Thursday, August 1, 2002

Monks calls for corporate responsibility

Published in the Current

Part-year Cape resident and former Republican U.S. Senate candidate, Bob Monks, spoke out against corporate accounting scandals July 29 at a Portland campaign event for Democratic Senate candidate, Chellie Pingree. He called the current financial, accounting and legislative climate “a watershed in America.”

Speaking alongside Bevis Longstreth, a former member of the Securities and Exchange Commission and also a part-year Maine resident, Monks called for Democratic control of both houses of Congress, saying it was the only way corporate financial reform would truly happen.

Monks was a Reagan appointee at the U.S. Department of Labor and has been a member of the boards of several public companies. A Republican, he challenged now Sen. Susan Collins in 1996, and now is supporting Pingree. “Who you vote for makes a difference,” Monks said.

He said the American economy has succeeded as a direct result of the trust investors had in publicly traded companies. “That has enabled our standard of living,” Monks said. But corporate and government irresponsibility has badly hurt the credibility of the system.

“We may have killed the golden goose,” Monks said.

He roundly criticized the U.S. Senate for regulating specifics of the accounting profession, saying legislators “can’t tell people how they should add.”

Corporate officers have had huge pay increases that do not relate to the value of the work they do at a company. Instead, Monks said, CEOs have formed a powerful group of people who serve on each other’s boards and increase their own salaries.

“When people change the rules, vote themselves the money and get 1,000 percent pay increases, that’s just wrong,” Monks said.

Also, he said, 75 percent of stock options go to the top five corporate officers in a company. Stock options are at the center of a national controversy about accounting practices, with companies claiming they are not expenses, while critics say stock options have value and therefore are expenses.

“It’s about Mr. Big getting bigger, ” Monks said.