Washington (Sept. 20, 2004) -- Shortly after California Democrats sent a letter to President Bush urging him to support the passage of a House bill aimed at thwarting a controversial plan by accounting rulemakers to mandate stock option expensing, four Senators fired off a letter urging Bush to oppose efforts to block the plan.
In a letter, Republican Senators Peter G. Fitzgerald of Illinois and John McCain of Arizona, along with Democratic Senators Carl Levin of Michigan and Richard Durbin of Illinois, urged President Bush to "oppose any back door effort in the Senate to enact legislation" that would undermine the Financial Accounting Standards Board’s authority. The senators said that the letter followed rumors that opponents of the FASB rule, which would require companies to expense options granted to all employees, might attempt to attach legislation to an upcoming appropriations bill that would undermine FASB's standard-setting authority, effectively killing the options proposal.
"As members of the United State Senate, we are writing to express our strong opposition to legislation that would undermine the integrity and independence of the Financial Accounting Standards Board's standard setting process, and request that you and your administration oppose any appropriations bill in the Senate that may include a legislative rider that would allow such legislation to be enacted," the senators wrote.
The letter marks the latest shot fired in the long-running battle on options between the seven-member FASB, which sets technical accounting standards, and some members of Congress who hope to stymie the proposal. In July, the House passed H.R. 3574, which would prohibit the Securities and Exchange Commission from recognizing FASB's proposed treatment of stock option compensation if it become a final rule, and would instead only require companies to expense options granted to their top five employees.
H.R. 3574 and its companion bill, S. 1890, are pending with the Senate Banking Committee and aren't likely to be acted on during the remainder of the 108th Congress.
"Co-sponsors of S. 1890 are contemplating attaching legislation similar to H.R. 3574 and S. 1890 to an appropriations bill or a conference committee report to achieve their goal of obstructing FASB's proposed accounting treatment of stock option compensation. Therefore, we ask that you and your administration actively oppose any such legislative rider that would undermine the integrity and independence of the Financial Accounting Standards Board's standard-setting process," the senators wrote.
Last week, Sen. Barbara Boxer and Rep. Anna Eshoo, both California Democrats, sent a letter to President Bush urging him to support passage of H.R. 3574, claiming that expensing stock options “directly threatens rank-and-file worker opportunities.”
-- WebCPA staff
