The stampede of Senate Republicans to climb aboard the Sarbanes bill, leaving their president to scramble aboard himself, shows they know a political safe harbor when they see one.

Jules Witcover writes from The Sun's Washington bureau. His column appears Mondays, Wednesdays and Fridays.

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