[Congressional Record Volume 148, Number 97 (Wednesday, July 17, 2002)]
[Extensions of Remarks]
[Page E1285]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            CORPORATE ACCOUNTING METHODS AND THE RULE OF LAW

                                 ______
                                 

                          HON. ADAM H. PUTNAM

                               of florida

                    in the house of representatives

                        Wednesday, July 17, 2002

  Mr. PUTNAM. Mr. Speaker, in recent months America has seen the 
collapse of several large corporations because of shady accounting 
methods and practices. These events have left many American investors 
worried and some financially ruined. These revelations of corporate 
abuses and corporate fraud have caused a temporary crisis of confidence 
in our markets and financial institutions.
  The ripple effect of these financial scandals is extending all the 
way to the smallest investors. It is the small private investor, not 
necessarily the large institutional investor, who is taking the brunt 
of this crisis of confidence. Small investors have seen their 
retirement plans dwindle not because of a poor investment strategy, but 
because the entire market has been depressed by the actions of a few 
dishonest and corrupt corporate executives.
  I do not believe these instances of fraud and abuse are 
representative of all American corporations or the executives that run 
them, but there should be no difference between ``ethics'' and 
``business ethics.'' Like anyone else in our society, for a corporate 
executive to succeed, honesty and integrity are essential. Corporate 
CEOs who commit fraud or whose actions destroy confidence in the entire 
market and thereby steal the retirement nest eggs of millions of 
Americans are no better than thugs. They must be identified and 
prosecuted to the fullest extent of the law. To root out the 
perpetrators of these crimes, we must move corporate accounting out of 
the shadows to protect America's small investors and pension holders.
  Our society and culture must reaffirm that it values ethics over next 
quarter's balance sheet. Corporate executives, no matter how much paper 
wealth they create, are not above the law. Those that commit fraud and 
violate the public's trust will be brought to justice.
  Our free market economy is anchored in the rule of law. There can be 
no special exceptions for corporate leaders with regard to the rule of 
law.

                          ____________________