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Emanuel Wants To Undo Investor Reforms

From (not the candidate, the company) Bloomberg:

Emanuel Said to Press for Sarbanes-Oxley Exemption

By Jesse Westbrook

Nov. 2 (Bloomberg) — The Obama administration is pushing House Democrats to spare small public companies the cost of complying with investor-protection rules imposed after the accounting frauds at Enron Corp. and WorldCom Inc., according to people familiar with the efforts.

Chief of Staff Rahm Emanuel is seeking the reprieve from audit requirements under the 2002 Sarbanes-Oxley Act, the people said. Representative Carolyn Maloney plans to add the exemption, postponing compliance fees for firms with market values of less than $75 million, to a bill overhauling financial rules.

The administration may be seeking the delay, which investor advocates oppose, to help Democrats retain control of Congress, said James Cox, a law professor at Duke University in Durham, North Carolina. Unemployment climbed to a 26-year high of 9.8 percent in September, putting pressure on the Obama administration to bring it down before the 2010 elections.

“The Democrats are getting clobbered over the unemployment rate,” he said. “In a recovery, a vastly disproportionate number of new hires are made by small businesses. The White [sic] doesn’t want to be perceived as doing things that hurt those companies.” …

Emanuel, a former congressman who in 2006 helped his party win control of the House, has made it clear to Democrats on the financial services panel that he supports Maloney’s amendment, said the people, who declined to be identified because the discussions were private

U.S. Representative John Adler, a New Jersey Democrat, has proposed going further. His amendment would exempt companies with market values below $700 million from the audit rules until the SEC can figure out how to reduce their compliance costs.

Lawmakers in 2002 passed Sarbanes-Oxley, imposing checks on corporate financial statements after meltdowns at Enron and WorldCom shattered investor confidence. The law requires companies to have adequate safeguards to prevent misstatements and make sure employees don’t falsify results. Controls must be scrutinized and assessed by an outside accounting firm…

Business groups and venture-capital firms, which profit by investing before companies sell shares to the public, argue that the law imposes a disproportionate burden on smaller companies…

Small companies voluntarily adhering to the audit requirements said they spent $690,219 on average in their most recent fiscal year, according to an SEC survey in October. Businesses with market capitalizations from $75 million to $700 million spent $1 million and the largest U.S. corporations spent $3.99 million, the SEC said

“In 2002, in the midst of the tech bust and Enron corporate scandal, Democrats publicly flogged Republicans for not supporting the reforms Democrats are now working to undo,” said Lynn Turner, a former SEC chief accountant. “It seems outrageous that the Democrats in Congress and the White House are working so hard to use the current crisis to now undo these past reforms that have been proven to protect investors.”

What’s this?

Someone in the Obama administration trying to do something for small business on the QT?

(Of course we suspect that ultimately Mr. Emanuel is doing something for himself as well, if not first of all.)

Needless to say, however, once the danger of the 2010 elections has passed, they will get back to destroying capitalism, one job at a time.

But right now they have to save their phony-baloney jobs.

(Thanks to Sen for the heads up.)

This article was posted by Steve on Tuesday, November 3rd, 2009. Comments are currently closed.

6 Responses to “Emanuel Wants To Undo Investor Reforms”

  1. proreason says:

    There is something suspicious about this. There is something sinister about it.

    I think Steve’s point about saving their “phoney baloney jobs” is that destroying small business could lose the Statists the next election. That might be true, but I think that is one of their highest goals, and I fully expect to see them implement dozens more measures to do it. The 8% tax in the Health Care Cram-down is one of them. Halting the Bush tax cuts is another. Ruining Auto Dealerships is a third. There will be many more.

    Destroying small businesses is next in-line behind families and religion on the statist Hit List. The reason is that small businesses (like families and churches) are hard to control, and serve as social frameworks that enable people to bond and resist government domination. Destroying small businesses is much higher on the fascinst hit-list than Big Business, because Big Business is easy to control. If you don’t believe that, just look at what is happening in the country today, and what happened in Nazi Germany. Big Business lines up behind Big Government instantly, every time. Pharma, GE, Banks, GM, the list is endless.

    So I think there must be another shoe to drop. I cannot conceive of them doing something to help Small Businesses. There is a sinister objective in this. We just don’t know it yet.

  2. Liberals Demise says:

    Can you say, “Kickback” ponzi …….. Chi-Town style?

  3. TwilightZoned says:

    This guy’s nothing but a pit viper.
    We need a mongoose, or several, to take
    out this and all the other venomous snakes
    that are poisoning this country.

  4. sbaxter says:

    Clue: Private equity is targetting small cap public firms. Dropping the cost/savings of SOX compliance to the bottom line is the incentive.

    Rahm is attempting to stymie a windfall for private equity investment – in effect, mitigate the unintended consequences of over-regulation.

  5. canary says:

    This has been unchallenged on informal wikiepedia site for along time now.

    Emanuel is known for his “take-no-prisoners style” that has earned him the nickname “Rahmbo.”
    [21] Emanuel is said to have sent a dead fish in a box to a pollster who was late delivering polling results.
    [17] On the night after the 1996 election, “Emanuel was so angry at the president’s enemies
    that he stood up at a celebratory dinner with colleagues from the campaign, grabbed a steak knife and began rattling off a list of betrayers, shouting ‘Dead! … Dead! … Dead!’ and plunging the knife into the table after every name.”
    [7][5] Before Tony Blair gave a pro-Clinton speech during the impeachment crisis, Emanuel reportedly screamed to Blair’s face “Don’t fuck this up!” while Clinton was present; Blair and Clinton both burst into laughter.[22] However, by 2007 his close friends were saying that he has “mellowed out.”[10] ….that chronicle these and other quotes and incidents.[23][24][25][26]

  6. Tater Salad says:

    Please, please small business owners, don’t cave in to the White House and let them get their hooks into you. Do NOT accept ANY federal dollars. This is exactly what the Obama administration wants you to do. They will then “own” you and dictate to you on how to run your business and how to support “their agenda”. Please do not fall for this.

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