[Congressional Record Volume 148, Number 98 (Thursday, July 18, 2002)]
[Extensions of Remarks]
[Pages E1298-E1299]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 ``WATCH WHAT WE DO, NOT WHAT WE SAY''

                                 ______
                                 

                         HON. JOHN CONYERS, JR.

                              of michigan

                    in the house of representatives

                        Thursday, July 18, 2002

  Mr. CONYERS. Mr. Speaker, over the past few months, we have seen one 
revelation after another about the conflicts of interest rampant among 
figures of the Bush Administration, from the President and Vice 
President, themselves, to senior officials in key agencies. We have had 
a veritable cornucopia of conflicts. Almost every day, the media has 
uncovered a new one. It reminds me of a prophetic invitation made by 
John Mitchell, President Nixon's first Attorney General. Before we 
learned the scope of Watergate, Mitchell asked the American people to:

                   Watch What We Do--Not What We Say

  Well we watched what Mr. Mitchell did, as he requested. And John 
Mitchell went to jail. His advice seems particularly pertinent these 
days. Practically every senior official of the Bush Administration has 
made pious speeches about the importance of business ethics, 
professional integrity and scrupulous avoidance of conflict of 
interest. That's what they have said.
  But when we examine what they have done, the chasm between their 
sermons and their actions is striking. That sharp contrast angers 
ordinary citizens who have been laid off, or seen their nest egg 
investments evaporate, or their pensions become worthless. Why should 
they be angry? Let me count the ways.

                 Deputy Attorney General Larry Thompson

  The head of the President's so-called ``Swat Team'' on corporate 
crime is Deputy Attorney General Larry Thompson. He already has 
rejected my call, months ago, for him to recuse himself from the 
Department's decisions in the Enron scandal. I did so because Thompson 
had received benefits from--and might be receiving a pension from--a 
law firm that has substantially represented Enron. That raised a 
serious possibility that he could not vigorously pursue the case 
against Enron. At the least, I asked him to explain his decision if he 
did not recuse himself.
  Now Thompson has pledged to the public that he will hunt down 
corporate criminals ``with vigor and aggressive manner.'' Yet Thompson 
was on the board of Providian Financial Corporation and chaired its 
compliance and audit committee, at a time when--to put it very 
charitably--Providian was not only unscrupulously enticing and 
exploiting the poorest class of debtors, but also inflating earnings by 
excessive charges and by shady lender practices that violated federal 
and state consumer protection rules. Thompson's spokesman has claimed 
that he only learned of these practices when regulators made inquiries. 
His spokesman actually claimed that Thompson was owed applause for 
helping to settle the claims. Well I'm sorry, Mr. Speaker, but if he 
was chairman of Providian's compliance committee and was unaware his 
corporation was badly out of compliance, then I have to wonder if he's 
fit to manage the Department of Justice.
  It's bad enough for someone with the sensitivities Thompson should 
have, that Providian's growth relied on pursuing customers with poor 
credit card histories, who have difficulty obtaining further credit, 
misled them into accepting excessive interest rates and hidden charges, 
and denied the customary grace period for delinquent credit card 
payments. Apparently, Thompson, and other executive insiders, dumped 
large blocks of stock knowing that the reported revenues were 
overstated because of these unlawful practices. And worse still--just 
like the Enron officials Thompson is supposed to be investigating--the 
Providian executives sold their company stock while recommending 
purchase of large holdings of that stock to the employees 401 K plan. 
It is true that Thompson would have had to sell his shares in the 
company in connection with his nomination; but there is no suggestion 
yet that he was going to act any differently than his Providian 
colleagues, even before his nomination.

                      Army Secretary Thomas White

  Thomas White was Vice President of Enron's Energy Services Unit, one 
of the company's components engaged in its most egregious accounting 
practices. In 1981, between June and October he unloaded over $12 
million worth of Enron stock. Investigators are assessing whether he 
violated insider trading laws. In addition he first hid the full number 
of contacts he had with Enron officials after he had assumed federal 
office. Then he admitted to having 84 phone calls with company 
officials in his first 10 months as Army Secretary. He also failed to 
comply with the ethics laws in divesting himself in a timely manner of 
all of his Enron shares and options. As in Larry Thompson's case, if 
White's dubious claims are true that he was unaware of the 
corporation's phony accounting, it is hard to have confidence in his 
ability to manage operations and procurement involving billions of 
dollars.
  In sum, I cannot put his offensive situation any better than a New 
York Times Editorial that said: ``Army Secretary Thomas White has 
repeatedly pledged that, if questions stemming from his ties to Enron 
became too much of a distraction, he would resign. They now have and he 
should.''

                             President Bush

  The numerous serious questions raised about President's Bush's 
relationship with Harken Energy while he served on its board have been 
widely reported in the press. These principally include the 
circumstances under which he received several loans to purchase company 
stock; and under which he sold stock with knowledge of negative 
business news that was about to be made public. Obviously such serious 
charges require a thorough airing. In the meanwhile, the public will 
have to make its own judgment as to whether the President's corporate 
experience makes it inappropriate for him to so sternly lecture the 
private sector on the importance of the highest ethical standards for 
American business.

                         Vice President Cheney

  A major Securities and Exchange Commission investigation is underway 
of oil services giant Halliburton Corporation. Among other activities 
at issue are Halliburton accounting practices, which were parallel to 
those of other corporations now under current public scrutiny. Vice 
President Cheney was not merely a vice president or division chief at 
Halliburton, Mr. Speaker, he was the CEO. He was in charge. Polls have 
shown that 53 percent of the American people believe he is either lying 
or hiding something about his involvement in Halliburton's questionable 
corporate practices. This is hardly surprising since the Nation is 
already suspicious about Mr. Cheney's refusal to make public his secret 
meetings with oil industry executives lobbying his energy policy task 
force behind the scenes. Yet the Vice President refuses to disclose his 
records regarding his role in these Halliburton transactions. He won't 
even talk about this troubling matter, even though there is no law, 
regulation or rule that he has been able to cite that would prevent him 
from doing so.
  The Vice President says that whenever the SEC asks him for 
information, he will cooperate fully. . . But that raises a catch 22 
problem because the head of the SEC, Chairman Harvey Pitt, himself has 
two conflicts of interest that are equally serious

                              Harvey Pitt

  First, as is now widely known, Mr. Pitt for years was private lapdog 
of almost every major accounting firm and numerous banking clients. His 
bona fides to conduct vigorous investigation of past wrongdoing and 
oversight of future conduct are highly suspect. This is especially 
disturbing because his one year ``probation period'' under the Ethics 
Law is about to end. He then will be free even to participate in cases 
involving his former clients. To be sure, in recent weeks, Chairman 
Pitt has missed no opportunity to proclaim how tough he plans to be on 
corporate criminals. But last fall, he was telling people that what the 
private sector needed was a ``kinder, gentler SEC.'' This year he 
strongly lobbied for the far weaker Oxley bill to regulate corporate 
misbehavior, rather than the tough Sarbanes bill that passed the Senate 
unanimously last week.
  Second, it will not be credible to the American public that Mr. Pitt 
will really pull out all the stops to investigate wrongdoing by the 
Halliburton and Harken corporations and ``let the chips fall where they 
may'' regarding any culpable involvement of the President or the Vice 
President. As James Madison sagely advised over two hundred years ago, 
``If men were angels,'' we would need no government watchdogs. Even if 
we were convinced that Mr. Pitt is an honorable man, none of us are 
angels. It is too much to expect that he will supervise investigations 
which may involve his bosses, President Bush and Vice President Cheney, 
without being influenced one iota by their relationship to him. The 
inherent conflict is just too great.
  Therefore, I call on Chairman Pitt to appoint a widely respected 
Special Counsel to the SEC, clearly independent of Pitt's chain of 
command authority, to conduct those investigations, as well as any 
investigation involving Pitt's former clients. Should he and the 
Department of Justice determine he lacks full authority to do so, then 
I call on them to present to the House and Senate the necessary 
legislation to provide that authority, so that we may enact it 
expeditiously.
  Mr. Speaker, I agree with President Bush and the other outspoken 
Administration officials that it is essential to restore public 
confidence in American corporate ethics, investor

[[Page E1299]]

markets and the operation of our free market system. Appointing a 
Special Counsel for the SEC to pursue these sensitive cases will help 
us start to do so right away.

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