[Congressional Record Volume 148, Number 87 (Wednesday, June 26, 2002)]
[House]
[Page H4030]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           CORPORATE SCANDALS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Oregon (Mr. DeFazio) is recognized for 5 minutes.
  Mr. DeFAZIO. Mr. Speaker, well, today's headlines, WorldCom Finds 
Accounting Fraud, $3.8 billion, slight misstatement of their earnings. 
The stock dropped from $64.50 down to a few pennies, and 17,000 people 
will lose their jobs, but the former CEO is living happily in his 
mansion on the millions which he looted, as are many of his cohorts. 
This is a pattern that is being repeated time and time again. It has 
gone on for far too long.
  It started a year ago today with the energy scandals in the West, 
little more than a year ago today. We were told by the Republican 
majority this is market forces at work, you have not built enough 
plants, has nothing to do with market manipulation. Well, now we got 
the memo that, in fact, Enron was manipulating the markets, but even 
with those market manipulations they went bankrupt.
  Their former CEO, Mr. Lay, and their former Chief Operating Officer, 
Mr. Fastow, have between them more than $100 million while employees 
have lost their pensions and their jobs.

                              {time}  1815

  This seems to be a pattern, does it not? What is the response of the 
Republican majority? Well, we pretended to adopt pension reform, but we 
did not prohibit what Enron did to its employees happening at other 
corporations, and it looks like there is a whole heck of a lot of other 
corporations out there on the edge while the CEOs are living on the 
gravy here, and that was sort of the initial response.
  Then we had another little scandal coming along here which was 
American corporations do not think they should pay taxes anymore. 
Stanley Works wants to move to Bermuda, set up the new Bermuda 
Triangle, avoid U.S. taxes on its U.S. earnings and its overseas 
earnings. Bank of America has done the same scam. The corporations are 
lined up from here to Sunday to do that.
  What is the response on that side? Well, the Secretary of the 
Treasury says our tax laws are too complex, this is a rational response 
by these unpatriotic corporations who are ripping off the American 
people, taxpayers and their own employees, and the majority leader on 
that side says he endorses this practice that they should not pay taxes 
unlike working wage-earning Americans.
  Then we had Global Crossing, the CEO, a couple hundred million bucks 
there, little accounting scandal; Enron, accounting scandal; Tyco, 
accounting scandal; now WorldCom. What have we done about the 
accounting system? Well, we are going to let the market work, the 
Republicans said. We adopted some securities and accounting reforms 
here. They say let them police themselves. Of course we get Harvey 
Pitt, Harvey Pitt appointed by the President of the United States, 
George Bush, to be headed by the Securities and Exchange Commission. He 
is a former lawyer for the securities companies that are out defrauding 
the American people. He is going to be a real lap dog down there. So 
the response here is status quo, do not upset the boat.
  So there seems to be a common trend here which is we are in a 
meltdown. American CEOs are discredited, American corporations are 
discredited, the stock market is crashing, hurting average Americans; 
and the response on that side of the aisle is do not do anything, let 
market forces work and, by the way, let the CEOs skate. Oh, yes, we did 
do one really important thing last week. We passed the permanent repeal 
of estate tax for people who have over $5 million of assets to make 
sure that Ken Lay, Mr. Fastow, and all these others who have ripped off 
tens of millions of dollars from their employees will never pay any 
taxes on the money they stole. God forbid they should, because they are 
all major contributors.
  Last week the Republicans held the largest fundraiser in the history 
of Washington, D.C., headlined by the wonderful pharmaceutical 
companies, but followed up by many of the other players whom I have 
mentioned here because their CEOs happen to be awash in cash, and they 
want to make sure they do not go to jail. So they are becoming more and 
more generous in their contributing.
  This is the most outrageous scandal in the history of the United 
States. The largest restatement of earnings by a corporation, tens of 
thousands of employees losing their pensions, their jobs, millions of 
Americans losing their 401(k)s, their pensions; and the response on the 
Republican side of the aisle is nothing, because they are frozen in 
place by the fact that they are taking so much money from the people 
who have perpetrated these frauds. I hope that the American people 
demand and vote for some change next fall.

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