President George W. Bush said he'll ask Congress to almost double funding for the Securities and Exchange Commission to help the agency hire accountants and investigators to fight corporate fraud.
The 93 percent increase over the agency's budget level for last year of US$438 million reverses his opposition to a 77 percent increase that Congress recommended last year to create an accounting standards review board after the Enron Corp and WorldCom Inc bankruptcies. The spending jump represents an increase from the US$581 million SEC budget the president recommended last year.
"The SEC and Justice Department are the referees of corporate conduct," the president said in his weekly radio address. "Under my budget, they will have every resource they need to enforce the laws that punish fraud and protect investors."
Bush's about-face on blocking additional funds comes as lawmakers are trying to complete work on last year's budget while preparing to write the document for next year. Democrats and investors had complained the White House wasn't backing up legislation designed to bolster accountability, such as the accounting oversight board's creation, with resources to do the job.
A 93 percent increase over last year's funding levels would put the agency's budget at about US$842 million for fiscal 2004, which begins Oct. 1.
US Representative Barney Frank of Massachusetts, the top Democrat on the House Financial Services Committee, said the president's SEC budget request is too little, too delayed.
"He still hasn't gotten it right," Frank said. "The proposal he announced today promises sufficient SEC funding for the next fiscal year -- which is nearly nine months from today."
The president also said in his radio address that he's requesting US$25 million for the Justice Department to create 118 FBI jobs, including 56 agents, to investigate corporate crime.
Bush said Justice also would be able to hire 94 people, including 29 new prosecutors, to staff US attorney's offices around the country.
The White House fact sheet said the president's budget would boost the Labor Department's budget to allow the hiring of specialists in protecting workers' pensions. Thousands of employees lost their pensions in the Enron and WorldCom bankruptcies.
Bush made his SEC budget increase announcement two days after the accounting oversight board created by Congress met in public for the first time.
The board, operating with no money and without a permanent chairman, announced the hiring of a temporary staff director and approved bylaws at a meeting on Thursday.
"It has been quite a path to get here," Charles Niemeier, who was named acting chairman of the group by the SEC, said yesterday. The meeting is "the beginning of a new era," he said.
The oversight board is charged under the corporate-governance law passed by Congress last July with regulating the accounting industry after audit failures at Enron Corp, WorldCom Inc and other companies eroded investor confidence.
Officially named the Public Company Accounting Oversight Board, the panel has power to inspect accounting firms, discipline accountants and to set standards for auditors of public companies.