Business Week On Line http://www.businessweek.com/bwdaily/dnflash/may2006/nf20060523_2210.htm
MAY 23, 2006
NEWS By Dawn Kopecki
Intelligence Czar Can Waive SEC Rules Now, the White House's top spymaster can cite national security to exempt businesses from reporting requirements President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities- disclosure obligations. Notice of the development came in a brief entry in the Federal Register, dated May 5, 2006, that was opaque to the untrained eye.
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Of course there is a real strong incentive for corporations not to take advantage of this doubtful benefit. Who's going to invest in some firm that isn't at least as transparent as a 10-K or a 10-Q can make it? Not me, that's for damn sure. How are the ratings folks like S&P going to evaluate a firm or recommend m that doesn't disclose its finances? What responsible pension fund or mutual fund is going to buy X Co. stocks on no basis at all?
It's especially ironic that Bernake does this the day that Lay & Skilling go down for cooking the books. I think it's just Bush-symbolic -- the public ain't got no right to know nothin.' Here, however, for once the more or less free market creates powerful reasons for companies to disclose their finances, whatever the SEC says they are technically required to do.
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