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by John Tarleton and Cathy Bussewitz
NEW YORK--Janice Schiavo is a former Wall Street office worker who has been out of work for 22 months. Her savings have dwindled to $2,000 and her 401(k) plan has taken a beating during the recent stock market slide. Her anxiety has turned to anger with the recent flood of corporate scandals that have rocked the world’s financial markets. On Tuesday, Schiavo, 55, stood outside the Regent Hotel waiting for answers, or at least a shred of hope, while president Bush gave a speech inside about corporate responsibility.
“I was doing good and then all these scandals hit,” she said. “I was saving for my golden years and now I might end up in a shopping bag.”
Schiavo, of Bay Ridge, is a daily churchgoer, follows the stock market religiously and now lives on a diet of rice and beans. She was joined by 500 other mostly curious on-lookers who lined the police barricades at the corner of Wall and William Sts. The presidential motorcade arrived to a scattering of polite applause, but the mood was one more of sullen curiosity.
“It’s like my father said: steal $500 and you’ll go to jail for a couple of years. Steal $500 million and you’ll never go to jail,” said Stuart Locker, a Hewlett-Packard employee visiting from Houston this week.
David Mehlman, 20, a clerk on the Stock Exchange floor, said long jail terms for crooked CEOs of companies like Enron and Worldcom were the only possible deterrent to the current epidemic of white collar crime. But, he didn’t think Bush’s speech would have much impact.
“Nothing is going to change today,” Mehlman said. “Bush is here to appease all the people who are losing their money.”
A Fox Promises to Guard the Henhouse
In his much-anticipated speech to business leaders, Bush called for:
*increasing Securities and Exchange Commission (S.E.C.) funding by $100 million per year (Congressional Democrats are calling for a $340 million increase)
*more regulation to ensure that company directors are independent
* greater S.E.C enforcement powers including a corporate fraud task force. which "will function as a financial crimes SWAT team.”,
*preventing corporate officers at publicly-traded firms from receiving loans from their own companies.
*The nation's stock markets to require that a majority of a company's directors and all members of the company's audit, nominating and compensation committees have no material relationship with the company so that they are truly independent.
*Companies to explain how their executive compensation packages are in the company's interest and provide "every detail" of these packages in plain English in their annual reports.
“At this moment, America’s greatest economic need is higher ethical standards—standards enforced by strict laws and upheld by responsible leaders,” Bush said.
However, Bush did not endorse:
*any specific reform bill
*a more far-reaching proposal that is gaining considerable support in the Senate to create a new felony for any "scheme or artifice" knowingly used to defraud shareholders
*strengthening whistle-blower protections
*barring corporate criminals from getting government contracts
*closing the offshore tax haven loophole which allows CEOs to claim that they are not covered by the new proposals by locating overseas.
Bush also re-affirmed his support for embattled S.E.C. Chairman Harvey L. Pitt. By day’s end, the market appeared to concur with Mehlman. The Dow Jones industrial average fell 178.81 points to 9,096.09. The Standard & Poor’s 500 suffered its largest loss in five weeks and the NASDAQ composite also declined.
Outside, protesters struggled to find each other amid the maze of police barricades that ran through the financial district. When one group of about ten across the street from the Regent worked up the nerve to begin chanting “Bush is a hypocrite! Bush must quit!” they were quickly threatened with arrest and shunted off to a “protest pen” several blocks away.
Justus Ohlhaver, a financial news analyst from Hamburg, Germany, was disturbed by how the protesters were treated. “I think the cops are misinterpreting the laws,” he said. “You should be allowed to demonstrate wherever you are, to voice your opinion. You also get easily intimidated by the police.”
“The opposition is very disorganized,” added Peter Rock, 55, an unemployed Spanish and English interpreter who immigrated from Cuba in 1960. “There should have been hundreds and thousands of people protesting.”
Though not protesting himself, Rock was scathing in his criticism of Bush’s visit. “The Republican agenda throughout history, especially in this administration, is that poor people have too much money and rich people don’t have enough and they are going to do something about it.”
Amin Rashid, 37, a stockbroker from Long Island, was more forgiving of Bush. “I think it is reassuring that we have a system where the government cares, and is interested in fixing what goes on in the system,” Rashid said. “The problem has been around for a very long time. It’s not about any administration. We have an opportunity to fix the problem. The reason this problem is magnified is because we’re going through a downturn.”
Protesters from the Sierra Club and NYPIRG were also present. They noted the difference between the Bush Administration’s call for corporate responsibility toward shareholders and its business-friendly environmental policies including its recent proposal to shift Superfund payments for cleaning toxic waste sites from businesses to taxpayers and a proposal that would gut a key provision of the Clean Air Act that mandates when businesses have to install new pollution controls.
“We feel it is scandalous that the administration is proposing to eliminate the funding in 33 sites, and shift payment for the fund from the companies to the taxpayers,” said Norma Ramos, New York City representative of the Sierra Club. “Every president, including Bush senior, has supported the polluter pays principle.”
The crowd waited about 45 minutes before Bush slipped out the back door of the Regent and quickly disappeared in his motorcade. Schiavo was still troubled about her future.
“They think it’s going to go away. But, it’s not,” she said. “He (Bush) needs to talk to the small person.”
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