A new law should help end many kinds of corporate abuses, but it remains to be seen how serious the Bush administration will be in using its new regulatory muscle.

President Bush had grins and pens for the Democratic congressional leaders who flanked him as he signed a sweeping corporate-fraud bill this week. The bill, aimed at holding chief executives and their accountants responsible for misconduct, contained provisions that the president had opposed as recently as three weeks ago, before the wave of corporate scandals rocked Wall Street and moved to the top of both parties' political agenda. Like other Republicans, he underwent a fox-hole conversion.

The new law won't apply retroactively, but if aggressively enforced, it should help to end the fraud, insider deals and deceptive accounting practices that have come to light in recent months, roiling the financial markets and jeopardizing the retirement dreams of many American investors. What remains to be seen is how serious the Bush administration will be in using its new regulatory muscle to crack down on corporate abuses.

The president talked tough at the White House signing ceremony. "No more easy money for corporate criminals, just hard time," Bush said.

However, within hours after the president signed the bill into law, some lawmakers were accusing the White House of trying to weaken the new law. For example, the White House has taken the position that a provision protecting corporate whistle-blowers from retaliation applies only to workers who talk to a congressional committee "in the course of an investigation." It would not shield whistle-blowers who provide individual lawmakers with information on corporate wrongdoing. That interpretation, critics say, clearly violates the spirit of the new law. The fact is, many congressional investigations begin after a whistle-blower tells his story to an individual senator or congressman.

The new law targets fraud on a wide front. Accountants can no longer indulge in a range of consulting work with corporations they are paid to audit. A new board will oversee and discipline accountants, and have broad power to audit their work. Executives will have to certify their company's financial statements, and corporate officers will face new criminal penalties for misrepresenting their company's financial health.

These are all steps that will keep investors better informed and help bring a sense of calm, over the long-term, to the markets. The prospect of sending corporate criminals to jail is not the high point of this reform, but it may discourage some of the worst excesses we have seen and restore some confidence among average investors.

The symbolic value in seeing the government as striking back on behalf of Americans cannot be overemphasized. Much of the panic selling in recent weeks was based on emotion. That unease will likely continue as more and more companies restate their earnings. It is important in this climate for the government to show it is serious about holding corporations accountable.

There might be greater confidence in the administration's regulatory enforcement effort if it were being led by someone other than Securities and Exchange Commission Chairman Harvey Pitt, a former lobbyist for the accounting industry. With calls for his resignation coming from congressional Democrats, Pitt has vowed to prove his critics wrong and show corporate wrongdoers that the SEC means business. We'll know soon enough whether the tough talk will be followed by tough action.

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