Bush to propose crackdown on corporate abuses

George W Bush is to outline plans to crack down on business practices that have fuelled corporate scandals and shaken public faith in much of corporate America.

The president's key policy speech is coming as he faces renewed questions about his own actions a decade ago as an oil company director.

Mr Bush is expected to propose a new federal body to investigate and prosecute large-scale corporate fraud, and to call for longer jail terms for executives who commit such wrongdoing.

The president said: "I am an avid backer of the free enterprise system, but I also understand that that requires trust."

Mr Bush, the first US president to hold a Master of Business Administration degree, promised "tough new laws and actions to punish abuses, restore investor confidence and protect the pensions of American workers".

He was also bombarded with questions about his record as a director at Harken Energy Corporation in the early 1990s, when the Securities and Exchange Commission forced it to amend its books to reflect millions of pounds in losses that had been hidden by the sale of a subsidiary to a group of its own executives.

The sale had the effect of concealing €6.5m ($6.5m) in losses. But Mr Bush said: "There was an honest difference of opinion as to how to account for a complicated transaction."

Mr Bush, who was on the company's audit committee, was the subject of a separate insider trading investigation. The SEC took no action against him in that inquiry, which also found he had disclosed his sales of Harken stock later than the law required on four occasions.

Pressed to explain his eight-month delay in reporting such a sale on one occasion, Mr Bush said, "I still haven't figured it out completely."

Previously, he had said he thought regulators lost the documents. Last week, the White House called it a mix-up by lawyers.