Maryland senator fought accounting fraud
Former Sen. Paul Sarbanes, of Maryland — a publicity-shy lawmaker who wrote landmark legislation to curb fraudulent accounting practices that led to huge investor losses and major corporate bankruptcies in 2001 and 2002 — died Sunday in Baltimore. He was 87.
Judy Keenan, a longtime aide, said he died while watching a Georgia Senate runoff debate on television at the retirement community in which he lived. She did not specify a cause but said he had had heart problems.
Sarbanes (pronounced SAR-baynz) might be best remembered for the Sarbanes-Oxley Act of 2002, co-sponsored by Rep. Michael Oxley, R-Ohio and chairman of the House Financial Services Committee.
Adopted in response to the scandals involving Enron and other companies, the legislation strengthened corporate governance and created a federal oversight board for the accounting industry. In addition, it curbed accounting firms’ consulting work for companies that they audited and required them to judge internal fraud controls at those companies. It also required chief executives to certify audits personally and attest to their accuracy.
But while other members of Congress pursued the Enron scandal with splashy televised hearings and spirited denunciations, Sarbanes approached it by holding 10 thorough hearings to get widespread expert advice on what corrective legislation should include.
Initially opposed by many Republicans and by the powerful lobbying of the accounting industry, the measure eventually passed 97-0 in the Senate after another accounting failure, at WorldCom, had sent the stock market plunging.
The House had originally passed a weaker measure but agreed to a compromise that was basically the Senate bill.
Sarbanes headed the Senate Banking Committee for 18 months in 2001 and 2002. In 2001, he pushed a measure through the committee giving the government more ability to track money laundering involving terrorism, a bill that became part of the Patriot Act, which, signed into law after the attacks of Sept. 11 that year, gave the government broad new powers with which to confront terrorism.
The first senator of GreekAmerican heritage, he frequently supported Greece, maintaining that the United States was unduly friendly to its antagonist Turkey.
Having his name in headlines over the accounting measure was a rare moment in his 30 years in the Senate. Sarbanes avoided publicity and scoffed at repeated attempts by Maryland Republicans to label him a “stealth senator.”
While Sarbanes compiled a 95% liberal voting record, according to the progressive group Americans for Democratic Action, some of his liberal allies grumbled that he often stayed away from partisan fights when they saw Republican vulnerabilities.
For the most part, he operated quietly. “I was doing a lot,” he said in 2013. “I just didn’t make a lot of noise about it.”
As George Mitchell, the Senate majority leader from 1987 to 1994, observed, “Paul was effective because he didn’t seek credit, which endeared him to his colleagues.”
He is survived by a brother; a sister; two sons, John, who holds his father’s old seat in the House, and Michael; a daughter, Janet Sarbanes; and several grandchildren. His wife died in 2009 after 48 years of marriage.