Ushering in what he called a new era of corporate responsibility, U.S. President George W. Bush has launched a post- Enron Corp. crackdown on business and accounting misdeeds.
Mr. Bush announced a 10-point plan yesterday to beef up corporate disclosure, create a new accounting watchdog and toughen penalties for wrongdoers.
Under the Bush plan, chief executive officers would be required to personally vouch for all their company's financial statements and disclosures.
And executives found guilty of accounting abuses could be stripped of their bonuses and barred from working as an officer or director of a public company.
"The CEO's signature should also be his personal certification, vouching for the veracity and fairness of the financial disclosures," Mr. Bush said at a business awards ceremony in Washington.
"When he signs a statement, he's giving his word and should stand behind it."
In his speech, Mr. Bush never once mentioned Enron or its long-time auditor, Arthur Andersen.
Enron is the Houston-based energy trader that was run by Mr. Bush's friend and political donor Kenneth Lay until its collapse in December.
Mr. Bush noted only that a "single bankruptcy" had shaken the faith of Americans in the financial markets.
"We need to get back to basic capitalism," he said. "In a system based on the willingness to take risks, investors need to know the true nature of the risks."
The clampdown falls short of some of the proposals made by Treasury Secretary Paul O'Neill and some members of the U.S. Congress that would make it easier to pursue executives and accountants.
The proposed accounting regulatory review board -- an idea first floated by Securities and Exchange Commission chairman Harvey Pitt -- would develop standards as well as have investigative and enforcement powers.
Mr. Pitt has also asked Congress for funds to hire as many as 100 new lawyers and accountants.
Mr. Bush said he would also ask the SEC to review whether accounting firms should be allowed to perform both audits as well as lucrative business consulting for their clients. Arthur Andersen earned more from Enron in consulting fees than auditing -- a fact critics said may have coloured its judgment.
The Bush administration plans to push for other new rules, including a requirement that executives and directors make speedier disclosures of their stock transactions -- within two days rather than the one-year limit that applies now on personal deals with a company.
Several top Enron executives were actively dumping shares in the months and weeks before the company's collapse while reassuring employees and investors that the future looked bright.
Democrats immediately charged that the Bush plan isn't tough enough on penalties or oversight.
"We need a strong cop on the street corner or there will be a continual element of breakdown in the system," said New Jersey Senator John Corzine, a former top executive of investment dealer Goldman Sachs & Co.
White House officials said most of Mr. Bush's plan could be done by the SEC within its existing powers. But new legislation would likely be needed if the SEC seeks authority to ban individuals from serving as corporate officers or directors.
Barrie McKenna