Please don't shoot anybody in the face once you read this.
Want to be sure that those pesky government auditors and compliance officials go away? Be sure to re-up your contribution to the GOP election campaigns!
President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations.
Sarbanes-Oxley? What's that?
I can't wait to see the next quarterly earnings reports from Boeing, Lockheed Martin, Chevron, and Diebold.
Maybe even Raytheon and Northrup-Grumman can benefit. And now since the phone companies are in bed with the NSA, they can skimp on their audits too.
(Too bad this came too late to save Bush's buddy Ken Lay, huh? Who needs the creative accounting skills of Scott Sullivan and Andy Fastow when you just ... waive their compliance requirements? GENIUS!)
Oh, and of course, the grand-pappy of 'em all, Halliburton. They can't account for billions of borrowed dollars given to them by the government, so let's just wave the unitary executive wand and make the problem disappear!
I have a preview copy of the next Exxon quarterly earnings report, too. Wanna see?

All kidding aside...
In the document, Bush addressed Negroponte, saying: "I hereby assign to you the function of the President under section 13(b)(3)(A) of the Securities Exchange Act of 1934, as amended."
A trip to the statute books showed that the amended version of the 1934 act states that "with respect to matters concerning the national security of the United States," the President or the head of an Executive Branch agency may exempt companies from certain critical legal obligations. These obligations include keeping accurate "books, records, and accounts" and maintaining "a system of internal accounting controls sufficient" to ensure the propriety of financial transactions and the preparation of financial statements in compliance with "generally accepted accounting principles."
...it's not very funny.
Bush apparently can now deputize his minions, and vested with "the power of the president," anyone so deputized can exempt publicly-traded companies from keeping straight books.
And since this is all about "national security," expect the SEC to receive the same reception that the FCC got from Deputy Alberto's Department of Justice.
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I'm surprised the financial
I'm surprised the financial markets haven't reacted negatively to this news. All the information for making investment decisions, whether by an individual or by a mutual fund manager, is now completely worthless.
Wow. Guess that means that
Wow.
Guess that means that quite a few companies could hide lots of stuff. Never knew that existed. Seems that (per the article) presidents since carter have always been able to do this but Bush is the first to delegate it. Seems the defense contractors could make out like bandits.
Delegation is nothing knew, really, as many agencies (DEA, USDA, ATF, JD, etc.) have been delegated decision making authority. It's just another symptom of the bureaucracy.
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SayUncle
Can't we all just get a long gun?
"Yeah, Uncle. Fuck it, let's
"Yeah, Uncle. Fuck it, let's just have a dictatorship. "
Not sure where that came from but it seems like we're headed more toward a bureaucracy (meaning ruled by bureaus, not the typical meaning of the word).
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SayUncle
Can't we all just get a long gun?
To err is human. To forgive is divan.
You speak more truth from the Bushido -- the way of the armchair warrior -- Mr. Metulj.
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Wasabi peas are people! They're people!
That was kinda my point...
Seems the defense contractors could make out like bandits.
Not that they don't already.
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Wasabi peas are people! They're people!
Nuh uh
Actually, I'd describe this and everything else the Bushies do as anti-bureaucratic. Max Weber defined the principles of an ideal bureaucracy in Wirtschaft und Gesellschaft. To be effective, a bureaucracy must:
The Bushies' approach to each of these is, of course, the polar opposite. They're apparently bent on fucking up the federal government's source code beyond recognition, so the whole system shuts down.
That's not bureaucracy, it's idiocracy.
Politics Aside...
I wouldn't lose any sleep if SOX went away overnight. The cost of compliance for our IT department is substantial (20% of our labor cost, plus a few six-figure consultants), not to mention the fact that it takes money that could be spent on new software development and puts it into the costs of SOX compliance. That is not to say that I am anti-compliance. But the idiocy of SOX is all too apparent.
Negotialis obscuro
I suppose I should expand on that thought a bit.
I have no idea whether Sarbanes-Oxley accomplishes what it was meant to in the first place. However, it was born out of a spate of fraud and mismanagement and "creative accounting" that made it look like some remedy would be necessary.
Having lived through the Worldcom debacle from the inside? Yeah, something needed to be done. Losing my job and over a quarter of my vested 401K not only sucked, it didn't need to happen.
I sat in a meeting not two months before that news all broke where the company COO, Ron Beaumont, addressed the field and told everyone there that salary and commissions weren't what made working at Worldcom worthwhile. It was the stock options package.
I guess he meant "if you need toilet paper or a fish wrapper," because not one of my options was ever worth a dime. The money that I earned and socked away in my 401K (15%, every paycheck, which I maxed out every year) was matched with company stock, which left me with a whopping $136.58 after the class action was settled this year. (I don't think that was even one paycheck's worth of hard-earned contribution.)
I note that it's the height of ironic hilarity to pretend that there's a need for transparency and accountability (which SOX was supposed to provide) when you're potentially just going to grant a reprieve to anyone who does business with the government, all within the span of 3 years.
It's the MTV of policy -- business responsibility for the attention deficit crowd. (And say what you will, SOX was a boon for public accounting practices, all of whom have lucrative side businesses in consulting. You have to admire the technique.)
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Wasabi peas are people! They're people!