Washington D.C. - In commemoration of the Sarbanes-Oxley Act, Citizen Works today presented a list of eleven next step reforms that are necessary to continue the crackdown on corporate crime.

"Sarbanes-Oxley was a first step, though still awaiting full implementation by the SEC," said Citizen Works founder Ralph Nader. "But now is not the time for regulators and members of Congress to be sitting around patting themselves on the back. The only people who should be celebrating after one year of Sarbanes-Oxley are the corporate lobbyists who have prevented any significant reforms from being passed despite an avalanche of corporate looting of trillions of dollars from millions of workers and small investors and their jobs and pensions. To date, just one major CEO has gone to jail. If Washington is serious about getting tough on corporate crime, fraud, and abuse and continuing accounting shenanigans, more work needs to be done. Even President Bush's minimal rhetoric against corporate crime has not been reflected in an adequate budget for the DOJ's corporate criminal enforcement actions."

Citizen Works today presented these eleven next-step suggestions for corporate reform:

1. Give the owners more control over the corporation. Many of the corporate scandals involved corporate governance failures. Corporations should open up proxy ballots to minority shareholders and should introduce cumulative voting so that shareholders can democratically nominate and elect the corporate board of directors. Shareholders should also vote on major corporate decisions, like executive pay and mergers and acquisitions of $1 billion or more.

2. Rein in excessive executive pay. Despite repeated scandals and outrages, CEO pay remains obscenely high and largely unlinked to performance. As a start, the SEC should require shareholders to approve annually all executive compensation plans.

3. Expense stock options. Keeping stock options off the balance sheet allows corporation to continue to inflate profits and mislead investors. In order to have honest accounting, options must be counted as expenses. Congress should drop any effort to delay FASB's effort to finish this inevitable reform.

4. Regulate derivatives trading. Unregulated derivatives trading has been a key factor in most major financial scandals of the past decade. They also figured prominently in the recent Freddie Mac fiasco. Rules for derivatives trading should be enacted regarding collateral-margin, reporting, and dealer licensing in order to maintain regulatory parity and ensure that markets are transparent and problems can be detected before they become a crisis.

5. Crack down on corporate tax havens. Every year, U.S. corporations cheat the Treasury Department out of billions of dollars through off-shore tax havens. Some companies have even moved their headquarters there while keeping their operations in the United States. The government needs to start going after these tax cheats.

6. Eliminate the gap between what companies tell the IRS and what they tell shareholders. Corporations report very different incomes to the IRS and to shareholders. In 1998, the gap was $159 billion, up from $92.5 billion two years earlier. From 1996 to 1999, Enron paid no federal income tax, reporting tax losses of three billion dollars while reporting to its shareholders rosy profits of over two billion dollars. Either corporations are cheating the government or lying to shareholders - and either way it needs to stop.

7. Establish an annual corporate crime report and database. It is hard to fix the problem of corporate crime without good, well-organized data. To remedy this, the Department of Justice should establish an online corporate crime database and the FBI should produce an annual corporate crime report as an analogue to its annual Crime in America report, which focuses principally on street crime.

8. Enact tough contractor responsibility standards. MCI/WorldCom enjoys approximately $1 billion a year in government contracts despite having paid $750 million to settle charges in the largest accounting fraud case in history. The federal government should not be rewarding corporate criminals with taxpayer money. Instead, it should enact high standards for contractors.

9. Restore protections for investors. The Private Securities Litigation Reform Act of 1995 created the conditions for the financial scandals by making it harder for defrauded investors to sue the aiders and abettors of corporate fraud - the bankers, lawyers, and accountants. Until this law is repealed, defrauded investors will have little success in seeking restitution through the courts.

10. Enforce the Foreign Corrupt Practices Act. Yesterday, the Senate Finance Committee released a report indicating that the SEC and the Department of Justice failed to act on an IRS referral of "serious allegations" regarding potential violations of the Foreign Corrupt Practices Act by Enron. The disturbing question is: how many of these cases are not being aggressively pursued. Other potential violators include Tyco, Xerox, Halliburton and Accenture.

11. Let state regulators do their job. The SEC has indicated its support for legislation that would preempt the ability of states to work independently of the SEC to seek structural changes in brokerages and investment banks. As one state official said, the bill "would basically neuter state protections for investors." This bill must be defeated.