In a major speech in New York, President Bush will try to reassure investors shaken by the growing list of accounting scandals at American corporations. Among his expected recommendations: harsher penalties, such as prison time, for executives who intentionally submit false or misleading financial statements. Tuesday's address comes as Democrats have sought to portray the Bush administration as too friendly with big business and unwilling to pursue comprehensive regulatory reforms.
Two key WorldCom figures were to refuse to testify at a House hearing into $3.8 billion in concealed expenses at the telecommunications giant. Former chairman Bernard Ebbers and former chief financial officer Scott Sullivan intended to cite their Fifth Amendment right against self-incrimination, according to the chairman of the Financial Services Committee. In written testimony released to the news media in advance of his appearance, current WorldCom chief executive John Sidgmore apologized and promised that his new management team was "committed to our company's survival."
Calls mounted for the resignation of Securities and Exchange chairman Harvey Pitt. In a New York Times editorial, Sen. John McCain (R) of Arizona said Pitt "has appeared slow and tepid in addressing accounting abuses" and hasn't distanced himself enough from Wall Street, where he worked as a lawyer prior to the SEC post. Senate majority leader Tom Daschle (D) of South Dakota, urged Pitt's removal Sunday.
In Arizona, firefighters were being sent home or reassigned, after the largest blaze in the state's history was declared fully contained Sunday. About 1,100 continued to work fire lines, down from a high of four times that number. Two wildfires, started by a lost hiker and a part-time firefighter seeking employment, combined to burn more than 468,000 acres and 467 homes, causing an estimated $28 million in damage.
As floodwaters began to recede from last week's deluge in central and west Texas, the first residents returned to start cleaning up their damaged homes and businesses. With property damage estimates ranging from the tens to the hundreds of millions of dollars, Gov. Rick Perry (R) declared disasters in 17 counties, in addition to the 13 already accorded that status by Bush.
Flooding brought Nebraska Gov. Mike Johanns (R) to Ogallala, in the west of that state. "I knew the damage was extensive, but it was worse than I anticipated," he said following Sunday's tour. Thirty inches of rain the previous day washed out roads, causing one fatal accident, and inundated 65 mobile homes.
Jury selection began in Boston for the federal trial of two white supremacists accused of plotting to bomb Jewish or African-American targets. Prosecutors maintain that Leo Felton and Erica Chase hoped to incite a "racial holy war." Police found bomb-making materials and terrorism literature at their apartment last year after the pair were arrested on counterfeiting charges.