NEW YORK, July 9: US President George W. Bush proposed tough new criminal penalties for wayward executives, vowing to root out corruption and “cooking the books” in a speech on Tuesday to Wall Street.

New legislation would double the maximum prison terms for those convicted of financial fraud from five to 10 years, Bush said. He also said he was creating a new corporate fraud task force by executive order.

“We will use the full weight of the law to expose and root out corruption,” Bush said. “My administration will do everything in our power to end the days of cooking the books, shading the truth and breaking our laws.”

According to a White House summary, the president wanted to expose and punish acts of corruption, move corporate accounting out of the shadows, and protect small investors and pension holders.

Bush pressed the US Sentencing Commission to “enhance prison time” for executives found guilty of criminal fraud. And he called for tougher laws criminalizing document shredding and obstructing justice.

“The president will unveil tough new criminal penalties and enforcement provisions to punish those who refuse to play by the rules and threaten to undermine the integrity of our financial markets,” the White House said.

The speech follows an avalanche of corporate scandals that began last year with the fall of Texas-based energy giant Enron. The group’s auditor Arthur Andersen was found guilty of obstruction of justice for destroying documents.

Outrage against corporate misdeeds reached a peak last month when telecommunications giant WorldCom revealed a 3.8-billion-dollar black hole in its accounts.

Opposition Democrats, long critical of Bush’s close ties with big business, have seized on public anger in hopes of turning it to their political advantage in the November elections that will decide control of the US Congress.

And the US media has of late focused on resurgent questions about Bush’s own dealings a decade ago, centering on delayed notice of stock sales in Harken Energy, on whose board he served, before its share price collapsed as well as on questions about possible shady accounting.

During a Monday press conference, Bush brushed those questions aside as “recycled stuff” used by his political foes and noted that the US Securities and Exchange Commission (SEC) investigated him and found nothing wrong.

But Bush, who points out he filed a notice to sell on time to the SEC, said of the failure to file notice that the transaction was completed: “I still haven’t figured it out completely.”

That explanation was at odds with his own previous explanation that the form was filed and the SEC must have misplaced it and his spokesman’s explanation that Harken’s corporate lawyers were to blame.

Still, “the SEC fully looked into the matter. They looked at all aspects of it, and they did so in a very thorough way, and the people that looked into it said there is no case,” the president emphasized.

On Tuesday, Bush vowed to sign an executive order creating a Corporate Fraud Task force to direct investigations and prosecutions of criminal activity by executives.

In an effort to clean up company boardrooms, he advocated a 20-per cent increase in funds and greater powers for SEC regulators.

He urged Congress to immediately pass a 20-million-dollar funding request to allow the SEC to hire 100 new enforcement officers, and an extra $100 million in the fiscal year ending September 2003.—AFP