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July 15, 2002
Stock-Option Accounting Proposal Blocked
U.S. Sen. John McCain had sought the change as an amendment to an overall corporate reform bill.
Senate Majority Leader Tom Daschle, D-South Dakota, said Thursday morning that he expected passage of the overall bill, which includes new and increased criminal penalties for cooking the books, sometime early this week.
But that was before the chamber descended into wrangling Thursday afternoon over the order of dozens of potential amendments to the bill. They included McCain's measure.
The Reuters news agency reports that Assistant Majority Leader Harry Reid, a Nevada Democrat, moved to put two already-proposed Democratic amendments at the top of the voting order, provoking a lengthy tirade from McCain, who accused the Democratic leadership of considering stock options to be a reform too far.
"The fix is in," McCain charged. "It's because every lobbyist in this for the high-tech community has said, 'Don't do it.' The one thing folks in Silicon Valley are scared of more than anything else is that they would lose their precious stock options."
Reid, according to Reuters, said he first wanted to have a vote on the two Democratic amendments, including one from Sen. John Edwards of North Carolina to require lawyers to report evidence of lawbreaking up the corporate ladder. But this prompted an objection from Texas Republican Sen. Phil Gramm, a critic of the main bill, put together by Sen. Paul Sarbanes, D-Maryland.
Amid the bickering, no votes were held, and action was postponed.
Daschle told reporters that stock options were not among the amendments he wanted to see pegged to the corporate-reform bill, which is intended to respond to scandals ranging from Enron Corp. to WorldCom Inc.
"We have to make a fundamental question about how far into the weeds we get here, how far do we want to extend current statute and current law with regard to accounting practices," Daschle said.
"It seems to me that it's a reach for us to go that far and to apply a one-size-fits-all statute to all circumstances involving options," he said.
Click here to read the Reuters article, via Yahoo!
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ate Democrats blocked last week a measure that would have forced companies to recognize the cost of stock options in their income statements.