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For Immediate Release
Office of the Press Secretary
January 11, 2003
Fact Sheet: Restoring Economic Confidence and Tackling Corporate Fraud
Today's Presidential Action
In his weekly Radio Address to the nation, President Bush announced that his Budget includes major increases in funding to crack down on corporate fraud. The President is providing historic levels of funding to allow federal investigators, prosecutors, and regulators to fully enforce the dramatically enhanced corporate governance reforms the President signed into law last year.
Background on Today's Presidential Action
Earlier this week, President Bush announced a growth and jobs plan to strengthen the American economy, and called on Congress to act swiftly to pass it. The President's economic agenda will encourage consumer spending that will continue to boost the economic recovery; promote investment by individuals and businesses that will lead to economic growth and job creation; and deliver critical help to unemployed citizens.
In announcing his jobs and growth plan, President Bush also stressed that addressing corporate fraud will play a vital role in restoring economic growth. The President said, "Corporate greed and malfeasance cause innocent people to lose their jobs, their savings, and often their confidence in the American system."
In March 2002, the President announced his "Ten-Point Plan to Improve Corporate Responsibility and Protect America's Shareholders," based on three core principles: information accuracy and accessibility, management accountability, and auditor independence. Following the President's proposals, the SEC took decisive action to propose rules and adopt policies consistent with all ten of the President's reforms.
In July 2002, President Bush signed into law the bipartisan Oxley-Sarbanes corporate accountability legislation that will expose and punish acts of corruption, restore confidence in corporate America, and protect small investors. The law gives federal officials new abilities to crack down on fraud and wrongdoing and provides for tough oversight of the accounting industry.
President Bush today announced major increases in funding to ensure that resources are available to crack down on corporate fraud and to implement important corporate accountability reforms:
Securities and Exchange Commission: The President's FY 2004 budget includes $842 million for the SEC, the largest increase in the history of the agency. This request would nearly double the SEC budget over FY 2002 levels, enabling the agency to hire new accountants, lawyers, and examiners to protect investors and combat corporate wrongdoing. This increase reflects the additional efforts made by the agency to implement new investor protection policies, including the President's Ten Point Plan on Corporate Responsibility. The increased funding will also enable the SEC to replace aging technology such as the EDGAR system and to upgrade other information technology systems
Department of Justice: The President's Budget includes an additional $25 million for DOJ to expand investigative and prosecutorial capacity to address the corporate fraud problem. The FBI will receive $16 million to hire 118 additional staff (56 agents) to investigate corporate fraud. The balance of the funding will go to the U.S. Attorneys and Legal Divisions for 94 positions (29 attorneys) to prosecute those involved in criminal acts of corporate fraud.
Department of Labor: The President's Budget requests a 10% increase for the Employee Benefits Security Administration in the Department of Labor (formerly the Pension and Welfare Benefits Administration). With these additional resources, EBSA expects to restore, protect or recover about $500 million in pension plan assets. This funding will provide additional enforcement to safeguard workers' retirement savings and other benefits in the wake of corporate fraud cases. Funding will also be used to expand compliance assistance efforts to educate employers and pension plan administrators on their responsibilities under the new pension laws.
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