President Bush takes to the bully pulpit to deliver a stern lecture to America's business elitE.The Justice Dept. stuns the accounting profession by filing a criminal indictment of Arthur Andersen LLP for destroying documents related to its audits of Enron Corp. On Capitol Hill, some congressional panels push on with biased hearings on Enron's collapse and, now, another busted New Economy star, telecom's Global Crossing. Lawmakers sign on to new bills aimed at tightening oversight of everything from pensions and accounting to executive pay.
To any spectators, it would be easy to conclude that the winds of change are sweeping Corporate America, led by George W. Bush, who ran as 'a reformer with result'. But far from deconstructing the corporate world brick by brick into something cleaner, sparer, and stronger, Bush aides and many legislators are preparing modest legislative and administrative reforms. Instead of an overhaul, Bushes team is counting on its enforcers, Justice and a newly empowered Securities & Exchange Commission, to make examples of the most egregious offenders. The idea is that business will quickly get the message and clean up its own act.
Why won't the outraged rhetoric result in more changes? For starters, the Bush Administration warns that any rush to legislate corporate behavior. could produce a raft of flawed bills that raise costs without halting abuses. Business has striven to drive the point home with an intense lobbying blitz that has convinced many lawmakers that over-regulation could startle the stock market and perhaps endanger the nascent economic recovery.
All this sets the stage for Washington to get busy with predictably modest results. A surge of caution is sweeping would-be reformers on the Hill. 'They know they don't want to make a big mistake,' says Jerry J. Jasinowski, president of the National Association of Manufacturers. That go-slow approach suits the White HousE.Aides say the President, while personally disgusted by Enron's sellout of its pensioners, is reluctant to embrace new sanctions that frustrate even law-abiding corporations and create a litigation bonanza for trial lawyers. Instead, the White House will push for narrowly targeted action, most of it carried out by the SEC, the Treasury Dept., and the Labor Dept. The right outcome, Treasury Secretary Paul H. O'Neill said on Mar. 15th, 'depends on the Congress not legislating things that are over the top.'
To O'Neill and Bush, that means enforcing current laws before passing too many new ones. Nowhere is that stance clearer than in the Andersen indictment. So the Bush Administration left the decision to Justice Dept. prosecutors rather than White House political operatives or their reformist fellows at the SEC.
We can learn from the first paragraph that
A.the Justice Department seized on the plight of Enron's workers.
B.the White House recognized that stricter control is a political must.
C.The President was determined to turn a reformed Andersen into a model.
D.the White House responded strongly to the Andersen's scandal.