Following on yesterday’s ruminations on lobbying reform, when NAM President John Engler went to the Senate to testify on Wednesday, he called for greater disclosure and for enforcement of existing policies and rules. As we mentioned yesterday, there are a plethora of rules today, both for the House and the Senate. You should check them out. We abide by them every day. Once again, two people were caught breaking the rules and will be prosecuted and punished, as it should be. The system worked.
However, former SEC Chair Arthur Levitt had an op-ed in the Washington Post on Monday saying that Congress has a “handy example” for reform in the Sarbanes-Oxley Act. God help us all. We supported its passage, but it really is an object lesson. Almost any company today can tell you of the enormous paperwork burdens that Sarbanes-Oxley has wrought. There is much motion, little progress. In other words, companies have to spend mightily on lots and lots of paperwork, but at the end of the day, it all doesn’t go toward making corporations better, or more honest, or cleaner. Like lobbying reform, it came about after a few high-profile bad apples caused another legislative feeding frenzy. Ready. Fire. Aim. In 2003, Sun Microsystems CEO Scott McNealy said in an article that the bill’s many onerous requirements were like throwing “buckets of sand into the gears of the market economy.”
So we would say that Sarbanes-Oxley absolutely presents a lesson — a lesson in what not to do. That is, Congress should find a Sarbanes-Oxley model and then dial it a few full turns backwards and we might be about in the right place.
Another little irony in all of this, also pointed out during the Q & A by our boss: In all this sturm und drang over staff travel, what’s asinine is that whatever may or may not pass the smell test today as far as staff travel is concerned (and ours certainly does pass the test — in writing), if it’s done in conjunction with a fundraiser, it’s all OK. Does that make sense to you?
We’d encourage Congress to take a collective deep breath. Let’s look at the laws, the extensive rules and reporting requirements that are in place today, the infractions that have all quite publicly been witnessed and ask the question posed by Gov. Engler on Wednesday: “How big is the problem we’re trying to fix?” Once they get a handle on that, Congress might be surprised to find that they have the tools in place to fix it. The only thing missing may be the will to make it so.
They don’t need legislation for that.
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