Associated Press
SACRAMENTO — The state Senate sent legislation to Gov. Gray Davis Thursday that would strengthen whistle-blower protections and corporate accountability requirements, including fines of up to $1 million for publicly traded companies that hide damaging financial information.
The two bills were authored by Sen. Martha Escutia, D-Norwalk. Last year, Davis vetoed Escutia’s bill on corporate finances because it would have allowed fines against executives who had covered up financial fraud.
That provision was removed from this year’s bill, which would allow a fine of up to $1 million against a corporation that withheld information about financial shenanigans.
Davis hasn’t taken a position on the revised bills, his spokesman said.
The whistle-blower bill is key to preventing corporate wrongdoing, said Doug Heller, a consumer advocate with the Foundation for Taxpayer and Consumer Rights.
“Punishing corporations after the fact doesn’t help pensioners who have lost their savings,” he said. “With this package of bills, we create the nation’s best defense against future fraud.”
The bill bars company officials from retaliating against an employee who refused to participate in an illegal activity, and it would double, from $5,000 to $10,000, the maximum potential fines for retaliating against whistle-blowers who disclose company crimes.
It would require the attorney general’s office to set up a whistle-blower hot line to receive calls about potential violations of laws, regulations or corporate fiduciary responsibilities.
The Senate approved Assembly amendments to the whistle-blower bill on a 22-12 vote. The corporate accountability bill was approved 23-13.
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On the Net: Read the bills, SB523 and SB777, at http://www.senate.ca.gov
