On the legislative warpath

0 Comments | Insight on the News, August 12, 2002 | by Jennifer G. Hickey

The New York Times reported July 1 on passage of corporate-reform legislation sponsored by Rep. Mike Oxley (R-Ohio), and a pension-reform bill sponsored by John Boehner (R-Ohio), as having occurred along a "nearly party line." But the Times ran a correction on July 12, saying: "Many Democrats and almost all Republicans voted for final passage of both bills; the votes were not along party lines, or close to them."

Mistakes often are made in the rush to meet deadlines and beat competitors, and more often than not the damage easily can be repaired with a simple admission of error. If only the same could be said for the making of laws, particularly when the speed of legislating is being driven by public-opinion polls. For voters and readers alike, there is no wiser axiom than that old Ronald Reagan favorite: "Trust but verify."

As investor anger registered more clearly with each downward tick of the stock markets, legislators in both parties engaged in an indelicate parliamentary exchange of whoops about arcane congressional rules while they danced and ululated to mutual charges of chicanery. But as usual it will be the taxpayers whose feet and pockets will feel the pain. Awaiting Senate passage of corporate reform, members of the House leadership leveled charges of weakness. House Majority Whip Tom Delay (R-Texas) accused Democrats of attempting to water down the measure with a "motion to instruct conferees" which his supporters say would have decreased prison terms for illegally shredding corporate documents from 20 years to 10 years and weakened penalties on whistle-blower retaliation from a criminal offense to a civil one.

Meanwhile, Democrats countered with complaints that their caucus was being excluded from the legislative process after defeat of a move to extend the amount of time defrauded investors may have to sue the evil corporations. Republicans, on the other hand, contended user fees included in the Senate legislation amounted to a "revenue" proposal, an action required by the Constitution in Article 1, Section 7, to originate in the House. Minority Leader Richard Gephardt (D-Mo.) responded to reporters' questions with his usual aplomb. "That is the most ridiculous argument that can possibly be made. They don't have to pay attention to this technicality," said Gephardt, who maintained GOP gripes were just "another dodge" by "professional poseurs."

Not to be outdone, the chairman of the House Ways and Means Committee, Rep. Bill Thomas (R-Calif.), became righteously indignant concerning the Democrats' lefteous indignation. He stepped to the House floor to note a similar "technicality" complaint was made at the opening of the 102nd Congress by Democratic House Speaker Tom Foley of Washington state. However, with both parties fearing voter recrimination if it appeared no action were being taken to reform the malevolence of Wall Street, a conference committee was convened by week's end.

The GOP-led House followed up Tuesday with a 391-28 vote on a criminal-penalties bill that is more stringent in some aspects than the Senate measure.

In the Senate, Sen. Mitch McConnell (R-Ky.) sponsored an amendment to provide for certification of financial reports by labor organizations and to improve quality and transparency of financial reporting and independent audits and accounting services for labor unions.

Expressing investor outrage by raising the standards for disclosure and the level of accountability of corporations and accounting firms may have been the focus of the legislation at hand, but McConnell put his hands together for the double standard adopted by Democrats (and GOP Sen. John McCain of Arizona). Thumbing through a lengthy list of enforcement actions taken by the Department of Labor against labor lawbreakers, McConnell noted that "when it comes to unions, some of our colleagues speak less about the cost of workers being ripped off and more about the burdens this amendment will place on unions whose officials are responsible for the greed and corruption" detailed in the Office of Labor Management Standards documents.

Noting his colleagues' complaints that union officials would bear too harsh a financial burden to comply with the proposed law, McConnell said that is not where his concern lies. "I am only concerned about the quality of that disclosure, specifically whether the information is accurate and certified as such for the benefit of the dues-paying American union workers," he added.

The ramifications of corporate misdeeds may have greater impact on the ups and downs of the stock market, but members of Union Labor Life Insurance (ULLICO), a private life-insurance company largely owned by unions, also may feel the sting. As ULLICO boasted of its reported $198.7 million in mortgage activity in 2000, it was being alleged that board members engaged in insider trading of ULLICO funds in the rigged stocks of Global Crossing, clearing a quick $6.5 million. The Wall Street Journal, Business Week and several other business journals have led the pack in reporting on the matter, although most "mainstream" newspapers and magazines have not yet followed. Both a Washington grand jury and the Labor Department are investigating the matter.