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Fri, Jul 12, 2002 - Page 12 News List

Bush proposals carry little weight


European reaction on Wednesday to US President George W. Bush's proposed crackdown on corporate crime was mainly sceptical, with one analyst dismissing it as limited while others offered their own legislation as models for the world's most powerful economy.

"It will be useful, but also insufficient," said Claude Cazes, president of the French accountant's association in reference to a plan presented by Bush to Wall Street on Tuesday.

"The Bush plan concentrates its efforts on leaders, one of the links in the chain, the initial link, but I notice that few measures concern the accounting profession, particularly in the US, which is highly auto-regulatory and which has come under fire since the Enron affair with the Anderson firm."

Formerly discreet accounting firms have been thrust into the spotlight by financial scandals such as those that rocked the US energy trading company Enron and now WorldCom.

In other cases, accountants have been accused of turning a blind eye to methods that test legal limits within the profession.

"We must get away from political hysteria and make some pragmatic decisions," International Federation of Accountants vice president Rene Ricol commented after listening to Bush's speech.

Michel Prada, president of the French stock market watchdog agency, told Liberation: "France need not be ashamed of its [financial] regulations."

In fact, the country was "rather ahead of its partners," he added.

In London, the Confederation of British Industry's company affairs head Rod Armitage said: "President Bush's crackdown on corporate fraud illustrates how parts of UK law have yet to be mirrored in the US.

"We have possibly the world's best corporate governance system and legislation that is in many cases more advanced than in the US."

Brian Mairs, spokesman for the Association of Private Client Investment Managers and Stockbrokers, was more neutral, saying Bush "had to calm the situation and to demonstrate to investors that something is being done."

Spanish Prime Minister Jose Maria Aznar did not mention Bush's plan directly, but said Wednesday that measures prepared by his government "are wide ranging and concern company management, interests, and transparency ... as well as accounting controls."

German Chancellor Gerhard Schroeder said in Berlin the US scandals "are certainly just the tip of the iceberg."

He added they "are explained by a business culture very different than the one which prevails here."

In Rome however, center-left opposition leader Giuseppe Fioroni asked if the "government does not think it opportune, in light of what is happening in the United States, to reconsider its position on accounting fraud."

In the Netherlands, the newspaper Algemeen Dagblad said: "As corporate distrust grows in Europe, it would be good to examine oversight on our continent."

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