Thursday, November 9, 2006

Trade groups campaigning to relax costly provisions of a corporate accountability law passed four years ago after widespread accounting scandals can expect a lukewarm reception on Capitol Hill and will probably aim their efforts instead at federal agencies that implement the law.

Rep. Barney Frank (D-Mass.) is poised to assume control of the House Financial Services Committee from the retiring Rep. Michael G. Oxley (R-Ohio), who co-sponsored the 2002 Sarbanes-Oxley law and has been loath to alter it. Still, the likelihood of wholesale legislative revision is slim. Frank in recent weeks said he would allow the Securities and Exchange Commission and accounting sector overseers more time and leeway to implement controversial rules requiring public companies to test their financial controls, rather than overhaul the law.

In the Senate, where Democrats could prevail by a slight margin, Connecticut's Christopher J. Dodd (D) could replace Richard C. Shelby (R-Ala.) as head of the Banking Committee. Damon A. Silvers, associate general counsel for the AFL-CIO, predicted few big changes on accountability in the House or Senate.

The exception, to the chagrin of the business lobby, may be the hot-button issue of executive compensation, which has ballooned in recent years even as investors cried out over corporate frauds that cost them billions of dollars. Frank has spoken out on the issue and could hold hearings, analysts said.

-- Carrie Johnson