NEW YORK, 10 July — President George W. Bush, on the defensive about current-day corporate scandals and his own record as a businessman a decade ago, pledged yesterday to “expose and punish acts of corruption.”

Bush called for stiff new penalties for corporate criminals and a crackdown on boardroom scandals yesterday, promising in a speech on Wall Street that his administration would “end the days of cooking the books, shading the truth and breaking our laws.’’

The president called on the US Sentencing Commission to recommend longer prison terms for corporate executives guilty of fraud and announcing a new task force for the pursuit and prosecution of corporate criminal activity.

Bush also wants to double the maximum prison term for mail fraud and wire fraud to 10 years, and strengthen laws criminalizing document shredding and other forms of obstruction of justice.

Confronting a wave of corporate wrongdoing that has undermined investor confidence and threatened political damage to the White House, Bush said, “We will use the full weight of the law to expose and root out corruption.’’

The task force, that Bush plans to set up, would be headed by Deputy Attorney General Larry Thompson and include FBI Director Robert Mueller and investigators from the Justice Department and other agencies. Bush likened it to a “financial crimes SWAT team.’’

But Bush’s speech drew flak from the Democrats and also failed to revitalize investor’s sentiment. “One cannot really legislate honesty and truth,” said Nofal Barbar, executive vice president and regional manager of the Arab Bank in New York. “All of this boils down to people not having the professional and ethical codes to run their businesses. I think the only recourse is that if people cannot be convinced to behave in an ethical way, then one has to put the fear of punishment into them and this fear has to be in the form of very real and substantial personal penalties.”

Regarding the loss of confidence in the credibility and accuracy of the financial information that has led to a lot of people losing their investments and retirement savings, Barbar said: “The unfortunate thing is that these investors, in the end, are not going to be in a position to recover their losses unless the government comes up with a compensation scheme, which I believe is unlikely.”

While, Barbar was optimistic, another executive was not. “I think it’s too little too late,” said Jamie Court, executive director for the Foundation for Taxpayer and Consumer Rights, based in Santa Monica, California.

“This is a way of punishing a small group of executives, but it doesn’t deal with fundamental institution reform of the corporate system. For instance, it doesn’t punish those within a corporation who knew of another person’s fraud, but did not come forward. So the real problem is that Bush’s speech deals with the symptom but not the disease.” Unlike Barbar, Court was disappointed with Bush’s announcement of a financial crimes SWAT team, which he said “would only be effective if he appoints someone like Ralph Nader.”

Bush addressed the controversy and its political implications for his administration at a White House news conference Monday and yesterday. “I’m an avid backer of the free enterprise system, but I also understand that requires trust,” said Bush. “And we’ve had some destroy the trust of the American people, and we need to do something about it.”

On Wall Street, Bush was additionally calling for:

— New provisions to strengthen the ability of the government’s Securities and Exchange Commission to freeze improper payments to corporate executives while a company is under investigation.

— Publicly traded companies to prevent corporate officers from receiving loans from their own companies.

— Stock markets to require that a majority of a company’s directors

— and all members of the company’s audit, nominating and compensation committees

— have no material relationship with the company so that they are truly independent.

It was unclear how much his get-tough message would penetrate public outrage over the scandals at business giants such as Enron and WorldCom. At Monday’s press conference, Bush was bombarded by questions about his record as a director at Harken Energy Corp. in the early 1990s. The SEC forced the company to amend its books to reflect millions of dollars in losses that had been hidden by the sale of a subsidiary to a group of insiders.

As Bush described it Monday, when the SEC cried foul on Harken’s sale of a subsidiary to a partnership of its own executives, which had the effect of concealing $10 million in losses, “There was an honest difference of opinion as to how to account for a complicated transaction.”

The president rejected comparisons to Enron Corp., where sham off-the-books partnerships were used to hide hundreds of millions of dollars in losses. Arthur Andersen LLP was the accounting firm in both cases. Bush, who was on the company’s audit committee, was the subject of a separate insider-stock trade investigation. The president is calling for swift disclosure of such insider stock sales as part of his corporate reform package.

But top congressional Democrats yesterday called for action not just words from President George W. Bush. “What is important is what is done, not what is said,” stated House Minority Leader Democratic Dick Gephardt.

Democrats are calling on Bush to sign into law two pieces of legislation they have introduced in the Senate aimed at reforming the US accounting industry and creating criminal penalties for corporate fraud.