WASHINGTON (AP) — Bush administration officials gave themselves high marks Tuesday for combating corporate corruption a year after the White House formed a task force in response to the Enron collapse and other white-collar scandals.
"I hope we've seen the worst of it," Securities and Exchange Commission Chairman William Donaldson said after meeting with President Bush for a progress report. "From here on out, the country and the nation, the business community is well informed of the risks" of corporate fraud, Donaldson said.
Bush's Corporate Fraud Task Force, with members from an array of federal departments, has taken part in almost all corporate fraud cases brought by federal prosecutors over the last year, according to the White House.
Prosecutors have won more than 250 corporate fraud convictions, charged 354 people with corporate crime and obtained fines, forfeiture and restitution worth more than $85 million, the administration said.
"We are trying to react to this problem in a swift manner, and to conduct our investigations and prosecutions in a different way and not let them linger on," said Deputy Attorney General Larry Thompson. "And I do think that that sends a message of deterrence."
Yet no charges have yet been brought against former Enron chairman Kenneth Lay, a Bush friend and contributor, or former chief executive Jeffrey Skilling.
The energy trading company, which spiraled into bankruptcy in late 2001, was the first big corporate scandal in what became a stream of accounting failures including WorldCom, Global Crossing, Adelphia Communications and more.
Enron's longtime auditor, Arthur Andersen LLP, was convicted of obstruction of justice in June 2002 for destroying Enron audit documents. The accounting firm now exists only as a shell.
The highest-ranking Enron executive charged to date in the scandal is former chief financial officer Andrew Fastow, who faces nearly 100 criminal charges including fraud, money laundering, conspiracy and obstruction of justice. Fastow has pleaded innocent and is free on $5 million bond as he awaits trial.
The government's first legal action against Lay and Skilling came last month when the Labor Department filed a civil lawsuit against the company and several former executives and directors, seeking to recover hundreds of millions of dollars in retirement money that Enron employees lost.
A federal judge's recent ruling showed that, in some instances, there is a conflict in trying to push cases of the Justice Department and Securities and Exchange Commission — the two leading players in the task force — simultaneously. The ruling by U.S. District Court Judge Inge Johnson regarding prosecution of HealthSouth, one of the biggest, newest cases of alleged accounting fraud, came amid the government's hot pursuit of the raft of business scandals that provoked public outrage.
Longtime rivals, the two agencies also have cooperated in recent years, and the corporate fraud team enshrines a stepped-up effort to work together.
Since late 2001, the SEC has been pushing what it calls "real-time" enforcement: bringing cases to resolution quickly rather than taking years to pursue them. The strategy gained impetus from last year's landmark legislation cracking down on corporate fraud, which expanded the SEC's civil powers. But some experts believe it may be making the SEC's already-delicate collaboration with the Justice Department more difficult, as reflected in the HealthSouth ruling.
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