On corporate responsibility
By By Trent Lott / senator
July 14, 2002
Many Mississippians, including myself, are disappointed and saddened about the financial problems at Mississippi-based WorldCom. However, we must remember that WorldCom's misfortunes are an economic problem, not a political one.
The rash of corporate scandals reflects a lack of corporate responsibility, poor accounting practices and a disregard for the ethics of corporate conduct. Congress should support President Bush's plan for tougher laws and stiffer penalties for those who violate the trust of employees, shareholders and the public.
In all public companies, the top executives are charged with reporting the truth to board members and shareholders. If the company is successful, its leaders must say that. If the company is a money-hemorrhaging failure, its leaders must say that too. To do anything else is lying, not to mention against the law.
I don't know the details about the interworkings of WorldCom, but what happened is certainly unethical and possibly a violation of law. Therefore, the federal government has a clear responsibility to address a troubling series of corporate scandals which have hurt many innocent people.
This week, President Bush outlined some specific actions relating to the way corporations are held accountable to shareholders and to the public. Among several things, the president called for the establishment of a corporate fraud task force. This task force would essentially act as a white-collar SWAT team, dedicated to rooting-out corporate fraud.
The president also supports tougher prison terms for criminal fraud when committed by corporate officers and debtors. Laws regarding document shredding and other forms of obstruction of justice will also be enhanced under the president's plan.
President Bush's plan should be supported by Congress. This is not an opportunity to score political points, as some in Congress are unfortunately seeing it. The American people obviously understand that President George W. Bush is not responsible for the Enron debacle, the WorldCom mess or the other recent corporate problems, and those who desperately try to link this to our president and his allies are clearly taking cheap shots.
These pitiful political antics cannot solve this economic problem. Congress must focus on meaningful reforms which will help prevent similar accounting schemes from happening again, and save countless jobs, investments and retirement accounts for the American people.
However, as federal lawmakers address this problem, we must not overdo it. Though not perfect, America's business community including its publicly-held corporations is a huge part of what has given Americans a high living standard unequaled in history.
Millions of jobs and livelihoods depend on America's publicly held companies, and federal laws and regulations should promote business development.
I just returned from a trip to Ireland and Latvia. In the last decade, these countries have built thriving economies virtually from scratch. They created more wealth with a tried and true method: freedom. They kept government limited and tax rates low, enabling entrepreneurs to create wealth and jobs. They sold off government assets to the private sector, which usually gets better results. Parents can choose their children's schools, and they have a fairer tax code. They know that a healthy economy depends on limited government.
Accountants must be truthful with corporate executives. Corporate executives have an ethical and legal responsibility to be honest with employees and stockholders. When this does not happen, the federal government must make sure America's corporations comply with the law, and we must enact new laws if needed.
However, all Americans must remember that these recent cases are an economic problem and should be addressed in the context of economics, not political gamesmanship. To do less would be disingenuous to the employees, stockholders and communities hurt by a handful of poor business advisers, and bad business decisions.
