WASHINGTON – Senate Governmental Affairs Committee Chairman Joe Lieberman, D-Conn., Thursday called on President Bush to keep his word and provide a 77 percent budget increase for the Securities and Exchange Commission, warning that the public was at greater risk of more Enrons without those additional dollars.
Two weeks ago the Governmental Affairs Committee issued a staff report on the SEC’s oversight performance in the wake of the Enron scandal that revealed a “systemic and catastrophic failure” in protecting investors. To prevent similar breakdowns in the future, the report recommended several measures the SEC should take to strengthen its oversight and enforcement — including reviewing more filings, implementing better technology to proactively root out fraud, and expanding efforts to monitor compliance. Today Lieberman said he was deeply concerned that the Administration’s backtracking on its support for the funding levels for the SEC in the Sarbanes-Oxley bill would prevent the Commission from fixing the holes the Enron debacle exposed — and therefore leave investors vulnerable to more corporate scandals.
“No amount of tough rhetoric and perp walk footage can cover up for the fact that the SEC desperately needs a big boost in its resources to make the reforms we just passed a real deterrent,” Lieberman said. “I thought the Administration had a clear understanding of this need, but now it seems like they are intent on undermining it.”
The Sarbanes-Oxley bill provided not only for a broader role for the SEC to ensure corporate honesty and the integrity in the financial markets, but provided also for the resources necessary to support that broad mandate. The additional funding would also support the initiatives recommended in the Governmental Affairs Committee staff report. The final version of the bill, which passed the Senate 99-0, authorized an increase in funding for the SEC from the current level of $438 million up to $776 million. President Bush voiced his strong support for the bill in signing it in July. But according to recent reports, the Administration is now scaling back its budget request to $568 million for the next fiscal year.
“This is a serious mistake,” Lieberman said. “The worst thing we could do right now, with the markets still clouded by uncertainty and investor confidence still shaken, is send a signal that we have not learned from our mistakes and are not committed to stamping out corporate crime. I strongly urge the President to rectify that mistake, and put his corporate accountability money where his corporate accountability mouth has been.”