Business aims to loosen regulations

WASHINGTON — While hewing to a neutral line, the Bush administration signaled Monday it was prepared to give a sympathetic hearing to complaints by business about the laws and rules born of the 2002 scandals and to consider possible policy changes.

A gathering of influential figures convened by Treasury Secretary Henry Paulson to discuss the impact on corporate America of the post-Enron regulations likely will produce some ideas that could quickly be turned into actions, a high-level administration official told reporters.

Robert Steel, the Treasury undersecretary for domestic finance, was speaking about an unusual conference being held in Washington, D.C., today that is expected to provide a serious hearing to the months-long campaign by business interests to ease laws and regulations.

Campaign pushes back

An array of companies and business leaders have been making the case that the requirements spawned by the crisis of corporate malfeasance are onerous, costly and hurt the competitiveness of U.S. financial markets by driving some companies away from them.

Vice President Dick Cheney was tapped as the speaker for a private dinner Monday at the Treasury Department for conference participants and key lawmakers, signaling the White House's keen interest.

President Bush has been briefed on the subject by Paulson, Steel said.

Billionaire investor Warren Buffett was also picked as a dinner speaker.

Paulson and Christopher Cox, the chairman of the Securities and Exchange Commission, are moderators for panel discussions.

The panelists are a cavalcade of notables, including Buffett, General Electric Chairman Jeffrey Immelt, brokerage founder and CEO Charles Schwab, former Federal Reserve Chairman Alan Greenspan and New York Mayor Michael Bloomberg.

While the conference likely will yield some proposals that are "actionable and more immediate," others will lay groundwork for possible longer-term action, said Steel, who worked with Paulson at Wall Street powerhouse Goldman Sachs.

Paulson headed the investment house before coming into the administration last summer. Steel was its vice chairman until early 2004, when he left to head the Duke University board of trustees.

In November, a committee of business, legal and academic figures offered proposals to push back corporate-governance rules, class-action lawsuits against companies and auditors, and federal criminal prosecution of companies.

A second group, formed by the U.S. Chamber of Commerce, issued a report this week calling for "quick and decisive adjustments in the U.S. legal and regulatory framework ... to ensure that U.S. investor and business interests are best served in the global marketplace."

Scrap guidance

Among its key recommendations: Public companies should stop issuing quarterly earnings guidance and policymakers should seriously consider proposals to reduce the liability of accounting firms in litigation over company audits.

A key target of the business campaign is the internal-controls provision of the Sarbanes-Oxley anti-fraud law, enacted in 2002 at the height of the scandals that engulfed Enron, WorldCom and other big corporations.

Yet amid the rising chorus of complaints about regulation and warnings on U.S. competitiveness, some experts and regulators warn against dismantling the scandal-inspired governance and financial requirements.

"A key component of investor confidence is a regulatory framework that provides strong investor protection," said Joseph Borg, head of the group representing securities regulators in the 50 states.

"Some on Wall Street and in Washington are calling for weakening this framework," Borg said.

"With record profits on Wall Street and the echoes of Enron still reverberating, rolling back a system of regulation that has vigorously protected U.S. investors for decades could have profound and costly consequences if it went too far," Borg said.