WASHINGTON - A unified Senate approved harsh new penalties yesterday for corporate fraud and document shredding, adding enforcement teeth to President Bush's plan to curb a growing wave of accounting scandals.
In a series of unanimous votes, senators added the penalties to an accounting oversight bill moving toward passage against a backdrop of eroded public confidence in corporate America.
Underscoring that sentiment, the Dow Jones industrials lost more than 280 points and closed below 9,000 for the first time since October yesterday, a day after Bush's speech on corporate responsibility aimed at shoring up investor confidence.
A stream of revelations of accounting misdeeds at big corporations in recent months has scared investors and prompted concern about the fragile economic recovery. Tens of thousands of workers have been laid off and millions of people have lost retirement savings.
The criminal penalty measures would create new 10-year prison terms for securities fraud and give federal protection to company whistle-blowers.
Chief executive officers and chief financial officers who certify false company financial reports would be slapped with prison terms of five to 10 years and fines up to $1 million.
"These people deserve to go to jail. They've ruined the lives of thousands of people," Senate Judiciary Committee Chairman Patrick J. Leahy, a Vermont Democrat, said on the Senate floor in reference to executive excesses at Enron, WorldCom and other big corporations.
Democrats said they wanted tougher penalties than those Bush proposed Tuesday. Bush called for doubled prison terms and aggressive policing to stem fraud and corruption. Most of his proposals don't call for new laws; many just urge companies and executives to adopt them.
Bush has given only qualified support to the bipartisan accounting bill, which would create an independent private body with authority to discipline auditors and establish auditing and ethics rules.
In a series of unanimous votes, senators added the penalties to an accounting oversight bill moving toward passage against a backdrop of eroded public confidence in corporate America.
Underscoring that sentiment, the Dow Jones industrials lost more than 280 points and closed below 9,000 for the first time since October yesterday, a day after Bush's speech on corporate responsibility aimed at shoring up investor confidence.
A stream of revelations of accounting misdeeds at big corporations in recent months has scared investors and prompted concern about the fragile economic recovery. Tens of thousands of workers have been laid off and millions of people have lost retirement savings.
The criminal penalty measures would create new 10-year prison terms for securities fraud and give federal protection to company whistle-blowers.
Chief executive officers and chief financial officers who certify false company financial reports would be slapped with prison terms of five to 10 years and fines up to $1 million.
"These people deserve to go to jail. They've ruined the lives of thousands of people," Senate Judiciary Committee Chairman Patrick J. Leahy, a Vermont Democrat, said on the Senate floor in reference to executive excesses at Enron, WorldCom and other big corporations.
Democrats said they wanted tougher penalties than those Bush proposed Tuesday. Bush called for doubled prison terms and aggressive policing to stem fraud and corruption. Most of his proposals don't call for new laws; many just urge companies and executives to adopt them.
Bush has given only qualified support to the bipartisan accounting bill, which would create an independent private body with authority to discipline auditors and establish auditing and ethics rules.