Carl J. Mayer Statement

Statement of Carl J. Mayer
January 21, 2002

Enron makes Teapot Dome, the Penn-Central bankruptcy, and the Ivan Boesky and Michael Milliken Insider Trading scandals look like raids on a child's Piggy Bank. Enron is the Frankenstein of deregulation. Like mad scientists inebriated on cash, corporate lobbyists and willing politicians of both parties deregulated virtually everything there is to deregulate. The last decade's volatile mixture of energy deregulation, securities deregulation, banking deregulation, financial deregulation and accounting deregulation imploded and workers, investors, retirees and taxpayers are left with the bill.

The American people will never accept the results of an investigation into Enron directed by Democrats and Republicans, a majority of whom has received cash from BOTH Enron and Arthur Anderson. This violates the most ancient doctrine of Anglo-American jurisprudence that one should not be a judge in his own cause.

There is only one solution. President Bush, Majority Leader Daschle and Attorney General Aschcroft should all agree to appoint an Independent Counsel unrelated to the two parties to investigate and determine the root causes of the Enron debacle. That Independent Counsel can then enlist in the effort ex-prosecutors retired accountants, law professors and others with no stake in this tainted system of cash for influence.

For this investigation to be credible someone must head it with no future stake in the political system. Preferably it should be someone like former U.S. Attorney Mary Jo White or a member of a Third Party, not a Democrat or Republican.

How could the American public ever accept an Enron investigation conducted by Democrats and Republicans when 71 Senators and 188 Congressman have received Enron lucre? Moreover, 94 current senators and more than half the current members of the House have received some campaign donations from Enron's auditor, Arther Andersen, since 1989, according to the Center for Responsive Politics, a nonpartisan group that studies the influence of money in politics. (Almost all the members of the House Energy and Commerce Committee - an Investigative Committee- got Enron or Arthur Anderson cash as have many other self-appointed Congressional Keystone cops.)

I came here today to propose modest reforms based on my past writings as a law professor and attorney. I wrote an article in 1995 calling for a greater statute of limitations period to allow investors to uncover fraud by accountants. I wrote an article in 1992 calling for enhanced penalties for corporations convicted of crimes. Sixty Minutes asked me to appear in 1996 to analyze the influence of money on politics and I advocated campaign finance reform, as I had in 1995 in an article in the New York Times. We need to repeal the Private Securities Litigation Act of 1995 which made recovery by plaintiffs against accounts (i.e. Arthur Anderson in case of Enron) much more difficult. Today, in the light of the Enron debacle, any one of these reforms seems more than necessary but also quaint and inadequate.

Only a thorough and far-reaching investigation of this collapse, led by a truly Independent Prosecutor can inform the citizenry and point to prophylactic solutions.

The Framers of the Constitution envisioned a system of government whereby each branch of government would watch the other in a balance of power system. The one development the Framers did not anticipate was a system in which all three branches of government have become unduly influenced by what is today the dominant power in American politics: unaccountable global corporations. In that situation, the citizens of the country must step in and reform the process. A first measure in that process is a thorough and honest investigation which will reaffirm Felix Frankfurter's maxim - that underpins the Securities Laws of the United States -- that "sunshine is the best disinfectant."