Names In the News

Presidential Bud

Anheuser-Busch Companies, Inc. has been selected by the Commission on Presidential Debates as a national sponsor of the four presidential debates for the 2000 election, as well as the sole sponsor of the debate scheduled for October 17 at Washington University in St. Louis.

The company will pay $550,000 to underwrite the debate at Washington University.

The Commission on Presidential Debates, while portraying itself as non-partisan, is controlled by the two major parties and is funded primarily by corporate donations.

The Commission announced in January that the three presidential debates will take place in October in St. Louis, at Wake Forest University in Winston-Salem, North Carolina and at the University of Massachusetts in Boston.

The vice presidential debate will take place at Centre College in Danville, Kentucky.

In an interview, Commission chair Janet Brown was asked what corporations get in return for sponsoring the debates.

"They get very little," says Brown. "We are not set up the way the Olympics are. This is something that the donors that give to the commission see as promoting the ultimate in civic education. The donors get the affiliation with us and the event. The events are not in any way packaged or produced."

She says that Anheuser-Busch will not be allowed to advertise at the St. Louis debate, but that it can "announce that it is a national sponsor."

Not So Fine at NHTSA

The automobile industry is increasingly ignoring federal auto safety laws, the Center for Auto Safety alleged in January.

The National Highway Traffic Safety Administration (NHTSA) doesn't enforce its own rules, rationalizing that the fines are too small to have an impact.

In one instance, NHTSA decided against prosecuting Ford Motor Co. for failing to submit required documents in part because the penalty was only $1,000 per infraction.

"NHTSA has decided in its prosecutorial discretion not to pursue an action for civil penalties against Ford for these failures in consideration of the small size of the maximum penalty, the fact that the incomplete responses were provided quite some time ago, and potential defenses," a NHTSA lawyer wrote.

The Center for Auto Safety's Eleanor Lewis says that "if NHTSA believes its penalty provisions are inadequate, it should immediately ask Congress to increase them."

"But failing to fine a violator because the fine would be too small sends the wrong signal to all potential violators and makes a mockery of NHTSA's enforcement provisions," Lewis says.

In a letter to NHTSA, Lewis lists a string of instances where in recent years auto companies have violated NHTSA reporting requirements and were either not prosecuted or not fined, or fined "a paltry" amount.

In one case, Volvo failed to file with NHTSA a copy of communications to its dealers about defects in its vehicles, Lewis said. Lewis said that Volvo has admitted that it failed to file with NHTSA.

Kenneth Weinstein, NHTSA's Associate Administrator for Safety Assurance said NHTSA is "looking into the issues raised in the letter."

A Bad Accounting

An independent consultant hired by the Securities and Exchange Commission (SEC) has found that the accounting firm PricewaterhouseCoopers engaged in significant violations of the firm's, the profession's and the SEC's rules requiring accountants to remain independent from companies they audit.

The consultant, Jess Fardella, was appointed by the SEC in March 1999 to conduct the review. The SEC said in January that its investigation of the firm is ongoing.

Last year, the firm agreed to conduct the review after the SEC alleged that some of its accountants owned stock in corporations they audited.

In his report, Fardella discloses that a substantial number of the firm's professionals, particularly partners, had violations of the independence rules, and that many had multiple violations.

The review found excusable mistakes, but also attributed the violations to laxity and insensitivity to the importance of independence compliance.

According to the report, the firm acknowledges that the review disclosed widespread independence non-compliance that reflected serious structural and cultural problems in the firm.

The report summarizes results of the internal review at PricewaterhouseCoopers, which included two key parts: the firm's professionals were requested in March 1999 to self-report independence violations; and Fardella randomly tested a sample of the responses for completeness and accuracy.

Almost half of the the firm's partners -- 1,301 out of a total of 2,698 -- self-reported at least one independence violation.

The 1,301 partners who reported a violation reported an average of five violations; 153 partners had more than 10 violations each.

"This report is a sobering reminder that accounting professionals need to renew their commitment to the fundamental principle of auditor independence," Securities and Exchange Commission Chief Accountant Lynn E. Turner said.

-\ Russell Mokhiber