Chicago, IL
A seemingly unending series of corporate scandals has precipitated the most serious crisis of confidence in American business since the Great Depression.
The sudden and spectacular collapse of Enron, one of the largest and most celebrated American companies, shocked the nation last winter. The conviction of Arthur Andersen, among the nation's most prestigious accounting firms, and the bankruptcy of WorldCom, the largest in our history, confirmed the depth of the problem. And the drumbeat of accounting scandals at Global Crossing, Tyco, Adelphia, Halliburton, and others has raised the anxiety of the public concerning the enormous scope of the crisis in American corporations and capital markets.
American working families are the real victims of the greed gripping American business. Across America, hundreds of thousands of working families have lost jobs and seen their retirement security disappear as the companies they worked for lied to their employees, their investors and the public. At Enron, WorldCom and Arthur Andersen alone, corporate greed cost 28,500 workers their jobs, and nearly $2 billion in retirement savings. Overall, two million other workers have been thrown out of work by failing companies, and $1.5 trillion have been drained from worker retirement and savings funds.
Corporate wrongdoing is not the product of a few bad people. It is the systematic result of markets that were once well-regulated but are now trapped in a destructive cycle where short-term financial pressures combine with the greed of corrupt, corporate insiders manipulating conflicts of interest in the accounting and financial services industries to destroy companies, industries, and lives. American corporate governance is rigged to entrench and enrich speculators and corrupt, corporate insiders at the expense of employees, shareholders, communities, the companies themselves and the national economy.
In the wake of our corporate crime wave, Congress passed a much-needed corporate accounting bill. But cooked books are just a part of the problem and accounting reform is just part of the solution. We need a comprehensive reform agenda to restore accountability to America's corporations and integrity to our capital markets.
We must restore the regulations and strengthen corporate governance mechanisms necessary to assure that American corporations serve their economic purpose of creating the wealth on which our prosperity depends. Working families are demanding fundamental reforms in the way American corporations are organized, regulated and governed. And America's unions are uniquely positioned to lead the reform effort.
· We have to reshape our corporate priorities and put people first.
· We have to hold CEOs and corporate boards accountable and restore integrity to our capital markets.
· We have to give shareholders a voice in the companies they own.
· And we have to clean up corporate corruption of politics through public financing of congressional election campaigns.
We are not going to restore confidence in the stock market, or renew trust in American business, or bring equity to our economy unless we seize this historic opportunity. Working with allies from business and politics, academic and opinion leaders, and community and religious leaders, the American labor movement will lead an aggressive, multi-faceted campaign to end business as usual and drive the reform of America's corporations and capital markets.
First, we insist that the Securities and Exchange Commission and all three stock exchanges adopt higher standards for publicly traded corporations. The new standards must require companies to expense and index stock options they give CEOs or, better yet, ban them outright. They must prohibit CEOs from selling their company stock while in office. They must outlaw the use of offshore tax havens. And they must give workers and their pension funds real power to choose corporate directors so we can replace the aiders and abettors of corporate corruption with genuinely independent directors.
Second, we demand that Congress put people first by advancing the claims of workers for wages, benefits and severance to the front of the line in bankruptcy proceedings. As it returns from summer recess, we demand that Congress act to restore security to America's retirees. Congress should eliminate the incentives for companies to substitute defined-contribution savings plans for defined-benefit pension plans and allow workers to elect trustees of their pension and savings plans. Finally, Congress should resist all efforts to privatize Social Security, our nation's most successful social program.
But when it comes to the families victimized by the largest corporate bankruptcy in history, we can't wait for Congress. In the wake of America's two largest bankruptcies, America's unions are responding to the workers and retirees that are being left behind. As our third action step, we will go to court with a suit on behalf of the 17,000 laid-off WorldCom workers to get the severance they are owed—and we will win for them just as we won $34 million for the Enron workers.
But we are not going to leave corporate accountability and business reform to the lawmakers and the regulators and the courts alone. We have more than $6 trillion in workers' pension funds invested in American corporations, our country's single largest source of investment dollars. America's unions and pension funds they negotiated are our country's most active shareholders. The 2001 shareholder season was the most successful ever, and 2002 will be even bigger and more effective. Company by company, starting with the S&P 100, we will demand corporate accountability through shareholder action, cyber-action, suite action and street action.
Fifth and finally, we will demand political accountability by using the influence of 13 million union members and their families to change the way business is done in Washington. During the month of August, we will publicly link corporate criminals with their congressional co-conspirators while members of Congress are home in their districts. On Labor Day, we will launch the most aggressive effort in our history to replace anti-worker members of Congress with men and women who reject insiders and put people first. And then on October 19th, we will convene a "No More Business As Usual" National Day of Action to educate and energize workers and their families and motivate them to go to the polls and vote on November 5th.
We face an historic opportunity to reform America's corporations, to make them more accountable to investors and more responsible to employees, customers, communities and the national economy. Nothing could be more important for restoring confidence in American business and returning prosperity with equity to the American economy.
The union movement is uniquely positioned to lead this reform effort. As representatives of working families who - as employees, shareholders and citizens - are front-line victims of corporate abuse, we have both opportunity and obligation to put a stop to business as usual. We are determined to do so. On behalf of America's working families, we will use our voice and our power to restore corporate accountability and rebuild confidence in American business.