The White House, President George W. Bush Click to print this document

For Immediate Release
Office of the Press Secretary
January 10, 2003

Embargoed Until 10 Saturday, January 11
06 Am
Restoring Economic Confidence and Tackling Corporate Fraud
Today's Presidential Action
Ø 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


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."

o 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.

o 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:

o 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

o 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.

o 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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