Bush promises action against corporate wrong-doers
US President George W Bush has promised to punish corporate wrong-doing after a string of accountancy scandals rocked investor confidence in the US.
‘‘When we catch someone doing wrong, there will be consequences,’’ Mr Bush said at a campaign fund-raiser in Washington.
‘‘Corporate America has got to understand there is a higher calling than trying to fudge the numbers, trying to slip a billion here and a billion here and ... hope nobody notices. Our Justice Department will hold people accountable.’’
The comments are seen as attempt by the President to restore battered business confidence after a succession of corporate bookkeeping debacles that have left global markets reeling.
Telecom giant WorldCom is being investigated after the company’s board of directors revealed £2.5 billion in improperly booked expenses on Tuesday night.
Enron collapsed last year in what was the biggest bankruptcy in US history amid revelations that it kept millions of dollars in losses off the books through shady accounting practises.
And yesterday, US office equipment firm Xerox revealed a £1.3 billion gap in its books.
The company was forced to restate earnings to reflect just over £1 billion less in pre-tax profits over the last five years.
White House Press Secretary Ari Fleischer said big business executives who break the law should face prison.
‘‘The president believes the law needs to be enforced vigorously and that involves putting people in jail,’’ he said.
Executives who have profited from misrepresenting financial results will be forced to return their ill-gotten gains, he said.
The Bush administration would use the financial watchdog, the Securities and Exchange Commission, to enforce the law, and those who abuse investor trust would be banned from serving on corporate boards, he added.
In March, Mr Bush outlined a 10-point plan to prevent corporate fraud, including measures calling on chief executives to personally vouch for the veracity of their companies’ financial statements.
