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| Repeal Sarbanes-Oxley |
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Sign the petition to repeal Sarbanes-Oxley and help grow the American economy. The San Francisco Chronicle
November 5, 2008
By Newt Gingrich and David Kralik
It has been six years since Congress passed the Sarbanes-Oxley Act after the devastating accounting irregularities of Enron and WorldCom. While the intent of the law was to prevent corporate fraud, there is growing evidence that it has done more harm than good, and is undermining the venture-capital industry in Silicon Valley. Now, with signs that our economy is moving toward recession, Congress should take this opportunity to repeal the law. Rep. Michael G. Oxley, R-Ohio, recently said in an interview with the International Herald Tribune that Sarbanes-Oxley was passed in haste. "Frankly, I would have written it differently. ... Everyone felt like Rome was burning." Sarbanes-Oxley went too far in regulating corporate governance, resulting in at least three unintended consequences. -- It was insufficient at preventing insolvencies and accounting shortfalls in companies such as Bear Sterns, Lehman Bros., American International Group (AIG) and Merrill Lynch. Estimates from leading figures in the venture-capital community indicate the average company will now take 12 years before it can successfully issue an initial public offering (up from five years pre-Sarbanes-Oxley) because they do not have enough capital to cover the estimated $4.36 million hidden tax in yearly compliance costs, according to an estimate by the Financial Executives International. (The initial estimate from the Securities and Exchange Commission was approximately $91,000 per company on average.) Sarbanes-Oxley turned out in practice to cost small companies 50 times more than the SEC estimated. Oxley said the law gave the accounting industry "almost carte blanche to do almost everything they wanted to do, which turned out to be far more expensive than anticipated. ... They just went crazy." In addition, by creating criminal liabilities for board members, Sarbanes-Oxley has made it harder to find experienced members to join corporate boards. -- It initiated a movement among smaller public companies to return to private status or merge. In 2006, the law firm Foley & Lardner LLP conducted a survey of 114 public companies on the effects of Sarbanes-Oxley. Twenty-one percent of companies were considering going private, 10 percent were considering selling the company, and 8 percent were considering merging with another company. These respondents mostly were companies with less than $1 billion in annual revenue. -- It is resulting in a trend where companies choose to go public on foreign, not American, stock exchanges. In 2005, a report by the London Stock Exchange cited that about 38 percent of the international companies surveyed said they had considered issuing securities in the United States. Of those, 90 percent said the onerous demands of the new Sarbanes-Oxley corporate governance law had made London listing more attractive. Continue reading this article here. |
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 By
Dumbhillbilly @
Tuesday, November 25, 2008 3:39 PM
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This is a good example of how government in general operates. I'm involved in local government and find this at all levels of government. They almost always react to problems, never become proactive, This law, the bailouts and other laws are passed in reaction to happenings. Government is reacting to the mortgage mess with plans to keep more homeowners from being foreclosed. Nothing is being or will be done for the ones that have been foreclosed on already. If our government would have been proactive and worked out a plan to help homeowners to start with we would not have the mortgage mess which led to the financial crisis we are in.
Just another example of the government catering to the rich. They didn't and would not do anything until it got to the financial institutions.
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By
JeffS @
Sunday, November 23, 2008 8:41 AM
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Government regulation of commerce has often only proven one thing, politicians know little about business.
While not cast aspersions on those that chose political public service as a course in life but it needs to be said that if you've never run a business how are you to know what affects rules, laws and regulations will create? Regulatory law is often reactionary and is meant to stem issues that do not represent the sum total of all commerce or even the preponderance of a market segment.
Broad and sweeping changes are oft made from the malfeasance of a few. Sarbanes-Oxley (SOX) is one of those changes.
Companies that are fiscally sound and believe in their chartered core principles will never have issues that SOX was created to address. Having to do compliance audits is only a costly redundancy than an otherwise well run company would not need.
That is the majority of American Corporations.
Yet, politicians in a reactionary twitter to be seen as 'on the job' and thereby a positive reaction in polling, will creation ill-thought and over-reaching law that only inhibits commerce instead of protecting those they say the laws were created protect.
Corporations in America are seemingly demons that can be subject to endless beat downs and receives the least well thought government intervention.
Would you trust congress to fix your car? Why then do you think that congress can fix commerce? They know about as much about commerce as they do about what top dead center is on a '71 Ford LTD.
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By
erniegs @
Thursday, November 20, 2008 11:22 AM
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For_The_Gipper
Use your Spell Checker...............
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By
Linda1776 @
Wednesday, November 12, 2008 2:07 AM
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I work at a major telecommunications company and Sarbanes-Oxley hinders productivity at every turn. While providing employment for auditors, it does nothing to really secure data. The amount of revenue it drains from a large corporation is appalling.
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By
For_The_Gipper @
Tuesday, November 11, 2008 8:28 PM
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This would probally go better on the RNC. but it should be debated.
Really dissapointed Newt turned down the RNC chairmanship. Micheal Steele is a good guy though and at least with him we can't be lambested as being racist everytime we nail Obamas horrible plans. Have you seen this guys recent actions? It looks like he will rule as a far left idealouge. I pray I am wrong.
Anyway I find it funy Liberal commentators are disscusing the future of the GOP.
I had a couple of thoughts on somethings we did wrong. First the hispanic vote. It should be obvouis why we lost it. The DHS raids. Sadly enforcing the law is not good it seems.
How would we counter this? I guess like we do social security. Just repeat this. We welcome all immagrants. We would like to help all law abiding immagrants find work and help them attain citinship through the system. Immagration reform was probally the best idea haha. We need a strong border though.
White women we can easily win. Our goal should be to help promote self made women up the ladder of oppurtinunty. Stay of the abortion issue unless we have to. We have to stay Pro-life or lose a incredible portion of our party.
If we encourage Republican women to run in 2012. I would like to see 2-3 women run in the GOP primary. We could easily win 70-80 percent of the women vote.
Asians maybe. I am not really sure on this. They are tradintoally conservative, however they are strong on stuff like global warming. Maybe talk about free-trade with China.
Talk about working with the Chinese to help make products safer for Asians and Americans?
We might as well give up on the African-American vote for 2012. Maybe after we could re-think the approach.
I hope someone will pass this on to the RNC. I don't feel like typing this again.
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By
jy22077 @
Tuesday, November 11, 2008 5:22 PM
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TO ALL MCCAIN/PALIN SUPPORTERS!!!!!
Obama Citizenship Controversy: A Call to Action
http://www.youtube.com/watch?v=gnZ68ZBR1fc
PLEASE SPREAD FAR AND WIDE!!!!
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By
mamawgrnp @
Tuesday, November 11, 2008 3:24 PM
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NEWT PRESIDENT 2012,SARAH VICE PRESIDENT! WHAT A TEAM THAT WOULD BE TO REALLY SHAKE UP WASHINGTON!!
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By
krallion @
Tuesday, November 11, 2008 3:04 PM
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According to a study by the Wharton Business School, the number of American companies
deregistering from public stock exchanges almost tripled during the year after Sarbanes-Oxley became law.
Costs Sarbanes-Oxley places on small business drives these firms
and foreign firms to find a more friendly business environment, naturally outside the USA.
Is this what we want? I have not mentioned the hassle factor yet.
I remember reading about an English Economist who wrote about the costs
in time of compliance with rules, laws and regulations and said it added costs to the
production and should be considered as lowering efficiency. American economist did
not agree and Dr. Milton Friedman invited him to present his case at a dinner with
him and other economists. Dr. Friedman was the last hold out, but by the end of the
dinner, the whole group did agree that it was a cost. I was in business. I quit like many others.
The time and costs of staying within the laws from local, state, and federal
agencies was just not worth it, because if you are late or break any law, you are going to jail.
Dr. R. Voelker
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By
jdubyahoyt @
Tuesday, November 11, 2008 12:00 PM
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Mr. Speaker,...
I could not agree more with the sentiments communicated to you in the comments below.
Let's use your approach:
1. Values - you communicate our values better than anyone else today.
2. Vision - your vision for what can make Washington work is right on, from a world that fails to a world that works.
3. Metrics - you understand (a) being in the majority is key, (b) republicans all need to speak with one clear message and agenda, (c) every piece of legislation should be measured at how it affects jobs in the free market, and (d) time and money wasted on deciding how to avoid taxes is hurtful to our economy.
4. Strategy - no one is better at developing strategies for a majority takeover, one that will actually govern conservatively and get things done.
5. Projects - American Solutions and CHT are a triumph and will continue, but the RNC needs your leadership.
6. Tasks - RUN THE RNC and help us take our country back!
We are a center-right nation,...it's a fact and exit polls (if you trust them) prove it, along with the results of several ballot initiatives throughout the country.
What we are not, however, is going to give those that do not stand up for what they believe in both on the campaign trail and once elected, a passing grade.
Campaign on conservatism then move to the middle once elected in order to seem bi-partisan and able to work with those across the isle? FINE,..YOU'RE OUT!
When Democrats and Republicans get along, the people get screwed. In order for them to get along, principles have to be comprimised,...and we can't afford to sacrifice our principles. We are a center-right country looking for someone to articulate our values nationally,....and you running the RNC is exactly what we need right now.
...then we'll talk about http://www.Newt2012.com
We've blogged about it in Orlando:
http://www.whatyoucandoforamerica.com/profiles/blogs/sarah-and-newt
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By
harley2 @
Tuesday, November 11, 2008 11:26 AM
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Hey wouldn't it be nice if the big three where allowed to make things that people will buy. The goverment is now telling them what to make an now americans are being told what they will buy.You only have to turn to the (greenies) AKA Comunist an say thank you for killing our freedom an spirit. Idiot people educated by idiot idealog = dependent on goverment for solutionins. Come on people wake up the invasion is happenning right before our eyes.
I 'am just an avearge schmo an with my gut feeling,I feel doomed. I WANT ACCOUNTABILITY ! The solution starts out WE THE PEOPLE . We have a contract with America lets inforce it !
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By
For_The_Gipper @
Monday, November 10, 2008 4:54 PM
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Well my point on coming here was say hoe dissapointed I am with the continuous hand outs everybody asks for from the Fedral Goverment. I will get to that latter.
I read an interesting article saying Newt was open to the idea of RNC chirman which I am enthusied by. I also noticed many other people love the idea as well. Some mentioned Micheal Steele as well. More for Newt though.
I find it terrifying all these companys failing. If GM fails will it hurt the U.S. probally. Would you rather see these companys fail and boot there Unions, re-organize and come back stronger yes.
I am no economist but I am highly skeptical if they fail it will have a domino effect. Will Volkswagon or Toyota go under? Of course not.
There is also these senseless sense of Patriotsim. I understand it but I think it would be more Partiotic so they can come back stronger.
Economist are right about one thing there is already a domino effect, it is going from one handout to one handout. How long must this continue?
We keep usuing money we don't have. It seems like a wierd sense of economy. Where the Fedral Goverment should be the main supplier of Fedral business. The Fedral Goverment gets money from loans and taxpayer dollars. Take the buisness away in that cycle and you get my point.
Charles Krauthammer (a man I absolutly love on Brit Hume, like Newt) mentioned Vladmir Putin in a postive light.
I like to learn from our enemys and I hate know one. It is painful but I know I musn't hate.
There was one thing I reading on a goverment factbook that was pretty impressive. It said within ten years after the Soviet Union collapsed Putin was able to implement reforms and help pay off ALL of the Soviet Unions debt with there oil based economy.
Now having an oil based economy was probally good then but not with these prices. Anyway you get my point.
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By
CowboyJoe @
Sunday, November 09, 2008 10:31 PM
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The creeping Socialism has started.
Be wise with your money because we are in for 4 years of pain. It's time to break out the shoe box and if you are one of those Americans who is interested in owning a gun, I suggest you hurry to your local gun shop and apply for your license.
Mark my words. Isn't that right Joe Biden?
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By
42long @
Sunday, November 09, 2008 10:22 PM
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Obama will likely use his executive powers to block new drilling leases in Utah and anywhere else.
President Barack Obama...Change you will feel !!
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By
SHelby350 @
Sunday, November 09, 2008 4:21 PM
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I have 18 years experience as a corporate internal audit director and Certified Internal Auditor (CIA, not CPA). A major impact of SARBOX was to place much larger emphasis on hiring Internal Audit Managers and staff who were CPA compliance types who were happy doing SARBOX compliance. It also led to much more outsourcing of internal audit departments to CPA firms and specialists, rather than having professional CIA's running audit departments who focused on operational audits that caught business mistakes before they became a reason to cook the books to hide losses. I had too much experience in my 18 years of Corporate Internal Audit management with Big 8/6/4 CPA firms and compliance types who had no aptitude for identifying unstructured business system problems and missed losses created by them. In my mind, CPA firms, and SARBOX compliance systems focus on checklists and developing audit evidence to survive lawsuits. They miss new methods used by poor corporate managers to skirt controls and who find a way around them to get commissions, make numbers, etc.
Get rid of SARBOX, and stop outsourcing internal audit to CPAs and get professional CIAs and you might really seem some reduction in risks. Think I am wrong? Just look at the major job boards, IA outsourcer websites, or Robert Half websites - they all just want big 4 CPA's , and rarely is there a mention of using professional Certified Internal Auditors. CPAs are compliance people, who use a four level "staff" system, but instead, to control ever changing systems in corporations you need people who can deal with unstructured business systems, not need a reference manual and checklists. CPAs, who use inexperienced staff on the front lines no longer provide adequate oversight.
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By
SHelby350 @
Sunday, November 09, 2008 4:15 PM
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I have 18 years experience as a corporate internal audit director and Certified Infternal Auditor (CIA, not CPA). A major impact of Sarbox was to place much larger emphasis on hiring Internal Audit Managers and staff who were CPA compliance types who were happy doing SARBOX compliance. It also led to much more outsourcing of internal audit departments to CPA firms and specialists, rather than having professional CIA's runnin audit departments who focused on operational audits that caught business mistakes before they became a reason to cook the books to hide losses. I had too much experience in my 18 years of Corporate Internal Audit management with Big 8/6/4 CPA firms and compliance types who had no aptitude for identifying unstructured business system problems and missed losses created by them. In my mind, CPA firms, and SARBOX compliance systems focus on checklists and miss new methods used by poor corporate managers to skirt controls and who find a way around them to get commissions, make numbers, etc.
Get rid of SARBOX, and stop outsourcing internal audit to CPAs and get professional CIAs and you might really seem some reduction in risks. Think i am wrong? Just look at the major job boards, IA outsourcer websites, or Robert Half websites - they all just want big 4 CPA's , and rarely is there a mention of using professional Certified Internal Auditors. CPAs are compliance people, who use a four level "staff" system, but instead, to control ever changing systems in corporations you need people who can deal with unstructured business systems, not need a reference manual and checklists. CPAs, who use inexperienced staff on the front lines no longer provide adequate oversight.
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By
capn72 @
Sunday, November 09, 2008 12:43 PM
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This sounds like the right cause at the absolute worst time. We were hammered in the election for being pro wall street and ignoring main street. We need to put all our energy into looking at each of our loosing arguments and turn them around.
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By
alexcc @
Friday, November 07, 2008 11:54 PM
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Laws that protect public stakeholders from corporate misdeeds have become a necessity. However, Sarbanes-Oxley Act of 2002, like many reactionary laws have latent and far-reaching consequences. For example, the SOX Act has also been interpreted by the court system to hold corporations and executives legally liable for negligent and fraudulent actions or inactions related to disaster-business continuity planning. This Act, like the Foreign Corrupt Powers Act of 1977 is not intended to utilized in such a manner. I agree that the time has come for SOX to go away.
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By
lechad2 @
Friday, November 07, 2008 2:12 PM
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Reactionary legislation all too often has these unintended consequences. Just look at McCain-Feingold.
-the road to hell is paved with good intentions
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By
pastor_chris @
Friday, November 07, 2008 1:11 AM
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By
pastor_chris @
Friday, November 07, 2008 1:07 AM
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Newt I totally agree with you about this you are spot on. Regulation can be good but only when they are effective, if not they become a hinderance and an obstacle to economic growth. The tricky part is how to get congress to actually consisder this. At this point due to the political climate people are so anti-wallstreet that attempting to repeal this legislation would be perceived as trying to help out the Baron's on Wallstreet. Also there are few Republicans in the house that have the political courage or clout to make this happen.
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By
JackJack @
Thursday, November 06, 2008 4:46 PM
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The notion that all regulation is good is as unfounded as all deregulation is bad. If SOX was thrown together and has proven not to be effective, get rid of the bad and enhance the good. This should be common sense. But common sense as well as a strong understanding of economics and business are not in great supply in Washington. Less so after Jan. 20th.
I would like to see more transparency in government, especially in the laws that are passed. I would like to see a lot of these bills broken apart and a permanent record kept of who voted for what part of a bill and when. This would go a long way to clarifying just what the law makers are voting for. It just might make them more aware of what they are voting for.
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By
ericrobinson @
Thursday, November 06, 2008 4:21 PM
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Seriously, does anyone think that serious entrepreneurs are going to be starting or expanding companies until the actually see what the new administration and Congress are going to do with taxes and regulations? Russia and Europe should be offering them havens for their risk and genius, and let the Americans live with their decision to elect a socialist.
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By
bgensler @
Thursday, November 06, 2008 2:55 PM
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The only way to repeal these nonsensical regulations is to first rebuild the Republican party from the grass roots into an entity with the political capability to do so. As it stands now the Republican party is corrupt, lacking anything resembling a coherent political message and is totally out of touch with reality and its rank and file members. We need to pull this party up by its boot laces and get it started back down the path of responsible physical conservatism.
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By
txusul @
Thursday, November 06, 2008 11:14 AM
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I agree but I think that repealing Title X of the Congressional Budget and Impoundment Control Act of 1974 is way more important.
It removed the President's unilateral ability to simply not spend money Congress appropriates. That power was the classic counter argument for a line item veto. And repealing Title X canonically defeats the SCOTUS' argument that line item veto requires a constitutional amendment.
impoundment was a check on Congress, and clearly would be a way McCain could have ended earmarks.
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By
Common Sense @
Wednesday, November 05, 2008 11:07 PM
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"...... Sarbanes-Oxley was passed in haste. "Frankly, I would have written it differently. ... Everyone felt like Rome was burning." ......"
This was my concern about the Bailout... I felt that the slight pause imposed by Sen. McCain's return to DC was a good thing in that is at least provided a moment of consideration for what was being done. Yet, I fear that like SOX it was a reactionary and far too broadly based action. Shame on me as an American taxpayer and citizen for not keeping up on the policies & procedures of the Congress. It's unfortunate that the "average American" can't even understand the legislation that is shoved down our throats... let alone that the Congress often don't even read a finalized version (even if they are available). This alone, to me, is a travesty. This practice lends itself to encourage dishonesty and questionable outcomes, all the while the American people are trusting the "judgment" of our representatives to vote on our behalf. The more I discover about the way things "work", and I use that term in light of the notoriety attained by the "100th Congress", the more I am disheartened. Perhaps this election has caused others, like me, to awaken to a new reality of our responsibilities as citizens. May God help us.
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By
NeoArmanino @
Wednesday, November 05, 2008 6:40 PM
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What timing! Yesterday all of America voted for more oversight and today you call for greater deregulation. But sure, let's just deregulate everything--why listen to the American public?
Investors only lost $1.2 trillion in the first deregulation debacle (prior to SOX), and when the banking and commodities businesses were deregulated (institutions not covered by SOX) the American taxpayers have only had to put in $5 trillion in different types of bailouts (so far) to correct the problem.
You claim that it's "too costly" for corporations. But Business Week pointed out on October 29th (just a week ago) that corporations made 10.8% per year for the last 8 years straight while the American taxpayer's average salary during this same period fell 1% overall (and that's not even adjusted for inflation--then it fell by over 35%). Yep, Sarbanes-Oxley sure is "hurting" the corporations and making them less competitive.
How about some protection for Middle America--those of us who pay for these deregulatory schemes which have allowed over $62 trillion in credit default swaps to bankrupt the world.
Note that both Obama and McCain ran on a platform of more government oversight of financial institutions--only you and George Bush are still are proposing less oversight.
Look Newt, if you wants to repeal Sarbanes-Oxley, you are going to need to run for Congress again--you are not going to be able to convince the new Democratic Congress (or even the current Republicans in Congress) that this is the time to take chances and deregulate the financial institutions once again.
Good luck to you--but I see this as the wrong battle to be fighting--at least at this time.
G.K.
San Jose, CA
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By
vinnie999 @
Wednesday, November 05, 2008 11:59 AM
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