Gephardt: GOP deregulation to blame for WorldCom
WASHINGTON (CNN) -- Stepping into the latest accounting scandal rocking Wall Street, House Democratic Leader Dick Gephardt said Republican deregulation policies were to blame for a wave of high-profile corporate troubles, including the accounting problems at WorldCom.
"In 1995 when the Republican leadership came in, both Newt Gingrich and Tom DeLay made statements that the main goal of their effort was to deregulate corporate America," Gephardt, D-Missouri, said at a press conference Wednesday. "Well, they did a lot of that in the last years and now we see some of the results of that."
"We have people trying to misstate earnings so they can get stock option prices up and stock prices up so they can enrich themselves to a huge degree," he said. "Then have to restate the earnings after they've cashed out of the corporations. Leaving the employees with nothing -- destitute."
Senate Majority Leader Tom Daschle, D-South Dakota, called the WorldCom situation "reprehensible."
"We are dismayed and we are angered at the news of WorldCom today," Daschle said at a press conference with Sen. John Corzine, D-New Jersey, a former Wall Street executive.
"We don't know yet whether laws were broken, but there must be enforcement of the law and if the laws were broken someone needs to go to jail," Daschle said.
A Republican aide blunted Democratic criticism.
"What leads to crime is criminals," the aide said. "In a free-market system, corporate leaders have an obligation to obey the law and be good corporate citizens and those that fall down on the job should be held accountable."
The aide, who said WorldCom Inc., had donated money to both political parties, accused Democrats of trying to take political advantage of recent business scandals.
"Every time it rains, it's the Republicans fault," he said.
The Senate is scheduled later this week to take up an accounting reform bill which was prompted by the collapse of the Enron Corp. It is designed to create more transparency in the ledgers of America's corporations. The Senate bill is seen by its supporters as tougher than a bill that passed out of the Republican-controlled House earlier this year.
Daschle said the Securities and Exchange Commission needs to be more aggressive in enforcing corporate accountability.
"Unless we see it, you're going to see a continued crisis of confidence about enforcement that I think is perilously troubling to this country," he said.
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