Pay It Back And Go To Jail
Can the Congressional Democrats draw a bright line between themselves and the Republicans over what needs to be done about corporate crime in the eight weeks before the November elections?
At first thought, the answer should be easy. The Republicans and their “whatever corporations want” subservient stance during the Nineties reached levels somewhere between unconditional surrender and unconditional sell out. The former pesticide exterminator, House Republican Whip, Tom Delay (R-TX) once declared that he could not think of one regulation to keep on the law books. De-regulate everything in sight was their fevered mantra — including taking the federal cops off the corporate crime beats.
Getting rid of corporate law and order, pushing to lock up the corporate cops and throwing away the keys became the Republicans’ inventory to raise huge piles of cash from the corporate malefactors. The Democrats, while as a whole not as obeisant, did not throw the gauntlet down then. Also some Democrats, like Senators Lieberman and Dodd, locked arms with the Republicans to take away important rights to sue held by shareholders until 1995.
Now during the past year’s surge in corporate crime — Enron, Worldcom, et al — and its massive media attention, more Democrats than Republicans finally seem interested in reforms. So what do the Republicans tell the voters back home? That they’re going to be tough on corporate crooks and demand that they should go to jail.
Bingo! The Republicans are even with the Democrats in the rhetoric game. When the Sarbanes reform legislation came to the Senate floor this summer, the Republicans, at first, bridled at its modest regulatory measuresover accounting firms and corporate governance matters. Then cleverer heads prevailed. The Republican leaders in the Senate and House told their flock to jump on the Sarbanes bandwagon and make common identity with the Democrats.
Bingo! Blur! The Republicans become even with the Democrats in the legislation scorecard, including President Bush who signed it into law with the proper rhetoric.
At present, the Democrats know full well the stands that they can take and should take which the Republicans will refuse to imitate.
Senator Byron Dorgan (D-ND) has one of them — a tough crackdown on U.S. corporations who renounce their U.S. state charter, reincorporate in Bermuda or other tax haven, escape gobs of taxes to Uncle Sam yet retain all the benefits as if they were still U.S. corporations. Dorgan says he will have hearings on this subject. One of the lead proposals will be to stop these companies from receiving government contracts and subsidies.
Another realm that the Republicans would never enter is to provide by law more powers and rights to shareholders to control the corporation that they own. Here the majority of Republicans are anti-capitalist because they are in the hands of the corporate bosses who too often mismanage their companies, enrich themselves immensely and contribute heavily to political campaigns.
Shareholders in large public companies must be given the authority to approve or disapprove executive compensation packages. It has been executive pay that provided the bosses with the incentives to cook the books and inflate company profits so as to make their stock options and other bonuses more lucrative.
Facilities to make it easier for consumers, taxpayers and shareholders to band together voluntarily into powerful self-help associations areanathema to Republicans. If the Democrats drop their coolness or indifference to this proposal (see Citizenworks.org for information about this proposed Act), they could broaden their appeal significantly to millions of defrauded or anxious Americans.
A more immediate bright line opportunity comes very soon when the House and Senate votes on the Justice Department appropriations bill. At least fifty million dollars should be added to expand the corporate crime prosecution section in the Department. There is no way that the Justice Department can go after corporate crooks with its meager staff and, certainly, no way can it respond to the recommendations for prosecution by the beefed up Securities and Exchange Commission.
More federal cops on the corporate beat, and the establishment of a corporate crime database are necessary to make law and order happen and to help save millions of Americans their investments, savings, pensions and jobs. Will the Democrats distinguish themselves from the Republicans and take the lead here in the next couple of weeks by amending this appropriations legislation on the floor of Congress? Isn’t this the best way to respond to the most immediate demand of the voters — whether conservative or liberal — which is to make the corporate bosses “pay it back and go to jail.”
Rolling back the failed de-regulation of the financial industry which opened the floodgates to reckless, avaricious crimes and frauds in the Nineties is also an area Republicans won’t touch. Derivatives should be brought under regulation as should electricity (a necessity). It was de-regulation that allowed the Enronitis disease which gouged Californians and others and which eventually brought down Enron and cost thousands of workers their jobs.
These and other positions that could be turned into bright lines between the two major Parties are available on Citizenworks.org. Of course one Party has supported these sensible proposals all along. Color it Green.