[Weekly Compilation of Presidential Documents Volume 38, Number 39 (Monday, September 30, 2002)]
[Pages 1626-1628]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
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 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.

[[Page 1627]]

    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 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.

[[Page 1628]]

    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.