FROM THE OFFICE OF PUBLIC AFFAIRS
July 20, 2004
JS-1796
Remarks of Samuel Bodman, Deputy Secretary of the Treasury
On the Second Anniversary of
The President’s Corporate Fraud Task Force
It's good to be here today at the Department of Justice to talk about the work that this task force is doing to combat corporate fraud and therefore protect investors and consumers from corrupt practices that are not worthy of our great free-market system.
This task force is serving a vital purpose in bringing government agencies together under a central, critical purpose: protecting American investors, consumers and workers from corporate fraud. At the Treasury Department, we are proud to serve as part of this important group.
Corporate fraud and scandals that were growing in the 1990s came to light at a critical and vulnerable time in our nation's history: the months following September 11th.
It was a blow to thousands of workers and investors, and our economy took a hit at a time when we were trying to recover.
We learned many lessons in those months, not the least of which was how important minimizing – and ideally eliminating – corporate fraud is to the health of our economy.
In order for economic growth to occur, investors – large and small – must have confidence in corporations, in corporate leadership, and in our markets generally. And while fraudulent practices are the exception in today's world of business, we've found out how just a few bad apples can spoil the barrel for all.
The President's actions to crack down on corporate fraud, including the all-important signing of Sarbanes-Oxley and the creation of this task force, went a long way toward restoring investor confidence and bolstered our economic recovery.
Since then, corporate giants have been handcuffed, tried and sentenced. America has watched as the repercussions for fraud rained down upon those who lied and cheated.
The message was clear: there are consequences to your actions, and America's CEOs are expected to maintain the highest code of conduct and responsibility. And this responsibility extends beyond looking after the bottom line. Corporate leaders must be honest and accountable to investors. No exceptions will be made, and the penalties will be severe.
The clarity of the message restored strength and confidence in our markets. Investors returned, and today our economy has come through the recovery and is in an expansion. We're seeing the highest growth rates in 20 years.
But this is a job that is never finished. Government agencies must always be vigilant, using the tools available to them, to prevent fraud from occurring or stopping it in its tracks if it does. We must always work together on this, as a team. That's what this task force is all about.
Because anything short of zero-tolerance for corporate fraud would do a disservice to consumers, investors and employees. Anything short would also put our economy at risk.
The IRS, under the umbrella of the Treasury Department, is proud to contribute to the efforts of this task force to fight fraud. Nationwide, over 120 IRS-CI Special Agents are devoted specifically to battling corporate fraud. All 35 field offices have a corporate fraud coordinator to ensure effective identification and investigation of appropriate cases.
The priorities they operate under are:
- discouraging and deterring non-compliance with our tax laws;
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assuring that tax practitioners adhere to professional standards and follow the law;
- detecting and deterring domestic and off-shore based tax and financial criminal tax activity; and
- discouraging and deterring non-compliance within tax-exempt and government entities as well as misuse of such entities by third parties for tax avoidance.
The IRS Criminal Investigation division is aggressively pursuing these priorities, which frequently highlight the intersection between corporate fraud and tax crimes.
General Ashcroft, we are pleased to work with the Justice Department as task force members, and as partners in this fight. The American economy depends upon our vigilance, and we are proud to serve.