John Kerry's stance on Corporate Fraud

Corporate Fraud: At the height of the recession, scandals began to surface, and whistle-blowers became more prominent. CEOs of such companies as Enron, Adelphia Communications, and WorldCom have been accused of accounting fraud. Otherwise known as "cooking the books," this allowed companies to profit further and financially drain shareholders, bankrupting many and resulting in a loss of consumer confidence. In a time of financial stress, the next president would need to figure out ways to curb corporate fraud.

John F. Kerry:

Description of candidate's position: Kerry seems to agree with the Task Force that Bush has set up but argues that the administration is hypocritical and counter-productive, pointing to Halliburton as one of the biggest examples of fraudulent behavior and saying that tax breaks for companies that outsource is the wrong message to send.

Quotation from the candidate: "It is clear: George W. Bush and Dick Cheney have mismanaged every aspect of the war in Iraq. By blatantly turning a blind eye to the massive overcharging and waste of their friends at Halliburton, they have proven once again why they are the wrong choice, the wrong direction and the wrong leadership for America…As President, I will stop companies like Halliburton from profiting at the expense of our troops and taxpayers. I will stop companies from receiving no-bid contracts from the government when the president or vice president is still receiving compensation from that company. I will make sure that all government funds are properly accounted for. And as Commander in Chief, I will have two words for companies that cheat the U.S. military &endash; 'You're fired.'"

Assessment of the proposal:

Positive: The Economic Policy Institute, a non-partisan group, wrote an article in 2002 commenting that legislative action needed to be taken in order for corporate fraud to stop. In this way, the Institute argues, "future losses like those experienced by workers at WorldCom, Enron, and Global Crossing can be prevented." EPI

Negative: The American Enterprise Institute, in an article jointly sponsored by the Brookings Institution, agrees that something needs to be done about corporate fraud but advocates help from the inside, allowing whistle-blowers protection, instead of putting more time and money into finding corporate fraud, which they argue doesn't work better with more people working on it. AEI-Brookings

Comparison: In 2002, Bush put together a Corporate Fraud Task Force, designed to coordinate federal authorities to result in more crackdowns and convictions of fraudulent business practices. Its purpose is to "restore consumer confidence, provide fair and accurate information to the investing public, reward shareholder and employee trust, and protect jobs and savings." From the Bush re-election website

Link to George W. Bush's issue brief.