    [Public Papers of the Presidents of the United States: George W. Bush (2002, Book II)]
    [July 30, 2002]
    [Pages 1319-1321]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks on Signing the Sarbanes-Oxley Act of 2002
    July 30, 2002

        Thank you very much. Welcome to the White House, and welcome to this
    historic occasion.
        During the past year, the American economy has faced several sudden
    challenges and proven its great resiliency. Terrorists attacked a center
    and symbol of our prosperity. A recession cost many American workers
    their jobs, and now corporate corruption has struck at investor
    confidence, offending the conscience of our Nation. Yet, in the
    aftermath of September the 11th, we refuse to allow fear to undermine
    our economy, and we will not allow fraud to undermine it either.
        With well-timed tax cuts, we fought our way out of recession and
    back to economic growth. And now with a tough new law, we will act
    against those who have shaken confidence in our markets, using the full
    authority of Government to expose corruption, punish wrongdoers, and
    defend the rights and interests of American workers and investors.
        My administration pressed for greater corporate integrity. A united
    Congress has written it into law. And today I sign the most far-reaching
    reforms of American business practices since the time of Franklin Delano
    Roosevelt. This new law sends very clear messages that all concerned
    must heed. This law says to every dishonest corporate leader: ``You will
    be exposed and punished. The era of low standards and false profits is
    over. No boardroom in America is above or beyond the law.''
        This law says to honest corporate leaders: ``Your integrity will be
    recognized and rewarded, because the shadow of suspicion will be lifted
    from good companies that respect the rules.''
        This law says to corporate accountants: ``The high standards of your
    profession will be enforced without exception. The auditors will be
    audited. The accountants will be held to account.''
        This law says to shareholders that ``the financial information you
    receive from a company will be true and reliable, for those who
    deliberately sign their names to deception will be punished.''
        This law says to workers: ``We will not tolerate reckless practices
    that artificially drive up stock prices and eventually destroy the
    companies and the pensions and your jobs.''
        And this law says to every American: ``There will not be a different
    ethical standard for corporate America than the standard that applies to
    everyone else. The honesty you expect in your small businesses or in
    your workplaces, in your community

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    or in your home, will be expected and enforced in every corporate suite
    in this country.''
        I commend the Congress for passing a strong set of reforms. I
    particularly thank Senator Paul Sarbanes
    and Congressman Mike Oxley. Both are very
    thoughtful and were persistent voices for reform. They are true
    advocates of corporate integrity. I appreciate their working together to
    send a signal to the rest of the country that it's possible in
    Washington, DC, to set aside partisan differences and to do what's right
    for the American people. I also appreciate the bipartisan leadership in
    the Congress, and I particularly thank Senator Daschle and Senator Lott who are with us
    here today.
        I want to thank members of my Cabinet who worked on this bill:
    Secretary of Treasury O'Neill and Attorney
    General Ashcroft, Secretary Evans, Secretary Chao. I
    appreciate the FBI Director being
    here, along with the Chairman of Securities and Exchange Commission,
    Harvey Pitt. I appreciate the Corporate Fraud
    Task Force members who are here. I want to assure the American people,
    they're just getting started.
        America's system of free enterprise, with all its risk and all its
    rewards, is a strength of our country and a model for the world. Yet,
    free markets are not a jungle in which only the unscrupulous survive or
    a financial free-for-all guided only by greed. The fundamentals of a
    free market--buying and selling, saving and investing--require clear
    rules and confidence in basic fairness.
        The only risks, the only fair risks are based on honest information.
    Tricking an investor into taking a risk is theft by another name.
    Corporate executives must set an ethical tone for their companies. They
    must understand the skepticism Americans feel and take action to set
    clear standards of right and wrong. Those who break the rules tarnish a
    great economic system that provides opportunity for all.
        Their actions hurt workers who committed their lives to building the
    company that hired them. Their actions hurt investors and retirees who
    placed their faith in the promise of growth and integrity. For the sake
    of our free economy, those who break the law, break the rules of
    fairness, those who are dishonest, however wealthy or successful they
    may be, must pay a price.
        Today we are taking practical steps to encourage honest enterprise
    in our Nation. Under this law, CEOs and chief financial officers must
    personally vouch for the truth and fairness of their companies'
    disclosures. Those financial disclosures will be broader and better, for
    the sake of shareholders and investors.
        Corporate officials will play by the same rules as their employees.
    In the periods when workers are prevented from buying and selling stock
    in their pensions or 401(k)s, corporate officials will also be barred
    from any buying or selling.
        Corporate misdeeds will be found and will be punished. This law
    authorizes new funding for investigators and technology at the
    Securities and Exchange Commission to uncover wrongdoing. The SEC will
    now have the administrative authority to bar dishonest directors and
    officers from ever again serving in positions of corporate
    responsibility. The penalties for obstructing justice and shredding
    documents are greatly increased. Corporate crime will no longer pay.
    CEOs who profit by betraying the public trust will be forced to return
    those gains to investors. And the maximum prison term for common types
    of fraud has quadrupled from 5 to 20 years.
        For the first time, the accounting profession will be regulated by
    an independent board. This board will set clear standards to uphold the
    integrity of public audits and have the authority to investigate abuses
    and discipline offenders. And auditing firms will no longer be permitted
    to provide consulting services that create conflicts of interest.

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        This law gives my administration new tools for enforcement. We will
    use them to the fullest. We will continue to investigate, arrest, and
    prosecute corporate officials who break the law. The Corporate Fraud
    Task Force I established is now hard at work, overseeing investigations
    of alleged fraud and insider trading. More than 200 Federal prosecutors
    are at work detecting and punishing corporate crimes. Every corporate
    official who has chosen to commit a crime can expect to face the
    consequences. No more easy money for corporate criminals, just hard
    time.
        As the work of enforcement proceeds, I hope Congress will join me in
    other important efforts to protect the savings and investments of
    Americans preparing for retirement. We've seen how workers can lose a
    lifetime of savings overnight, locked into pension plans without
    adequate choices and information.
        Workers should be able to sell company stock and diversify into
    other investments after 3 years in their own company's plan. They should
    receive updates on their retirement accounts, not once a year but every
    3 months. They should have access to sound investment advice. I have
    proposed pension protection reforms. The House has passed them. I hope
    the Senate takes them up soon.
        We must also work together to promote more growth in the economy and
    jobs for the American people. The fundamentals of our economy are sound.
    After all, sales of automobiles and new houses are on the rise. New
    unemployment claims have been falling since April. Inflation is low.
    Productivity is increasing, and growth continues. Those are signs of
    strength in our economy, and with the right policies, we can build on
    it.
        We must continue to work to control Federal spending and make the
    tax cuts permanent, so Americans can save and plan for their own future.
    We must tear down trade barriers, so people everywhere can buy American.
    We must make terrorism insurance available to spur more construction.
    And on energy, we must encourage conservation through new technology and
    produce more energy at home, to give our economy safe and steady sources
    of power and make our country less reliant upon foreign sources of
    power.
        The attacks against our economy in the last year have caused deep
    hardship and highlighted the economy's fundamental strength. The
    American economy is more diverse and more innovative than ever before,
    and its greatest strength, the people who make it work, are better
    trained and more productive and more highly skilled than ever before.
        Whenever we face challenges, from the fear that threatened our
    economy after September the 11th to the fraud that threatens investor
    confidence today, we've tackled them head on. The American economy
    depends on fairness and honesty. The vast majority of businesses uphold
    those values. With this law, we have new tools to enforce those values,
    and we will use those tools aggressively to defend our free enterprise
    system against corruption and crime.
        It is now my honor to sign the Sarbanes-Oxley Act of 2002.

    Note: The President spoke at 10:15 a.m. in the East Room at the White
    House. H.R. 3763, approved July 30, was assigned Public Law No. 107-204.