Reacting to a wave of accounting scandals, the U.S. Senate voted on Wednesday to adopt new criminal penalties for corporate fraud and document shredding.
The measure comes as an amendment to an accounting oversight bill moving toward Senate passage, possibly this week, the Associated Press reports.
The criminal penalty measure, written by Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., creates new 10-year prison terms for securities fraud and gives federal protection to company whistleblowers.
Pointing to executive excesses at Enron, WorldCom, and other big corporations, Leahy said, "These people deserve to go to jail. They've ruined the lives of thousands of people." Leahy said.
Democrats said they wanted tougher penalties than those President Bush proposed in a speech Tuesday on corporate responsibility. The AP reports that most of Bush's initiatives don't call for new laws; many just urge companies and executives to adopt them.
A stream of revelations of accounting misdeeds at big corporations in recent months has eroded public confidence in corporate America. Tens of thousands have been laid off - 17,000 at WorldCom alone - and millions have lost retirement savings, handing Democrats a key issue just months before the congressional elections and putting Bush on the defensive.
