Dayton Applauds Final Passage of Bill to Toughen Corporate Accountability Standards

Says Bill Will Create Independent Commission To Oversee Accounting Industry

July 25, 2002

WASHINGTON, DC – Senator Mark Dayton today applauded the final passage of major new legislation to toughen corporate accountability standards for corporate executives and board members, auditors, and financial advisors.

Dayton said that the Accounting Reform Bill, which unanimously passed the Senate today, contains key measures to help toughen accountability standards, such as more funding to help the Securities and Exchange Commission (SEC) effectively regulate U.S. business standards, the creation of a new, independent oversight board, and dramatically increased maximum fines and jail sentences for those who violate new and existing corporate laws.

"The recent scandals which cost thousands of Americans their jobs, their pensions, their stock holdings, and their security have made it all too clear how necessary this legislation is," Dayton said. "Real reform was needed, and that's what this bill delivers. It contains tough, common sense measures to establish higher standards of accountability for corporate chieftains and boards so they can't parachute away from workers and stockholders."

Dayton said he was disappointed that the bill did not include a measure he cosponsored to close a loophole that allows companies to deduct stock options, which are often worth tens of millions of dollars, from their corporate income taxes without reporting them to financial analysts, investors and employees.

"The amendment I cosponsored would have allowed a company to decide how to classify stock options -- either as expenses or not. However, they would have to be reported the same to all parties: the IRS, investors, financial analysts, employees, et.al. There would only be one set of books, one set of financial accounts, and one system of accounting."

Dayton said the Accounting Reform Bill, which is the result of negotiations between House and Senate representatives, was approved by the House of Representatives earlier today. He called upon the President to quickly sign the bill into law.