U.S. Treasury Secretary and GW alumnus John Snow blamed CEO corruption for the nation’s lack of confidence in corporate dealings in a speech at the GW Law School Wednesday afternoon.
Speaking in Stockton Hall’s Jacob Burns Moot Court, Snow, who graduated from the Law School in 1967, told an audience of about 100 law students and faculty that the only way executives could regain Americans’ trust is by being more accountable.
But he emphasized that the economy was recovering despite corporate scandals involving major U.S. corporations such as Enron, Worldcom and Imclone.
“The central lesson to me was how precious trust is,” he said. “The legitimacy of our system of organization and capital was called into question. In a way corporate capitalism was threatened.”
Snow, who was appointed to the treasury’s top post in January 2003, headed the transportation company CSX before joining President Bush’s cabinet.
Using an analogy from his days as a railroad CEO, Snow said the “train would not have gotten off tracks the way they did” if executives had been more responsible. At Enron and other companies, CEOs have been convicted of securities fraud.
“All the gate keepers of the process fell down,” he said “At every juncture the responsible people failed to live up to their duty.”
Snow said companies’ boards of directors have an obligation to the public and that they should hold CEOs liable for their actions. He said corporate greed has led to corruption in the law and accounting professions.
Snow told law students that it will be their job to ensure that companies’ decisions coincide with the public’s interest because lawyers serve as corporate advisors.
Law student Gabriel Ewing said that he agreed with Snow’s message of corporate responsibility.
“The Law School tries to instill responsibility of CEOs because people always forget it when they get big jobs in private practice,” Ewing said.
After Snow vowed “not to rest until all the people looking for jobs get jobs,” a group of people affiliated with presidential candidate Lyndon LaRouche asked how the secretary was planning to deal with unemployment.
The secretary cited an 8.2 percent economic growth as the highest in more than two decades and said that the growing economy has benefited from greater confidence in corporations.