Corporate scandals cost U.S. $200B
By Marcy Gordon
WASHINGTON Recent corporate scandals have cost Americans more than $200 billion in lost investment savings, jobs, pension losses and tax revenue, according to a report released yesterday.
The report issued by the "No More Enrons" coalition, partially funded by consumer groups and labor unions, said losses from 401(k) investment accounts alone totaled $175 billion and public pension funds nationwide lost at least $6.4 billion as the stock market plummeted amid a crisis of investor confidence.
It estimated that more than a million workers lost their jobs at the affected companies, while company executives cashed out billions of dollars of their stock.
Senate Majority Leader Tom Daschle, D-S.D., seized on the report to decry the scandals' impact and blame President Bush and Republican lawmakers for what he said was failure to take strong action.
"Tens of thousands of jobs, lost. Billions of dollars in personal and public retirement savings, gone. Confidence in our companies and our markets, badly damaged," Daschle said.
"The lesson ought to be clear: When corporate fraud leads to corporate failure, we all get hurt. Unfortunately, this administration and many of our Republican colleagues continue to deny that obvious fact."
Daschle renewed his call for Bush to remove Securities and Exchange Commission Chairman Harvey Pitt, accused by Democrats of heeding the accounting industry and blocking a tough candidate to head a new accounting oversight board.
Republicans said the Democrats were simply playing politics.
"With the elections almost two weeks away, the Senate Democratic leadership seems to be more interested in scoring political points than in helping solve people's problems," said Ron Bonjean, a spokesman for Senate Minority Leader Trent Lott, R-Miss.
Bush and administration officials have pointed to the growing number of executives who have been taken away in handcuffs in recent months for corporate malfeasance.
When Andrew Fastow, Enron's former chief financial officer, was charged with fraud and conspiracy earlier this month, Bush told a White House audience: "You might have noticed ... that people are being brought to justice."
The $200 billion total is "an extremely conservative estimate," said Mike Lux, president of American Family Voices, part of the "No More Enrons" coalition.