Democrats boost accounting bill pressure

WASHINGTON, July 16 (UPI) -- Democrats tried to increase pressure on House Republicans Tuesday to pass an accounting reform bill already overwhelmingly approved by the Senate and have the House set their own measure aside.

House Republicans dismissed the effort as a political maneuver. They said their version has merit and they will insist on a conference meeting to combine the two measures.

"We are going to go to conference," said John Feehery, spokesman for House Speaker Dennis Hastert, R-Ill.

Republicans in both chambers have said they are likely to support major tenets of the Senate bill, particularly giving the continuing financial crisis. They brushed aside Democrats' complaints as see-through efforts to use the current crises to their political advantage. "This is a political exercise designed to try to put us on the spot," a senior GOP leadership aide said.

Consumer groups generally support the Senate measure, which would set up an independent board to oversee accounting firms, set new penalties for white collar criminals and bar accountants from also performing some consulting services for their clients. Senate Banking Committee Chairman Sen. Paul Sarbanes, D-Md., was the main architect of that bill, which passed the Senate Monday in an overwhelming 97-0 vote.

"It would be hard to imagine a piece of legislation that more decisively demands instant action from the House," Senate Majority Leader Tom Daschle, D-S.D., wrote House Speaker Dennis Hastert, R-Ill., Tuesday. "The heart of what I sincerely believe is a passing trauma for our capital markets has been a failure of accountability, from senior executives and corporate boards to auditors and security analysts," Daschle wrote. "The Sarbanes/Leahy measures address those problems in a stronger and more direct way than any of the other available approaches."

The board established by the Senate legislation would be under the purview of the Securities and Exchange Commission, but with independent membership and the authority to investigate accountants and set accounting standards.

In addition to barring accountants from also performing consulting services for their clients, the legislation creates a new felony for securities fraud with a 10-year jail term.

The House version creates an independent board, but other accountants would staff it. On Tuesday, the House quickly passed increased penalties for white-collar criminals as well.

House Financial Services Committee Chairman Rep. John LaFalce, D-N.Y, said Republicans were doing too little, too late. "They are playing catch-up football," LaFalce said.