The Corporate Insider Blog

The nasty and tight Virginia Senate race between George Allen and Jim Webb has yet to be officially decided. There is bound to be a recount based on State Election Law. The result, as well as which party will control the senate, may be unknown into December.

What type of impact will the outcome have on corporate oversight?

Allen, the incumbant, is currently chair of the Senate Subcommittee on Consumer Affiars, Product Safety and Insurance; he is also part of the Committee on Small Business and Entrepreneurship. He has recieved a perfect rating from the Chamber of Commerce indicating that he always votes in the interest of corporations. Over the last year Allen recieved significant contributions from big companies in the defense, oil, pharmaceutical, and tobacco industries.

Jim Webb, whose expertise seems to be more on the national defense side, recieved donations mostly from unions and smaller Political Action Committees. His discussion of corporate issues was limited during the campaign, but he was strongly against the corporate tax breaks pushed by the Bush Administration over the last six years.

While Jim Webb may not come to office to reign in corporate excess, he would certainly be replacing someone who had repeatedly given corporations a blank check.

If the Democrats take control of at least the House of Representatives, look for increased oversight over many agencies controlled by the Bush Administration.

Squarely within the cross hairs of democratic oversight - according to observers inside the beltway -- will be the Food and Drug Administration -- which has come under public scrutiny for its lax oversight of the pharmaceutical and medical device industry.

The industry has been under fire for off label marketing, the failure to disclose or fully disclose the results of drug trials and studies, and the distribution into the market of defective products. The FDA has come under scrutiny for its lack of oversight .

Industry groups, with the support of insiders in the Bush Administration, are now attempting to to undue shareholder protections and rights afforded by the Sarbanes-Oxley and years of precedent under Federal Securities laws.This may include curtailment of the rights of shareholders to bring suits for securities fraud.

Reported in the New York Times on Sunday 10/29, this represents another pro-corporation, anti-consumer move by the current reigme. In a lame effort to conceal their cronyistic and self-preserving motives, the group that is pushing for these changes is doing so claiming that they are worried about "American Competitiveness."

These efforts, which may circumvent Congress through SEC rulemaking are astounding considering the wave of corporate corruption over the past decade that has taken its toll on individual shareholders, institutional investors, employees, and consumers.