Shell Game

Congressional attempts to crack down on corporate fraud is the biggest fraud yet

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'Sinking in a sea of debt and deception, [the government] . . . passed weak measures and called them a solution,' says David E. Sanger of The New York Times. Insisting this assessment of Japan is only 'a cautionary tale,' Sanger claims 'no one is predicting the same [depression] for America.'

Balderdash. Market losses are likely to continue until valuations return to pre-deregulation levels, and Congressional action is hardly inspiring investor confidence.

Spurred last week by the largest market loss, government debt, and trade deficit in history, and despairing of a 'free marketer' Fed chairman and president who inappositely 'fight' corporate corruption with failed Keynesian increases in the money supply and deficit spending necessitated by pseudo tax 'cuts,' Congress trumpeted its passage of accounting and securities 'reform' bills as 'tough' measures to protect investors and restore accountability to the financial system.

The bills are a sham, and their sponsors, including Rep. Michael Oxley (R-OH), Rep. James Sensenbrenner (R-WI) and Senator Paul Sarbanes (D-MD), are each playing a shell game, with the public playing the sucker and the press certifying the Congressional game as legitimate and quashing all dissent, much as Arthur Andersen certified Enron.

It makes no difference which combination of their bills pass. Each is an empty shell, which can?t remedy, let alone prevent, existing or future damage to investors and taxpayers, even if any were retroactive, which they aren?t. Each will make matters worse by resurrecting a proven failure, a 'public' oversight board, to conduct token reviews of auditors and companies while ignoring and implicitly passing their smoking guns, fraudulent securities filings.

Sarbanes? bill, S. 2673, is the most damaging because its POB is fleshed out with the most explicit loopholes, rendering it publicly unaccountable and diverting enforcement authority from an already fatally politicized Securities and Exchange Commission. As if to acknowledge the fix is in, President Bush, says he is 'confident' the SEC will acquit Vice President Cheney of fraud at Halliburton, and SEC Chairman Harvey Pitt claims 'no one in this country gets a pass,' even as he declined to reopen SEC?s much faulted investigation of President Bush?s insider trading when he was at Harken.

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