Bush Guts Corporate Crime Law

Bush has no shame. Within hours of signing the corporate accountability bill and trumpeting his supposed tough new attitude on corporate crime, Bush issued a legal "interpretation" from the White House that gutted the protections in the law for corporate whistleblowers who tip off Congression-al investigators of company abuses.

The law as passed clearly protects any employee from retaliation by their employer if they provide information of fraud to a supervisor, any government agency or to "any Member of Congress or any committee of Congress." [Emphasis added.) "This is a landmark breakthrough in corporate accountability, and a legal revolution for corporate freedom of speech," said Tom Devine, legal director for the Government Accountability Project, a Washington, D.C.-based public interest law firm.

Or at least that was the intent. However, Bush in his legal statement indicated that the administration would not protect a whistleblower if there was no already existing investigation into their company. Any whistleblower giving a Congressperson information on corporate abuses before an official investigation has been authorized by a vote of a Congressional committee would have no protection against losing their job under the new law, at least if Bush has his way. So if you are the first employee to reveal an abuse at Enron or WorldCom and help launch an investigation, you are out of luck.

Ignoring legislative intent: Bush's interpretation would rip the heart out of the whistleblower protections. And it's a complete perversion of the intent of the Congressional authors of the law.

The top Democrat and Republican on the Judiciary Committee, Patrick Leahy and Charles Grassley, wrote the whistleblower provisions, which were supported unanimously by the committee. Leahy and Grassley immediately fired off a letter of protest to the administration.

"Few whistleblowers know, nor should they be expected to know, the jurisdiction of the various Committees of Congress or the matters currently under investigation. The most common situation, and one that the recent Administration's statement excludes from protection, is a citizen reporting misconduct to his or her own Representative or Senator, regardless of their committee assignments. Such disclosures are clearly covered by the terms of the statute."

This Bush doctrine that the first whistleblower to contact their Con-gressperson is screwed legally means that there will almost never be a second, a classic catch-22 designed to frustrate the law. Bush's goal is clearly to undermine any expanded ability of Congress to investigate corporate wrongdoing. That's not even speculation. Bush's legal "interpretation" made the ridiculous claim that the legislators' goals in writing the whistleblower provisions was "not to define the scope of investigative authority or to grant new investigative authority" to Congress to ferret out corporate wrongdoing. What Bush fears is an expanded ability of opposition politicians to challenge his administration's failures to police corporate malfeasance.

Just part of a pattern: But this hostility by Bush to employee whistleblowers should not be surprising. He is fighting a similar battle to deny whistleblower protection to government employees in the new Homeland Security Department. As I detailed a few weeks ago (see "Homeland Security as Union Busting," 7/15/02 TPP), Bush and the GOP are fighting to weaken existing union and civil service protections in the name of "national security." Yet as Enron and the FBI scandals show, the greatest protection against incompetency and malfeasance in government and business are employees who can report problems to Congress and the public without fear of retaliation.

In the case of both Enron and WorldCom, the fraud by those companies were analyzed not by government investigations but by lower-level employees, Sherron Watkins at Enron and Cynthia Cooper at WorldCom, whose revelations would probably have never reached the public if those companies had not melted down to bankruptcy. Right now, a wave of press scrutiny and government investigation is propelling information on illegal conduct into public view. However, only if employees in the future have full and unquestioned legal protection against losing their jobs will this current round of corporate revelations be anything but a temporary aberration.

The corporate crime bill just passed is a good start, but the real fight will be to implement it. Bush's attempt to immediately undermine the law shows that it will not be an easy battle, since if he had so little compunction doing so the day of the bill's passage, imagine the flagrant disregard for the law he will have once the media spotlight recedes? The reality is that, despite his rhetoric, Bush does not want to bring new corporate crimes to light. For the sake of a public show, his administration is looking to throw a few corporate CEOs in the slammer as scapegoats to protect the rest. Then, he hopes, corporate accounts can return to the good old days of unscrutinized offshore tax havens and slick bookkeeping that he and Dick Cheney practiced so well when they themselves were executives.

If Bush keeps up this defense of his corporate cronies, the American people will hopefully be returning him to his beloved private sector at the next election.

Nathan Newman is a union lawyer, longtime community activist, a national vice president of the National Lawyers Guild and author of the forthcoming book Net Loss on Internet policy and economic inequality. Email or see

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