WASHINGTON – Treasury Secretary Paul O'Neill on Thursday called unethical behavior of a few "notorious company executives" a disgrace but he cautioned that Congress should move carefully in imposing new regulations on businesses.
Speaking to the National Federation of Independent Business, which represents small-business owners, O'Neill said his audience understands the importance of honoring commitments.
"Small-business owners know that, at the end of the day, they have to make good on their obligations to suppliers, employees and customers," he said. "It is your reputation and your bank account on the line."
But O'Neill said some recent high-profile cases showed some business executives do not live by the same rules.
O'Neill called the situation a "disgrace in this country right now -- the unethical behavior of a few notorious company executives." He did not name any individuals or companies.
"I believe these cases are infrequent, but even a few bad cases can poison confidence in our system, which depends on entrusting public company managers with investors' capital," he said. "We must take action to restore investor confidence in the accuracy of public company information."
O'Neill said the administration is working with Congress and the Securities and Exchange Commission to put into operation a 10-point program that President Bush unveiled in March after the collapse of Houston energy giant Enron.
O'Neill said Congress has a role to play as well in tightening laws and he pledged to work with committees reviewing various proposals.
But he cautioned that lawmakers must "avoid hastily constructed reforms that will have harmful unintended consequences."
O'Neill said policy-makers need to understand that "we will never be able to write rules that anticipate every possible subterfuge."
In addressing the performance of the economy, O'Neill said recent statistics had been "remarkably positive" and predicted the country is on track for growth of 3 percent to 3.5 percent by the end of this year.
He said last year's recession resulted in a loss in economic output of 0.3 percent, compared to the average drop of 2.2 percent for other recessions. He credited the mildness of the downturn in part to the Bush tax cuts enacted last year.
"Our economy today is far ahead of where pessimists even six months ago thought it could be," O'Neill said.