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 may 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 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. The 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.
Sarbanes, the first senator of Greek American heritage, also served on the Foreign Relations Committee, where he voted against resolutions in 1991 and 2002 authorizing war against Iraq.
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.”
Paul Spyros Sarbanes was born Feb. 3, 1933, in Salisbury, on Maryland’s Eastern Shore. He was the son of two Greek immigrants, Spyros and Matina (Tsigounis) Sarbanes, who ran the Mayf lower restaurant in Salisbury. The family lived upstairs.
Sarbanes received a full scholarship to Princeton in 1954 and won a Rhodes Scholarship. He attended Balliol College at Oxford and received a second bachelor’s degree in 1957. He earned a law degree at Harvard in 1960 and within a year or so married Christine Dunbar, whom he had met at Oxford.
Sarbanes served in Maryland’s House of Delegates from 1967 to 1971 and then in the U.S. House of Representatives from 1971 to 1977. He was first elected to the U.S. Senate in 1976, where he served for five terms before retiring in 2007.
He is survived by a brother, Anthony; a sister, Zoe Pappas; 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.