When the revelations of crime and deception poured out of the executive suites of Enron, Tyco, WorldCom and other corporations earlier this year, politicians-particularly sitting members of the Senate and the House of Representatives-unleashed a blizzard of news releases to denounce corporate crime.
Never mind that many of these same politicians long had been neck-deep in schemes to weaken (if not outright eliminate) regulation and remove the regulatory cops needed to uncover and stop the kind of corporate shenanigans that destroyed the Enrons and left thousands of workers without jobs and pensions-and investors holding worthless stock of bankrupt companies.
The politicians were betting that some well-honed news releases and a few speeches expressing outrage back home would be enough to take voters’ minds off the scandals and the human misery left in the wake of the corporate excesses.
Unfortunately, it is probably a good bet. Too often in the past, that has been the case-a quick outburst of anger and concern and then back to business as usual.
When hundreds of savings and loans failed in the 1980s followed by the greatest rash of bank collapses since the depression, there was a national uproar and a string of Congressional investigations. Some regulatory reforms did get through Congress, but less than a decade later the financial industry was back on Capitol Hill demanding deregulation once again. Despite the recent financial disasters, Congress agreed to the new deregulation in 1999-and many of the financial combinations created by that deregulation are intertwined in the current corporate scandals.
Are we about to repeat this same sad cycle in dealing with the current corporate fraud and crime wave that has cost millions of Americans trillions of dollars? Will this year’s headlines, a few limited reforms and a tap on the wrist be the end result-with no real protections in place for the public, investors, workers and the economy? We should not allow such a result. We need to prove that our political and economic system is better than that. We can make lasting-effective-change as citizens. This time, we need to keep the issues on the front burner until we have true reforms, not fake facsimiles that do nothing but lull the public into a false sense of security.
As part of that effort, I am asking candidates for the U. S. Senate and the House of Representatives this year to sign a 10-point pledge which contains provisions that will put teeth in the crackdown on corporate crime. The pledge includes a promise that the candidate will support legislation which would give shareholders the right to democratically nominate and elect the board of directors and approve all major business decisions such as mergers and acquisitions above $1 billion in value and the compensation packages of top executives. The pledge would also promise support for a ban on corporate criminals obtaining government contracts and banning government contracts for companies that relocate their headquarters offshore to avoid taxes.
Signers would also pledge to strengthen pension reforms and rein in excessive pay for corporate chief executives as well as establishing a federally-chartered non-profit Financial Consumers Association joined by millions of American investors that would represent consumers before legislative and regulatory bodies.
The pledge also contains a promise to repeal the notorious Private Securities Litigation Reform Act (1995) which shields the aiders and abetters of corporate crime, such as accounting and law firms, from civil liability. The pledge also calls on signers to support the regulation of derivatives trading.
Candidates would also pledge to support the establishment of a Congressional Commission on Corporate Power to explore various legal and economic proposals that would rein in unaccountable giant global corporations. The commission would seek ways to improve on the current state corporate chartering system and propose ways to correct the unfair legal status of corporations such as the doctrine of corporate personhood.
In addition to holding political candidates’ feet to the fire on corporate crime, we need to continue to energize and enlist citizens in the effort to crackdown on corporate crime. An upcoming effort in mobilizing citizen support will be a rally on Wall Street on Friday, October 4.
The rally, sponsored by Democracy Rising is designed to focus attention to ongoing corporate crime and to propose remedies to help shareholders, taxpayers, workers and consumers. The rally will be on the steps of City Hall directly facing the New York Stock Exchange. Reformers are going to take the issue right to the New York Stock Exchange.
Citizens across the nation have the power to change corporate behavior if they will stick with the issue over the coming weeks and into the next Congress. We will be pushing forward with the “The Candidate’s Pledge To Crackdown on Corporate Crime,” but citizens should raise the issue of corporate crime directly with Congressional candidates in their hometowns and demand that they produce more than news releases and speeches. This time we need to get real reform before the issues fade and the politicians find another convenient rug under which the crimes can be swept.