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Tuesday, 9 July, 2002, 11:29 GMT 12:29 UK
Bush vows action to stop scandals
George Bush
Bush: Will "vigorously pursue" lawbreakers
US President George W Bush is to deliver a speech to Wall Street executives on Tuesday aimed at restoring trust in big American companies following a series of damaging corporate scandals.

He is expected to set out plans to strengthen the Securities and Exchange Commission (SEC), which investigates corporate malpractice.


We have a duty to every worker, shareholder and investor in America to punish the guilty, to close loopholes and protect employee pensions, and we will

President Bush
And Bush administration officials say the president will also call for executives to be jailed if they deliberately falsify accounts - at the moment they face only civil penalties.

Investor confidence has been shaken by recent accounting scandals involving companies including Enron, Worldcom and Merck.

At a news conference on Monday, Mr Bush promised: "We will vigorously pursue people who break the law."

He told reporters: "We have a duty to every worker, shareholder and investor in America to punish the guilty, to close loopholes and protect employee pensions, and we will."

But Mr Bush was forced on to the defensive when asked about his own business past as an oil company director and an eight-month delay in reporting the sale of shares he held.

The president, whose political opponents say he should reveal more about what happened, said the accusations were "recycled stuff".

There was nothing new that had not been discovered by the authorities at the time they investigated and decided not to prosecute him, he said.

Business ally

Mr Bush's address to more than 1,000 business leaders on Tuesday is set to be one of the most difficult domestic policy speeches of his presidency, says the BBC's Justin Webb in Washington.

The Bush administration has been a close friend and ally of corporate America, but big business is now under unprecedented scrutiny.

Ex-Worldcom CEO Bernie Ebbers
Bernie Ebbers refused to testify to the congressional committee
The collapse of energy giant Enron last December - the biggest company bankruptcy in US corporate history - was blamed on complex financial arrangements and questionable accounting practices.

Since then, investor confidence has been further shaken by a series of revelations involving suspect accounting, culminating in a $3.8bn (2.5bn) fraud at telecoms firm WorldCom - now being investigated by a congressional committee.

Two former WorldCom bosses, Bernie Ebbers and Scott Sullivan, on Monday refused to give evidence to the committee, using their constitutional right against self-incrimination.

A separate investigation is being held into accounting practices at Halliburton, the energy company that Vice-President, Dick Cheney used to run.

And Harvey Pitt, Mr Bush's choice to head the SEC - the main market regulator - is under fire from both Democrats and Republicans in Congress for being too close to the brokerages and companies he oversees.

But Mr Bush has given Mr Pitt his full support. He also said he believed the vast majority of corporate executives in the US were decent, honourable people; just a few had created the stains of recent months.

No case

Mr Bush was pressed on his failure to disclose share details as director of Harken Energy Corporation in 1990.

He said those who were attacking him were politically motivated.

"People are going to attack me based on Harken," he said. "That's nothing new...This is recycled stuff."

The story had been fully looked into by the SEC and "there's no case there," he added.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Steve Kingstone in Washington
"The president's own finances have become part of the debate"
John Castellani , president, US Business Roundtable
"These (corporate scandals) are the actions of a few, but even a few is too many"
The BBC's Justin Webb reports
"Mr Bush said he thought the capitalist system in the United States was rather 'tender'"
WorldCom

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09 Jul 02 | Americas
09 Jul 02 | Business
03 Jul 02 | Business
08 Jul 02 | Business
30 Jun 02 | Business
28 Jun 02 | Business
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