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Panel vows to tackle fraud
Compiled from Times wires WASHINGTON -- President Bush met Friday for the first time with his new task force on corporate fraud, and its chairman pledged to aggressively go after business criminals. But, as the task force of prosecutors, investigators and regulators briefed Bush on its inaugural session at the Justice Department, Deputy Attorney General Larry Thompson emphasized that the group under his chairmanship would not undertake a witch hunt. 'We are going to pursue these matters with vigor and an aggressive manner, as they should be. But I also want to assure everyone that in doing our work, we're going to be professional, we're going to be fair and we're going to be just,' Thompson said outside the White House after the closed-door meeting with Bush. Hundreds of prosecutors around the country are already at work on an unspecified number of investigations, Thompson said, and the task force will additionally assemble recommendations to Bush for 'corrective and remedial action' such as new rules, regulations and legislation. Securities and Exchange Commission Chairman Harvey Pitt was also at the White House and said the president is boosting the number of SEC enforcement officers from 1,000 to 1,200. 'I think the combination of the SEC's financial accounting expertise and the wonderful prosecution resources arrayed make it clear that this is going to be a very very successful task force,' Pitt said. Attorney General John Ashcroft and FBI director Robert Mueller, both of them task force members, were involved in Friday's meetings but neither man addressed reporters afterward. Bush established the task force Tuesday, and gave Thompson until July 19 to convene its first meeting. But in a surprise move, the president decided to hold the first session before week's end and to include a meeting at the White House. For his part, Pitt, who has been under fire for his ties to the accounting industry in recent days, said Friday he 'absolutely' will not resign and that he has the full support of Bush. 'I have a big job to do,' said Pitt, who spoke in an interview with Cox Newspapers. Pitt also said that he had no plans to release additional SEC documents involving Bush's sale of Harken Energy Co. stock in 1990. Critics have raised questions about whether Bush benefitted from inside information before selling the stock. The president has acknowledged that company lawyers belatedly filed SEC paperwork related to the sale. Asked whether the release of all documents would help quiet questions about the president's business dealings at Harken, Pitt replied: 'I don't think so. The reason is, first of all, I don't think the president's credibility needs to be increased. And second, this was thoroughly investigated a decade ago. It was meticulously done ... so the issue at this juncture is political.' In recent days, more critics have been demanding Pitt resign, saying he is the wrong man for the job because he spent 23 years representing the same accounting and securities firms he now must police. On Thursday, Sen. John McCain, R-Ariz., said the agency needs a new leader 'whose background and record leave no question' about 'the independence and authority of the SEC.' Senate Majority Leader Tom Daschle, D-S.D., said Pitt's 'cozy relationship' with accountants calls into question 'whether or not he has the credibility to be the independent regulator he needs to be.' Pitt said such attacks are 'political diatribes' that ignore facts. 'If you look at the people who criticize, you'll notice that all of their criticisms are generic -- they're just sound bites,' he said. 'No one who sees what we have done could doubt that this is the most effective SEC in history.' Pitt said the SEC has stepped up its pace of enforcement actions and issued numerous new reporting rules and regulations. In related developments Friday: The Senate unanimously voted to prohibit public companies from making personal loans to their top executives, further toughening a bill on corporate regulation expected to gain final approval next week. Bush, in his speech on Wall Street earlier this week, called on companies to ban insider loans. But Democrats who control the Senate went further, voting to write the ban into law. 'This is wrong. It must be stopped,' said Sen. Charles Schumer, D-N.Y., who proposed the ban. 'Why can't these corporate executives go the bank like everybody else?' Rep. Henry Waxman, ranking Democrat on the House Committee on Government Reform, sent Bush a letter urging him to donate to charity the profits from his $848,000 sale of Harken stock. Waxman similarly suggested that Vice President Dick Cheney donate his stock-option profits from Halliburton Co. and that Army Secretary Thomas White give away some of his Enron-related income. Twenty-five banks sued WorldCom Inc., claiming the long-distance phone company committed fraud when it borrowed $2.5-billion six weeks before announcing it had misreported $3.9-billion in expenses. The lenders filed the suit on the same day a judge declined their request to order WorldCom to return the borrowed money immediately. The banks' move might push WorldCom closer to filing the largest bankruptcy in U.S. history.
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From the Times Business report
From the AP
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