[Public Papers of the Presidents of the United States: George W. Bush (2002, Book II)]
[September 26, 2002]
[Pages 1665-1667]
[From the U.S. Government Publishing Office www.gpo.gov]



Remarks at the Corporate Fraud Conference
September 26, 2002

    Thanks for the warm welcome. Thank you for being here. This is an 
important meeting you're having. After all, over the past year, high-
profile acts of deception in corporate America have shaken people's 
trust in corporations, the markets, and in the economy.
    A few dishonest individuals have hurt the reputations of many good 
and honest companies and their executives. They've hurt workers who 
committed their lives to building a company that hired them. They've 
hurt investors and retirees who placed their faith in the promise of 
growth and integrity. For the sake of our free market, corporate 
criminals must pay a price.
    Today I want to thank all of you, U.S. attorneys, senior 
prosecutors, FBI special agents, senior Treasury and IRS officials, and 
many others. I want to thank you for your efforts. And I want to thank 
you for the progress which is being made. Your

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mandate is to root out crime from corporate America's boardrooms and 
executive suites. Your mission is to protect the rights and interests of 
American workers and investors. And your work is essential to our 
Nation.
    I particularly want to thank Attorney General John 
Ashcroft, who is doing an excellent job as our 
Attorney General. I also want to thank Elaine Chao, the Secretary of Labor, for her hard work.
    I appreciate Harvey Pitt, who's the Chairman 
of the Securities and Exchange Commission. He's doing a fine job, as is 
Michael Powell, the Chairman of the FCC, Jim 
Newsome, the Chairman of the Commodities 
Futures Trading Company--Commission.
    Larry Thompson is in charge of the 
President's task force to root out corporate fraud as the Deputy 
Attorney General. Michael Chertoff, the 
Assistant Attorney General of the Criminal Division of the Department of 
Justice, Jim Comey, U.S. Attorney, Southern 
District of New York, and Debra Yang, U.S. 
Attorney, Central District of California--I want to thank them for being 
up here on the stage with me. I want to thank them for their fabulous 
leadership and doing what's right for America.
    Since the exposure of recent corporate scandals, we have taken a 
series of strong measures. The American people need to know we're 
acting. We're moving, and we're moving fast. The Securities and Exchange 
Commission has hired 50 new personnel to support their efforts to ensure 
that business in America is open and honest--and to confront it when 
it's not.
    More help is on the way. I've signed the most far-reaching reform of 
American business practices since the time of Franklin D. Roosevelt. 
With this law, we're making sure that the numbers are honest and the 
numbers are understandable. We're making sure the auditors are audited 
and the accountants are held to account.
    And one of the most aggressive steps we've taken has been to create 
the new Corporate Fraud Task Force, headed by Larry, to investigate and prosecute financial crimes, to 
recover the proceeds of those crimes, and hold corporate criminals to 
account. This task force includes members of the Justice Department and 
the FBI, U.S. attorneys from around the country. It includes the SEC and 
the Treasury and Labor Departments, the Commodities Futures Trading 
Commission, the Federal Communications Commission, and the Federal 
Energy Regulatory Commission.
    This broad effort is sending a clear warning and a clear message to 
every dishonest corporate leader: You will be exposed, and you will be 
punished. No boardroom in America is above or beyond the law.
    I set this mandate, and today I want to give a report to the 
American people on the progress, the great progress which you all are 
making. Our law enforcement agencies are after them--they're after them. 
Since the task force was formed just 2\1/2\ months ago, the Department 
of Justice has opened more than 100 investigations into suspected 
corporate fraud. In 2\1/2\ months, 100 cases have been opened. Charges 
have been filed against more than 150 defendants. In 2\1/2\ months, 150 
people have been charged, and more than 45 defendants have been 
convicted or intend to plead guilty. In 2\1/2\ months, 45 people have 
been brought to justice.
    The Securities and Exchange Commission is also acting. In the past 
year, the SEC has filed a record 156 actions for financial fraud and 
disclosure violations, a 51-percent increase over fiscal year 2000. 
During the same period, the SEC has sought to throw 107 unfit officers 
and directors out of corporate boardrooms, almost 3 times the number 
that the SEC sought to bar in fiscal 2000.
    The SEC is aggressively using its enforcement powers to make 
corporate wrongdoers financially accountable for their actions. This 
fiscal year, the SEC has sought to recover compensation, bonuses, stock 
options from 25 corporate officers

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who betrayed the public trust, an almost 40-percent increase over last 
year.
    By all these actions, we are making broad and dramatic progress 
against corporate fraud in America. We're defending our free enterprise 
system against corruption and crime. And we're beginning a new era of 
corporate integrity. Corporate responsibility is essential to America; 
it's essential to shareholders; it is essential to investors.
    It matters greatly to employees. In February, I proposed important 
pension reforms. We must give our workers better access to investment 
advice, so they can manage their money wisely. And right now, too many 
workers are locked into plans that force them to hold a large portion of 
their accounts in the company's stock. Workers ought to be able to 
diversify after 3 years in the company's plan.
    The House quickly passed these reforms. They moved swiftly. The 
Senate hasn't, and they need to act as well. It's good for American 
workers. It's good for job creation. It would be good for our economy.
    Underlying everything we have done so far and all the actions we 
will take in the future is a basic conviction: The American economy 
depends on fairness and honesty. It's not a jungle in which only the 
unscrupulous survive or a financial free-for-all guided only by greed. 
That's not the America we know.
    The fundamentals of a free market--buying and selling, saving and 
investing--require clear rules and confidence and fairness. The vast 
majority of American business men and women obey the law and uphold the 
rules. The vast majority of our fellow citizens care deeply about 
employees and shareholders. They bring great credit to the system. And 
those who break the rules and betray the confidence of their employees 
and shareholders will be punished. Government cannot and should not try 
to remove risk from investment. But we will help ensure that the risks 
are honest and the risks are clearly understood.
    We will hold corporate criminals accountable for their misdeeds, and 
we will deter corporate crimes by enforcing tough penalties. By doing 
this work so well, you are serving the American people. You are serving 
the American people with distinction. You are leaving a legacy of 
responsibility behind. You are making the country a better place. And 
for that I'm grateful, and so are the American people.
    May God bless you all. May God bless your families. And may God 
bless America.

Note: The President spoke at 11:19 a.m. in the Jefferson and Lincoln 
Ballrooms at the Washington Hilton Hotel.