(WASHINGTON, DC) - The leadership of the House of Representatives, realizing that its first attempt at legislation imposing penalties for corporate fraud was far weaker than the measure approved in the Senate 97-0 yesterday, hurriedly passed a second bill this afternoon, the Corporate Fraud Accountability Act. But, says U.S. Representative Chet Edwards, it is still too timid.

“I believe Central Texans are as fed up as I am at the continued revelations of bookkeeping slights of hand, double dealing and outright fraud by corporate executives,” said Edwards. “The House majority may eventually get it right, but it is past time for stronger action to punish corporate executives who act irresponsibly, hurt employees and investors, and then walk away with millions of dollars in their pockets.”

In April, the House majority defeated a Democratic bill with strict punishment for corporate wrongdoing and instead passed the Accounting Industry Reform Act, which was much weaker. Then, yesterday, the Senate unanimously approved a very much stronger measure that strengthens penalties for securities fraud, impeding an investigation, and destruction of audit records, and requires CEOs to certify in writing that financial statements are accurate. President Bush has embraced the Senate measure. So, this week, House leaders quickly came up with a second piece of legislation to strengthen penalties, but only somewhat.

“Many Members of Congress supported today’s House bill, as I did, because it’s a step in the right direction,” Edwards said. “But, it’s not a big enough step to ensure punishment of wrongdoers and prevent systemic conflicts of interest between auditors, stock analysts, CEOs and board members.”

• The Senate bill requires all audit work papers to be retained for five years, and imposes a five-year prison sentence for violation. Today’s House bill does not address the destruction of audit records. • The Senate bill creates a more independent regulatory board to set and enforce standards for audit firms. Under the House bill, the roles and powers of the oversight board are set by the Securities and Exchange Commission. • The Senate bill ensures that audit firms are independent and objective, barring them from holding stock in the companies they review. The House bill does not address conflicts of interest. • The Senate bill provides protection for “whistleblowers,” employees who report unlawful acts to the proper authorities. The House bill provides no such protection.

“Solving this business crisis is crucial. Thousands of hard working families and senior citizens in Central Texas have already seen their retirement investments drop dramatically because of corporate greed and dishonesty. That must be stopped now, not six months from now.”