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Big Business Loses Its Protector

July 28, 2002|WILLIAM SCHNEIDER | William Schneider, a contributing editor to Opinion, is a CNN political analyst.

WASHINGTON — The prospect of being hanged concentrates the mind wonderfully, Dr. Samuel Johnson once observed. So does the prospect of being defeated. Which is why you find a wonderful concentration of minds among congressional Republicans these days. They're in a panic. Very much like investors, but for a slightly different reason. Investors are worried that they won't be able to retire early. Republicans are worried that they'll be forced to retire early. Shortly after this year's midterm election, in fact.

So, what are congressional Republicans doing? The same thing a terrified crew does when it realizes the ship is sinking: They're throwing ballast overboard to keep the vessel afloat. "The mood of the [Republican] conference is, 'Let's get on with this thing. Let's not dillydally,' " Rep. Sherwood L. Boehlert (R-N.Y.) said. "We've got to do everything possible in short order to indicate to the American people we're on top of these issues and we're doing everything possible to restore confidence in the markets."

What about the party's long-standing commitment to big business? Overboard! Kersplash! Rep. W.J. "Billy" Tauzin (R-La.), chairman of the Energy and Commerce Committee, pressured House Republicans to take a hard line on accounting fraud. "Investor confidence is at a low, and the stock market is still going through this awful roller coaster," Tauzin said. "We've got to put a stop to it."

Then there was the spectacle of Rep. William M. Thomas (R-Bakersfield), chairman of the House Ways and Means Committee, advocating stronger enforcement powers for the Internal Revenue Service against companies that create dubious tax shelters. And introducing a bill to stop companies from relocating to Bermuda to avoid U.S. taxes. This, from one of business' best friends in Congress, a man who received the "Spirit of Enterprise" award from the U.S. Chamber of Commerce.

Nearly 40 House Republicans signed a letter urging their colleagues to accept the Senate bill sponsored by Sen. Paul S. Sarbanes (D-Md.), which contains far-reaching corporate regulations. A new independent board to oversee corporate audits. New categories of corporate crimes. New grounds for lawsuits against companies that deceive investors. The sorts of things House Republicans would have rejected out of hand a few weeks ago.

The WorldCom bankruptcy and the stock market slide changed all that. Last week, House negotiators signed off on the Sarbanes bill with a few changes. The House quickly voted 423 to 3 to pass it, then the Senate voted 99 to 0 to send it to the president's desk. Let's get this straight: Republicans agree to pass tough new regulations on business, and the stock market soars. There's an irony in there somewhere.

"We've got to look out for ourselves first and foremost," a top House Republican strategist told the Washington Post. "We have to go home in a week and say we've done something. People have to wake up and realize the political nature of this fight."

In a report distributed on Capitol Hill, a prominent Republican polling firm found that "the bottom has fallen out on the mood of the country." In the pollsters' view, "WorldCom's [bankruptcy] announcement may have been the straw that broke the camel's back." It certainly broke the stock market's back. "Voters' attitudes toward corporate offenders are hostile," the report warned. "Legislation punishing wrongdoers can't be too tough."

It is politically impossible to defend big business right now. Not even George W. Bush can do it. The president went to Wall Street to denounce "corporate abusers" and to call for an end to corporate wrongdoing--including practices he once engaged in. "I challenge compensation committees to put an end to all company loans to corporate officers," the president said. Presumably like the ones he once got at Harken Energy.

The culture has shifted from business heroes in the 1990s (Bill Gates) to what Theodore Roosevelt called "malefactors of great wealth." That puts Bush in an awkward position. How many business executives have been elected president? Answer: two. Both of them were named Bush.

The corporate crime wave also put conservatives in an awkward position. Isn't support for business a core element of the conservative faith?

Actually, no. The core element of the conservative faith is opposition to government. Business usually shares that sentiment, so conservatives and business have been long-standing allies. But it's an alliance of convenience. And money.

For business, politics isn't about causes. It's about interests. That's why conservatives distrust big business. The two work together when they have the same interests--say, to pass a tax cut or to defeat environmentalists on oil drilling. But conservatives suspect that business is always ready to sell them out. And they're right.

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