Rudolph Giuliani, New York City's former mayor, weighs in on corporate reform on ABCNEWS' Good Morning America.
ABCNEWS' CHARLES GIBSON: We turn now to Rudolph Giuliani, New York's former mayor, also a former federal prosecutor who made his name prosecuting some of Wall Street's biggest financial criminals back in the 1980s. Corporate reform is a major topic of discussion in New York and Washington these days, so an appropriate guest for us. And he joins us now. Good to have you with us.
RUDOLPH GIULIANI, FORMER NEW YORK CITY MAYOR: Nice to be with you, Charlie.
GIBSON: Has this gotten out of hand? There's a pattern, executives falsely building up the profits of their company, the stocks go through the roof, they cash out. They've got millions to build mansions, and the pensioners and the other people, or stockholders are left holding the bag. Has it gotten out of hand?
GIULIANI: Well, sure. I mean, yeah, it's gotten out of hand in the sense that a lot of it has happened all at once, at one period of time. Probably this has been going on for a long time, meaning maybe a hundred years in one way or another, or more. But the reality is a lot of it has happened in the last several years, maybe as a result of the economy, the market and everything else.
GIBSON: Exacerbated by the moment, the markets are.
GIULIANI:Right. And we're finding out a lot more about it. And although this a horrible thing, and it's a horrible thing for the people directly affected by it, as a society, this is a good thing for us. Because …
GIULIANI: Because we correct it. There's this imperfect way in which we get better; we find out about the bad things people are doing, the way in which they can abuse an otherwise good system, and then we correct it. And I think that's what you see happening in Congress. I think the president will sign the bill. And that, again, won't be perfect, but it'll be an improvement.
GIBSON: Are we correcting it, though? This bill yesterday, the House and Senate combined, 522 votes for the bill, only three against.
GIBSON: The president, who was wavering about this, now with this kind of momentum, obviously, will sign …
GIBSON: …this bill. Is this bill going to do something about the problem?
GIULIANI: Imperfect. It'll probably be somewhat of an overreaction. It'll probably miss the mark in a few places. But the idea of more transparency, more openness, more regulation, putting--putting a lot of this information out there so people can assess it. If you think about--think--think about the way in which a lot of this was done, in which debt was hidden. Well, if you put that debt out there, and you get people to see it, and you get them to be able to assess it, then--then we're getting closer to what a free market should be, one in which people have the information to assess the investments they should make. Whereas if you--if you hide it, then people think a company's a lot more profitable than it is. Then, all of a sudden, it all falls apart.
GIBSON: As a former prosecutor, what's your idea of the best way to restore confidence? Is it simply to get information out there, true information in financial statements? Or is the thing you need to do to restore confidence, literally, to put some of these guys behind bars?