"Too many times in the last seven or eight years, the special interests and extremist voices that would like to get rid of almost all regulations have triumphed in the face of common sense and the sentiment of the majority of the American people," he said in his opening statement at a Democratic hearing on corporate accountability.

Appearing on NPR's "Morning Edition" last Monday, Gephardt said, "The Republican leadership in the House -- after they won the House back in '95 -- made clear statements that the No. 1 goal of the Contract with America and the No. 1 goal of taking the House back was to totally deregulate American business and to get government out of the way" (RealPlayer audio file).

In a press conference last week, Gephardt even directly alleged that the Contract caused the current corporate crisis. "If you connect the dots, it's 1995 they said what they were going to do; they did it between 1995 and now; and now the third dot is you see the result, which is Enron on down the line, Adelphia, WorldCom, on down the line."

As we've noted, Gephardt and other Democrats have previously made vague accusations of how Republicans created a "climate" that made the scandals possible and promised evidence to back them up would come at a later date. This came on July 11 in a report from the Democratic Policy Committee.

When it comes to Gephardt's accusations that some Republicans wanted to "get rid of almost all regulations" and "totally deregulate American business," the report has only a single quote as evidence. It notes that DeLay, when asked whether there were any federal regulations he would like to keep, said, "Not that I can think of." The other quotes reflect a general anti-regulation sentiment held by some Republicans along the lines of a statement by former Speaker Newt Gingrich that "clearly it's not business that needs more regulation and limitation -- but government itself." Republicans also tried to create a cost/benefit analysis requirement for new regulations and to pass a moratorium on new regulations, but those hardly constitute evidence that the GOP wanted to eliminate all regulation.

Like Gephardt, the DPC report goes on to posit a causal relationship between the Contract and the current scandals: "The unfortunate legacy of the Republican 'Contract' and their overzealous drive to obliterate common sense laws and regulations safeguarding pension security, investor rights, and public health and safety has so far resulted in thousands of Americans losing their retirement savings and millions more investors seeing their investment portfolios evaporate at the same time that unscrupulous opportunists walk away with bloated golden parachute packages."

But only one piece of anti-regulatory legislation proposed by the Contract -- a bill that made it harder to bring securities fraud suits -- was passed into law. While some have argued that this law contributed to the current problems by reducing executives' exposure to shareholder lawsuits, it's absurdly simple to blame the entire wave of corporate scandals on it.

Furthermore, note how the DPC tries to jam together several different issues as the alleged GOP "drive to obliterate common sense laws and regulations regarding pension security, investor rights, and public health and safety." Even if all of these are relevant, none of the bills it cites became law except for the securities fraud legislation. The DPC is thus reduced to the weak argument that "even just the threat of these efforts to eviscerate regulations created an anti-regulatory, anti-government, wild west culture," citing as its only evidence a single article about government agencies pulling back on regulations as a result of pressure from congressional Republicans. It fails to note that the agencies cited in the article do not regulate securities.

The DPC continues, "Not only did the comprehensive GOP deregulatory assault influence the Administration, it sent loud and unmistakable signals to some in corporate America that you could do as you please and that Republicans would wink at corporate misdeeds."

Even if this is true, winking is a far cry from trying to "totally deregulate American business." In this election year blame game, both parties are likely to score points with some less attentive, more partisan voters. But both of these efforts are losers.

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