Chambers Go to Conference on Corporate Responsibility

As Congress stands poised to hammer out the differences in House and Senate versions of a corporate responsibility bill, House Republicans expressed concerns that Democrats in both chambers are overlooking a critical issue that challenges the constitutional powers granted to Congress.

"There's apparently a constitutional issue and the funding of the independent board that could be considered a tax," said Chairman Michael Oxley, R-Ohio.

The Democratic-controlled Senate on Monday unanimously approved a sweeping package creating new criminal penalties and jail terms against business fraud and tightening oversight of the accounting industry. The GOP-led House followed up Tuesday with a 391-28 vote on a criminal penalties bill that is more stringent in some aspects than the Senate measure.

Both the House and Senate bills would create new criminal penalties for corporate fraud and document shredding. Chief executive officers and chief financial officers who certified false company financial reports would be slapped with prison terms -- 10 years to 20 years under the House bill, five years to 10 years in the Senate version. They would be fined $1 million to $5 million in the House bill, $500,000 to $1 million in the Senate bill.

Both bills would create an independent board to oversee the accounting profession and increase penalties for corporate wrongdoing.

The Senate bill gives the accounting board greater authority; a key point of dispute with the Bush administration, and it would prohibit most accounting firms from providing consulting services to companies that they audit.

Republicans, led by House Ways and Means Chairman Bill Thomas, D-Calif., say the parties must hash out in conference a part of the Senate bill that insists that the independent accounting oversight board collect fees from public companies. Thomas called that a tax, and said the Constitution requires that revenue-raising bills originate in the House.

Democrats said Wednesday that Republican protestations over the fee issue were nothing more than a stalling tactic to prevent greater regulations on their corporate partners.

"I believe it is an excuse. A pathetic excuse I might add, to create an illusion that you really would like to do this, but oops we got this constitutional problem won't let us do it," said House Minority Leader Dick Gephardt, D-Mo.

"I'm just extraordinarily surprised that they would use a technicality to kill a bill as important as this," said Senate Majority Leader Tom Daschle, D-S.D.

But Republicans shot back that Democrats are seeking political gridlock and economic uncertainty, charging them with wanting an election-year issue more than a solution.

"We have fears that the Democrats in the Senate may use this as a campaign issue and let the stock market decline so they can use this as an issue in the election," said Rep. Jim Greenwood, R-Pa.

Nevertheless, the House and Senate moved Wednesday toward starting compromise negotiations after House Democrats could not convince Republicans to abandon the House bill it passed in April, skip the standard compromise process, and adopt the Senate bill that passed unanimously earlier in the week.

Republicans say they can't consider the Senate measures unless changes are made in a conference. But, they say, it won't take long to strike a deal.

"Going to conference is not dilatory, it is not a stalling tactic, it is not something to say to Senate Democrats, or to the White House and certainly not to the speaker of the House that we don't want to complete this work," said Rep. Richard Baker, R-La. "All we are saying is by going to conference, we can take an OK bill and make it really pretty good."

"I think that take a few days to merge the two bills and make sure we've done what we need to do and not gone too far on one way or another, makes good plain common sense," said Senate Minority Leader Trent Lott, R-Miss.

A conference to churn out the differences in the House and Senate versions could take as long as two months, but officials in both parties insist they want to get it done before they leave for August break.

That would leave both sides the opportunity to claim credit for correcting corporate abuses, but another campaign issue resolved.

Fox News' Carl Cameron and the Associated Press contributed to this report.