Monitor Breakfast: Arthur Levitt Jr.

On the nature of the problems at Enron:

The "Enron failure is much broader than accounting failure... (There was) a vast cultural erosion cutting across every gatekeeper..."

I am "convinced it is very widespread. (It) comes up in many ways in many different companies... (The) phenomenon of a seduced board and audit committee is very very broad."

"Prolonged booms bring out situations that breed financial scandals. A culture of what (one) can get away with takes hold rather than what is best for the investor. The boom environment provides fuel for a meltdown that is at once economic and moral."

The "core is public confidence. Public confidence has been severely shaken. (It) is having a dramatic impact on markets. Companies are paying a higher premium for money" as a result.

"To restore public confidence you need an (accounting) oversight body with the power to subpoena documents." It must be "free of the taint of being funded by the industry being overseen." The (accounting industry trade group) AICPA has done " a dreadful job of overseeing the profession."

"Financial statements should be written in plain English. Plain English financial statements would be a very useful exercise."

"Behavior is already changing without rules. Humiliation and embarrassment tend to change behavior faster than rules and legislation. Legislation and rule-making can be effective in prolonging changes in behavior. "

"SEC investor education will have a richer return than rule-making."

"The very people calling for reform today are the very people who fought hardest against it."

Ordinary investors are " the least well-organized" and "the most underrepresented" constituency on the Hill. "Most congressmen are more moved by local business concerns than local investor concerns."