WASHINGTON, DC - Senator Tom Carper voted today to pass tough accounting reforms to restore investor confidence by addressing many of the problems that caused the financial disaster at Enron and several other companies. The Senate passed legislation today that was drafted by the Senate Banking Committee and creates an independent board to oversee the accounting industry; strengthens the Securities and Exchange Commission; increases corporate responsibility and toughens auditor independence standards. Carper delivered the following statement from the floor of the Senate concerning the vote: "This is all about the economy. As a nation, we're trying to come out of a recession, and I think there's a fair amount of data that would suggest we're heading in the right direction. The number of people being laid off is slowing. Manufacturing activity is increasing. Economic activity among some of the hardest hit sectors of our economy is starting to show signs of life. One of the reasons why it's so important for us to pass this legislation is to send a clear signal to investors around the world that the United States is a good place in which to invest. Our trade deficit last year was about $300 billion. The worst thing that could happen for us at a time when we need to attract foreign investments would be to send a message that the United States is not a good or safe place in which to invest. Shareholders of publicly traded companies should have confidence in the CEO's that run those companies and in the board of directors whose obligation it is to represent the interest of the shareholders to know that that board is independent. Shareholders should have confidence that the audit committees of the board comprised of independent-minded and knowledgeable board members who will act not as a lap dog but as a watchdog every day. Shareholders should have confidence that there are rigorous auditing standards that exist in this country. They should know there is a strong, independent, knowledgeable entity that is going to make sure those auditing standards are enforced. Regarding the auditors of publicly traded companies - I think we should take away from them the temptation to look the other way, or give the benefit of the doubt, to a company that they're auditing because of the temptation from some other part of their auditing company that deals with consulting services. We want to make sure the folks that are doing the audits of these publicly traded companies are interested in doing a good job because that's their responsibility, and not cut corners or look the other way because doing so might enable their accounting company to attract and to retain lucrative consulting services. I think this bill goes a long way - some would say too far - toward curtailing that activity. I think it strikes the right balance. Most of us, I suspect, in this body know someone who used to work for one of the big accounting firms who actually went to work for one of the companies that they audit. There's nothing wrong with that. However, the revolving door can be more troublesome when the person who moves from the auditing company ends up as a senior official of the company during that the last week or month they were auditing. This measure doesn't completely stop that revolving door, but I think it slows it down, particularly at the very top. Another aspect this bill tries to address is just to ask the question: "How often is it appropriate to have a federal set of eyes - a fresh set of eyes - in charge of those independent auditors during that important audit of a publicly traded company?" This measure moves from seven to five years the period of time after which the lead auditor, lead partner has to be changed. I think that's a sound measure. I think the investors in this country, and other countries need to be comforted by the knowledge that when they hear an analyst on television or read of an analyst recommendation of a particular stock or stocks, that when an analyst says buy, they mean buy. When an analyst says sell, they mean sell. When an analyst says hold, they mean hold. They need to know that the analyst's compensation is going to be derived more from how well the analyst does the job of providing good analysis and investment advice and not by how much new business that that analyst can help bring to their investment banking side of their company. How about CEO's in senior management? When they break the law, they should be fully prosecuted under the law. If what they've done is an offense for which they can be imprisoned, we ought to put them there. CEO's shouldn't be allowed to profit from financial misinformation or from manipulation of their books. At Worldcom, the senior official of the company received a $360 million loan from the company, which I don't believe the shareholders ever knew about. At least, when they found out about it, it was too late for the lot of them. That kind of information should be fully disclosed. It should be disclosed promptly, and it should be disclosed through a medium that allows those who have some need to know, investors and shareholders, to have that information in a timely way. Finally, a word about the employees themselves, employees who work for companies, including some of these companies who are who have gone through a meltdown or are going through a meltdown. Employees need some recourse when they are urged on the one hand by their senior officials to buy into their 401(k)'s investment plan at the very time their senior officials are bailing out of the company. There should be some kind of recourse for employees when that happens because what is good for the goose is good for the gander. Employees should never again face the situation that Enron employees faced during a lockdown period of time when employees could not sell their stock when other senior officials were able to bail out. Again, what is good for the goose is good for the gander. When employees in a lockdown period are not able to sell their company stock from their 401(k) plan, the senior officials of that company should not be able to enter into transactions involving their stock either, and one thing I don't believe we address in this bill, the others I've mentioned we do. A lot is riding on this legislation, a whole lot more than we would have guessed six months ago. Six months ago, as we saw Enron melt down and the disclosures come forward, we thought it was one company. Poorly run, fraudulently run. A lot of people were hurt who worked at that company. A lot of people who worked for the accounting firm of the company Arthur Anderson, lost their jobs and were fully innocent. Six months ago there was a full sense of outrage at Enron, and the people who led to its fall. We know now that what happened at Enron has not precisely been the same at other companies, but it is symptomatic of behavior in other companies. Where people who run those companies do not meet their obligation to the shareholders and they don't meet their obligation to their employees. Where greed has corrupted too many people. While it is difficult for us to pass a law outlawing greed, and we can try to outlaw fraud, the developments of a whole host of other companies, the disclosures of financial mismanagement and the misstatement and misrepresentation of performance of other companies in recent months, makes what we are doing here all the more important. We need to get this economy moving in the right direction. I believe underneath, a lot of the fundamentals are sound. If you look at growth and productivity and the manufacturing activity I alluded to earlier, there is some good news. Inventories are still not being built - they are being drawn down, that is good. But what's troubling news is what's going on the stock exchange. Investors are skittish. That's understandable that they are. We can begin to restore in a very meaningful tangible way the confidence of those in very stores in America, and in American companies, and we ought to do that. I am proud to participate as a member of the banking committee in its development, and proud to be a witness to the work that's going on, on the floor, here in this senate this week, to make a good bill even better. I yield back my time.