WASHINGTON, Jan 11: US President George W. Bush said on Saturday he would propose the largest-ever increase in the Securities and Exchange Commission’s budget, promising to give market regulators the resources needed to crack down on corporate crime and restore investor confidence.
The 2004 budget proposal, which would include $842 million for the SEC, could help insulate Bush from Democratic charges that his Republican administration was soft on corporate fraud after a flood of boardroom scandals, starting with the collapse in fall 2001 of energy trader Enron Corp.
Bush and some of his senior advisers had close ties to Enron and other companies under scrutiny, but the issue slipped from the headlines as the administration — and the nation — focused on a possible war with Iraq and homeland security.
“The SEC and the Justice Department are the referees of corporate conduct. Under my budget, they will have every resource they need to enforce the laws that punish fraud and protect investors,” Bush said in his weekly radio address.
He also touted his administration’s commitment to restoring investor confidence by fighting corporate crime and cutting taxes to strengthen the economy.
Bush said his fiscal 2004 budget for the SEC would be 73 per cent higher than 2002 levels and the largest increase in the history of the market-regulating agency.
If approved by Congress, the request would enable the SEC to hire hundreds of new accountants, lawyers and examiners to police 17,000 publicly traded corporations, 34,000 investment company portfolios, 8,000 brokerage firms and 7,500 financial advisers.
For months, congressional Democrats have blasted Bush for resisting the SEC budget hike called for in July by the sweeping Sarbanes-Oxley Act, the biggest securities law overhaul since the 1930s.
House Appropriations sub-committee chairman Rep. Frank Wolf of Virginia has introduced a spending bill that would provide the SEC with the $776 million for fiscal 2003 authorized by Sarbanes-Oxley.
Critics also accused the administration of undermining the landmark corporate reforms by seeking to limit protections for government whistle-blowers who cooperate with lawmakers.
Bush promised to vigorously enforce the corporate reform law. He said an administration task force had already obtained convictions or guilty pleas in over 50 cases. More than 160 defendants have been charged with criminal or civil wrongdoing, and 130 new corporate fraud investigations have been launched, Bush said.
In addition to increasing SEC funding, Bush’s budget, scheduled for release next month, would include an extra $25 million for the Department of Justice to expand investigations of corporate fraud.
The White House said Bush would also request a 10 per cent funding increase for the Labour Department’s Employee Benefits Security Administration to recover some $500 million in pension plan assets and increase safeguards for workers’ retirement savings after a string of corporate abuses.
“Our country has made great progress in restoring investor confidence, and putting the recession behind us. We cannot be satisfied, however, until every corporate wrongdoer is held to account, and every part of our economy is strong, and every person who wants to work can find a job,” Bush said.
Bush has proposed a 10-year, $674 billion stimulus package which would eliminate taxes on most corporate dividends, accelerate across-the-board cuts in tax rates and offer more relief to married couples and families with children.
The president’s plan was denounced as a windfall for the wealthy by Democrats who said it would provide no immediate help to the economy and swell the budget deficit.—Reuters