Senator Sarbanes' Involvement in the Sarbanes-Oxley Act of 2002

In response to the failure of Enron Corporation in 2001, which, at the time, was the 7th largest corporation in the United States, Paul Sarbanes, in his capacity as Chairman of the Senate Banking, Housing, and Urban Affairs Committee, held a series of comprehensive hearings resulting in the passage of a bi-partisan bill designed to reform the accounting industry and restore the investor confidence that had been eroded following the collapse of Enron.

Immediately following the Senate Banking Committee’s approval of the legislation in June 2002, the accounting woes of WorldCom further shook the financial markets and created a tidal wave of support for the Sarbanes legislation. Sarbanes appeared on ABC’s This Week, NBC’s Meet the Press, CNN, and CNBC. In addition, he was chosen by Senate Democratic Leader Tom Daschle to deliver the Democratic response to the President’s weekly national radio address on June 29, 2002.

“The Public Company Accounting Reform and Investor Protection Act” was signed into law on July 30, 2002, and has been referred to as “the most far-reaching reforms of American business practices since the time of Franklin Delano Roosevelt.” The law is now known as the “Sarbanes-Oxley Act,” named for the principal sponsors of the legislation.

The legislation creates a strong independent oversight board to oversee the auditors of public companies and enables the board to set accounting standards, and investigate and discipline accountants. It addresses conflicts of interest, ensures auditor independence, strengthens corporate governance, by requiring corporate leaders to be personally responsible for the accuracy of their company’s financial reports, and establishes safeguards to protect against investment analysts’ conflicts.

As a result of his work in shepherding this historic legislation through the Congress and into law, Sarbanes was honored in June 2003 with the prestigious Paul H. Douglas Ethics in Government Award from the University of Illinois. The award, established in 1992 to honor Senator Douglas, a man often labeled “the conscience of the United States Senate,” was designed to honor individuals who have made a substantial contribution to promoting ethics. Additional awards include receipt of the “Rolfe Award for Extraordinary Impact on Policy in Economics, Business and Finance,” from the Women’s Economic Roundtable in November 2003, and the “Cox, Coleman, Richardson Award for Distinguished Public Service,” from Harvard Law School in March 2004.

About Paul Sarbanes

Senator Paul Sarbanes has achieved many great feats for the people of Maryland over the past three decades. One of senator Sarbanes’ accomplishments, unprecedented in Maryland history, occurred in 2000 when he was reelected for a fifth term to the United States Senate. His career began in 1966 when he ran for the Maryland House of Delegates in Baltimore City. In 1970 was elected to the United States House of Representatives, where he remained for three terms. “While in the House, from 1971-76, Sarbanes served on the House Judiciary Committee, the Merchant Marine and Fisheries Committee, and the Select Committee on House Reorganization. It was during his service in the House, in August 1974, that Sarbanes was selected by his Democratic colleagues on the House Watergate Committee to introduce the first Article of Impeachment, for obstruction of justice, against President Richard Nixon.”

On November 2, 1976, Sarbanes was began his career as a United States Senator. He did such an outstanding job and was re-elected in 1982, 1988, 1994, and 2000. Senator Sarbanes is dedicated to representing the people of Maryland with pride and providing them with “independent representation; representation based upon intelligence and integrity; representation which gives people the confidence that elected officials are there to serve the public interest.”

Senator Sarbanes was born on February 2, 1933 in Salisbury, Maryland as the son of immigrants from Laconia, Greece. He attended Princeton University and received his A.B. in 1954. In 1957, he received his First Class B.A. at Oxford, England and then returned to the United States to study law at Harvard Law School. He attributes much of his current success to excellent parenting and a great education.

Related Links

• OpenPages Sarbanes Oxley Express
• The Sarbanes-Oxley Act of 2002

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