TOPICS > Economy

Background: Cleaning Up

July 12, 2002 at 12:00 AM EST

TRANSCRIPT

KWAME HOLMAN: It emerged late yesterday as a bone of contention in the Senate’s debate on reforming accounting practices,. An amendment by Senator John McCain requiring corporations to declare stock options given to top executives as an expense recorded on the corporation’s balance sheet.

SEN. JOHN McCAIN: Before the Senator from Nevada leaves the floor, I would wonder if he would respond to a question. Do we intend to vote on these pending amendments and the motion to recommit?

KWAME HOLMAN: Assistant Majority Leader Harry Reid was almost apologetic in denying McCain a vote.

SEN. HARRY REID: I have spoken to the manager of the bill in the minority and it appears to me very unlikely we are going to be able to do that. So even though would I like votes, it doesn’t appear we are going to be able to have votes.

KWAME HOLMAN: McCain was incensed.

SEN. JOHN McCAIN: Whatever side you are on the issue, the fix is in, as we say in the sport of boxing or all too often in the sport of boxing and the fix is in and we will now have cloture invoked and there will not be a vote on stock options. I have been through rather difficult issues that I have been blocked on getting votes on and I want to tell my friend from Nevada and all my colleagues, we will have a vote on stock options. Sooner or later we will have a vote on stock options.

It’s curious to me– actually, it’s not curious to me, why a vote on this amendment is blocked. It’s because every lobbyist in this town for the high-tech community has said don’t, don’t do it. The one thing that the folks in Silicon Valley are scared of more than anything else is that they would lose their precious stock options.

SEN. TOM DASCHLE: That’s as unfortunate as it is inaccurate.

KWAME HOLMAN: This morning, Senate Majority Leader Tom Daschle said he agrees something should be done by stock options — not by the Senate but by an independent accounting review board the Senate would create.

SEN. TOM DASCHLE: We haven’t sent the bill to the President yet and have you some members dictating to that independent board what they should do. How independent is a board if we’re already dictating to them what they ought to be doing once they organize?

KWAME HOLMAN: And so on the Senate floor this morning, Michigan Democrat Carl Levin on behalf of Senator McCain as well proposed requiring any newly accounting board to review the issue of stock options within one year and adopt an appropriate standard.

SEN. CARL LEVIN: At a minimum, Madam President I ought to be allowed to get a vote on this amendment.

KWAME HOLMAN: But Levin also was denied, this time about it objection of a Republican. Levin said he would try again on Monday.

SEN. CARL LEVIN: This is a critical issue that is not addressed in this bill, which is a big part of the lack of credibility that we have right now in our markets.

KWAME HOLMAN: Meanwhile, the Senate, by simple voice vote today did approve a ban on personal loans from companies to top officials. That goes with the bill’s main provision requiring executives to certify accuracy of corporate financial statements and with the tougher criminal penalties adopted this week for corporate officials who deceive shareholders and shred documents. Final action on the Senate’s accounting reform bill is expected late Monday.