Jun 18 2002
WASHINGTON, DC - Senator Tom Carper joined the Senate Banking Committee today in passing tough accounting reforms to restore investor confidence by addressing many of the problems that caused the financial disaster at Enron. The committee passed legislation today that: 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 before casting his vote: "Mr. Chairman, I believe it was James Carville a decade ago that coined that immortal phrase "It's the economy, stupid." I believe it's always the economy. As we see on the floor of the Senate today as we deal with the terrorism reinsurance bill, it's the economy that's really forcing us and urging us to pass that legislation. Here, [with this reform legislation] it's the economy again. Because this is all about investor confidence. To make sure that the monies that are coming into this country from around the world to help fuel our economy and, frankly, help to finance our trade deficits must continue to come our way. We don't want to see that confidence diminished. "Shareholders who own stock in American companies, publicly traded companies, should have the confidence in their boards, the boards of the companies they hold stock in, and the audit committees that are looking after the real interest of the shareholders. Those shareholders should know that the auditing firms that are auditing the books of their company are not being tempted to look the other way to lucrative consulting contracts. That [the accounting firms] are adhering to rigorous standards, and that there is a strong, independent panel out there to enforce those rigorous standards. Analysts should not be tempted to say one thing and mean another. And investors who are following the advice of those analysts shouldn't be betrayed and lead wrongly. Analysts shouldn't be forced by the investment banking portions of their companies to be anything less than independent. CEOs shouldn't be able to cook the books and game the system in ways that enable them to keep profits wrongfully gained for a long time. "Employees, much of whose savings might end up in a 401K, shouldn't be hearing from CEOs who are saying 'continue to buy this stock' while they're bailing out. Employees should not be forced in a lockdown period to hold on to their stock while the more senior officials in the company are able to do as they please. "The last thing I would say is this: Much of what needs to be done to restore investor confidence is not going to be done by the law that we pass and the law that the President signs. A lot of the hearings that took place in this room though have lead to actions on the part of the marketplace to do more than we probably could ever do as legislators. The hearings that you've held, Mr. Chairman, have urged the regulators to do what needs to be done- to urge the stock exchanges to take the actions that need to be taken. But in the end there's still something for us to do. Today we're going to decide a good deal about what that is, and I'm pleased to be here to help make those decisions. Thank you."