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| 2002 News and Press Releases |
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HEADLINE ARCHIVED:
Bush Officials Vowing To Seek Tough Penalties In Wall St. Cases
By: Eric Lichtblau
The New York Times. December 29, 2002
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EXCERPT: As they try to restore confidence in financial markets, senior Bush administration officials are planning to seek tougher corporate fraud penalties and to prosecute vigorously the lawyers, bankers, accountants and others who have failed to detect the scandals that have rocked Wall Street. Deputy Attorney General Larry D. Thompson said in an interview that he had instructed prosecutors to take a harder look at "what kind of advice the outside professionals gave to these companies and whether or not they were complicit in the wrongdoing." The aim, Justice Department officials said, is to broaden the pool of suspects who may ultimately be prosecuted. Specifically, they want to move investigations beyond boardrooms and executive suites and into the offices of professional firms that advise companies, as prosecutors did with Arthur Andersen, Enron's accountant. "You will be seeing more prosecutions of individual professionals," a senior Justice Department official said. "We're making this a focus," said the official, who insisted on anonymity. "In the past, there's been a tendency to go after mainly the executives at the companies themselves. We want to make sure our investigations are broader than that. Major corporate accounting fraud cannot happen over an extended period of time without the complicity of accountants and lawyers and other professionals." At the same time, the Justice Department - criticized in some quarters for a sluggish approach to white-collar crime - is pushing to enact tougher sentencing guidelines to punish companies, executives and outside professionals. The United States Sentencing Commission has proposed stiffer sentencing guidelines under the corporate reform bill that Congress passed last summer, the Sarbanes-Oxley Act. But the Justice Department is urging major revisions in the commission's plan because, the official said, the department does not think it goes far enough. "We have a very different idea of what Congress meant," the official said. Mr. Thompson, who leads the task force the president created in July, said he thought that the government needed tougher penalties to deter executives from defrauding shareholders. "These people who abuse the public trust and adversely affect the lives of millions of Americans have to be appropriately punished," he said. "I think an adjustment would accurately reflect the magnitude and scope of the wrongdoing." The push to broaden corporate crime investigations comes as the White House, after dismissing Treasury Secretary Paul H. O'Neill and its top economic adviser, Lawrence B. Lindsey, is struggling to regain its footing on economic issues. Restoring investor confidence is seen as one crucial part of that effort, and it offers the administration a chance to seize the initiative and deflect criticism from some Democrats who believe that the administration has coddled big business. Since the creation of the fraud task force, it has overseen more than 100 investigations into allegations of white-collar crime, securing about 50 convictions, according to newly compiled Justice Department data.
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