Ten Things the Democrats Can Do to Hold Corporations Accountable

The midterm election demonstrated a deep dissatisfaction with the Bush administration's handling of the war and with the cornucopia of corruption that infected the Republican-controlled Congress. Yet it was more than a partisan victory for the Democrats. It also represented a popular backlash against business-friendly policies that have left many Americans behind.

The new Congress faces a staggering list of corporate abuses that have been ignored by lawmakers for years -- including executive pay levels that remain out of control, rampant contract fraud and war profiteering in Iraq and at home, widespread corporate tax avoidance, the offshoring of well-paying jobs, and the shredding of health, safety and environmental standards. It's enough to keep many congressional committees working overtime for years.

But the election must be seen as much more than a rejection of government of the Halliburtons, by the Enrons and for the Pfizers. It was also a sign that the myth of the good corporate citizen providing for broad prosperity has been punctured, providing an opportunity for deep change in the entire relationship between government and big business.

Some of the initial measures planned by Democrats, such as a minimum wage increase and a rollback of oil industry tax breaks, will begin to rectify the situation. But much more needs to be done. Twelve years ago, when the Republicans won control of Congress, they proposed a Contract with America. Now is the time for what might be called a Contract with Corporate America -- an effort to put limits on the power of big business.

What follows are a few clauses that Congress might include in such a contract. They come out of an ongoing conversation we've been having with leading corporate campaigners and policy experts poised to help Congress take a tough stance on business oversight and regulation.

Provide financial oversight

Business apologists want us to believe corporate fraud is a thing of the past, yet we continue to see business corruption in activities like the widespread backdating of stock options. Rather than tightening controls, the Bush administration and business groups have been seeking to relax the rules. Just last week, the Securities and Exchange Commission announced that companies would be given more flexibility in structuring their internal financial controls. The adjustment is touted as necessary to avoid excessive recordkeeping and auditing costs. Yet this limited relief will only encourage business to push for even more radical deregulation. Now is the time for stricter not weaker financial oversight.

Curb corporate crime

Also last week, the Justice Department announced it was putting new restrictions on the ability of federal prosecutors to use methods such as pressuring companies to waive the confidentiality of their legal communications -- a common technique in developing evidence against an executive suspected of fraud. The claim is that these changes restore "balance" to the process; in truth, Justice is caving in to demands from right-wing academics and former prosecutors who have moved to lucrative careers in the leading white-collar criminal defense firms. It should go without saying that Big Business has not earned the right to lax enforcement.

Restore regulatory integrity

Serious regulation -- on the environment, product safety, occupational safety and health, etc. -- is also being eviscerated as top positions at federal agencies have been filled with industry lobbyists who pass through the revolving door from the private sector and later return to the corporate world. Restoring reasonable oversight is possible only if those making regulatory policy are truly independent of the companies they are supposed to be regulating, which means tightening restrictions on the revolving door, encouraging the appointment of career public servants and providing strong protections for whistleblowers.