The recent outbreak of corporate misconduct (revealed over the last several months) has not only sent shockwaves through the stock market but has also sent lawmakers scurrying for cover as the mid term elections approach. Concerned over how the current scandals and shaky economy will affect their reelection bids, members of Congress worked feverishly throughout July to pass legislation that would hopefully restore investor confidence and avoid a backlash at the polls come November.

The recent outbreak of corporate misconduct revealed over the last several months has not only sent shockwaves through the stock market but has also sent lawmakers scurrying for cover as the mid term elections approach. Concerned over how the current scandals and shaky economy will affect their reelection bids, members of Congress worked feverishly throughout July to pass legislation that would hopefully restore investor confidence and avoid a backlash at the polls come November.

Millions of employees and investors have been devastated by the deceptive accounting practices of companies such as Enron and WorldCom, and as each new scandal sent the market plunging to a five year low, even Republicans, who are normally resistant to government interference in the business sector, became convinced that additional reforms and oversight were needed to ensure corporate responsibility and to protect economic stability, not to mention to protect themselves from criticism for their typically hands off approach to corporate regulations . The Accounting Industry Reform Act, which was rushed through Congress before the lawmakers adjourned for their August recess, was designed to reassure nervous investors by discouraging fraud. The bill included measures that hold corporate executives personally accountable to correctly report their companies' financial condition or risk being penalized with up to 20 years in prison and $5 million in fines. Also included in the legislation were previsions for increased oversight of the accounting industry and stricter penalties for obstruction of justice, such as a 20 year sentence for document shredding, like that which the accounting firm of Arthur Andersen was found guilty of during the government's investigation into Enron's collapse.

Even though there was widespread bipartisan support for the Accounting Industry Reform Act, Democrats have already begun to exploit this issue against the traditionally pro business Republicans as both parties battle for control of Congress during this election year. With the Democrats leading the Senate by only one vote and the Republicans holding a slim majority in the House, both parties were already preparing for a contentious campaign season. However, the Republican Party's reputation as either the champion or lapdog of corporate America will now undoubtedly hurt their chances on Election Day. In fact, the Democrats have already seized the opportunity to capitalize on the public's increasing mistrust of corporations by condemning Republicans for their close ties to big business, and only adding fuel to the Democrats' fire is the fact that both President Bush and Vice President Cheney were themselves CEOs of corporations and in Cheney's case, his former company, Halliburton, is currently under investigation by the Securities and Exchange Commission. With President Bush's approval rating at its lowest since September 11, exploiting these accounting fraud scandals and their effects on the economy might just be the Democratic Party's best hope of regaining control of Congress.

With nervous lawmakers looking for a scapegoat for the public's outrage over each new scandal, Republicans have watched their electoral chances plummet right along side the stock market, but as President Bush signed the new corporate fraud bill into law, the stock market had already begun to rally.

Will stiffer penalties for fraud and closer supervision of the accounting industry calm the public's economic fears in time for the November elections, or will investors' mistrust of corporations turn into voters' mistrust of Republicans?

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Susan Hollis graduated with a degree in Political Science from Oklahoma State University. Her educational background consists of a mixture of studies in both domestic and foreign affairs. She has been an intern for a United States Senator at the US Capitol in Washington DC, where she obtained firsthand knowledge of the legislative process by watching it in action. During her internship, Susan had the opportunity to observe congressional hearings, deal with constituent services, and contribute to legislative research. Ms. Hollis has also had the chance to participate with a congressional campaign for the US House of Representatives.