Businesses Prepare to Mount a Concerted Attack on Regulation
Monday, March 12, 2007
Call it the end of the post-Enron era.
A major anti-regulatory offensive culminates this week with a one-two punch thrown by Washington and Wall Street's most moneyed institutions, as the Treasury Department convenes a star-studded meeting tomorrow and the nation's largest business lobby issues its own call to action a day later.
At the top of the agenda are ways to "secure America's competitiveness."
Translation: Burdensome rules, costly litigation and hard-nosed prosecutors are killing U.S. companies.
Five years after debacles at Enron and WorldCom ushered in the Sarbanes-Oxley law and forced companies to spend more to detect fraud, the campaign to shake off government watchdogs again is in full swing.
Industry is presenting its wish list. The key requests are to streamline corporate rules, dial back on cases against business in favor of going after individual employees, and impose new limits on investor lawsuits.
But the months-long effort is peaking at an inopportune moment for advocates of the drive to repeal corporate accountability legislation.
First, Democrats seized control of Congress, shaking up allegiances and shifting many business priorities lower -- in favor of hearings about outsize executive pay, no-bid defense contracts and allegedly predatory practices by credit card companies.
Then stock markets shuddered because of concerns that risky mortgage loans are cracking the foundation of the housing sector. Federal grand juries indicted managers who gamed compensation documents to guarantee themselves fat paydays.
And the Securities and Exchange Commission announced that it is hunting for evidence of rampant insider trading that cheats average investors.
The organized drive to scrap expensive rules began last fall with the creation of the Committee on Capital Markets Regulation, a group that won the blessing of Treasury Secretary Henry M. Paulson Jr.
The committee said Wall Street was losing ground to international rivals, and it urged prosecutors and regulators to slap business with criminal charges only as a "last resort."