"It's apples and oranges," insists Communications Director Dan Bartlett comparing the accounting practices at WorldCom and Enron and those that led to a 1990 SEC investigation and restatement of Harken's earnings. The distinction, say administration officials, is not only that Harken's restatement was in millions, not billions, but also that the company was merely caught being aggressive, not fraudulent. Many corporate executives currently under the bright lights are saying a version of the same thing.
Democrats have been working hard to draw the parallels and revive interest in another SEC investigation in which Bush was cleared of trading on inside information twelve years ago when he sold stock two months before the company announced a large loss and its stock price sank. White House aides insist none of the recent questions about the president's past have affected his policy or the speech outlining it, but the dustup has annoyed a Bush team always nervous that voters might turn their anger about corporate fraud on a president who is proud of his business-friendly posture.
The Tuesday speech has run through the word processor a few times as different administration factions debate over policy and tone. On the one hand, Bush wants to penalize corporate executives who diddle with their books. "They have to know we are serious," says a top adviser, "so that people don't think: 'give them two months, they're Republicans, then we can start doing this again." The president is likely to call for criminal penalties for wayward executives and offer more money for the Securities and Exchange Commission to help hunt down the swindle-doers.
Aides promise a bold speech. Democrats claim Bush's corporate past gives him no credibility on this issue. The White House argues just the opposite. One official even used the inevitable "Nixon goes to China" analogy, arguing that executives will be certain to heed the guidance of one of their own. But Bush isn't likely to throw the whole book at corporate executives or board members. Vice President Dick Cheney and economic adviser Larry Lindsey have argued that regulatory over-reaction will put a chilling effect on entrepreneurial activity and keep good people from serving on corporate boards. "We've been dancing on the head of a pin here for two weeks trying to find balance because this is hard to do," says a top White House aide.
At heart, Bush's speech will praise his corporate audience but also "call business leaders to a higher ethical standard," says one who has worked on it. Speaking in Manhattan, the president will refer to the "character of New York," after the attacks of 9/11, a suggestion that Wall Street should aim for the same standard. Throughout the week, cabinet secretaries will help make the big sell. Commerce Secretary Don Evans and Treasury Secretary Paul O'Neill, both ex-CEOs will speak to a town hall meeting of investor groups, and Labor Secretary Elaine Chao will assure people their pensions are safe. In the end, say administration officials, the markets will decide whether the push has been successful. "Doing too little won't just lose us voters, "says a senior administration official, "but, more importantly, we'll lose the economy."