Appearing at a fund-raiser for GOP Rep. Connie Morella of Maryland, President Bush said the vast majority of business executives are honest, upright people, but the Justice Department will hold them responsible if they "cook the books."
"Corporate America has got to understand there is a higher calling than trying to fudge the numbers, trying to slip a billion here and a billion here and ... hope nobody notices," he said Friday. "Our Justice Department will hold people accountable."
The president said he wants to boost the confidence of the American people in the business sector after a series of reports by Wall Street companies that they overstated their revenues and understated their expenses. WorldCom announced Thursday that it hid $3.8 billion in expenses. The Securities and Exchange Commission has already indicted executives from WorldCom, and Congress has issued subpoenas of top leaders at WorldCom.
On Friday, Xerox said it used fuzzy math to overstate its earnings by $2 billion. Xerox's shares plunged 28 percent.
In March, Bush outlined a 10-point plan designed to require chief executives to certify personally the accuracy of their financial statements and disclosures at each business quarter. Top executives would be forced to give up their bonuses in order to punish accounting-type abuses.
Under the president's proposal, accounting firms would face intense oversight, and any "cooking of the books" would be punishable by jail time.
The president feels the laws should be enforced vigorously and that includes going to jail," said White House spokesman Ari Fleischer.
Bush, who will discuss corporate responsibility in his weekly radio address and in a July 9 speech in New York City, is pushing Congress to pass his legislative outline.
Senate Majority Leader Tom Daschle, D-S.D., said the Senate will take up in mid-July a Democratic version of a corporate governance bill authored by Sen. Paul Sarbanes, D-Md., that has already passed out of the Senate Finance Committee with bipartisan support.
Bush discussed corporate responsibility while collecting $500,000 for Morella, 71, who faces the toughest re-election race of her career in a district that added more than 100,000 new voters in Democratic areas of the Maryland suburbs around Washington as the result of redistricting.
"She's an independent soul," Bush said at the fund-raiser. "She is a highly intelligent person who is with you if she thinks you're right and she is gracious enough to explain to you when she thinks you're wrong."
Arguably the most liberal Republican in the House, she votes for abortion rights, supported campaign finance legislation that the GOP leaders battled, and voted against all four impeachment charges that Republicans filed against President Clinton in 1998.
The Associated Press contributed to this report.