2002 July 5 Sacramento Bee Lawrence M. O’Rourke
Main News P: A1
Matsui's role: Keep scandals in the news

After lining up with the White House in the war against terrorism, congressional Democratic leaders have launched a campaign to turn Enron, WorldCom and other exploding business scandals into political assets this fall.

House Democratic leaders have asked Rep. Robert Matsui of Sacramento to take a lead role in pushing the scandals as a political issue for the November mid-term election.

"This is a natural role for Bob Matsui," said House Minority Leader Dick Gephardt, D-Mo. "He has been a leader on corporate responsibility and retirement security for many years, and I can't think of a member who has a better command over these critical issues."

"Bob Matsui has always been out front on the issues that are most important to the American people," said House Minority Whip Nancy Pelosi, D-San Francisco. "He was discussing retirement security and accounting transparency long before they were front-page news."

In response to the Democratic moves, Republicans are adjusting their campaign strategy to deal with what some party strategists acknowledge is a potentially damaging political issue.
"If the widening corporate scandal merges with the sagging economy, it could be the perfect political storm in the Democrats' favor," said Marshall Wittman, director of the Hudson Institute's Project for Conservative Reform.

Matsui said in an interview, "The Bush administration and House Republicans have refused to enact tight financial standards. That's a message we need to put before voters this fall."
Corporate scandals have given Democrats a "cutting campaign issue," Matsui said. "The fall of those companies has stunned investors and stockholders. We're going to make the point that Republicans have weakened regulation and allowed this to happen."

Matsui said he has been booked for campaign speeches in Connecticut, Michigan, Southern California and elsewhere.

Carl Forti, spokesman for the National Republican Congressional Committee, charged, "Matsui doesn't have a lot to stand on. He voted in 1996 for deregulation of the phone industry, a vote that led to these business scandals.

"We're seeing a business scandal. These are not political issues that Matsui can use against Republicans. We don't think Matsui and other Democrats can develop a campaign message out of a business scandal."

As Matsui encourages Democrats to look for openings to pound away at the corporate issue this fall, President Bush has scheduled a speech next week in which he is expected to propose stiff new penalties for corporate executives who deceive federal regulators, employees and investors.

And House Republicans plan to approve a package of bills in September that would show voters their determination to root out corporate corruption.
The congressional GOP drive toward tougher government regulation and stiffer penalties for false disclosure of company information would represent a change in tactics for GOP leaders.
Previously, GOP leaders insisted that corporate failures are primarily business scandals. They also said that voters do not view the conduct of corporate executives as the fault of government or any political party.

But Democrats have now concluded that they can turn the scandals into political issues as they bid to take back control of the House and retain control of the Senate.
In a move to put the blame on the Republican majority that has controlled the House since the 1994 election, Gephardt has asked several Democrats to spearhead the issue for the party. Joining Matsui will be Richard Neal of Massachusetts and David Obey of Wisconsin.

In the Senate, Majority Leader Tom Daschle, D-S.D., asked Sen. Jon Corzine of New Jersey, a former Wall Street investment banker, to lead the charge.
In stepping to the forefront in raising the corporate scandals as a political issue, Matsui has taken another step toward a more public leadership role among House Democrats.
House Democratic leaders pointed out that Matsui is known to many party officials as former treasurer of the Democratic National Committee, but he has not had a high profile as a stump speaker.

Earlier this year, Gephardt asked Matsui to take a leading role in the Democrats' effort to use Social Security as a political wedge issue this fall.
As a result, Matsui has made several speeches and held press conferences to argue that House Republicans have invaded the Social Security trust fund to pay other government costs and have broken their promise to strengthen the system.

"Matsui is a perfect choice to lead the Democrats' campaign on corporate irresponsibility," said Bob Mulholland, campaign adviser to the California Democratic Party. "Matsui has a safe district in Sacramento and can afford to be on the road for other Democrats. He's a prominent Asian American who gives the party a good image.
"And perhaps most importantly, he's a moderate who can speak to the swing voters Democrats need to get back the House."