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Washington, DC--“In July of this year, President Bush signed the law seeking to improve corporate accountability. Unfortunately, in the ensuing five months, the president and his administration have through a combination of lack of interest, covert opposition, and incompetence, deconstructed the act. In fact, the Securities and Exchange Commission, whose power was to be enhanced by this new law, is in fact weaker now than it was in many ways before the president signed the bill, and the effort to increase corporate accountability is in a shambles.
“A key part of that law was the Public Company Accounting Oversight Board. Today, the board has a chairman who has announced his resignation, and four members with no staff, no office, no telephones, and no real capacity to do their jobs.
“It is the Bush administration’s fault both that the board remains without an operational chairman, and that it is today, months after the law was passed and two months after the members were appointed, without any funds. The tale of the non-existent budget for the PCAOB is a telling example of how the Republicans have succeeded in preventing the Sarbanes-Oxley Act from taking full effect.
“The law authorized the Secretary of the Treasury to make an advance from SEC 2003 appropriations to get the board started, until it could collect from the private corporations which are to be its funding source. But the House Republicans refused to include in any of the continuing resolutions which they passed before adjournment the language necessary according to the SEC to allow this infusion of funds to take place and Treasury decided that it could not advance any funds.
“When the November CR was being debated, I and others approached the Democratic members of the Appropriations Committee urging that we include the language necessary to unlock the funds so that the board could begin its work. Republican and Democratic appropriators agreed that this should be done, as did the SEC.
But the House Republican leadership refused to include the appropriate language. Thus, the CR passed in November continued the Republican policy of not providing any funds for this board.
“In response to this, the SEC, the Treasury and members of the board have had conversations and we are now told that they believe they can provide funds from the Treasury even without the appropriate CR language. I appreciate their effort to accommodate themselves to the Republican leadership’s refusal to fund the board, but I am distressed at the time it is taking to act on this. As of today we are told that pending OMB approval, the Treasury will advance money to the board if they receive a budget approved both by the Public Accounting Oversight Board and the SEC. According to the schedule presented to us, the earliest this can happen is January 8, and that assumes that all will go well – an assumption I am loathe to make given the record of this administration and the Congressional leadership with regard to this act.
“So, at best, the Public Accounting Oversight Board will receive funds more than five months after the act was signed, and months after the Accounting Board members were appointed. Since the first statutory deadline the board faces is in April, this means that a substantial part of the time they had to organize themselves will have gone by because of this failure to fund them.
“In addition, the administration and the Republican leadership have combined to keep SEC funding at a level significantly below what it needed to bring this entire act into reality. The Sarbanes-Oxley Bill called for a seven hundred and seventy six million dollar appropriation for SEC. In the various CRs passed since that time, the Republicans have provided a figure two hundred and fifty million dollars below that. In the recommittal motion which Ranking Appropriations Committee Democrat David Obey offered in November to the CR, we sought to provide the SEC with the full amount called for by the bill. We were defeated on a largely party line vote. [Click here to be linked to a record of the recommittal motion.]
“The president did announce when he appointed William Donaldson that he supported a doubling of the SEC budget. Unfortunately, the president was careful to point out that he meant this to take place for the Fiscal 04 budget. This means that he intends to keep the SEC at the pre-Sarbanes-Oxley level for another nine or ten months.
“Taken together with the failed appointments that this administration has made to both the SEC and the Accounting Oversight Board, this opposition to adequate funding for either entity has led us into the present situation in which, apparently to the satisfaction of many in the Republican party and some of their business community allies, the legislative effort for increased corporate accountability remains an unrealized hope.”
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