Wed, Jul 10, 2002 page1

• Bush wants corporate penalties to be tougher

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  US President George W. Bush yesterday sought to boost criminal penalties for corporate abuses and beef up the federal securities watchdog in his response to accounting scandals that have shaken investor confidence and threatened to become a political liability.

  Responding to outrage over sloppy or deceptive bookkeeping at firms from Enron to WorldCom, Bush began a much-anticipated speech shortly before 11:30am to an audience on Wall Street. Bush said such misdeeds were threatening workers and investors and called higher ethical standards the "greatest economic need."

  He proposed doubling to 10 years jail terms for mail and wire fraud -- federal charges frequently used in cases of corporate fraud -- and strengthening laws against document shredding and other forms of obstruction of justice.

  Bush proposed a new US$100 million increase in the Securities and Exchange Commission budget for fiscal 2003 to hire more investigators and buy equipment. This comes on top of US$20 million sought earlier this year.

  Bush's speech last night followed a surprise news conference at the White House on Monday in which he promised to take more action after a slew of corporate scandals and had to defend his own record as an oil executive.

  He also promised to fully fund the war on terrorism, saying some accounts could be depleted in a matter of days and that "further delay is intolerable."

  Fielding questions for more than 30 minutes, Bush reiterated his determination to see Iraqi leader Saddam Hussein ousted from power, but he refused to say how soon that could be expected. And he confessed he doesn't know whether al-Qaeda leader Osama bin Laden is alive or dead.

  But Bush was put on the defensive when he faced questions about an eight-month delay in his filing a notice confirming he had sold stock in Harken Energy, on whose board he served.

  Asked why he was late in filing the notice to the SEC, Bush said: "I still haven't figured it out completely.

  "But nevertheless, the SEC fully looked into the matter. They looked at all aspects of it, and they did so in a very thorough way, and the people that looked into it said there is no case."Bush also was asked about Harken's 1989 sale of a petroleum subsidiary, which later led the SEC to require Harken to restate its earnings.

  "There was an honest difference of opinion as to how to account for a complicated transaction," Bush said.

  Asked whether he had supported the sale of the subsidiary, Bush said: "You need to look back on the director's minutes, but all I can tell you is that in the corporate world, sometimes things aren't exactly black and white when it comes to accounting procedures.

  Moving on to Iraq, Bush opened a wide door to possible military action, saying the US would use all tools available to oust Iraqi President Saddam Hussein.

  "It's a stated policy of this government to have regime change. And it hasn't changed," Bush said. "And we'll use all tools at our disposal to do so."

  "I'm involved in the military planning, diplomatic planning, financial planning, all aspects of reviewing all the tools at my disposal."

  Bush declined on Monday to comment on a New York Times report last week that a draft military plan for an invasion of Iraq envisioned a multi-pronged attack with tens of thousands of US Marines and soldiers probably invading from Kuwait.

  "Listen, I recognize there's speculation out there, but people shouldn't speculate about the desire of the government to have a regime change," Bush said. "And there's different ways to do it."

  In regard to the world's most wanted man, Bush said the war on terror was bigger than Osama bin Laden.

  Asked whether the fugitive al-Qaeda leader would be found before the first anniversary of the Sept. 11 attacks, Bush replied: "We haven't heard from him in a long time. I don't know if the man's living or the man's dead.

  "But one thing is for certain: the war on terrorists is a lot bigger than one person," Bush said. "And as I told the American people, this is going to be ... a long struggle."

  He urged approval of an emergency spending bill for the military and the new Transportation Security Administration and passage of a Defense Department spending bill for the 2003 fiscal year.

  "Our nation is at war and our budget priorities and actions need to reflect that reality," Bush said.

  The wide-ranging press conference also touched upon the situation between Israel and the Palestinians, with Bush saying Israel was justified in occupying the West Bank until "security improves."

  Bush pointedly passed up an opportunity to offer a warning similar to the one he gave in April, when he angrily said that Prime Minister Ariel Sharon should "heed my call" and withdraw Israeli troops. Instead, with the Israeli army fully in command of most of the Palestinian areas of the West Bank, he said, "I would hope that everybody got the message that we all have responsibilities to fight off terrorist attacks."
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