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Saturday, 29 June, 2002, 14:45 GMT 15:45 UK
Bush demands corporate abuse laws
WorldCom offices
The financial world has been rocked by recent revelations
President George W Bush has demanded tough new legislation to restore faith in American business following new corporate scandals that have rocked confidence in US business.

In his weekly radio address, Mr Bush said those guilty of corporate fraud should be sent to jail for the sake of US capitalism - "A few bad actors can tarnish our entire free enterprise system."

Bush's proposals
Prosecution of corporate wrongdoers
Prison for those guilty of fraud
Wrongdoers prevented from making profits
Wrongdoers banned from high-level business positions

The president's dissatisfaction has been fuelled by revelations in recent days that US telecoms giant WorldCom and office equipment company Xerox have misled the public over their profitability.

A leading international economic forecaster has warned that these accounting scandals could shake consumer confidence on both sides of the Atlantic.

Punishment pledge

"No violation of the public's trust will be tolerated," Mr Bush said.

"The federal government will be vigilant in prosecuting wrongdoers to ensure that investors and workers maintain the highest confidence in American business."

A laid-off WorldCom employee
A laid-off WorldCom employee leaves his office for the last time

The BBC's correspondent in Washington, Justin Webb, says distancing the president from the crisis in America's boardrooms is the number one political priority for the White House.

The American president also said he wants to see senior corporation figures stopped from making financial gains from false company profit statements.

"When bad accounting practices make the company appear to be more successful than it actually is, corporate executives should lose their phoney profits gained at the expense of employees and stockholders," he said.

And he argued that people guilty of such abuses should be prevented from holding high-level business positions again.

Mr Bush sought to calm investor nerves arguing that: "Despite recent abuses of the public's trust, our economy remains fundamentally sound and strong."

Sustained attack

Saturday's radio address marked the fourth day in a row Mr Bush has promised to crack down on business mismanagement.

President Bush
Bush is trying to distance himself from the scandal
On Friday he said the Justice Department would hold accountable any firms engaging in corruption and deceit.

"Corporate America has got to understand there is a higher calling than trying to fudge the numbers, trying to slip a billion here and a billion here and... hope nobody notices," he said.

WorldCom, the US telecommunications giant, revealed $3.8bn in accounting irregularities this week and office equipment giant Xerox disclosed an accounting black hole of nearly $2bn.

Repercussions

But a leading international economic forecaster has warned that the recent accounting scandals and stock market jitters could shake consumer confidence on both sides of the Atlantic.

Vincent Koen of the Organisation for Economic Co-operation and Development (OECD) told the BBC's Today programme that there could be a significant slow-down in spending, which might in turn dampen economic growth.

On 9 July, Mr Bush is due to visit New York to urge US businesses to adopt better management practices.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Stephen Evans
"Most Americans own shares"
President George Bush
"Our economy remains fundamentally sound"
WorldCom

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29 Jun 02 | From Our Own Correspondent
29 Jun 02 | Business
28 Jun 02 | Business
28 Jun 02 | Business
27 Jun 02 | Business
26 Jun 02 | Business
11 Apr 02 | Business
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