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SPOKESMAN: Do you swear that the testimony you are about to give is the truth, the whole truth, and nothing but the truth?
SPOKESMAN: Yes, sir.
GWEN IFILL: The spectacle is familiar: Executives from once-high-flying corporations telling Congress that they had little idea what caused their businesses to collapse.
SKILLING: I think I’d have to be an accountant to know if it’s true. I don’t…
SEN. BARBARA BOXER: Wait a minute. You have to be an accountant to know that a company could never use its own stock to generate a gain or avoid a loss on an income statement. What was your education, Mr. Skilling? I know I read it was pretty good. What…
SKILLING: I have a master’s in business administration.
SEN. BARBARA BOXER: A master’s in business administration. And where did you go to school?
SKILLING: Harvard Business School.
SEN. BARBARA BOXER: Okay. In Harvard Business School… (laughter)
GWEN IFILL: Such displays involving corporate officers of Enron, Global Crossing and other troubled companies have tainted business leadership and prompted the President and Congress to devise a new response: Hold the chief executives themselves– many of whom pocketed millions in stock option gains and bonuses from their floundering companies– responsible for their corporate mistakes. (Whistles and cheers) President Bush announced his proposals in a speech in Florida.
PRESIDENT GEORGE W. BUSH: This country must hold corporate CEO’s… CEO’s of publicly held companies to the highest of high standards.
GWEN IFILL: The White House plan would make CEO’s personally vouch for the accuracy of their company’s financial statements. Any bonuses they receive would be returned if misconduct produces inaccurate balance sheets. Corporate officers who abuse their power would be banned from ever serving as officers or directors of a publicly held corporation. And any corporate officer who sells company stock would be required to notify investors and employees within two business days.
PRESIDENT GEORGE W. BUSH: In order to usher in a period of responsibility in America, a culture of responsibility, corporate America must be responsible, must make sure that there are no shenanigans or sleight of hands, must make sure there is a openness and disclosure about true liabilities and true assets. And if they don’t, they must be held to account. (Applause)
GWEN IFILL: A week later, Senate Majority Leader Tom Daschle derided the President’s proposals as “only the illusion of reform,” and instead endorsed legislation presented by fellow Democrat Patrick Leahy of Vermont.
SEN. TOM DASCHLE: The principle here is very simple: Purposeful corporate fraud and abuse, purposeful criminal behavior should be punished.
GWEN IFILL: The plan would create a category of felony for securities fraud; protect whistleblowers from retaliation, and toughen laws against shredding documents; increase from three years to five the statute of limitation for prosecuting stock fraud; and increase jail time for those convicted of fraud.
SEN. PATRICK LEAHY: When you have billions of dollars on the table, while you hope that everybody thinks what’s in the best interest of everybody else, it’s nice to focus their interest. And I found, as a former prosecutor, the best way to focus somebody’s interest is to have them know if they do wrong, they’re going to go to jail.