Backtracking on SEC Oversight
Funding
Cites lessons from Enron failures,
challenges President to
"put his money where his mouth has been" on corporate
accountability
October 24, 2002
WASHINGTON
- Senate Governmental Affairs Committee Chairman Joe Lieberman,
D-Conn., Thursday called on President Bush to keep his word and
provide a 77 percent budget increase for the Securities and
Exchange Commission, warning that the public was at greater risk
of more Enrons without those additional dollars.
Two weeks ago the Governmental
Affairs Committee issued a staff report on the SEC's oversight
performance in the wake of the Enron scandal that revealed a
"systemic and catastrophic failure" in protecting
investors. To
prevent similar breakdowns in the future, the report recommended
several measures the SEC should take to strengthen its oversight
and enforcement -- including reviewing more filings,
implementing better technology to proactively root out fraud,
and expanding efforts to monitor compliance.
Today Lieberman said he was deeply
concerned that the Administration's backtracking on its support
for the funding levels for the SEC in the Sarbanes-Oxley bill
would prevent the Commission from fixing the holes the Enron
debacle exposed -- and therefore leave investors vulnerable to
more corporate scandals.
"No amount of tough rhetoric
and perp walk footage can cover up for the fact that the SEC
desperately needs a big boost in its resources to make the
reforms we just passed a real deterrent," Lieberman said.
"I thought the Administration had a clear understanding of
this need, but now it seems like they are intent on undermining
it."
The Sarbanes-Oxley bill provided
not only for a broader role for the SEC to ensure corporate
honesty and the integrity in the financial markets, but provided
also for the resources necessary to support that broad mandate.
The additional funding would also support the initiatives
recommended in the Governmental Affairs Committee staff report.
The final version of the bill, which passed the Senate
99-0, authorized an increase in funding for the SEC from the
current level of $438 million up to $776 million.
President Bush voiced his strong support for the bill in
signing it in July. But
according to recent reports, the Administration is now scaling
back its budget request to $568 million for the next fiscal
year.
"This is a serious
mistake," Lieberman said. "The worst thing we could do
right now, with the markets still clouded by uncertainty and
investor confidence still shaken, is send a signal that we have
not learned from our mistakes and are not committed to stamping
out corporate crime. I
strongly urge the President to rectify that mistake, and put his
corporate accountability money where his corporate
accountability mouth has been."
|