Latest news from D.C. bad for investors

Amid the big headlines in recent days, two seemingly unrelated events, which barely registered a blip on the news radar, should not slip by unnoticed by anyone who's interested in financial security.

The first happened Tuesday, when the U.S. Supreme Court overturned the conviction of accounting firm Arthur Andersen for its role in the Enron scandal. The second bit of news hit the wires Thursday, when President Bush announced his pick to succeed William Donaldson at the Securities and Exchange Commission.

The two events bring simultaneous cause for concern because of their potential for further stacking the financial deck against little investors.

In its decision in favor of Andersen, the court ruled on a technicality. Andersen's conviction was for obstruction of justice. Specifically, when Enron's collapse became public in October 2001, Andersen set about shredding 2 tons of documents before it was notified three weeks later that it was under SEC investigation for enabling the fraud that killed its client.

In the court's decision, written by its chief justice, William Rehnquist, it was determined that the jury was given faulty instructions, so Andersen was convicted without proof that it destroyed the documents to undermine the impending investigation. The reversal is a huge setback for the Justice Department's corporate crimes prosecution, and a slap in the face to all the people who lost money and livelihoods when massive fraud brought down energy trading giant Enron in 2001.

Given the nature of our legal system, federal prosecutors say it is unlikely that the case will be retried. This surely comes as great news to individual Andersen executives, some of whom, like their criminal brethren at Enron, still await trial.

The biggest lesson of the corporate scandals is that deregulation is not always a good thing. Especially if it's unchecked.

The landmark fraud perpetrated on stockholders by the likes of Enron, WorldCom and Tyco came about in a climate of laxity that was the direct descendent of moves to "get government off the back of business." That the SEC chief who preceded Donaldson was hand-picked by ex-Enron CEO and Bush crony Kenneth Lay speaks volumes about the priorities of this administration with regard to protecting individual investors.

Following the Enron scandal, the less permissive Donaldson was put in charge of the SEC. The reforms enacted under him have led to increased consumer confidence in the stock market, but have caused no small amount of complaining in corporate America.

Enter the president's new choice to head the SEC. Rep. Christopher Cox, a California Republican who made his own millions as an attorney specializing in venture capital and corporate finance, has made a congressional career for himself as a tireless advocate for corporate interests. Among his most generous campaign contributors are some of the biggest names in corporate America, including accounting firms and large brokerage houses. One of his most notable legislation sponsorships is a law enacted over a veto by former President Clinton that makes it easier for companies to defend against securities fraud lawsuits.

By all accounts, the shift is on back to a hands-off approach to the regulation of business practices. This has the potential to be very bad news for investors. Even as the president sings the praises of the stock market while touting his Social Security system overhaul, he is making the market less safe for investors.

Cox's nomination still must be approved by the Senate. We urge Alaska Sens. Ted Stevens and Lisa Murkowski to stick up for the rights of individual investors and not allow this nominee to go forward.