E PL UR UM IB N U U S Congressional Record United States th of America PROCEEDINGS AND DEBATES OF THE 107 CONGRESS, SECOND SESSION

Vol. 148 WASHINGTON, MONDAY, JULY 15, 2002 No. 95 House of Representatives The House met at 12:30 p.m. and was the House of Representatives to the legislation which, frankly, breaks a bi- called to order by the Speaker pro tem- amendment of the Senate to the bill partisan agreement back in my home pore (Mr. CULBERSON). (H.R. 3009) ‘‘An Act to extend the Ande- State in Illinois. f an Trade Preference Act, to grant addi- I am referring to H.R. 3479, legisla- tional trade benefits under that Act, tion that is before us that we in the DESIGNATION OF SPEAKER PRO and for other purposes.’’, and agrees to Chicago area know as the O’Hare bill, TEMPORE a conference asked by the House on the legislation that federally mandates The SPEAKER pro tempore laid be- disagreeing votes of the two Houses construction of O’Hare and expansion fore the House the following commu- thereon, and appoints Mr. BAUCUS, Mr. of O’Hare. I want to ask my colleagues nication from the Speaker: ROCKEFELLER, Mr. BREAUX, Mr. GRASS- to join me today in opposition to this WASHINGTON, DC, LEY, and Mr. HATCH, to be the conferees legislation. July 15, 2002. on the part of the Senate. Let me explain why. I stand here in I hereby appoint the Honorable JOHN strong support of O’Hare. I stand in f ABNEY CULBERSON to act as Speaker pro tem- strong support of Midway. I also be- pore on this day. MORNING HOUR DEBATES lieve we need to build a third airport to J. DENNIS HASTERT, serve the Chicago region. As we know, Speaker of the House of Representatives. The SPEAKER pro tempore. Pursu- ant to the order of the House of Janu- air travel is going to double over the f ary 23, 2002, the Chair will now recog- coming decade, and O’Hare and Midway MESSAGE FROM THE SENATE nize Members from lists submitted by in the Chicago area are today at capac- the majority and minority leaders for ity. We need to rebuild and modernize A message from the Senate by Mr. O’Hare, but we also need to build a morning hour debates. The Chair will Monahan, one of its clerks, announced third airport in south suburban alternate recognition between the par- that the Senate has passed with Peotone to serve the Chicago region. amendments in which the concurrence ties, with each party limited to not to This past year, Governor Ryan and of the House is requested, a bill of the exceed 30 minutes, and each Member, Mayor Daley entered into a historic House of the following title: except the majority leader, the minor- agreement which provided for the re- H.R. 2069. An act to amend the Foreign As- ity leader, or the minority whip, lim- configuration and expansion of O’Hare, sistance Act of 1961 and the Global AIDS and ited to not to exceed 5 minutes. as well as development of Chicago’s Tuberculosis Relief Act of 2000 to authorize The Chair recognizes the gentleman south suburban airport near Peotone, assistance to prevent, treat, and monitor from Illinois (Mr. WELLER) for 5 min- Illinois. My colleague, the gentleman HIV/AIDS in sub-Saharan Africa and other utes. from Illinois (Mr. LIPINSKI), introduced developing countries. f legislation which originally would have The message also announced that the URGING MEMBERS TO JOIN IN OP- codified this agreement into law, mod- Senate has passed without amendment POSITION TO H.R. 3479, LEGISLA- ernizing O’Hare, and pushing develop- in which the concurrence of the House TION WHICH EXPANDS O’HARE ment of a south suburban airport. is requested, concurrent resolutions of AIRPORT BUT EXCLUDES FUND- I had originally stood here and stated the House of the following titles: ING FOR PEOTONE AIRPORT time after time that I wanted to sup- H. Con. Res. 161. Concurrent resolution port this legislation and that I was honoring the 19 United States servicemen Mr. WELLER. Mr. Speaker, today is ready to cosponsor the bill if it truly who died in the terrorist bombing of the the first day we are in session in the reflected the integrity of the agree- Khobar Towers military housing compound week. Usually on the first day we deal ment between the Governor and the in Dhahran, Saudi Arabia, on June 25, 1996. with noncontroversial issues, some- mayor. H. Con. Res. 378. Concurrent resolution thing called the Suspension Calendar. However, this legislation, H.R. 3479, commending the District of Columbia Na- It is my understanding we have al- tional Guard, the National Guard Bureau, which will be before us this afternoon, and the entire Department of Defense for the most 15 pieces of legislation before us does not reflect the agreement between assistance provided to the United States today on what is normally a non- the Governor and the mayor. In fact, Capitol Police and the entire Congressional controversial day. But I want to draw the Governor has indicated he does not community in response to the terrorist and the attention of my colleagues to a support the bill today in its current anthrax attacks of September and October very controversial piece of legislation form. That is why I think it is impor- 2001. that is on the Suspension Calendar, tant to note that H.R. 3479 breaks the The message also announced that the and I want to ask my colleagues to join bipartisan agreement between Gov- Senate disagrees to the amendment of me in opposition to this legislation, ernor Ryan and Mayor Daley on

b This symbol represents the time of day during the House proceedings, e.g., b 1407 is 2:07 p.m. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor.

H4577

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VerDate May 23 2002 01:35 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00001 Fmt 4634 Sfmt 0634 E:\CR\FM\A15JY7.000 pfrm12 PsN: H15PT1 H4578 CONGRESSIONAL RECORD — HOUSE July 15, 2002 O’Hare. That is why I ask my col- lation will kill any development of a ronmental legislation written by the leagues to join me in opposition to this south suburban airport and keep Chi- chemical companies, he supports pri- bill today. cago aviation gridlocked for years to vatization of Social Security written My hope is that the Committee on come. by Wall Street bankers. Transportation and Infrastructure will Mr. Speaker, we need a bipartisan so- Most recently, the President en- go back and move legislation again, lution. The mayor and the Governor dorsed a prescription drug benefit to be and bring it back to the floor, which came together with an agreement. The administered by the health insurance truly reflects the bipartisan agreement bill before us today, H.R. 3479, fails to industry, the same people who brought which expands O’Hare as well as moves honor that agreement; in fact, it us HMOs. This plan would provide sen- forward on construction of an airport breaks the agreement between the iors with totally inadequate coverage, at Peotone. mayor and the Governor. making no provision for dealing with Mr. Speaker, this legislation, as I no- I urge opposition to this bill and ask the outrageous prices Americans are ticed, breaks the agreement between that my colleagues join me in voting paying for their prescription drugs. It the mayor and the Governor. I would ‘‘no.’’ would undercut seniors’ purchasing note that the legislation, H.R. 3479, has f power and enable the drug industry to no language in it which reflects the sustain its outrageous drug prices. CORPORATE GREED agreement that the Governor and Apparently, the President has been mayor agreed to, which moves forward The SPEAKER pro tempore. Pursu- convinced by the brand-name big drug with the construction of a third airport ant to the order of the House of Janu- companies that prices are not a prob- at Peotone. ary 23, 2002, the gentleman from Ohio lem. Democrats are more concerned The legislation takes away the State (Mr. BROWN) is recognized during morn- about the burden on seniors and their of Illinois’s rights and undercuts the ing hour debates for 5 minutes. families who are being gouged by the authority of the State of Illinois to Mr. BROWN of Ohio. Mr. Speaker, it predatory pricing of the prescription make its own decisions regarding air has been almost a week since President drug industry. The Democratic plan travel. Bush went to Wall Street to present his provides a direct prescription drug ben- H.R. 3479 completely ignores the plan to curb executive greed and cor- efit inside Medicare and combats high needs of the south suburbs of Chicago, porate misgovernance. The response, prescription drug prices. The Repub- where 2.5 million people live within 45 unfortunately, has been pretty lican plan, written by the drug compa- minutes of the proposed airport at underwhelming. The markets dropped nies, calls for a privatized system that Peotone. Additionally, I would note by several hundred points day after day coddles industry and leaves gaps in that failure to develop Peotone would after day. The press and the American coverage for seniors. shortchange the entire Chicago region people have openly questioned the The Republicans claim they are of- by forfeiting almost 250,000 new jobs. President’s commitment to real fering the best drug benefit possible Unfortunately, H.R. 3479 does not pay change. under current budgetary constraints; any heed to the studies that have, Even Wall Street workers who at- but a year ago, when the Bush tax cut since the 1980s, consistently shown that tended the speech, mostly Bush sup- plan, the tax breaks, which went over- Chicago, the region, and our Nation porters, wondered aloud about how whelmingly to the richest 1 percent of will have aviation gridlock, and the much of the speech was just politics people in this society, when that was best solution is a new airport, a third and how much was about real change. being debated, we were assured by the airport to serve the Chicago region. Why was this speech so poorly re- President and Republican leadership of Both the Governor and mayor recog- ceived? One, because so many officials huge budget surpluses. We were told nized these studies when they reached in the Bush administration are them- these surpluses would be enough to ad- their agreement last year. selves former corporate CEOs, lawyers, dress long-term solvency of Medicare I would note that the bill that will be and accountants who lack the moral and Social Security and still have the before us today breaks the agreement authority or the will to change cor- money for education and the money for between the mayor and the Governor porate practices, or even to enforce a prescription drug benefit. Since then, and does not reflect the integrity of current law. these projected surpluses promised by the agreement. Nevertheless, the bill Second, because in the middle of the President Bush and others have evapo- imposes a Federal solution on a State current crisis, the President and the rated, mostly because of the overly- problem and does not have the full sup- Vice President, both former oil com- generous-to-the-most-privileged-in- port of the Illinois delegation nor the pany CEOs, have been forced to answer this-society tax cut. people of Illinois, who will be most im- questions about their own ethics and Maybe the President and his adminis- pacted by the legislation. business practices in the private sec- tration, full of corporate executives, In fact, the three members of the Illi- tor. were using the same accounting prac- nois delegation most affected by H.R. Third, because, despite his rhetorical tices as America’s big companies. 3479, the gentlemen from Illinois, Mr. calls for corporate America to clean up Maybe, Mr. Speaker, this is what Presi- HYDE, Mr. JACKSON, and myself, stand its act, President Bush continues to op- dent Bush and Vice President CHENEY in opposition to this bill this after- pose real reform on Capitol Hill. He has meant when they said that, under their noon. refused to support meaningful pension leadership, the country would be run I support Chicago-O’Hare and believe and accounting reform; he opposes leg- like a corporation. it needs to be expanded and modernized islation to halt offshore tax avoidance f to be a safer airport with more capac- by huge corporations; and, to make ity, but expanding O’Hare is not matters worse, even though America’s HONORING TED WILLIAMS enough. It will not solve the capacity capital markets lost $2.4 trillion last The SPEAKER pro tempore. Pursu- problem or face it in the future. Even year, more than the gross domestic ant to the order of the House of Janu- with the development of a south subur- product of Germany, the President con- ary 23, 2002, the gentleman from Flor- ban airport, O’Hare can still expect a 40 tinues to favor turning Social Security ida (Mr. STEARNS) is recognized during percent increase in passenger load, so over to Wall Street in a privatization morning hour debates for 5 minutes. they are still going to increase their scheme. This is the same Wall Street Mr. STEARNS. Mr. Speaker, today business. that advised American investors to buy we will honor Ted Williams, the base- Air travel is expected to double in Enron and WorldCom and Adelphia and ball legend, here on the House floor. I the next 15 years. Expanding O’Hare others while their analysts privately am here this morning to also honor will take 12 to 15 years, and we know ridiculed those companies. him. we cannot land airplanes while pouring In addition, the President has sup- On July 5, of course, of this year, he concrete. The south suburban airport ported a whole slew of bills that have died. He is one of baseball’s greatest at Peotone could be expanding capacity been written by and for big industry. legends. He was known as the ‘‘Splen- in just 4 to 5 years as a complement to He supports energy legislation written did Splinter,’’ ‘‘Teddy Ballgame,’’ ‘‘the O’Hare expansion. However, this legis- by the oil companies, he supports envi- Kid,’’ ‘‘the Thumper’’; he was a man

VerDate May 23 2002 01:35 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00002 Fmt 4634 Sfmt 0634 E:\CR\FM\K15JY7.002 pfrm12 PsN: H15PT1 July 15, 2002 CONGRESSIONAL RECORD — HOUSE H4579 who turned the art of batting into a If ever, as long as I live, I can help any- SENBRENNER) come forward and lead science. one in any way possible, I will. It the House in the Pledge of Allegiance. Mr. Speaker, he began his major makes you just feel great.’’ Mr. SENSENBRENNER led the Pledge of league career with the Boston Red Sox This statement, of course, is no sur- Allegiance as follows: on December 7, 1937, and played for the prise to those who knew Ted. His pas- I pledge allegiance to the Flag of the team exclusively for 19 years. He re- sionate support of the Jimmy Fund, an United States of America, and to the Repub- tired with a career high .344 batting av- organization dedicated to raising funds lic for which it stands, one nation under God, erage, and was, of course, the last play- for cancer research and treatment for indivisible, with liberty and justice for all. er to hit over 400 for a full season in children, is also legend. In his auto- f 1941. Ted Williams is tied for 11th all biography Ted wrote, ‘‘I think one of COMMUNICATION FROM DISTRICT time, with 521 home runs, and 11th with the greatest things ever said is that a DIRECTOR OF HON. SHERROD 1,839 RBIs. man never stands so high as when he BROWN OF OHIO, MEMBER OF He won two Triple Crowns, and was a stoops to help a kid.’’ CONGRESS two-time MVP. He held six American Mr. Speaker, Ted Williams is one of League batting championships and re- the greatest hitters to ever play the The SPEAKER pro tempore laid be- ceived 18 All-star game selections. game, if not the greatest. But he fore the House the following commu- These tremendous achievements, Mr. should also be remembered for what he nication from Elizabeth Thames, Dis- Speaker, were reached despite Ted accomplished outside of the game, ac- trict Director to the Honorable missing five seasons serving his coun- complishments that we will not find in SHERROD BROWN of Ohio, Member of try as a naval aviator in World War II, career statistics, but the impact of Congress: and then later he went on to become a which will be felt for years to come. JULY 8, 2002. Marine aviator, flying 39 combat mis- God bless Ted Williams and his family. Hon. DENNIS J. HASTERT, sions in Korea and earning an Air Speaker, House of Representatives, f Medal and two Gold Stars. Washington, DC. On January 20, 1966, Ted Williams RECESS DEAR MR. SPEAKER: This is to formally no- tify you, pursuant to Rule VIII of the Rules was inducted into the Baseball Hall of The SPEAKER pro tempore (Mr. of the House, that I have been served with a Fame, and on May 29, 1984, the Red Sox CULBERSON). Pursuant to clause 12 of civil subpoena for testimony issued by the formally retired his number 9. rule I, the Chair declares the House in Geauga County Court of Common Pleas, In 1994, the so-called ‘‘Einstein of recess until 2 p.m. Chardon, Ohio. batting’’ opened the Ted Williams Mu- Accordingly (at 12 o’clock and 48 After consultation with the Office of Gen- seum and Library in Hernando, Flor- eral Counsel, I determined that it is incon- minutes p.m.), the House stood in re- sistent with the precedents and privileges of ida, becoming the number one tourist cess until 2 p.m. attraction in Citrus County. My family the House to comply with the subpoena. Sincerely, has had the opportunity to visit this f ELIZABETH THAMES, wonderful museum, and I was his Con- b 1400 District Director. gressman for many years. We had an f opportunity to meet and talk with him AFTER RECESS many times. The recess having expired, the House COMMUNICATION FROM THE HON. But Mr. Speaker, Ted Williams was was called to order by the Speaker pro SHERROD BROWN OF OHIO, MEM- much more to his country than just a tempore (Mr. CULBERSON) at 2 p.m. BER OF CONGRESS baseball legend. f The SPEAKER pro tempore laid be- b 1245 fore the House the following commu- PRAYER He was also a legend in terms of help- nication from the HONORABLE SHERROD ing others. When I first came to Con- The Chaplain, the Reverend Daniel P. BROWN of Ohio, Member of Congress: gress, Ted Williams, as I mentioned, Coughlin, offered the following prayer: JULY 8, 2002. was one of my constituents. Unfortu- Lord, You are wisdom for the ages Hon. DENNIS J. HASTERT, Speaker, House of Representatives, nately, districts were redrawn in 1991 and strength in times of weakness, renew Your people in faith and by our Washington, DC. and I moved away from him. However, DEAR MR. SPEAKER: This is to formally no- I continued to work with him and to prayer wash us clean in Your Holy Spirit. tify you, pursuant to Rule VIII of the Rules speak with him on a number of key of the House, that I have been served with a Guide the Members of Congress dur- issues. And one issue, Mr. Speaker, I civil subpoena for testimony issued by the would like to share with you this after- ing this week. Bring forth from their Geauga County Court of Common Pleas, noon. diversity a unity of purpose. Born out Chardon, Ohio. In 1995 he was recovering from a of honest exchange and compromise, After consultation with the Office of Gen- eral Counsel, I determined that it is incon- stroke that he suffered. During his let there emerge great leadership for Your people. sistent with the precedents and privileges to therapy he came to know a young the House to comply with the subpoena. woman whose name was Tricia Through the power of Your own Spir- it work through them and in them. Sincerely, Miranti. She was also going through SHERROD BROWN, therapy much like him, and he used to By works in the mind provide new Member of Congress. understanding and by works in the play checkers with her and talk to her. f She had a brain hemorrhage which she heart bring about freedom and unity, suffered at the age of five. Ted Wil- enough to hold a Nation, now and for- COMMUNICATION FROM THE liams is a man who exemplified deter- ever. Amen. CLERK OF THE HOUSE mination and hard work. He was im- f The SPEAKER pro tempore laid be- fore the House the following commu- pressed with her determination and her THE JOURNAL hard work and he watched her go nication from the Clerk of the House of through therapy. They became fast The SPEAKER pro tempore. The Representatives: friends and out of their friendship grew Chair has examined the Journal of the OFFICE OF THE CLERK, Williams’ creation of a scholarship last day’s proceedings and announces HOUSE OF REPRESENTATIVES, fund for disabled students. to the House his approval thereof. Washington, DC, July 12, 2002. In 1997 I had the honor of working Pursuant to clause 1, rule I, the Jour- Hon. J. DENNIS HASTERT, with Ted to raise funds for that schol- nal stands approved. The Speaker, House of Representatives, arship program. Ted’s dedication to Washington, DC. f DEAR MR. SPEAKER: Pursuant to the per- Tricia and those who share her experi- PLEDGE OF ALLEGIANCE mission granted in Clause 2(h) of Rule II of ences can be summed up in the fol- the Rules of the U.S. House of Representa- lowing quote he gave to an article in The SPEAKER pro tempore. Will the tives, I have the honor to transmit a sealed 1998. He said, ‘‘It makes me feel lucky. gentleman from Wisconsin (Mr. SEN- envelope received from the White House on

VerDate May 23 2002 01:35 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00003 Fmt 4634 Sfmt 0634 E:\CR\FM\K15JY7.029 pfrm12 PsN: H15PT1 H4580 CONGRESSIONAL RECORD — HOUSE July 15, 2002 Friday, July 12, 2002 at 1:21 p.m., and said to for 1 minute and to revise and extend (b) REQUIREMENTS.—In carrying out this contain a message from the President where- his remarks.) section, the Sentencing Commission shall— by he transmits the District of Columbia’s Mr. BROWN of Ohio. Mr. Speaker, (1) ensure that the sentencing guidelines Fiscal Year 2003 Budget Request Act. this morning in Birmingham, President and policy statements reflect the serious na- Sincerely yours, ture of the offenses described in subsection MARTHA C. MORRISON, Bush gave another speech aimed at re- (a), the growing incidence of such offenses, Deputy Clerk. storing investor confidence at the same and the need for an effective deterrent and time the country’s equity markets f appropriate punishment to prevent such of- were well on their way to a sixth day of fenses; DISTRICT OF COLUMBIA FISCAL losses. Why is that? (2) consider the following factors and the YEAR 2003 BUDGET REQUEST Could it be because so many adminis- extent to which the guidelines may or may ACT—MESSAGE FROM THE tration officials in the Bush White not account for them— PRESIDENT OF THE UNITED House are themselves former corporate (A) the potential and actual loss resulting STATES (H. DOC. NO. 107– ) from the offense; CEOs, lawyers, or accountants who (B) the level of sophistication and planning The SPEAKER pro tempore laid be- lack the moral authority or the will to involved in the offense; fore the House the following message change corporate practices, or even to (C) whether the offense was committed for from the President of the United enforce current law? Or could it be be- purposes of commercial advantage or private States; which was read and, together cause in the middle of the current fi- financial benefit; with the accompanying papers, without nancial crisis, the President and the (D) whether the defendant acted with mali- objection, referred to the Committee Vice President have been forced to an- cious intent to cause harm in committing on Appropriations and ordered to be swer questions about their own ethics the offense; printed: (E) the extent to which the offense violated and business practices as oil company the privacy rights of individuals harmed; To the Congress of the United States: CEOs? Or could it be, because despite (F) whether the offense involved a com- Pursuant to my constitutional au- his rhetorical calls for corporate Amer- puter used by the government in furtherance thority and consistent with sections ica to clean up its act, the President of national defense, national security, or the 202(c) and (e) of the The District of Co- continues to oppose real reform on administration of justice; lumbia Financial Management and Re- Capitol Hill? (G) whether the violation was intended to sponsibility Assistance Act of 1995 and Maybe, Mr. Speaker, with the recent or had the effect of significantly interfering section 446 of The District of Columbia spate of corporate collapses, the Amer- with or disrupting a critical infrastructure; Self-Governmental Reorganization Act and ican people have begun to wonder (H) whether the violation was intended to as amended in 1989, I am transmitting whether running the company like a or had the effect of creating a threat to pub- the District of Columbia’s Fiscal Year corporation, as the President and Vice lic health or safety, or injury to any person; 2003 Budget Request Act. President have promised, is all that (3) assure reasonable consistency with The proposed FY 2003 Budget Request good an idea. other relevant directives and with other sen- Act reflects the major programmatic f tencing guidelines; objectives of the Mayor and the Coun- (4) account for any additional aggravating cil of the District of Columbia. For FY ANNOUNCEMENT BY THE SPEAKER or mitigating circumstances that might jus- 2003, the District estimates total rev- PRO TEMPORE tify exceptions to the generally applicable enue and expenditures of $5.7 billion. The SPEAKER pro tempore. Pursu- sentencing ranges; (5) make any necessary conforming GEORGE W. BUSH. ant to clause 8 of rule XX, the Chair changes to the sentencing guidelines; and THE WHITE HOUSE, July 11, 2002. announces that he will postpone fur- (6) assure that the guidelines adequately f ther proceedings today on each motion meet the purposes of sentencing as set forth REMEMBERING OUR VETERANS to suspend the rules on which a re- in section 3553(a)(2) of title 18, United States THROUGH SERVICE ORGANIZA- corded vote or the yeas and nays are Code. SEC. 101A. STUDY AND REPORT ON COMPUTER TIONS ordered, or on which the vote is ob- jected to under clause 6 of rule XX. CRIMES. (Mr. GEKAS asked and was given Any record votes on motions to sus- Not later than May 1, 2003, the United States Sentencing Commission shall submit permission to address the House for 1 pend the rules ordered prior to 6:30 p.m. minute and to revise and extend his re- a brief report to Congress that explains any will be taken today. Record votes on actions taken by the Sentencing Commission marks.) remaining motions to suspend the rules in response to this Act and includes any rec- Mr. GEKAS. Mr. Speaker, 1941 was a will be taken tomorrow. ommendations the Commission may have re- banner year for American baseball and garding statutory penalties for offenses f baseball in the American League, as it under section 1030 of title 18, United States were. In that year Joe DiMaggio hit in CYBER SECURITY ENHANCEMENT Code. 56 games straight, and Ted Williams ACT OF 2002 SEC. 102. EMERGENCY DISCLOSURE EXCEPTION. batted 406. These are not the important Mr. SENSENBRENNER. Mr. Speak- (a) IN GENERAL.—Section 2702(b) of title 18, United States Code, is amended— historical facts, although they are er, I move to suspend the rules and great for those of us who follow base- (1) by striking ‘‘or’’ at the end of paragraph pass the bill (H.R. 3482) to provide (5); ball, but both of them did something greater cybersecurity, as amended. (2) by striking subparagraph (C) of para- extraordinary. Joe DiMaggio, very The Clerk read as follows: graph (6); soon after that wonderful streak, en- H.R. 3482 (3) in paragraph (6), by inserting ‘‘or’’ at tered the United States Army and Be it enacted by the Senate and House of Rep- the end of subparagraph (A); and served until 1946 as a noncommissioned resentatives of the United States of America in (4) by inserting after paragraph (6) the fol- officer in the United States Army. Ted Congress assembled, lowing: ‘‘(7) to a Federal, State, or local govern- Williams went into the Air Force, or SECTION 1. SHORT TITLE. mental entity, if the provider, in good faith, Army, and served the balance of the This Act may be cited as the ‘‘Cyber Secu- believes that an emergency involving danger war in his branch of the service. rity Enhancement Act of 2002’’. Then dramatically twice after that, of death or serious physical injury to any TITLE I—COMPUTER CRIME person requires disclosure without delay of Ted Williams reported back for duty SEC. 101. AMENDMENT OF SENTENCING GUIDE- communications relating to the emer- and served in the Korean conflict. LINES RELATING TO CERTAIN COM- gency.’’. These are the great Americans that we PUTER CRIMES. (b) REPORTING OF DISCLOSURES.—A govern- remember and we will continue to re- (a) DIRECTIVE TO THE UNITED STATES SEN- ment entity that receives a disclosure under member through the service organiza- TENCING COMMISSION.—Pursuant to its au- this section shall file, no later than 90 days tions which we will discuss a little bit thority under section 994(p) of title 28, after such disclosure, a report to the Attor- United States Code, and in accordance with later. ney General stating the subparagraph under this section, the United States Sentencing which the disclosure was made, the date of f Commission shall review and, if appropriate, the disclosure, the entity to which the dis- CORPORATE GREED amend its guidelines and its policy state- closure was made, the number of customers ments applicable to persons convicted of an or subscribers to whom the information dis- (Mr. BROWN of Ohio asked and was offense under section 1030 of title 18, United closed pertained, and the number of commu- given permission to address the House States Code. nications, if any, that were disclosed. The

VerDate May 23 2002 01:35 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00004 Fmt 4634 Sfmt 0634 E:\CR\FM\A15JY7.005 pfrm12 PsN: H15PT1 July 15, 2002 CONGRESSIONAL RECORD — HOUSE H4581 Attorney General shall publish all such re- the case of a first offense under this para- (A) weapons capable of preventing use by ports into a single report to be submitted to graph; and unauthorized persons, including personalized Congress one year after enactment of the ‘‘(B) a fine under this title or imprison- guns; bill. ment for not more than 5 years, or both, in (B) protective apparel; SEC. 103. GOOD FAITH EXCEPTION. the case of an offense under this subpara- (C) bullet-resistant and explosion-resistant Section 2520(d)(3) of title 18, United States graph that occurs after a conviction of an- glass; Code, is amended by inserting ‘‘or 2511(2)(i)’’ other offense under this section.’’. (D) monitoring systems and alarm systems after ‘‘2511(3)’’. (c) PRESENCE OF OFFICER AT SERVICE AND capable of providing precise location infor- SEC. 104. INTERNET ADVERTISING OF ILLEGAL EXECUTION OF WARRANTS FOR COMMUNICA- mation; DEVICES. TIONS AND CUSTOMER RECORDS.—Section 3105 (E) wire and wireless interoperable com- Section 2512(1)(c) of title 18, United States of title 18, United States Code, is amended by munication technologies; Code, is amended— adding at the end the following: ‘‘The pres- (F) tools and techniques that facilitate in- (1) by inserting ‘‘or disseminates by elec- ence of an officer is not required for service vestigative and forensic work, including tronic means’’ after ‘‘or other publication’’; or execution of a search warrant directed to computer forensics; and a provider of electronic communication serv- (G) equipment for particular use in (2) by inserting ‘‘knowing the content of ice or remote computing service for records counterterrorism, including devices and the advertisement and’’ before ‘‘knowing or or other information pertaining to a sub- technologies to disable terrorist devices; scriber to or customer of such service.’’. having reason to know’’. (H) guides to assist State and local law en- SEC. 105. STRENGTHENING PENALTIES. TITLE II—OFFICE OF SCIENCE AND forcement agencies; Section 1030(c) of title 18, United States TECHNOLOGY (I) DNA identification technologies; and Code, is amended— SEC. 201. ESTABLISHMENT OF OFFICE; DIREC- (J) tools and techniques that facilitate in- (1) by striking ‘‘and’’ at the end of para- TOR. vestigations of computer crime. graph (3); (a) ESTABLISHMENT.— (7) To administer a program of research, (2) in each of subparagraphs (A) and (C) of (1) IN GENERAL.—There is hereby estab- development, testing, and demonstration to paragraph (4), by inserting ‘‘except as pro- lished within the Department of Justice an improve the interoperability of voice and vided in paragraph (5),’’ before ‘‘a fine under Office of Science and Technology (herein- data public safety communications. this title’’; after in this title referred to as the ‘‘Office’’). (8) To serve on the Technical Support (3) by striking the period at the end of (2) AUTHORITY.—The Office shall be under Working Group of the Department of De- paragraph (4)(C) and inserting ‘‘; and’’; and the general authority of the Assistant Attor- fense, and on other relevant interagency ney General, Office of Justice Programs, and (4) by adding at the end the following: panels, as requested. shall be independent of the National Insti- ‘‘(5)(A) if the offender knowingly or reck- (9) To develop, and disseminate to State tute of Justice. lessly causes or attempts to cause serious and local law enforcement agencies, tech- (b) DIRECTOR.—The Office shall be headed nical assistance and training materials for bodily injury from conduct in violation of by a Director, who shall be an individual ap- law enforcement personnel, including pros- subsection (a)(5)(A)(i), a fine under this title pointed based on approval by the Office of ecutors. or imprisonment for not more than 20 years, Personnel Management of the executive or both; and qualifications of the individual. (10) To operate the regional National Law ‘‘(B) if the offender knowingly or reck- Enforcement and Corrections Technology SEC. 202. MISSION OF OFFICE; DUTIES. lessly causes or attempts to cause death Centers and, to the extent necessary, estab- (a) MISSION.—The mission of the Office lish additional centers through a competi- from conduct in violation of subsection shall be— tive process. (a)(5)(A)(i), a fine under this title or impris- (1) to serve as the national focal point for onment for any term of years or for life, or work on law enforcement technology; and (11) To administer a program of acquisi- both.’’. (2) to carry out programs that, through the tion, research, development, and dissemina- SEC. 106. PROVIDER ASSISTANCE. provision of equipment, training, and tech- tion of advanced investigative analysis and (a) SECTION 2703.—Section 2703(e) of title 18, nical assistance, improve the safety and ef- forensic tools to assist State and local law United States Code, is amended by inserting fectiveness of law enforcement technology enforcement agencies in combating ‘‘, statutory authorization’’ after ‘‘sub- and improve access to such technology by cybercrime. poena’’. Federal, State, and local law enforcement (12) To support research fellowships in sup- (b) SECTION 2511.—Section 2511(2)(a)(ii) of agencies. port of its mission. title 18, United States Code, is amended by (b) DUTIES.—In carrying out its mission, (13) To serve as a clearinghouse for infor- inserting ‘‘, statutory authorization,’’ after the Office shall have the following duties: mation on law enforcement technologies. ‘‘court order’’ the last place it appears. (1) To provide recommendations and advice (14) To represent the United States and SEC. 107. EMERGENCIES. to the Attorney General. State and local law enforcement agencies, as Section 3125(a)(1) of title 18, United States (2) To establish and maintain advisory requested, in international activities con- Code, is amended— groups (which shall be exempt from the pro- cerning law enforcement technology. (1) by striking ‘‘or’’ at the end of subpara- visions of the Federal Advisory Committee (15) To enter into contracts and coopera- graph (A); Act (5 U.S.C. App.)) to assess the law en- tive agreements and provide grants, which (2) by striking the comma at the end of forcement technology needs of Federal, may require in-kind or cash matches from subparagraph (B) and inserting a semicolon; State, and local law enforcement agencies. the recipient, as necessary to carry out its and (3) To establish and maintain performance mission. (3) by adding at the end the following: standards in accordance with the National (16) To carry out other duties assigned by ‘‘(C) an immediate threat to a national se- Technology Transfer and Advancement Act the Attorney General to accomplish the mis- curity interest; or of 1995 (Public Law 104–113) for, and test and sion of the Office. ‘‘(D) an ongoing attack on a protected evaluate law enforcement technologies that (c) COMPETITION REQUIRED.—Except as oth- computer (as defined in section 1030) that may be used by, Federal, State, and local law erwise expressly provided by law, all re- constitutes a crime punishable by a term of enforcement agencies. search and development carried out by or imprisonment greater than one year;’’. (4) To establish and maintain a program to through the Office shall be carried out on a competitive basis. SEC. 108. PROTECTING PRIVACY. certify, validate, and mark or otherwise rec- (d) INFORMATION FROM FEDERAL AGEN- (a) SECTION 2511.—Section 2511(4) of title 18, ognize law enforcement technology products CIES.—Federal agencies shall, upon request that conform to standards established and United States Code, is amended— from the Office and in accordance with Fed- maintained by the Office in accordance with (1) by striking paragraph (b); and eral law, provide the Office with any data, (2) by redesignating paragraph (c) as para- the National Technology Transfer and Ad- reports, or other information requested, un- graph (b). vancement Act of 1995 (Public Law 104–113). less compliance with such request is other- (b) SECTION 2701.—Section 2701(b) of title The program may, at the discretion of the wise prohibited by law. 18, United States Code, is amended— Office, allow for supplier’s declaration of (e) PUBLICATIONS.—Decisions concerning (1) in paragraph (1), by inserting ‘‘, or in conformity with such standards. publications issued by the Office shall rest furtherance of any criminal or tortious act (5) To work with other entities within the solely with the Director of the Office. in violation of the Constitution or laws of Department of Justice, other Federal agen- (f) TRANSFER OF FUNDS.—The Office may the United States or any State’’ after ‘‘com- cies, and the executive office of the Presi- transfer funds to other Federal agencies or mercial gain’’; dent to establish a coordinated Federal ap- provide funding to non-Federal entities (2) in paragraph (1)(A), by striking ‘‘one proach on issues related to law enforcement through grants, cooperative agreements, or year’’ and inserting ‘‘5 years’’; technology. contracts to carry out its duties under this (3) in paragraph (1)(B), by striking ‘‘two (6) To carry out research, development, section. years’’ and inserting ‘‘10 years’’; and testing, and evaluation in fields that would (g) ANNUAL REPORT.—The Director of the (4) so that paragraph (2) reads as follows: improve the safety, effectiveness, and effi- Office shall include with the budget jus- ‘‘(2) in any other case— ciency of law enforcement technologies used tification materials submitted to Congress ‘‘(A) a fine under this title or imprison- by Federal, State, and local law enforcement in support of the Department of Justice ment for not more than one year or both, in agencies, including, but not limited to— budget for each fiscal year (as submitted

VerDate May 23 2002 00:43 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00005 Fmt 4634 Sfmt 0634 E:\CR\FM\A15JY7.002 pfrm12 PsN: H15PT1 H4582 CONGRESSIONAL RECORD — HOUSE July 15, 2002 with the budget of the President under sec- (e) REPORT ON IMPLEMENTATION.—Not later curity. Unfortunately, this same tech- tion 1105(a) of title 31, United States Code) a than 1 year after the date of the enactment nology has also facilitated terrorist report on the activities of the Office. Each of this Act, the Attorney General shall sub- and criminal activity alike. At the such report shall include the following: mit to the Committee on the Judiciary of stroke of a key, someone can cause (1) For the period of 5 fiscal years begin- the Senate and the Committee on the Judici- ning with the fiscal year for which the budg- ary of the House of Representatives a report millions of dollars of damage to our et is submitted— on the implementation of this title. The re- economy as well as threaten our na- (A) the Director’s assessment of the needs port shall— tional security and the public’s safety. of Federal, State, and local law enforcement (1) identify each transfer carried out pursu- This threat is not new; but after the agencies for assistance with respect to law ant to subsection (b); September 11 attacks, the risks are enforcement technology and other matters (2) provide an accounting of the amounts greater. Even prior to the attacks, the consistent with the mission of the Office; and sources of funding available to the Office Committee on the Judiciary’s Sub- and to carry out its mission under existing au- (B) a strategic plan for meeting such needs thorizations and appropriations, and set committee on Crime, Terrorism, and of such law enforcement agencies. forth the future funding needs of the Office; Homeland Security was working on (2) For the fiscal year preceding the fiscal (3) include such other information and rec- legislation to improve Federal law to year for which such budget is submitted, a ommendations as the Attorney General con- protect the Nation from cybercrime description of the activities carried out by siders appropriate. and cyberterrorism. the Office and an evaluation of the extent to SEC. 205. NATIONAL LAW ENFORCEMENT AND Last summer, the subcommittee held which those activities successfully meet the CORRECTIONS TECHNOLOGY CEN- three hearings on the growing threat of needs assessed under paragraph (1)(A) in pre- TERS. vious reports. (a) IN GENERAL.—The Director of the Office cybercrime and cyberterrorism. Those SEC. 203. DEFINITION OF LAW ENFORCEMENT shall operate and support National Law En- hearings highlighted the fact that TECHNOLOGY. forcement and Corrections Technology Cen- cybercrime knows no borders or re- For the purposes of this title, the term ters (hereinafter in this section referred to straints and can substantially harm ‘‘law enforcement technology’’ includes in- as ‘‘Centers’’) and, to the extent necessary, the American people and our economy. vestigative and forensic technologies, correc- establish new centers through a merit-based, tions technologies, and technologies that The law enforcement officials and competitive process. private industry representatives at the support the judicial process. (b) PURPOSE OF CENTERS.—The purpose of SEC. 204. ABOLISHMENT OF OFFICE OF SCIENCE the Centers shall be to— hearings agreed that better coordina- AND TECHNOLOGY OF NATIONAL IN- (1) support research and development of tion, cooperation and information- STITUTE OF JUSTICE; TRANSFER OF sharing were needed as well as stronger FUNCTIONS. law enforcement technology; (a) TRANSFERS FROM OFFICE WITHIN NIJ.— (2) support the transfer and implementa- penalties for cyberattacks. The Office of Science and Technology of the tion of technology; The U.S.A. PATRIOT Act, which the National Institute of Justice is hereby abol- (3) assist in the development and dissemi- Committee on the Judiciary adopted ished, and all functions and activities per- nation of guidelines and technological stand- much of H.R. 2915, an earlier formed immediately before the date of the ards; and (4) provide technology assistance, informa- cybersecurity bill introduced by the enactment of this Act by the Office of gentleman from Texas (Chairman Science and Technology of the National In- tion, and support for law enforcement, cor- stitute of Justice are hereby transferred to rections, and criminal justice purposes. SMITH), and began to improve the Na- the Office. (c) ANNUAL MEETING.—Each year, the Di- tion’s cybersecurity, this bill, the (b) AUTHORITY TO TRANSFER ADDITIONAL rector shall convene a meeting of the Cen- Cyber Security Enhancement Act of FUNCTIONS.—The Attorney General may ters in order to foster collaboration and com- 2002, continues that work. transfer to the Office any other program or munication between Center participants. The bill strengthens penalties to bet- activity of the Department of Justice that (d) REPORT.—Not later than 12 months the Attorney General, in consultation with after the date of the enactment of this Act, ter reflect the seriousness of the Committee on the Judiciary of the Sen- the Director shall transmit to the Congress a cyberattacks, assists State and local ate and the Committee on the Judiciary of report assessing the effectiveness of the ex- law enforcement through better grant the House of Representatives, determines to isting system of Centers and identify the management, accountability and dis- be consistent with the mission of the Office. number of Centers necessary to meet the semination of technical advice and in- (c) TRANSFER OF FUNDS.— technology needs of Federal, State, and local formation, helps protect the Nation’s (1) IN GENERAL.—Any balance of appropria- law enforcement in the United States. tions that the Attorney General determines critical infrastructure, and enhances SEC. 206. COORDINATION WITH OTHER ENTITIES privacy protections. is available and needed to finance or dis- WITHIN DEPARTMENT OF JUSTICE. charge a function, power, or duty of the Of- Section 102 of the Omnibus Crime Control On May 8, the Committee on the Ju- fice or a program or activity that is trans- and Safe Streets Act of 1968 (42 U.S.C. 3712) is diciary reported this bill favorably by ferred to the Office shall be transferred to amended in subsection (a)(5) by inserting voice vote. The bill as introduced and the Office and used for any purpose for which ‘‘coordinate and’’ before ‘‘provide’’. reported out of committee contained those appropriations were originally avail- The SPEAKER pro tempore. Pursu- an authorization for the National In- able. Balances of appropriations so trans- frastructure Protection Center within ferred shall— ant to the rule, the gentleman from (A) be credited to any applicable appro- Wisconsin (Mr. SENSENBRENNER) and the Department of Justice. priation account of the Office; or the gentlewoman from Texas (Ms. Since that time, it appears that the (B) be credited to a new account that may JACKSON-LEE) each will control 20 min- center will be transferred out of the be established on the books of the Depart- utes. Department of Justice into the new De- ment of the Treasury; The Chair recognizes the gentleman partment of Homeland Security pro- and shall be merged with the funds already from Wisconsin (Mr. SENSENBRENNER). posed in H.R. 5005. Accordingly, the credited to that account and accounted for committee has removed that author- as one fund. GENERAL LEAVE ization to be consistent with H.R. 5005 (2) LIMITATIONS.—Balances of appropria- Mr. SENSENBRENNER. Mr. Speak- tions credited to an account under paragraph er, I ask unanimous consent that all in this amended version of H.R. 3482. (1)(A) are subject only to such limitations as Members may have 5 legislative days The bill also contains a few technical are specifically applicable to that account. within which to revise and extend their changes as well. Balances of appropriations credited to an ac- remarks on H.R. 3482. H.R. 3482, the Cyber Security En- count under paragraph (1)(B) are subject The SPEAKER pro tempore. Is there hancement Act of 2002, is designed to only to such limitations as are applicable to objection to the request of the gen- increase the cybersecurity of our Na- the appropriations from which they are tion against criminal and terrorist at- transferred. tleman from Wisconsin? (d) TRANSFER OF PERSONNEL AND ASSETS.— There was no objection. tacks. As one of the most techno- With respect to any function, power, or duty, Mr. SENSENBRENNER. Mr. Speak- logically advanced nations in the or any program or activity, that is trans- er, I yield myself such time as I may world, we must deal with a new vulner- ferred to the Office, those employees and as- consume. ability, the interconnectedness of our sets of the element of the Department of Mr. Speaker, our society has become Nation’s economy and national secu- Justice from which the transfer is made that rity. I urge Members to support this the Attorney General determines are needed technologically dependent. Computers to perform that function, power, or duty, or and related technologies have im- bill. for that program or activity, as the case may proved every aspect of our lives, our Mr. Speaker, I reserve the balance of be, shall be transferred to the Office. health care, our education, and our se- my time.

VerDate May 23 2002 01:35 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00006 Fmt 4634 Sfmt 0634 E:\CR\FM\A15JY7.002 pfrm12 PsN: H15PT1 July 15, 2002 CONGRESSIONAL RECORD — HOUSE H4583 Ms. JACKSON-LEE of Texas. Mr. that. With the reporting requirement, lives and the livelihoods of many inno- Speaker, I yield myself such time as I we should be able to assess whether cent victims. may consume. this provision is being used as con- Mr. Speaker, a crime is still a crime, (Ms. JACKSON-LEE of Texas asked templated and not abused. whether it occurs on the Internet or on and was given permission to revise and With this understanding of the bill, the street. We are in a war against ter- extend her remarks.) Mr. Speaker, I support it and urge my rorism. According to a recent news- Ms. JACKSON-LEE of Texas. Mr. colleagues to vote for it. paper article, ‘‘Unsettling signs of al Speaker, I rise to join the gentleman Mr. Speaker, I rise to join Chairman SEN- Qaeda’s aims and skills in cyberspace from Wisconsin (Mr. SENSENBRENNER) SENBRENNER in support of H.R. 3482, the have led some government experts to in support of H.R. 3482, the Cyber Secu- Cyber Security Act of 2001. conclude that terrorists are at the rity Act of 2002. I support the concept I support the concept of allowing Internet threshold of using the Internet as a di- of allowing internal service providers Service Providers (ISP) to give information to rect instrument of bloodshed.’’ to give information to law enforcement law enforcement officials when an emergency The article stated, ‘‘Most signifi- officials when emergency threat of threat of death or serious bodily injury exists. cantly, perhaps, U.S. investigators death or serious bodily injury exists. In general, information held by an ISP in pri- have found evidence in the logs that In general, information held by an vate information which is entitled to protection mark a browser’s path through the ISP is private information which is en- as such. Under current law, an ISP is author- Internet that al Qaeda operators spent titled to protection as such. In fact, we ized to release information to law enforcement time on sites that offer software and have worked very hard to ensure that officials when the ISP ‘‘reasonably believes’’ programming instructions for the dig- the privacy of Internet users and pro- an immediate danger exists. For an ISP to ital switches that run power, water, viders have been secured. This is a new ‘‘reasonably believe’’ an immediate danger ex- transport and communication grids.’’ way that America provides its informa- ists, an assessment of relevant information Cybercrimes and cybercriminals tion and communication; and, there- must be made. However, if the FBI presents know no borders. As long as there is fore, we believe the privacy issues are information which an ISP believes, if true, technology, cybercrime will exist. We extremely important. would present a threat of death or serious must improve our Nation’s b 1415 bodily injury, the ISP dispatcher on duty cybersecurity and strengthen our shouldn’t have to wake up the corporate gen- criminal laws to prevent, deter and re- Under current law, an ISP is author- eral counsel to assess the information to de- spond to such attacks. ized to release information to law en- termine if it can be reasonably believed. If This legislation, H.R. 3482, the Cyber forcement officials when the ISP rea- there is time to do all that, there is time to go Security Enhancement Act of 2002, in- sonably believes an immediate danger to a magistrate or judge and get a search war- creases penalties to better reflect the exists. For an ISP to reasonably be- rant. Accordingly, I support changing ‘‘reason- seriousness of cybercrime, enhances lieve an immediate danger exists, an ably believes’’ to ‘‘believes in good faith’’, as Federal, State and local law enforce- assessment of relevant information the bill does. ment efforts through better coordina- must be made. However, if the FBI pre- I appreciate the adjustments Subcommittee tion, and assists State and local law sents information which an ISP be- Chairman SMITH made to the bill to address enforcement officials through better lieves, if true, would present a threat concerns I had with the bill, including adding grant management, accountability and of death or serious bodily injury, the a reporting requirement for law enforcement dissemination of technical advice and ISP dispatcher on duty should not have officials to report on their use of the provision information. The Information Tech- to wake up the corporate general coun- during the year following enactment, so that nology Association of America stated sel to assess the information to deter- we can see how it is being used. It is one that the bill is important for strength- mine if it can be reasonably believed, thing to use this emergency authority for gen- ening guidelines on sentencing people particularly as relates to saving lives. uine emergencies involving threats to life or who are convicted of cybercrimes. The If there is time to do all that, there is safety, it is another thing to use it in a cal- Information Technology Industry time to go to a magistrate or judge and culated manner to get around the regular re- Council concluded that the bill will re- get a search warrant. Accordingly, I quirement of obtaining a warrant from a de- move obstacles to information-sharing would support changing ‘‘reasonably tached magistrate or judge before being given between the public and private sectors believed’’ to ‘‘believes in good faith’’ as access to private information. Since the sub- to strengthen Internet security. the bill does. scriber may never know of the access by law Mr. Speaker, we must protect our I appreciate the adjustments Sub- enforcement to his or her private information, Nation and our economy from the committee Chairman SMITH made to there will be no way to know if they are ac- growing threat of cyberattacks. Pen- the bill to address concerns that we cessing information erroneously or improperly. alties and law enforcement capabilities had with the bill and Ranking Member With the reporting requirement, we should be must be able to prevent and deter SCOTT had with the bill, including add- able to assess whether this provision is being cybercriminals. Until we secure our ing a reporting requirement for law en- used as contemplated, and not abused. cyberinfrastructure, a few keystrokes forcement officials to report on their With this understanding of the bill, Mr. and an Internet connection is all one use of the provision during the year Speaker, I support it and urge my colleagues needs to disable the economy or endan- following enactment so that we can see to vote for it. ger lives. A mouse can be just as dan- how it is being used. This is in keeping Mr. Speaker, I reserve the balance of gerous as a bullet or a bomb. That is with the balance that I think is impor- my time. why I urge my colleagues to support tant in fighting terrorism and pro- Mr. SENSENBRENNER. Mr. Speak- this legislation. viding law enforcement officers with er, I yield 4 minutes to the gentleman Mr. SENSENBRENNER. Mr. Speak- the tools that they need, as well as bal- from Texas (Mr. SMITH), the sub- er, I yield such time as he may con- ancing the rights of Americans. It is committee chairman. sume to the gentleman from New York one thing to use this emergency au- Mr. SMITH of Texas. Mr. Speaker, I (Mr. BOEHLERT), the chairman of the thority for genuine emergencies in- thank the chairman of the Committee Committee on Science. volving threats to life or safety. It is on the Judiciary for yielding me this Mr. BOEHLERT. I thank the gen- another thing to use it in a calculated time. tleman for yielding me this time. manner to get around the regular re- Mr. Speaker, many people think of Mr. Speaker, I rise in strong supports quirement of obtaining a warrant from cybercrime simply as a form of van- of H.R. 3482, the Cyber Security En- a detached magistrate or judge before dalism involving hacking or planting hancement Act of 2002. I want to thank being given access to private informa- viruses. Cybercrime is much more than the gentleman from Texas (Mr. SMITH), tion. Since the subscriber may never this. It can devastate our businesses, the Subcommittee on Crime, Terrorism know of the access by law enforcement economy and national infrastructure. and Homeland Security chairman, for to his or her private information, there Cybercrime also includes child pornog- his excellent work in bringing this bi- will be no way to know if they are as- raphy, which terrorizes our children partisan bill to the floor. I also want to sessing information erroneously or im- and our families. Criminals use com- thank the gentleman from Wisconsin properly. With this particular require- puter technology to steal life savings (Mr. SENSENBRENNER), Judiciary chair- ment, providing this information in the and the identities of unsuspecting indi- man, former chairman of the Com- year following, this will help determine viduals. These attacks threaten the mittee on Science, where he received

VerDate May 23 2002 02:16 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00007 Fmt 4634 Sfmt 0634 E:\CR\FM\K15JY7.010 pfrm12 PsN: H15PT1 H4584 CONGRESSIONAL RECORD — HOUSE July 15, 2002 his best training. From his years of tary. Rather than creating a new R&D Ms. JACKSON-LEE of Texas. Mr. service on the Committee on Science, infrastructure for law enforcement, we Speaker, I yield myself such time as I the gentleman from Wisconsin under- must find ways to help law enforce- may consume. I rise to support this stands that research and development ment gain access to the scientific ex- legislation. I just want to make note are critical weapons in the war on ter- pertise found in our colleges and uni- that this legislation has provided a re- rorism as well as our fight against all versities as well as our defense and na- porting requirement placed in the bill forms of crime. We know that the next tional laboratories. to help address the concerns, making war, the current war, the ongoing war, H.R. 3482 does this by explicitly au- sure that the legislation is used prop- is going to be won as much in the lab- thorizing DOJ’s existing network of re- erly. I would have liked to have added oratory as on the battlefield. gional technology assistance centers, additional safeguards dealing with the Mr. Speaker, title I of the legislation the National Law Enforcement and unreasonable search and seizure, but I enhances penalties for cybercrime and Corrections Technology Centers. These believe that the reporting requirement allows for better cooperation between centers are able to leverage existing will go a long ways to addressing that law enforcement and the private sector defense capabilities in sensitive areas concern, and I would ask my colleagues to investigate cybercrime. This is crit- such as information security, chemical, to support this legislation. ical. However, in the interest of time, I biological and nuclear security to pro- Mr. GILMAN. Mr. Speaker, I rise today in will limit my comments to title II of vide Federal, State and local law en- strong support of H.R. 3482, the Cyber Secu- forcement access to the best tech- the bill before the House today. rity Enhancement Act of 2002. nologies available to meet these Title II establishes an Office of This resolution achieves several goals. The emerging threats. Science and Technology within the Of- act will serve as a national focal point for fice of Justice Programs at the Justice In my home district, one such center is leading the Nation in the fight science and technology and it will also aid in Department. It is a needed step forward the development and dissemination of cyber in our fight against all forms of crime against cybercrime and all forms of crime. This is the National Law En- law enforcement and technology. and terrorism. I have said repeatedly, Moreover, it will make technical assistance the war on terrorism, like the Cold forcement and Corrections Technology Center, Northeast Region, located at available to Federal, State, and local law en- War, will be won in the laboratory as forcement agencies which is increasingly crit- much as on the battlefield. That means the Air Force Research Laboratory In- formation Directorate at Rome, New ical for our national security and infrastructure. that, as in the Cold War, we must prop- Crimes of fraud in computers with protected erly organize our government to put York. A prominent example of the cen- ter’s work was the establishment of the information or computers used by the Federal the most into and get the most out of Government are addressed in the legislation. our academic, government and indus- highly successful Utica Arson Strike Force in 1997. In less than a year, the A program will be established and main- try laboratories. Criminal use of tech- tained to certify, validate, and mark, or other- nology, specifically information tech- city went from worst to first in the Na- tion in the rate of arson convictions. wise recognize law enforcement technology nology, is now commonplace. We rely Leveraging the high tech expertise of products that conform to standards set by the on computers, the Internet, cell phones the Air Force research laboratory, the National Infrastructure Protection Center. and pagers every day. But so, too, do center was able to create affordable The National Infrastructure Protection Cen- the criminals and terrorists. technology tools for the Utica task ter will operate for regional national law en- Increasingly criminals are becoming forcement and corrections technology centers more and more sophisticated. Online force’s use. While the track record of the center and, to the extent necessary, establish addi- fraud, identity theft, child pornog- and others around the Nation is im- tional centers through a competitive process. raphy, computer intrusions, hacking pressive, the amount of resources This bill further provides that law enforce- and introduction of viruses are all on available for technical assistance is ment agencies utilize and establish forensic the rise. Unfortunately, U.S. law en- meager. The entire center system, as technology, and technologies that support the forcement is often ill-equipped to well as the science and technology judicial process. counter this criminal high tech trend. function within the Department of Jus- The use of these forensic tools will assist It is particularly true for State and tice, needs a clear congressional man- State and local law enforcement agencies in local law enforcement that often lack date and an adequate budget. This bill combating cybercrime. In addition, penalties the resources, training and expertise to would bring needed focus to R&D in will increase for violations where the offender effectively use advanced information support of law enforcement and estab- knowingly causes death or serious bodily in- technology to stop crime. Currently lish the Office of Science and Tech- jury. the Justice Department does support nology as a key liaison between DOJ Mr. Speaker, I urge this body to support this the development of new technologies, and other Federal research agencies. measure as it addresses the growing and in- mostly through the National Institute Mr. Speaker, the Committee on creasingly visible problem of cybercrime. of Justice, to serve the needs of law en- Science recently heard testimony from Ms. JACKSON-LEE of Texas. Mr. forcement and corrections agencies, a distinguished panel of the National Speaker, I yield back the balance of but the effort as it stands today is Academy of Sciences about the need my time. unfocused and limited. for greater science and technology in- Mr. SENSENBRENNER. Mr. Speak- That is why I have sought for over 3 vestment to combat terrorism. For this er, I yield back the balance of my time. years to establish an office for science reason, the Committee on Science The SPEAKER pro tempore (Mr. and technology within the Department unanimously approved the creation of CULBERSON). The question is on the mo- of Justice with the mission of improv- an under secretary for research and de- tion offered by the gentleman from ing the technical capabilities of law en- velopment in the proposed Homeland Wisconsin (Mr. SENSENBRENNER) that forcement at all levels. The bill before Security Department. The bill before the House suspend the rules and pass us today would do just that. Let me us today is consistent with this vision. the bill, H.R. 3482, as amended. also note that this bill would not cre- As we move forward in this process, I The question was taken. ate a new bureaucracy. In fact, the hope to forge a close working partner- The SPEAKER pro tempore. In the Congressional Budget Office has scored ship between DOJ’s Office of Science opinion of the Chair, two-thirds of this bill as revenue-neutral. Rather, and Technology and the new Homeland those present have voted in the affirm- the bill would transfer existing assets Security Department. ative. within the Justice Department to give I look forward to working with Ms. JACKSON-LEE of Texas. Mr. the agency an improved science and Chairman SENSENBRENNER, Chairman Speaker, on that I demand the yeas technology capability to better respond SMITH and all members of the Com- and nays. to threats posed by technically savvy mittee on the Judiciary to ensure ap- The yeas and nays were ordered. criminals and terrorists. This is a com- propriate coordination of effort to help The SPEAKER pro tempore. Pursu- monsense proposition. U.S. law en- combat terrorism and to ensure that ant to clause 8 of rule XX and the forcement agencies traditionally do more and more State and local first re- Chair’s prior announcement, further not have research and development ca- sponders have access to first-rate sci- proceedings on this motion will be pabilities like those found in the mili- entific and technological expertise. postponed.

VerDate May 23 2002 01:48 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00008 Fmt 4634 Sfmt 0634 E:\CR\FM\K15JY7.012 pfrm12 PsN: H15PT1 July 15, 2002 CONGRESSIONAL RECORD — HOUSE H4585 AMERICAN LEGION AMENDMENTS Mr. Speaker, I urge the House to pass of service are eligible to become members of ACT H.R. 3988 to make this change in the the American Legion if they served since: ‘‘Au- Mr. SENSENBRENNER. Mr. Speak- Federal charter of the American Le- gust 2, 1990 through the date of cessation of er, I move to suspend the rules and gion. hostilities, as decided by the United States pass the bill (H.R. 3988) to amend title Mr. Speaker, I reserve the balance of Government’’ and ‘‘was honorably discharged 36, United States Code, to clarify the my time. or separated from that service or continues to requirements for eligibility in the Ms. JACKSON-LEE of Texas. I yield serve honorably after that period.’’ American Legion. myself such time as I may consume. Under the Charter, however, the U.S. Gov- The Clerk read as follows: (Ms. JACKSON-LEE of Texas asked ernment has never issued a cessation of hos- H.R. 3988 and was given permission to revise and tilities decision signifying the end to a conflict. Be it enacted by the Senate and House of Rep- extend her remarks.) Those who are no longer serving have dis- resentatives of the United States of America in Ms. JACKSON-LEE of Texas. Mr. charge papers stating they served honorably Congress assembled, Speaker, it is always important to re- during that period so they are unaffected. SECTION 1. CLARIFICATION OF REQUIREMENTS spect our veterans and to provide addi- However, servicemen who served since Au- FOR ELIGIBILITY IN THE AMERICAN tional assistance to them. gust 2, 1990 and are still on active duty have LEGION. This bill makes a technical amend- no discharge papers for the period, and serve Section 21703(2) of title 36, United States ment to the membership qualifications without the benefit of a U.S. government Code, is amended by inserting ‘‘during or’’ language of the Federal charter of the after ‘‘continues to serve honorably’’. issued cessation of hostilities decision. American Legion. Currently, under the The amendment would simply change the The SPEAKER pro tempore. Pursu- statute, veterans who get out of service ant to the rule, the gentleman from standard for qualification to say a veteran that are eligible to become members of the ‘‘continues to serve during or after that period’’ Wisconsin (Mr. SENSENBRENNER) and American Legion if they served since the gentlewoman from Texas (Ms. will qualify for membership. This makes it ‘‘August 2, 1990 through the date of ces- clear that membership is open to the thou- JACKSON-LEE) each will control 20 min- sation of hostilities, as decided by the sands of active duty personnel who served utes. United States Government’’ and ‘‘was The Chair recognizes the gentleman during operations Desert Shield, Desert Storm, honorably discharged or separated from Wisconsin (Mr. SENSENBRENNER). and all the operations that followed in Iraq, from that service or continues to serve Bosnia, Kosovo, and Afghanistan. GENERAL LEAVE honorably after that period.’’ Mr. SENSENBRENNER. Mr. Speak- ‘‘The American Legion was chartered by Under the charter, however, the U.S. Congress in 1919 as a patriotic, mutual-help, er, I ask unanimous consent that all Government has never issued a ces- Members may have 5 legislative days war-time veterans organization.’’ The 2.8-mil- sation of hostilities decision signifying lion member American Legion is the nation’s within which to revise and extend their the end to a conflict. Those who are no remarks and to include extraneous ma- largest veterans organization with nearly longer serving have discharge papers 15,000 American Legion Posts worldwide. The terial on H.R. 3988 under consideration. stating they served honorably during The SPEAKER pro tempore. Is there Legion assists our nations communities that period, so they are unaffected. objection to the request of the gen- through ‘‘fund-raising program, educational ac- However, servicemen who served since tleman from Wisconsin? tivities, library and museum services, and There was no objection. August 2, 1990, and are still on active many others.’’ Mr. SENSENBRENNER. Mr. Speak- duty have no discharge papers for the As has been stated, this Amendment simply er, I yield myself such time as I may period, and serve without the benefit of allow more veterans to join in the good works consume. a U.S. Government-issued cessation of of the American Legion. This will provide addi- Mr. Speaker, H.R. 3988 would amend hostilities decision. tional vitality to the Legion and I urge my col- the Federal charter of the American The amendment would simply change leagues to support this Act. Legion. the standard for qualification to say a Mr. Speaker, I reserve the balance of veteran that ‘‘continues to serve dur- my time. b 1430 ing or after that period’’ will qualify Mr. SENSENBRENNER. Mr. Speak- Current law makes a veteran eligible for membership. This makes it clear er, I yield 3 minutes to the gentleman to become a member of the legion if that membership is open to thousands from Pennsylvania (Mr. GEKAS). that veteran has served since ‘‘August of active duty personnel who served Mr. GEKAS. Mr. Speaker, I thank 2, 1990 through the date of cessation of during Operations Desert Shield, the gentleman for yielding me this hostilities as decided by the United Desert Storm, and all of the operations time. States Government’’ and was ‘‘honor- that followed in Iraq, Bosnia, Kosovo This is an opportunity for us to pay ably discharged or separated from that and Afghanistan, thereby respecting tribute to the American Legion that service or continues to serve honorably these particular service personnel and goes beyond the purpose of the bill, after that period.’’ veterans and allowing them to partici- which is laudable, and that is to allow The United States Government has pate in a very important and certainly the legion to expand its membership by never issued a cessation of hostilities honorable organization, the American inclusion of certain categories of vet- declaration for the Persian Gulf War. Legion. erans who heretofore have not been For those who are no longer serving, ‘‘The American Legion was chartered able to qualify. they have discharge papers stating by Congress in 1919 as a patriotic, mu- But I want to bring into the CON- that they honorably served during that tual-help, wartime veterans organiza- GRESSIONAL RECORD remembrances of period. Servicemen who have served tion.’’ The 2.8 million-member Amer- the American Legion as a young boy since August 2, 1990, and are still on ac- ican Legion is the Nation’s largest vet- growing up in central Pennsylvania. tive duty, have no discharge papers for erans organization with nearly 15,000 Most of the parades and most of the pa- the period, and are not serving after American Legion posts worldwide. The triotic functions of that era were ei- the cessation of hostilities, but during Legion assists our Nation’s commu- ther sponsored by or joined in by the that period. nities through ‘‘fundraising programs, American Legion, but that was not all. The amendment would simply change educational activities, library, and mu- They also sponsored teenage baseball the standard for qualification for mem- seum services, and many others.’’ organizational sports, they also spon- bership in the legion by adding the As has been stated, this is a technical sored essay and oratorical contests in words ‘‘during or’’ so that it states amendment that allows thousands the high schools, and in a variety of ‘‘continues to serve during or after upon thousands of veterans and service ways went beyond their chief function that period’’ to make it clear that le- personnel and others to join the Amer- of honoring the veteran, because they gion membership is open to active duty ican Legion, and I believe this will add were part of the actual life of the com- personnel who served during Oper- vitality to the American Legion. munity in so many different ways. ations Desert Shield, Desert Storm, This bill makes a technical amendment to Then the other portion of the Amer- and all of the operations that followed the membership qualifications language of the ican Legion that sticks hard to my in Iraq, Bosnia, Kosovo, and Afghani- federal charter of the American Legion. Cur- memory is that during the time I stan. rently, under the statute, veterans who get out served in the Armed Forces myself,

VerDate May 23 2002 02:16 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00009 Fmt 4634 Sfmt 0634 E:\CR\FM\K15JY7.013 pfrm12 PsN: H15PT1 H4586 CONGRESSIONAL RECORD — HOUSE July 15, 2002 there were two refuges for us in the the rules were suspended and the bill from those three wars, but also anyone various bases in which we served, and was passed. who served honorably after 1940, and in particular, I remember in Fort A motion to reconsider was laid on the National Guardsmen and Reserv- Knox, Kentucky, the USO was always the table. ists. there on the weekends for the purpose f At the AMVETS annual convention of providing extra services and relax- in 1998, the delegates voted for an offi- ation for the veterans who were serving AMVETS CHARTER AMENDMENT cial name change from American Vet- or the members of the Armed Forces ACT erans of World War II, Korea, and Viet- who were serving at Fort Knox, and Mr. SENSENBRENNER. Mr. Speak- nam to American Veterans to more ac- also the American Legion always had er, I move to suspend the rules and curately reflect the membership. Addi- some kind of hostmanship-type of func- pass the bill (H.R. 3214) to amend the tionally, AMVETS has voted to change tion to welcome the soldiers who were charter of the AMVETS organization. the structure of their governing body. stationed at Fort Knox. The Clerk read as follows: This bill contains language to reflect So for a whole series of remem- H.R. 3214 the structure change in the statute. brances for this Member, we support Be it enacted by the Senate and House of Rep- Finally, because AMVETS has moved the bill and hope that many more vet- resentatives of the United States of America in the location of their headquarters from erans will be joining the ranks of the Congress assembled, the District of Columbia to Lanham, American Legion in the next several SECTION 1. AMENDMENTS TO AMVETS CHARTER. Maryland, the ‘‘Headquarters and prin- years. (a) NAME OF ORGANIZATION.—(1) Sections cipal place of business’’ section of their Mr. GILMAN. Mr. Speaker, I rise today in 22701(a) and 22706 of title 36, United States charter needs to be changed to indicate strong support of H.R. 3988, the American Le- Code, are amended by striking ‘‘AMVETS that they are now located in Maryland. gion Amendments Act. I urge my colleagues (American Veterans of World War II, Korea, In order for these changes to be recog- to support this timely measure. and Vietnam)’’ and inserting ‘‘AMVETS nized by the Department of Veterans (American Veterans)’’. This legislation amends the charter of the Affairs, the AMVETS Federal charter American Legion to revise eligibility for the or- (2)(A) The heading of chapter 227 of such title is amended to read as follows: must be amended, and this bill does ganization to those individuals who have that. served honorably in the Armed Forces during ‘‘CHAPTER 227—AMVETS (AMERICAN VETERANS)’’. Mr. Speaker, I urge the House to pass or after specific periods. Presently, service H.R. 3214, and I reserve the balance of members are only eligible if they have served (B) The item relating to such chapter in the table of chapters at the beginning of sub- my time. during specific periods, including designated Ms. JACKSON-LEE of Texas. Mr. windows for World War I, World War II, Korea, title II of such title is amended to read as follows: Speaker, I yield myself such time as I Vietnam, Lebanon/Grenada, Panama, and may consume. Desert Storm. Because the window governing ‘‘227. AMVETS (AMERICAN VET- ERANS) ...... 22701’’. (Ms. JACKSON-LEE of Texas asked Desert Storm has not closed, under current and was given permission to revise and law, Desert Storm veterans are not eligible to (b) GOVERNING BODY.—Section 22704(c)(1) of such title is amended by striking ‘‘seven na- extend her remarks.) join the American Legion. This measure cor- tional vice commanders’’ and all that follows Ms. JACKSON-LEE of Texas. Mr. rects this problem. through ‘‘a judge advocate,’’ and inserting Speaker, the legislation that we have The American Legion was founded and ‘‘two national vice commanders, a finance before us, H.R. 3214, would amend the chartered by Congress in 1919. Its first major officer, a judge advocate, a chaplain, six na- Federal charter of the American vet- accomplishment was the creation of the U.S. tional district commanders,’’. erans of World War II, Korea, and Viet- (c) HEADQUARTERS AND PRINCIPAL PLACE OF Veterans Bureau, which was the precursor to nam to reflect changes made at its 1998 the Veteran’s Administration. Significant ac- BUSINESS.—Section 22708 of such title is convention. It is extremely important complishments of the Legion include the en- amended— to ensure that we respond to the re- actment of the G.I. bill, and the establishment (1) by striking ‘‘the District of Columbia’’ quest of these valiant and heroic serv- of the cabinet-level department of Veterans Af- in the first sentence and inserting ‘‘Mary- land’’; and icemen and women. fairs. (2) by striking ‘‘the District of Columbia’’ Their original charter, received in The Legion also led the fight for an inves- in the second sentence and inserting ‘‘Mary- 1947, has been amended by Congress tigation into the use of Agent Orange in Viet- land’’. over the years to give membership to nam, the investigations into gulf-war illnesses The SPEAKER pro tempore. Pursu- Korean War veterans and Vietnam vet- among Desert Storm veterans, and for the ant to the rule, the gentleman from erans, and to reflect other changing constitutional amendment to prohibit physical Wisconsin (Mr. SENSENBRENNER) and characteristics of the organization. desecration of the American flag. the gentlewoman from Texas (Ms. Like its fellow veterans service organiza- In 1998, at the AMVETS annual con- JACKSON-LEE) each will control 20 min- vention, the delegates voted for an offi- tions, the American Legion offers valuable utes. service to its membership, including, but not cial name change of American veterans The Chair recognizes the gentleman of World War II, Korea, and Vietnam to limited to: seeking discharge upgrades, record from Wisconsin (Mr. SENSENBRENNER). corrections, education benefits, disability com- ‘‘American Veterans’’ to more accu- GENERAL LEAVE pensation matters and pension eligibility. The rately reflect the membership of Mr. SENSENBRENNER. Mr. Speak- Legion also has a long and distinguished his- AMVETS. Additionally, AMVETS er, I ask unanimous consent that all tory of community service. voted to change the structure of their Given our current war on terrorism, I believe Members may have 5 legislative days governing body. The organization also it is appropriate for Congress to recognize, ex- within which to revise and extend their voted to change the location of their pand and promote the efforts of our veterans remarks and include extraneous mate- headquarters from the District of Co- service organizations. For this reason, I urge rial on H.R. 3214, the bill currently lumbia to Lanham, Maryland. There- my colleagues to support this bill. under consideration. fore, the ‘‘Headquarters and principal Ms. JACKSON-LEE of Texas. Mr. The SPEAKER pro tempore. Is there place of business’’ section of their char- Speaker, I have no further speakers, objection to the request of the gen- ter needs to be changed to indicate and I yield back the balance of my tleman from Wisconsin? that they are now located in Maryland. time. There was no objection. In order for these changes to be rec- Mr. SENSENBRENNER. Mr. Speak- Mr. SENSENBRENNER. Mr. Speak- ognized by the Department of Veterans er, I yield back the balance of my time. er, I yield myself such time as I may Affairs, the AMVETS Federal charter The SPEAKER pro tempore (Mr. consume. must be amended. This bill will accom- CULBERSON). The question is on the mo- Mr. Speaker, H.R. 3214 would amend plish that and allow them to continue tion offered by the gentleman from the Federal charter for the American to do the service that they do on behalf Wisconsin (Mr. SENSENBRENNER) that Veterans of World War II, Korea and of the American people and as well to the House suspend the rules and pass Vietnam to American Veterans to continue to honor the veterans who the bill, H.R. 3988. more accurately reflect the member- participate in this organization. The question was taken; and (two- ship of AMVETS. AMVETS member- I support H.R. 3214 as it would amend the thirds having voted in favor thereof) ship now includes not only veterans Federal charter of the American Veterans of

VerDate May 23 2002 01:48 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00010 Fmt 4634 Sfmt 9920 E:\CR\FM\K15JY7.016 pfrm12 PsN: H15PT1 July 15, 2002 CONGRESSIONAL RECORD — HOUSE H4587 World War II, Korea, and Vietnam (AMVETS), Charter Amendment Act. I urge my colleagues Mr. EVANS. Mr. Speaker, as an original co- to reflect changes made at its 1998 conven- to support this timely measure. sponsor of H.R. 3214, the AMVETS Charter tion. Their original charter, received in 1947, This legislation amends the charter of the Amendment Act, I am pleased this important has been amended by Congress over the AMVETS organization to: change the meaning measure has been considered and favorably years to give membership to Korean War vet- of AMVETS to American veterans, revises the reported by the Committee on Judiciary. This erans and Vietnam veterans, and to reflect composition of its governing body, and pro- measure amends the AMVETS charter to other changing characteristics of the organiza- vides for its headquarters and place of busi- bring the charter into conformance with current tion. ness to move from the District of Columbia to practices. It deserves the support of every In 1998, at the AMVETS annual convention, Maryland. Member. the delegates voted for an official name AMVETS, which previously stood for the Mr. Speaker, I also want to thank the gen- change from American Veterans of World War American Veterans of World War II, Korea and tleman from Florida, MIKE BILIRAKIS, for his II, Korea, and Vietnam to ‘‘American Vet- Vietnam, was founded in 1944 out of the belief leadership on this issue. As the author of H.R. erans’’ to more accurately reflect the member- that WWII Veterans needed an organization 3214, MIKE BILIRAKIS has been a strong and ship of AMVETS. Additionally, the AMVETS that represented their generation. In the fol- committed advocate for H.R. 3214 and his ef- voted to change the structure of their gov- lowing decades, veterans from Korea and forts in large measure are responsible for this erning body. The organization also voted to Vietnam were permitted to join through charter important legislation being considered by the change the location of their headquarters from modifications made by Congress. House today. the District of Columbia to Lanham, Maryland. Like its fellow veterans service organiza- Again, I urge all of my colleagues to support Therefore, the ‘‘Headquarters and principal tions, AMVETS offers valuable services to its passage of H.R. 3214, the AMVETS Charter place to business’’ section of their charter membership, including, but not limited to: Amendment Act. needs to be changed to indicate they are now seeking discharge upgrades, record correc- Ms. JACKSON-LEE of Texas. located in Maryland. tions, education benefits, disability compensa- Mr. Speaker, I yield back the balance In order for these changes to be recognized tion matters and pension eligibility. AMVETS of my time. by the Department of Veterans Affairs the also has a long and distinguished history of Mr. SENSENBRENNER. Mr. Speak- AMVETS federal charter must be amended. community service. er, I yield back the balance of my time. This bill will accomplish all of this. Given our current war on terrorism, I believe The SPEAKER pro tempore. The Mr. Speaker, I reserve the balance of it is appropriate for Congress to recognize, ex- question is on the motion offered by my time. pand and promote the efforts of our veterans the gentleman from Wisconsin (Mr. Mr. SENSENBRENNER. Mr. Speak- service organizations. For these reasons, I SENSENBRENNER) that the House sus- er, I yield 3 minutes to the gentleman urge my colleagues to support this measure. pend the rules and pass the bill, H.R. from Pennsylvania (Mr. GEKAS). Mr. BILIRAKIS. Mr. Speaker, I rise in strong 3214. Mr. GEKAS. Mr. Speaker, I thank support of H.R. 3214, a bill I introduced to The question was taken; and (two- the gentleman for yielding me this amend the Federal charter for the AMVETS thirds having voted in favor thereof) time. organization. The bill makes a number of sim- the rules were suspended and the bill This time, of course, I want to speak ple changes to the organization’s current char- was passed. about the AMVETS who, in Pennsyl- ter, which was first approved in 1947. A motion to reconsider was laid on vania, throughout the time that I First, my bill changes the meaning of the table. served in the legislature, continuously AMVETS from American Veterans of World f participated in legislative action that War II, Korea and Vietnam to American vet- VETERANS OF FOREIGN WARS pertained to veterans. On the question erans. AMVETS was founded on December CHARTER AMENDMENT ACT of veterans preference in civil service 10, 1944, in Kansas City, Missouri. It was born Mr. SENSENBRENNER. Mr. Speak- examinations and placement, in vet- out of the desire for WWII veterans to have er, I move to suspend the rules and erans benefits of all types, and in the their own organization. pass the bill (H.R. 3838) to amend the question that arose from time to time Overtime, AMVETS’ charter has been charter of the Veterans of Foreign on the legitimacy of when certain holi- amended to allow veterans from following Wars of the United States organization days were to be observed: Memorial wars to join the organization. In 1984, the to make members of the armed forces Day, Veteran’s Day back then, which charter was amended to allow anyone who who receive special pay for duty sub- was Armistice Day, et cetera. served honorably after 1940 to join the vet- ject to hostile fire or imminent danger So the AMVETS themselves, just erans’ group. As a result, its current name eligible for membership in the organi- like the American Legion aforemen- does not encompass this broader member- zation, and for other purposes. tioned, have participated in civic, as ship. H.R. 3214 would correct this discrepancy The Clerk read as follows: well as neighborhood, events through- and allow the organization’s name to more out Pennsylvania and, I am sure, adequately reflect its current membership. H.R. 3838 throughout the Nation. This name change was also approved by the Be it enacted by the Senate and House of Rep- I wanted the record to be complete resentatives of the United States of America in organization’s members at their 1998 annual Congress assembled, that this veterans organization, just as convention. SECTION 1. AMENDMENTS TO VETERANS OF FOR- the American Legion, have been a part In 1961, AMVETS modified the structure of EIGN WARS OF THE UNITED STATES of the neighborhood for many, many its governing body. However, its current char- CHARTER. years and will continue to expand now ter still reflects its old organizational structure. (a) ELIGIBILITY FOR MEMBERSHIP OF INDI- that we know the parameters, through Therefore, H.R. 3214 also revises the organi- VIDUALS RECEIVING SPECIAL PAY FOR DUTY this legislation, will have been ex- zation’s Federal charter to reflect the new SUBJECT TO HOSTILE FIRE OR IMMINENT DAN- panded. composition of AMVETS’ governing body. GER.—Section 230103 of title 36, United States Code, is amended— Ms. JACKSON-LEE of Texas. Mr. Finally, since the approval of the original (1) by striking ‘‘or’’ at the end of paragraph Speaker, I yield myself such time as I charter, the organization has relocated their (1); may consume. headquarters from the District of Columbia to (2) by striking the period at the end of Let me just simply say that today as Lanham, Maryland. H.R. 3214 amends the paragraph (2) and inserting ‘‘; or’’; and we stand here on this floor, we have original AMVETS charter to provide for its (3) by adding at the end the following new young men and women fighting for us headquarters and principal place of business paragraph: in Afghanistan, young men and women to be in Maryland rather than the District of ‘‘(3) in an area which entitled the indi- serving in Guantanamo Bay, Cuba. Columbia. vidual to receive special pay for duty subject This is important legislation, as the to hostile fire or imminent danger under sec- I want to thank Chairman SENSENBRENNER, tion 310 of title 37.’’. previous legislation was, to make pro- Subcommittee Chairman GEKAS, full Com- (b) CLARIFICATION OF PURPOSES OF THE COR- cedural changes for our vets; and we mittee Ranking Member CONYERS and Sub- PORATION.—Section 230102 of such title is honor them as we amend this par- committee Ranking member SHEILA JACKSON- amended in the matter preceding paragraph ticular legislation, and I would ask my LEE for their assistance in moving this legisla- (1) by inserting ‘‘charitable,’’ before ‘‘and colleagues to support it. tion. educational,’’. Mr. GILMAN. Mr. Speaker, I rise today in H.R. 3214 is noncontroversial and I urge my The SPEAKER pro tempore. Pursu- strong support of H.R. 3214, the AMVETS colleagues to support the legislation. ant to the rule, the gentleman from

VerDate May 23 2002 03:10 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00011 Fmt 4634 Sfmt 0634 E:\CR\FM\A15JY7.021 pfrm12 PsN: H15PT1 H4588 CONGRESSIONAL RECORD — HOUSE July 15, 2002 Wisconsin (Mr. SENSENBRENNER) and Without this amendment, members ceeding conflicts entry into these esteemed the gentlewoman from Texas (Ms. of the Armed Forces who have served veterans organizations. JACKSON-LEE) each will control 20 min- under equally dangerous conditions as Mr. Speaker, I reserve the balance of utes. those experienced in campaign medal my time. The Chair recognizes the gentleman service in Korea and in conflict areas Mr. SENSENBRENNER. Mr. Speak- from Wisconsin (Mr. SENSENBRENNER). such as Somalia or Kosovo are not eli- er, I yield 3 minutes to the gentleman GENERAL LEAVE gible for VFW membership. from Pennsylvania (Mr. GEKAS). Mr. SENSENBRENNER. Mr. Speak- The act also amends the charter of Mr. GEKAS. Mr. Speaker, I thank the gentleman for yielding time to me. er, I ask unanimous consent that all the VFW to include the word ‘‘chari- Mr. Speaker, this time I rise to pose Members may have 5 legislative days table’’ as one of the purposes. VFW some reflections on the VFW. Many within which to revise and extend their members have provided substantial amounts of time and volunteer efforts people will recall historically that dur- remarks and include extraneous mate- ing the Truman years there was an act rial on H.R. 3838, the bill currently in their communities and to the needy. This will prevent some States from de- of terrorism right in this Chamber, under consideration. when terrorists of a different era shot The SPEAKER pro tempore. Is there nying the VFW qualification as a char- itable organization under 501(c) of the up the entire Chamber here, wounding objection to the request of the gen- several people. tleman from Wisconsin? Tax Code simply because the word ‘‘charitable’’ is not mentioned in the One of the Members of the House at There was no objection. that time was the gentleman from Mr. SENSENBRENNER. Mr. Speak- charter. In Texas, there are tens of thousands Pennsylvania, Jimmy Van Zandt from er, I yield myself such time as I may Altoona, Pennsylvania, who helped to consume. of members of the VFW. In my district there are thousands of VFW members, apprehend one of the terrorists with a Mr. Speaker, H.R. 3838 would amend gallant leap into the back portion of the Federal charter of the Veterans of and I can assure the Members they are outstanding members of our commu- the balcony, and brought him or helped Foreign Wars to allow any member of nity. They always provide us with bring him to justice. the Armed Forces who received hostile honor and grace in our patriotic pa- But more than that, this Jimmy Van fire or imminent danger pay to be a rade, and they serve us in the Memo- Zandt was also, prior to that, national member of the VFW. The language rial Day commemoration as well as the commander of the VFW. He holds a would allow veterans from conflict Veterans Day commemoration, along place of honor in that organization for areas such as Somalia or Kosovo to be with the many other veterans groups. his special efforts and for his service eligible for membership in the VFW. Also, they are there to serve the com- directly to the country. Currently, VFW membership is lim- munity when we are in need. Then there was Dominique ited to those who have honorably As I speak today, I pay tribute to all DeFrancesco, also from central Penn- served in the Armed Forces and who of the veterans groups in the State of sylvania, served as national com- have received a campaign medal for Texas, in the 18th Congressional Dis- mander of the American Legion when, service or those who served honorably trict, and, of course, this Nation. These in 1991, he joined then President Bush for a specific period on the Korean pe- members provide critical assistance to in the 50-year commemorations at ninsula. other veterans, they help raise funds Pearl Harbor. b 1445 for the March of Dimes, and they pro- These are the kinds of devoted vet- vide scholarships to our Nation’s eran citizens who are in the back- Without this amendment, members ground of what we do here today when of the Armed Forces who served under youth. I urge my colleagues to support this we enlarge the membership potential equally dangerous conditions, such as measure, which will simply allow vet- of their organizations. those experienced in the campaign erans of succeeding conflicts entry into But the most important portion of medal service in Korea, are not eligible these esteemed veterans organizations. the VFW, as far as I am concerned, is for VFW membership. Again, I would be remiss without ac- because the last 30 years or more I The bill also adds the word ‘‘chari- knowledging the brave men and women have participated as a judge in the table’’ to the purpose of the VFW. VFW who serve us now in Afghanistan, VFW’s annual Voice of Democracy con- members volunteer millions of hours to throughout the Nation, and throughout test. Here is a contest of radio-spoken local communities. Although vol- the world. essays by our high school students who unteerism has always been a large part Mr. Speaker, this bill amends the federal speak on what America means to them, of the mission of the VFW, in some charter of the Veterans of Foreign Wars, VFW, or some other subject matter having to States the VFW is being denied quali- to allow any member of the armed forces who do with patriotism. In this way, the fication as a charitable organization has received hostile fire or imminent danger VFW spreads the notion of loyalty to because ‘‘charitable’’ is not included in pay to be a member of the VFW. Without this our Nation, service to our commu- their charter language. amendment members of the armed forces nities, and patriotism. For that, I sa- These amendments reflect the lan- who served under equally as dangerous con- lute the VFW and urge everyone to guage of two resolutions approved by ditions as those experienced in campaign support the legislation that is in front the voting delegates of the VFW at medal service in Korea and in conflict areas of us. their national convention in Mil- such as Somalia or Kosovo are not eligible for Ms. JACKSON-LEE of Texas. Mr. waukee, Wisconsin. I urge the House to VFW membership. Speaker, I yield myself such time as I pass this bill to ratify the changes to The Act also amends the charter of the may consume. the VFW Federal charter, which have VFW to include the word ‘‘charitable’’ as one Mr. Speaker, let me just say that been approved by the membership. of the purposes of the VFW. VFW members just a few minutes ago we have sup- Mr. Speaker, I reserve the balance of have provided substantial amounts of time to ported H.R. 3988, H.R. 3838, and H.R. my time. volunteer efforts in the communities and to the 3214, legislative initiatives helping our Ms. JACKSON-LEE of Texas. Mr. needy. This will prevent some states from de- veterans. Speaker, I yield myself such time as I nying VFW qualification as a charitable organi- I want to acknowledge and applaud may consume. zation under 501(c) of the Tax Code simply the President for his recent pronounce- Mr. Speaker, I rise to support this because the word charitable is not mentioned ment of allowing those who are serving legislation. This bill amends the Fed- in the charter. In the state of Texas, there are in our military to apply for citizenship eral charter of the Veterans of Foreign ten of thousands of members of the VFW. In immediately, without having to wait a Wars, VFW, to allow any members of my district there are thousands of VFW mem- period of time previously embodied in the armed services or Armed Forces bers. These members provided critical assist- our law. who have received hostile fire or immi- ance to other Veterans, help raise funds for With that in mind, Mr. Speaker, I nent-danger pay to be a member of the the March of Dimes and provide scholarships think as member of the Subcommittee VFW, and that is a great honor for so to our nation’s youth. on Immigration, Border Security, and many of our men and women who have I urge my colleagues to support this meas- Claims of the Committee on the Judici- served in the United States military. ure which will simply allow veterans of suc- ary, I hope that the Congress will move

VerDate May 23 2002 02:29 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00012 Fmt 4634 Sfmt 0634 E:\CR\FM\K15JY7.022 pfrm12 PsN: H15PT1 July 15, 2002 CONGRESSIONAL RECORD — HOUSE H4589 swiftly to pass 245(i) that will allow im- up with the times as the nature of our Nation’s The question was taken; and (two- migrants to access legalization and be- military operations has changed. The VFW’s thirds having voted in favor thereof) come citizens. This is long overdue. charter currently requires a veteran to have re- the rules were suspended and the bill This is legislation that recognizes that ceived a campaign medal in order to join the was passed. we do not equate immigration to ter- organization. But the dangerous contingency A motion to reconsider was laid on rorism, and it is as patriotic as the leg- operations our servicemembers have partici- the table. islation that we have just passed pated in over the past twenty or so years have f today. not resulted in the award of campaign medals. HONORING INVENTION OF MODERN So I hope that the Congress will Servicemenbers doing their duty in global hot AIR-CONDITIONING BY DR. WIL- move quickly on this legislation, and I spots have faced the type of risks that should LIS H. CARRIER ON OCCASION OF rise again to support the legislation be- qualify them for VFW membership. My bill ITS 100TH ANNIVERSARY fore us and ask my colleagues to sup- would remove this barrier to membership in a Mr. SHAYS. Mr. Speaker, I move to port this legislation as we honor the way that is consistent with the type of military suspend the rules and agree to the con- men and women who have served us in service the VFW has always required. the United States military and now our Mr. Speaker, H.R. 3838 would also address current resolution (H. Con. Res. 413) honoring the invention of modern air- veterans; and as we honor those, as a technical problem the VFW has occasionally conditioning by Dr. Willis H. Carrier on well, who serve us every day fighting encountered with the language of its charter the occasion of its 100th anniversary. for our freedoms. regarding its purposes as an organization. The The Clerk read as follows: I know the veterans of the nation, are sym- VFW has maintained a tax-exempt, nonprofit H. CON. RES. 413 pathetic to doing the right thing for all of us! status, but some states do not want to qualify Mr. Speaker, I yield back the balance it as a tax-exempt charitable organization de- Whereas on July 17, 1902, Dr. Willis H. Car- of my time. rier submitted designs to a printing plant in spite its long history of charitable work in com- Brooklyn, New York, for equipment to con- Mr. SENSENBRENNER. Mr. Speak- munities across America, because its charter trol temperature, humidity, ventilation, and er, I yield myself such time as I may does not contain the word ‘‘charitable’’. Well, air quality, marking the birth of modern air consume. Congress can and should fix this relatively conditioning; Mr. Speaker, just let me make it simply problem by inserting the word ‘‘chari- Whereas air-conditioning has become an clear, this bill has nothing to do with table’’ as one of its purposes in order to si- integral technology enabling the advance- the immigration law, lest anybody lence anyone who insists on elevating form ment of society through improvements to have a misimpression on this. It is leg- over substance. the Nation’s health and well-being, manufac- turing processes, building capacities, re- islation that changes the qualification Mr. Speaker, with roots that go back more for membership in the VFW, as well as search, medical capabilities, food preserva- than a century to the Spanish-American War, tion, art and historical conservation, and makes it clear that the VFW is a chari- the Veterans of Foreign Wars has an admi- general productivity and indoor comfort; table organization. Both of these rable history of helping its fellow veterans, Whereas Dr. Carrier debuted air-condi- changes were requested by the dele- their communities and their Nation. This legis- tioning technology for legislative activity in gates to the last VFW annual conven- lation will help to ensure that the VFW con- the House of Representatives Chamber in tion that was held in August of last tinues to perform these services in the 21st 1928, and the Senate Chamber in 1929; year in my hometown of Milwaukee, century and beyond. H.R. 3838 deserves the Whereas the air-conditioning industry now totals $36 billion on a global basis and em- Wisconsin. support of every House member and I urge its The best way we can help our vet- ploys more than 700,000 people in the United approval. States; and erans, I think, is by not confusing the Mr. GILMAN. Mr. Speaker, I rise today in Whereas the year 2002 marks the 100th an- issue. Let us help our veterans by strong support of H.R. 3838, the Veterans of niversary of modern air-conditioning: Now, doing what they asked us to do, which Foreign Wars Charter Amendment act. I urge therefore, be it is to allow them to expand their mem- my colleagues to support this timely measure. Resolved by the House of Representatives (the bership, as well as to get some State This legislation amends the charter of the Senate concurring), That the Congress honors departments of revenue off their back Veterans of Foreign Wars Organization to the invention of modern air-conditioning by claiming that what the VFW does is Dr. Willis H. Carrier on the occasion of its make members of the armed forces who re- 100th anniversary. not charitable in nature. ceive special pay for duty that is subject to The SPEAKER pro tempore. Pursu- I think all of us in this Chamber hostile fire or imminent danger eligible for ant to the rule, the gentleman from know that the VFW is a legitimate and membership in the organization. This change honorable charitable organization, and Connecticut (Mr. SHAYS) and the gen- would allow veterans of operations in Somolia tleman from Massachusetts (Mr. I think that we can send the message and Kosovo to become eligible for VFW mem- very clearly by amending their charter TIERNEY) each will control 20 minutes. bership. The Chair recognizes the gentleman to get the State tax departments off The VFW is one of the oldest veterans serv- from Connecticut (Mr. SHAYS). their backs so that they can continue ice organizations in the country, and has a GENERAL LEAVE to do their very meritorious work. long and hallowed history. The VFW was Mr. SHAYS. Mr. Speaker, I ask unan- Mr. SMITH of New Jersey. Mr. Speaker, as founded in 1899 for soldiers returning from the imous consent that all Members may the sponsor of H.R. 3838, I rise to urge all of Spanish-American war and Philippine insurrec- have 5 legislative days within which to my colleagues to support this legislation that tion. It was instrumental in creating the Vet- revise and extend their remarks on the will amend the Congressional charter of the erans Administration and its subsequent ele- concurrent resolution, H. Con. Res. 413. Veterans of Foreign Wars (VFW). As Chair- vation to cabinet level status. The SPEAKER pro tempore. Is there man of the Veterans’ Affairs Committee, I was The VFW participates in numerous commu- objection to the request of the gen- pleased to introduce this bill on March 4, nity service efforts, and assists its members in tleman from Connecticut? 2002, at the request of the VFW to allow seeking discharge upgrades, record correc- There was no objection. Members of the armed forces who have re- tions, education benefits, disability compensa- Mr. SHAYS. Mr. Speaker, I yield my- ceived hostile fire or imminent danger pay to tion matters and pension eligibility. self such time as I may consume. be eligible for VFW membership. Given our current military environment, it is Mr. Speaker, I am pleased to have Mr. Speaker, I want to especially commend appropriate for Congress to both recognize the House consider House Concurrent the Chairman of the Judiciary Committee, Mr. and promote the efforts of our Veterans Serv- Resolution 413, important legislation SENSENBRENNER; the Committee’s Ranking ice Organizations. Accordingly, I urge my col- introduced by my distinguished col- Member, Mr. CONYERS, the Chairman of the leagues to support this bill. league (JOHN WALSH of New York). This Judiciary Subcommittee on Immigration and Mr. SENSENBRENNER. Mr. Speak- resolution expresses the sense of the Claims; Mr. GEKAS; and the Subcommittee’s er, I yield back the balance of my time. House of Representatives in honoring Ranking Member, Ms. JACKSON-LEE, for their The SPEAKER pro tempore (Mr. the invention of modern air condi- attention to this matter in moving the bill CULBERSON). The question is on the mo- tioning by Dr. Willis H. Carrier on its through the committee and to the floor for tion offered by the gentleman from 100th anniversary. House consideration. Wisconsin (Mr. SENSENBRENNER) that Only 1 year after graduating with a This bipartisan amendment to the VFW the House suspend the rules and pass master’s degree from Cornell Univer- charter simply allows the organization to keep the bill, H.R. 3838. sity, Dr. Carrier submitted designs and

VerDate May 23 2002 03:10 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00013 Fmt 4634 Sfmt 0634 E:\CR\FM\K15JY7.058 pfrm12 PsN: H15PT1 H4590 CONGRESSIONAL RECORD — HOUSE July 15, 2002 later installed the first modern air con- only child, raised by his grandparents 700,000 Americans, we can all be very ditioning equipment. Installed in and great aunt. Known for his superior proud of Dr. Carrier. He did indeed Brooklyn, New York, the air condi- problem-solving capabilities, Carrier change history. I suspect that if he did tioner was designed to control indoor would solve every complex problem he not invent air conditioning, we would humidity and temperature. encountered by reducing it to its sim- not be meeting in Washington today When granted a U.S. patent for ‘‘the plest form and solving each component because they used to close the Capitol apparatus for treating air,’’ as it was one by one. in the beginning of the summer and called in 1906, Dr. Carrier became He once stated in a high school grad- stay away long until late in the fall. known as the ‘‘father of modern air uation essay, ‘‘A man with the power of This invention also may have created a conditioning.’’ The formula Dr. Carrier will could make himself anything he tremendous upsurge in the amount of used to develop the modern air condi- wished, no matter what the cir- legislation passed by this body, so tioner still stands today as the basis cumstances.’’ These words would define maybe all is not progress. for all fundamental calculations for the rest of Mr. Carrier’s life. The Sistine Chapel in Rome is air- the air conditioning industry. Carrier entered Cornell University at conditioned with Carrier air condi- Air conditioning became the integral Ithaca College in Ithaca, New York, on tioning. Many great documents of this technology enabling the advancement a 4-year scholarship, but he was forced country are enshrined in museums and of society through improvements to to earn room and board by mowing the air is conditioned also by Carrier the Nation’s health and well-being. In- lawns, stoking furnaces, and during his air conditioning. Indeed, this building dustries also grew with the new ability senior year, forming a co-op student in which we meet today is also chilled to control the temperature and humid- laundry. by Carrier air chillers. ity levels during and after production. b 1500 So in gratitude for all of that, I The invention of air conditioning has would ask unanimous support of H. With a degree in mechanical engi- Con. Res. 413 and I ask Members to join also improved areas such as film devel- neering, he found a job at the Buffalo opment, preservation of processed me in celebrating this 100-year anniver- Forge Company in 1901 and he began sary. meats, medical capsules, textiles, and designing heating systems to dry lum- other products. In 1921, Carrier re- Mr. TIERNEY. Mr. Speaker, I yield ber and coffee. Carrier was soon made myself such time as I may consume. ceived a patent for the centrifugal re- head of the company’s department of frigerator machine that became the Mr. Speaker, I rise only to say that experimental engineering. It was here we thank the gentleman from New first practical method for air condi- that he solved his first problem in tem- York (Mr. WALSH) for bringing this tioning large spaces. This single perature and humidity control for the matter before the House; and we, of achievement paved the way for the up- Sackett-Wilhelms Lithographing and course, agree that Mr. Carrier has a ward expansion of cities, as well as Publishing Company in Brooklyn in long and distinguished career and a bringing human comfort to hospitals, 1902. Marking the birth of modern air great invention; and we obviously schools, office buildings, airports, ho- conditioning, Carrier’s device con- would support this resolution. tels, and department stores. trolled temperature, humidity, ventila- I add only in his memory the one Dr. Carrier debuted air conditioning tion and air quality. thing we might concentrate on doing is technology for legislative activity in In 1915, Carrier and six colleagues concentrating more on research and de- this very Chamber in 1928 and in the pooled together their life savings and velop to improve efficiencies. Through Senate Chamber in 1929. After World founded Carrier Engineering Corpora- smart public policy we can reduce en- War II, the air conditioner began to be tion in New York. In 1910 the company ergy consumption by improving the en- installed in homes across America. Ac- bought its first building in Newark, ergy standards and efficiency standards cording to the Carrier Corporation, 10 New Jersey and soon found its way required of common appliances like air percent of American homes were air back to our Empire State. In 1937 Car- conditioners as well as refrigerators, conditioned by 1965. By 1995, more than rier consolidated five plants on Geddes photo copiers and fax machines. I think 75 percent of American homes were air Street near my home in Syracuse. In that would be a great testament to Mr. conditioned; and in some portions of 1947 Carrier moved to its present loca- Carrier’s life and his hard work. If we the South, 90 percent of homes have air tion on Thompson Road in the town of just applied those standards already on conditioning or central air systems. Dewitt, also in my congressional dis- the books in this country, we would be Now the air conditioning industry to- trict. Today Carrier Corporation, the estimated to save consumers some $150 tals $36 billion on a global basis and company that bears the founder’s billion in energy costs by 2020. In fact, employs more than 700,000 people in the name, is a nearly $9 billion organiza- if we really looked at our research and United States alone. tion and remains the global leader in development monies, we will know and Mr. Speaker, it is appropriate on this providing heating, cooling and refrig- realize that they have decreased from hot summer day that the House recog- eration solutions in more than 172 $6.55 billion in 1978 to some $2 billion nizes and honors the invention of mod- countries around the world. now in 1998. ern air conditioning by Dr. Willis H. As an aside, my colleague from Con- In 1998 the President’s Committee of Carrier on its 100th anniversary. necticut (Mr. SHAYS) will appreciate Advisors on Science and Technology Mr. Speaker, I yield such time as he this. As a Peace Corps volunteer in recommended that our research and de- may consume to the gentleman from Nepal, the only night I spent in an air- velopment costs over 5 years be in- New York (Mr. WALSH). conditioned room in about 2-and-a-half creased because right now they are not Mr. WALSH. Mr. Speaker, I thank years was in a Carrier air-conditioned commensurate in scope or scale with my good friend and colleague, the gen- room in Kathmandu, Nepal. the energy challenges and opportuni- tleman from Connecticut, for yielding The 43,000 worldwide employees of ties of the 21st century and those that time to me, and also the gentleman Carrier Corporation can be proud that they will present. from Massachusetts (Mr. TIERNEY) for they continue to carry on their found- Again, I also add our voice to the bringing this resolution to the floor. er’s tradition of excellence by gener- congratulations of Dr. Carrier. I thank Mr. Speaker, as my colleague, the ating comfort wherever people work, the gentleman from New York (Mr. gentleman from Connecticut, pointed live and play. Many of us take for WALSH) for bringing this forward and out, this Wednesday marks the 100th granted the fact that air conditioning say we look forward to improving the anniversary of the invention of the has become an integral technology, en- efficiencies of technology like this so modern-day air conditioner by Dr. Wil- abling the advancement of society we continue to do better and better by lis Carrier, a New Yorker. Today I offer through improvements to our Nation’s our energy consumption. before the House, House Concurrent health and well-being, manufacturing Mr. Speaker, I yield back the balance Resolution 413, recognizing this his- processes, building capacities, food of my time. toric event. preservation and general productivity Mr. SHAYS. Mr. Speaker, I yield my- Raised on a farm on the snowy east- and indoor comfort. self such time as I may consume. ern shore of Lake Erie in Angola, New From its birth 100 years ago to to- Mr. Speaker, the invention of modern York, the young Carrier grew up as an day’s $36 billion industry, employing air conditioning has clearly changed

VerDate May 23 2002 02:29 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00014 Fmt 4634 Sfmt 0634 E:\CR\FM\K15JY7.059 pfrm12 PsN: H15PT1 July 15, 2002 CONGRESSIONAL RECORD — HOUSE H4591 our country. Modern air conditioning caster, Ohio, as the Clarence Miller bill. It enjoys great support, from my fueled the post-war growth of sunbelt Post Office Building. understanding, from the entire Ohio cities such as Miami, Phoenix, Las The Clerk read as follows: delegation. Not having been a Member Vegas and Houston. The invention of H.R. 4755 of Congress when Mr. Miller was in fact modern air conditioning also led to the Be it enacted by the Senate and House of Rep- serving, I do know that by reputation building of glass skyscrapers, shopping resentatives of the United States of America in he served from 1966 until January of malls and pressurized modules for Congress assembled, 1993. I am also informed that the space exploration. SECTION 1. CLARENCE MILLER POST OFFICE former Representative Miller served on On this, the 100th anniversary of the BUILDING. the Committee on Agriculture, Com- invention of modern air conditioning, (a) DESIGNATION.—The facility of the mittee on Public Works and Transpor- we truly honor Dr. Willis H. Carrier. United States Postal Service located at 204 tation, and the Committee on Trans- South Broad Street in Lancaster, Ohio, shall Mr. Speaker, I urge all Members to be known and designated as the ‘‘Clarence portation and Infrastructure, on the 3 support this concurrent resolution. Miller Post Office Building’’. subcommittees of that group. He was Mr. BOEHLERT. Mr. Speaker, I rise in sup- (b) REFERENCES.—Any reference in a law, well known as a budget watchdog be- port of House Concurrent Resolution 413, of- map, regulation, document, paper, or other cause of his fierce dedication to fiscal fered by Mr. WALSH, marking the centennial of record of the United States to the facility re- responsibility. Dr. Willis H. Carrier’s invention of modern air- ferred to in subsection (a) shall be deemed to Former Representative Miller is now conditioning. I can think of no better place to be a reference to the Clarence Miller Post Of- retired but he is also active in his Lan- fice Building. recognize this accomplishment than in the caster community. He is a member of House Chamber—first air-conditioned by Dr. The SPEAKER pro tempore. Pursu- the First United Methodist Church, the Carrier in 1929—on a 90 degree July day. ant to the rule, the gentleman from recipient of numerous awards and hon- For the past century, Carrier air conditioning Connecticut (Mr. SHAYS) and the gen- ors in recognition of his untiring ef- and refrigeration systems have been keeping tleman from Massachusetts (Mr. forts to serve his fellow Ohioans. our offices and homes cool. The man respon- TIERNEY) each will control 20 minutes. Mr. Speaker, I urge the swift passage sible for this phenomenon is Carrier’s founder, The Chair recognizes the gentleman of this bill. Mr. Speaker, I yield back the balance Dr. Willis Haviland Carrier. Born on a farm in from Connecticut (Mr. SHAYS). of my time. Angola, New York in 1876, the only child had GENERAL LEAVE Mr. SHAYS. Mr. Speaker, I ask unan- Mr. SHAYS. Mr. Speaker, I yield a humble upbringing yet possessed high such time as he may consume to the hopes from the start. At the time he could not imous consent that all Members may have 5 legislative days within which to gentleman from Ohio (Mr. HOBSON). have known the worldwide impact his inven- Mr. HOBSON. Mr. Speaker, I rise revise and extend their remarks on tion would create. It would boost industrial pro- today to ask for the House to approve H.R. 4755, the bill under consideration. duction. It would change the face of urban ar- the bill to deem the Lancaster, Ohio, The SPEAKER pro tempore. Is there chitecture, including providing comfort cooling post office for former congressman objection to the request of the gen- to some of the world’s most prestigious build- Clarence J. Miller, to recognize his tleman from Connecticut? ings. It would improve health care for millions. years of public service to the citizens There was no objection. It would allow unimagined industries to flour- of Lancaster, Ohio. ish. Mr. SHAYS. Mr. Speaker, I yield my- Clarence Miller served the people of Today, Carrier Corporation, the company self such time as I may consume. Lancaster and central Ohio for over that bears the founder’s name, is an $8.895 Mr. Speaker, H.R. 4755, introduced by five decades and for thousands of Ohio- billion organization providing heating, cooling our distinguished colleague from the ans he exemplified the proper role of a and refrigeration solutions in more than 172 State of Ohio (Mr. HOBSON), designates public servant. countries around the world. The nearly 43,000 a post office in Lancaster, Ohio as the Clarence was a true community lead- worldwide employees of Carrier Corporation Clarence Miller Post Office Building. er who was committed to improving create comfort wherever people work, live or Members of the entire House delega- the lives of those he represented, play—from private residences and apartments tion from the State of Ohio are cospon- whether it was in the Lancaster City to grand hotels; from sprawling factories to sors of this legislation. Hall or the United States Congress. His soaring office towers; from theme parks to Mr. Speaker, this post office will rec- vision and civic spirit have made last- centuries-old cultural centers. Overall, the air- ognize former Congressman Clarence ing contributions to our area, and he conditioning industry totals $36 billion and em- Miller and his 5 decades of public serv- truly deserves this honor. ploys more than 700,000 people in the United ice to the citizens of Lancaster, Ohio Mr. Miller was born in Lancaster on States. whom Congressman Miller served as a November 1, 1917. After attending Lan- One hundred years later, we benefit now city councilman, mayor and U.S. rep- caster public schools and receiving more than ever from Dr. Carrier’s invention. I resentative. Born in Lancaster on No- technical training in Scranton, Penn- urge my colleagues to pass the Resolution. vember 1, 1917, Clarence Miller served sylvania, Mr. Miller was employed as a Mr. SHAYS. Mr. Speaker, I yield 13 terms as a United States Congress- utility company engineer. back the balance of my time. man, from 1967 until 1993. Prior to his He served as a member of the Lan- The SPEAKER pro tempore (Mr. term in Congress, he was mayor of caster City Council from 1957 to 1963 CULBERSON). The question is on the mo- Lancaster from 1964 to 1966 and a mem- and as mayor of Lancaster from 1964 to tion offered by the gentleman from ber of the Lancaster City Council, 1957 1966. In 1967, he was elected to the U.S. Connecticut (Mr. SHAYS) that the to 1963. House of Representatives where he House suspend the rules and agree to Congressman Miller originally made served until his retirement in 1993. the concurrent resolution, H. Con. Res. his living as a utility company engi- In Congress, Mr. Miller first served 413. neer before entering into public serv- on the Committee on Agriculture and The question was taken; and (two- ice. Committee on Public Works and Trans- thirds having voted in favor thereof) Mr. Speaker, I urge adoption of H.R. portation. In 1973, he became a member the rules were suspended and the con- 4755. of the House Committee on Appropria- current resolution was agreed to. Mr. Speaker, I reserve the balance of tions and served on the Subcommittee A motion to reconsider was laid on my time. on Foreign Operations; Subcommittee the table. Mr. TIERNEY. Mr. Speaker, I yield on Commerce, Justice, State; Sub- f myself such time as I may consume. committee on Treasury, Postal Service Mr. Speaker, as a member of Com- and General Government; and Sub- CLARENCE MILLER POST OFFICE mittee on Government Reform, I am committee on Defense. BUILDING pleased to join my colleague in consid- Clarence also holds U.S. and Cana- Mr. SHAYS. Mr. Speaker, I move to eration of H.R. 4755, a bill in fact to dian patents for technical innovations suspend the rules and pass the bill designate a facility of the United he developed in his professional ability (H.R. 4755) to designate the facility of States Postal Service after Clarence as an electrical engineer. the United States Postal Service lo- Miller. Obviously the gentleman from There are many in Congress and in cated at 204 South Broad Street in Lan- Ohio (Mr. HOBSON) has introduced this Washington today with fond memories

VerDate May 23 2002 03:10 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00015 Fmt 4634 Sfmt 0634 E:\CR\FM\K15JY7.032 pfrm12 PsN: H15PT1 H4592 CONGRESSIONAL RECORD — HOUSE July 15, 2002 of Clarence Miller. This legislation class. For six years Clarence served on the the House of Representatives on his would provide a lasting tribute to this House Agriculture Committee and the Public death. fine individual that would be most visi- Works and Transportation Committee, and The Clerk read as follows: ble to those he served for so many then he was selected to serve on the powerful H. RES. 482 years in Lancaster, Ohio. Appropriations Committee where he served for Resolved, That the House of Representa- I might say that Mr. Miller today the next 20 years. Clarence was noted for his tives honors the outstanding accomplish- lives in Lancaster, Ohio. He visits the efforts to reduce federal spending during times ments of Ted Williams and expresses its office often and still takes part in try- of skyrocketing deficits. He originated the idea deepest sympathies and condolences to the ing to help make our community bet- of offering 2-percent across-the-board reduc- family of Ted Williams on his passing. ter. tion amendments to appropriations bills, which The SPEAKER pro tempore. Pursu- So it is with deep appreciation that I became known as the Miller Amendments. ant to the rule, the gentleman from thank the House for passing this piece Clarence always had a keen interest in Connecticut (Mr. SHAYS) and the gen- of legislation today. technology, and was one of a handful of Mem- tleman from Massachusetts (Mr. Mr. SHAYS. Mr. Speaker, I urge bers of the House to hold both United States TIERNEY) each will control 20 minutes. adoption of this measure. and Canadian patents for technical innova- The Chair recognizes the gentleman Mr. PORTMAN. Mr. Speaker, as an original tions developed while he worked as an elec- from Connecticut (Mr. SHAYS). cosponsor of H.R. 4755, I rise in strong sup- trical engineer. Clarence successfully merged GENERAL LEAVE port of this bill to designate the post office in his technical background with his work in Con- Mr. SHAYS. Mr. Speaker, I ask unan- Lancaster, Ohio as the Clarence Miller Post gress. In 1977 he was appointed by the imous consent that all Members may Office Building. This building served as Clar- Speaker to be a member of the Technology have 5 legislative days within which to ence’s district office while he served the peo- Assessment Board of the Congress. revise and extend their remarks on H. ple of Southern Ohio for 26 years as a mem- Clarence received many honors and awards Res. 482. ber of the House of Representatives. including: honorary doctorate degrees from The SPEAKER pro tempore. Is there Clarence Miller is a native and lifelong resi- Marietta College in Marietta, Ohio, and Rio objection to the request of the gen- dent of Lancaster, Ohio. He was born in 1917. Grande College in Rio Grande, Ohio; the Phil- tleman from Connecticut? He was the third of six children born to Clar- lips Medal of Public Service from Ohio Univer- There was no objection. ence Miller, Sr., and Delores Lloyd Miller. He sity in Athens, OH; the National Associated Mr. SHAYS. Mr. Speaker, I yield my- married his high school sweetheart, Helen Businessmen’s ‘‘Watchdog of the Treasury self such time as I may consume. Brown, on December 25, 1936, and they Award’’; the Americans for Constitutional Ac- Mr. Speaker, I am pleased to have spent 50 happy years together until her pass- tion’s ‘‘Distinguished Service Award’’; and the the House consider House Resolution ing in 1986. National Rifle Association’s ‘‘Legislator of the 482, and I commend my distinguished Clarence has two children, Jacqueline and Year Award.’’ colleague, the gentleman from Massa- Ronald. He has five grandchildren, Tyler Wil- He always took great pride in his work. He chusetts (Mr. MARKEY) for introducing liams, Todd Williams, Amy Jackson, Jennifer was not one to seek the public limelight. Clar- it. This resolution recognizes the en- Smith, and Drew Miller and four great-grand- ence worked quietly and diligently over the during contributions, heroic achieve- children—Morgan, Connor, Drew and Grant. years for our nation and for his constituents. ments and dedicated work of Ted Wil- He has a surviving brother, Paul, a retired He always said it is not important to get your liams. broadcaster and marketing executive in Cin- name in the Washington Post or on the net- Mr. Speaker, it is truly my honor to cinnati. work news. Instead, you have to look after the rise today to support this resolution Clarence grew up during the Great Depres- people who sent you here to represent them, that honors Ted Williams. Ted Wil- sion. He was the son of an electrician. Clar- and to do what they think is best for the coun- liams is not only one of baseball’s ence and his brothers and sisters worked to try as a whole. greatest hitters, he was also a member help the family financially during those trou- Apparently Clarence’s philosophy served of this Nation’s greatest generation. bled times, and as a young boy he delivered him well, because he consistently defeated his Many of his baseball exploits still papers for the Lancaster Eagle Gazette. opponents over the years by a better than 2- stand today. During high school he unloaded trucks after to-1 margin. The last hitter to bat over .400, Ted school at the Omar Bakery, often not returning Mr. Speaker, I urge all members to vote for approached that endeavor like any- home until after midnight, and then rising early H.R. 4755 to honor Clarence Miller, a gen- thing else in his life, never taking a the next morning to attend classes. tleman who served the people of Southern shortcut. Batting under .400 but round- Clarence always prided himself on being a Ohio and our Nation very well in this chamber ed off to .400 going into the last two self-made man. Following high school he went for 26 years. games of the 1941 season, Ted took to to work digging ditches for the Ohio Fuel and Mr. SHAYS. Mr. Speaker, I yield the field and went six for eight in a Gas Co., now called Columbia Gas, and rose back the balance of my time. double header on the last day of the through the ranks to become a practicing elec- The SPEAKER pro tempore. The season, raising his average to .406, the trical engineer. While continuing to work full question is on the motion offered by last player to hit over .400. He led the time at Ohio Fuel, Clarence and his brother, the gentleman from Connecticut (Mr. American league in batting six times, Paul, along with their mother, started Miller SHAYS) that the House suspend the slugging percentage nine times, and Electric, a small retail and electric wiring busi- rules and pass the bill, H.R. 4755. total bases six times, and runs scored ness in Lancaster. The question was taken. six times. He won two triple crown ti- Clarence first become interested in politics The SPEAKER pro tempore. In the tles and was named Most Valuable in the 1950s when the Ohio Fuel and Gas Co. opinion of the Chair, two-thirds of Player of the league twice. He was also offered courses in civics to its employees to those present have voted in the affirm- named to the All Star Team 16 times. help provide them with a better appreciation of ative. Yet Ted’s love of country and duty to how government operates. Clarence found the Mr. SHAYS. Mr. Speaker, on that I serve took him away from the game subject so captivating that he himself started demand the yeas and nays. twice, once during the Second World teaching those courses, and afterwards began The yeas and nays were ordered. War and again during the Korean War. thinking about entering politics. The SPEAKER pro tempore. Pursu- During the Korean War, he flew 39 His political career began in 1957, when he ant to clause 8 of rule XX and the combat missions and earned an Air was appointed to fill an unexpired term as a Chair’s prior announcement, further Medal and two Gold Stars. During his member of the Lancaster City Council. He was proceedings on this motion will be baseball career Ted had always hoped elected to a full term, and then was elected postponed. that people would see him and refer to mayor of Lancaster, receiving the largest plu- f him as the greatest hitter who ever rality in the history of the city. lived. He was the greatest hitter that Clarence was first elected to the House of HONORING TED WILLIAMS ever lived. But today this House recog- Representatives in 1966 and was elected Mr. SHAYS. Mr. Speaker, I move to nizes Ted Williams as also a Navy avi- each succeeding Congress by wider margins. suspend the rules and agree to the reso- ator, a Marine, and a great American Clarence and President George Herbert Walk- lution (H. Res. 482) honoring Ted Wil- who exemplified dedication and sac- er Bush were members of the same freshman liams and extending the condolences of rifice in absolutely everything he did.

VerDate May 23 2002 03:50 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00016 Fmt 4634 Sfmt 0634 E:\CR\FM\K15JY7.035 pfrm12 PsN: H15PT1 July 15, 2002 CONGRESSIONAL RECORD — HOUSE H4593 Mr. Speaker, I urge all Members to When I was a boy growing up in Theo´dore Samuel Williams was born in San support this resolution. Malden, Massachusetts, playing base- Diego, California on August 30, 1918. Imme- Mr. Speaker, I reserve the balance of ball for 3 or 4 or 5 hours a day, the one diately after high school graduation, he signed my time. thing that I did at night was to lie a contract with the San Diego minor league Mr. TIERNEY. Mr. Speaker, I yield there at night trying to go to sleep, baseball team. There he played one and half myself such time as I may consume. dreaming of myself as Ted Williams, seasons with the team until the Red Sox ob- Mr. Speaker, I want to just reiterate trying to hit Whitey Ford or Bob tained him in 1937, where he finished his ca- some of the points that my esteemed Turley or Don Larson or some other reer in 1960. After one year with the Red Sox, colleague from Connecticut made, who Yankee pitcher because we knew that it was clear that Williams was destined to be has to travel a little bit further to of all of the people who we could call a star. Throughout his career, the ‘‘Splendid Fenway Park than some of us who live upon in order to protect us against the Splinter’’ was one of the few people to post a in Massachusetts. The points he made hated Yankees that Ted Williams was batting average over .400 for a season and is are worth noting, but we also have a at the top of the list. And not only did the last player to date to do so. Ted Williams number of young people in the House I go to sleep dreaming that I was Ted achieved the ‘‘Triple Crown’’ twice for leading today observing this particular pro- Williams with that perfect swing, but I the league in batting average, home runs, and ceeding, and I hope that what they am sure that there were millions of runs-batted-in. He won the American League’s take away from this even more so than others having the very same dream Most Valuable Player Award twice and led the the feats accomplished on Fenway about their own baseball aspirations. Red Sox to the pennant in 1946. He was Park and on the baseball fields around He not only was a great baseball elected into the Baseball Hall Of Fame in this country are the facts that Ted Wil- player and a great patriot, but he was 1966. In his career, he slugged 521 home liams served his country in the mili- also a great fisherman. He is in the runs with a batting average of .344. In almost tary, as the gentleman from Con- Fisherman’s Hall of Fame. He, for over 8,000 at-bats, he struck out only 709 times. necticut (Mr. SHAYS) said, on two occa- 50 years, was the living embodiment of Ted Williams once said, ‘‘When I walk down sions. When he left the baseball field the Jimmy Fund which is a fund which the street and meet people I just want them to first was for World War II and, sec- has been created up in Boston at the think ‘There goes the greatest hitter who ever ondly, for the Korean Conflict. He Farber Institute, which is now global lived.’’’ Few people would disagree with this served his country nobly there and was in its reach which helps to treat cancer statement. a hero and continued on beyond that. in children, which was his passion. Not only did Ted Williams play baseball with Even after he finished his baseball ca- A lot of people say that Ted Williams excitement, but he loved his country with a reer, he provided invaluable assistance reminds them of John Wayne; but in passion as well. Mr. Williams was dedicated to to the Commonwealth of Massachu- reality, John Wayne only played those his country and served in the Marine reserves setts and to others through his work parts in movies. John Wayne wishes he for nearly five years. He selflessly put his and service for the Jimmy Fund, help- was Ted Williams, wishes that he had baseball career aside two times at the peak of ing to eradicate cancer in children. had the life, the career, the success his performance in order to serve his country So for all the good deeds he did in that he had had in every single endeav- in its time of need. While in the service, he baseball, he was a rounded individual or that he touched in his life. flew bomber planes in both World War II and who served this country, who has con- If somebody says 406, everyone knows in the Korean War. Many called him a hero. tinued to serve his fellow man in a hu- that Ted Williams hit that for batting Williams was a patron for America. manitarian way, with very serious average in 1941. There are so many Ted Williams had no tolerance for anything issues of health. Besides that, he had things that we could talk about here but the best from his colleagues. His stubborn- some fantastic eyesight, a great ath- today; but at bottom, this was a great ness and need for perfection helped Williams letic ability, was a terrific fishermen, man, a great American and someone be the best at his trade, whether it be playing and probably was the greatest hitter to who is deserving of all of the praise baseball, flying fighter planes, or fishing. Ted ever live. which he is receiving across this coun- Williams will be missed. I ask my colleagues Mr. Speaker, I yield such time as he try, and I thank the gentleman from to join me in our condolences and remem- may consume to the gentleman from Massachusetts for yielding me the brances of Ted Williams for his brilliant ac- Massachusetts (Mr. MARKEY), an indi- time. complishments, patriotism, and fantastic vidual who is better known around the Mr. TIERNEY. Mr. Speaker, we have memories throughout the 20th century by vot- House of Representatives for his fowl no other speakers, and I yield back the ing in favor of H. Res. 482. shooting percentage, more so than his balance of my time. Mr. MCGOVERN. Mr. Speaker, I thank my batting average, the dean of the Massa- Mr. SHAYS. Mr. Speaker, I yield my- colleague Mr. MARKEY for sponsoring H. Res. chusetts delegation, and a great base- self such time as I may consume. 482 honoring the great Ted Williams. ball fan. Again, I thank the distinguished gen- Ted Williams—the Splendid Splinter—domi- tleman from Massachusetts (Mr. MAR- nated baseball throughout the 1940s and 50s. b 1515 KEY) for introducing this resolution As the Boston Red Sox left fielder, he batted Mr. MARKEY. Mr. Speaker, I thank and working so hard to bring it to the a lifetime .344, batted in 1,839 runs, had 2654 the gentleman from Massachusetts floor. Frankly, when he speaks, no one hits, and hit 521 home runs. Throughout this (Mr. TIERNEY) for yielding me the time, else needs to. time, he won two Triple Crowns. However, it and I thank the gentleman from Con- I also thank the gentleman from In- is his season batting average of .406 in 1941 necticut (Mr. SHAYS) for helping orga- diana (Mr. BURTON), chairman of the that will forever live in the hearts of all base- nize this tribute to Ted Williams. Committee on Government Reform, ball fans. No other player has hit over .400 for As has already been said, he served 5 and the gentleman from California (Mr. a season since. years in the military, 3 years in World WAXMAN), the ranking member, for ex- Yet, if one asked Mr. Williams what he was War II, 2 years in the Korean war, each pediting its consideration. I ask all most proud of in his life, he would say it was of those years at the prime of his base- Members to support this resolution to the time he spent fighting for this great nation. ball career. express our condolences on Ted Wil- Mr. Williams spent five years—in the prime of We in Boston and many across the liams’ death and honor his awesome his life and his baseball career—fighting in country believed that if he had not life and achievements. World War II and in the Korean War. Many been forced because of the need to pro- Mr. LARSON of Connecticut. Mr. Speaker, I often wonder how many more hits Williams tect our country to actually play those rise today in support of H. Res. 482 to honor would have had, had he not dedicated his life five seasons that he would hold the and recognize the life of baseball legend Ted to the Navy and the Marines. And people record in just about every single offen- Williams. I would like to extend my condo- throughout New England will remember Ted sive category of baseball statistics. lences on his recent passing away on July 5, Williams for all the charitable work he per- That is how great a hitter he was. The 2002. It is both fitting and proper to recognize formed for children. amazing thing is that even though he Mr. Williams for both his on the field and off Ted Williams spend 19 seasons with the missed 5 years, he is still near the top the field heroics. From his patriotism to his Red Sox, 19 summers in Fenway Park. In a in so many of the important baseball love for America’s greatest past time, Ted Wil- city where baseball is more than just a pas- categories. liams has touched the lives of millions. time, Ted Williams is an icon. A tunnel running

VerDate May 23 2002 03:50 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00017 Fmt 4634 Sfmt 9920 E:\CR\FM\K15JY7.061 pfrm12 PsN: H15PT1 H4594 CONGRESSIONAL RECORD — HOUSE July 15, 2002 underneath the city of Boston is named after Mr. HOYER. Mr. Speaker, I rise today in tion offered by the gentleman from the Splendid Splinter—the first of many ex- support of House Resolution 482, legislation Connecticut (Mr. SHAYS) that the pected tributes and memorials. Baseball fans that honors one of baseball’s finest players, House suspend the rules and agree to throughout New England and across the na- and one of America’s finest citizens, Ted Wil- the resolution, H. Res. 482. tion now join in mourning the loss of Ted Wil- liams. I also want to commend the gentleman The question was taken. liams—the greatest hitter of all time and a from Massachusetts, Mr. MARKEY for offering The SPEAKER pro tempore. In the man of great dignity and character. this fitting resolution. opinion of the Chair, two-thirds of And I think I speak for Red Sox fans every- Mr. Speaker, Ted Williams was respected those present have voted in the affirm- where in encouraging this year’s team to win by his peers, admired by his successors, and ative. the World Series in Ted Williams’ honor. A adored by his fans. His work-ethic was second Mr. SHAYS. Mr. Speaker, on that I guy can always hope, Mr. Speaker. to none, and he toiled day in and day out, demand the yeas and nays. Mr. Speaker, again I would like to thank Mr. dreaming that one day people would see him The yeas and nays were ordered. MARKEY and my other colleagues in the Mas- and remark: ‘‘There goes the greatest hitter The SPEAKER pro tempore. Pursu- sachusetts delegation for sponsoring this reso- who ever lived.’’ ant to clause 8 of rule XX and the lution. I ask Members to support this bill. His wiry frame and pure talent earned him Chair’s prior announcement, further Mrs. THURMAN. Mr. Speaker, I rise today the nickname ‘‘The Splendid Splinter,’’ and proceedings on this motion will be to honor the life of a great American, Ted Wil- Ted Williams never failed to live up to that postponed. liams and in strong support of a resolution that reputation on the field. f Williams is best remembered for batting the House with my support passed earlier this CONGRATULATING DETROIT RED afternoon. .406 in 1941. In the sixty years since that tre- mendous season, no one has approached the WINGS FOR WINNING 2002 STAN- I would also like to bring to my colleagues’ LEY CUP CHAMPIONSHIP attention legislation that I am introducing to milestone. name a post office in Hernando, Florida the That 1941 season typified Williams’ su- Mr. SHAYS. Mr. Speaker, I move to ‘‘Ted Williams Post Office Building.’’ preme devotion to the sport of baseball. Be- suspend the rules and agree to the reso- We all know about Mr. Williams’ legendary fore the final day of the season, Williams had lution (H. Res. 452) congratulating the baseball achievements, such as hitting .406 in secured a .400 batting average. Yet he re- Detroit Red Wings for winning the 2002 1941 and hitting a home run in his last at bat. fused to sit out that day’s double-header, play- Stanley Cup Championship. The Clerk read as follows: We also know about his dedication to our ing both games and batting 6 for 8, raising his average 6 points. ES country, which he showed by interrupting his H. R . 452 Ted Williams’ dedication to the game of baseball career TWICE, to serve in World War Resolved, That the House of Representa- baseball was evident as he continued to excel tives— II and Korea. at an age when most ballplayers would have (1) congratulates— However, I am her to talk about what Mr. long since hung up their cleats. At the age of (A) the Detroit Red Wings for winning the Williams did for Citrus County in my district, 40, he added his sixth and final batting title to 2002 Stanley Cup Championship and for their where he lived from the mid-1980’s until his his long list of accomplishments, becoming the outstanding performance during the entire passing earlier this month. oldest player to ever lead the league in hitting. 2001–2002 National Hockey League season; As most of you know, Mr. Williams was a Williams was also a master of dramatic fin- and fabulous fisherman, and he first came to Cit- (B) all of the 16 National Hockey League ishes, as he closed out his career in Fenway teams that played in the postseason; rus County in 1950 for that reason. However, Park with a home run in his last at-bat. It was it wasn’t until over 30 years later that he (2) recognizes the achievements of the Red a fitting end for Boston’s greatest and most Wings players, coaches, and support staff began to leave his mark on the County. beloved baseball player of all time. who worked hard and were instrumental in In 1982, Mr. Williams was named a mar- While Teddy Ballgame will always be re- bringing the Stanley Cup back to the city of keting consultant for the Citrus Hills residential membered as a baseball player, some of his Detroit; development, lent his name to the project and, greatest accomplishments came off the field. (3) commends the Carolina Hurricanes for a most importantly, moved to the County shortly Williams’ devotion to baseball was matched valiant performance during the playoff finals afterward. This helped bring thousands of only by his devotion to his country. He acted and for showing their strength and skill as a transplanted New Englanders who followed his team; and as a true role model and hero during a time (4) directs the Clerk of the House of Rep- playing career to retire in Citrus County. of war, sacrificing three years in the prime of Mr. Williams put Citrus County in the na- resentatives to transmit an enrolled copy of his career to serve in the United States Ma- this resolution to— tional spotlight in 1994 with the opening of the rines in World War II from 1943–1945. Seven (A) the Red Wings players; Ted Williams Museum and Hitters Hall of years later, he again left the baseball diamond (B) Head Coach Scotty Bowman; and Fame, which is located in Citrus Hills. The to serve his country, this time in the Korean (C) President and team owner Mike Ilitch. event brought plenty of celebrities to the area, War. And even though his time in the military The SPEAKER pro tempore. Pursu- such as Joe DiMaggio, Muhammad Ali and undoubtedly cost him some of his best playing ant to the rule, the gentleman from Bob Costas, who served as master of cere- days, he never regretted his service. In fact, Connecticut (Mr. SHAYS) and the gen- monies. Williams often counted his enlistment as a Ma- tleman from Massachusetts (Mr. The Museum would have an incredible ef- rine as one of his greatest accomplishments. TIERNEY) each will control 20 minutes. fect on tourism in the area—which continues In addition to his heroic sacrifices as a Ma- The Chair recognizes the gentleman to this day. Despite his failing health, Mr. Wil- rine, Williams will be remembered as the first from Connecticut (Mr. SHAYS). liams appeared before 2,000 fans at the Mu- Hall of Famer to have the courage to insist GENERAL LEAVE seum’s yearly hall of fame induction ceremony upon the inclusion of Negro League stars in Mr. SHAYS. Mr. Speaker, I ask unan- in February. Cooperstown. And we will be forever grateful imous consent that all Members may Everyone in Citrus County—baseball fans or to Williams for his generous support of the have 5 legislative days within which to not—had tremendous pride in the fact that one Jimmy Fund, a local charity that aids the fight revise and extend their remarks on H. of the world’s greatest baseball players lived against cancer. Res. 452. in the area. However, he wasn’t just a great Mr. Speaker, when Ted Williams passed The SPEAKER pro tempore. Is there ballplayer—he was a great American, and he away on July 5th, America lost a baseball leg- objection to the request of the gen- left his mark on Citrus County. end. But we also lost a man with courage, tleman from Connecticut? The last day of the 1941 season, Mr. Wil- dedication, and desire rarely equaled. It was There was no objection. liams was hitting .400 and was given the op- these qualities that allowed Ted Williams to Mr. SHAYS. Mr. Speaker, I yield my- portunity by his manager to sit out the game accomplish his lifelong goal. For when Ted self such time as I may consume. in order to preserve this monumental achieve- Williams, the Splendid Splinter, passed away, Mr. Speaker, I am grateful to have an ment. Of course, he did not sit, and finished there was one phrase that was on everyone’s opportunity to salute the Detroit Red going 6 for 8 in both games of a double- lips: ‘‘There goes the greatest hitter who ever Wings and will just point out that my header. lived.’’ statement was written by a staff mem- Ted Williams would continue that dedication Mr. SHAYS. Mr. Speaker, I yield ber who does not even happen to be a when he arrived in Citrus County. Indeed, the back the balance of my time. Detroit Red Wings fan, but he has done last player to bat over .400 batted 1.000 in Cit- The SPEAKER pro tempore (Mr. a gracious job in preparing this state- rus Countys. CULBERSON). The question is on the mo- ment.

VerDate May 23 2002 03:50 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00018 Fmt 4634 Sfmt 0634 E:\CR\FM\A15JY7.048 pfrm12 PsN: H15PT1 July 15, 2002 CONGRESSIONAL RECORD — HOUSE H4595 Mr. Speaker, House Resolution 452, make sure that everybody acknowl- new members, and I think that gave us introduced by our distinguished col- edges this important feat as well as the a sense of community and a sense, if I league from the State of Michigan (Ms. hard work of Mr. Bowman as the gen- may say so, even of family. When Vladi KILPATRICK), congratulates the Na- tleman from Connecticut (Mr. SHAYS) Konstantinov was seriously injured, ev- tional Hockey League’s Detroit Red said, the team captain and other play- erybody rallied around him. And it is Wings for winning the Stanley Cup for ers there. always a moving few moments when he the third time in 6 years. The entire Their whole delegation, I am sure all rejoins the team for various events. House delegation from the State of of Michigan, take great pride in the So I just wanted to come to the floor Michigan are cosponsors of this legisla- work that this team and the effort that and to say, in tribute to the Red Wings, tion. they have made. many thanks to all of the players, led Last month, the Detroit Red Wings Mr. Speaker, I reserve the balance of by Steve Yzerman, the captain; to all defeated the Carolina Hurricanes in my time. of the coaches, led by Scotty Bowman; just five games to win the Stanley Cup Mr. SHAYS. Mr. Speaker, I yield my- and to the entire Ilitch family, for Finals and bring the title back to, as self such time as I may consume. making a sports team something more the writer says, Hockeytown. En route I think it says something that a Bos- than a sports team. This wonderful to the finals, the Red Wings beat last ton Bruins, one of the original six, and group won the Stanley Cup, but they year’s Stanley Cup champions, the Col- a New York Rangers fan are saluting really also won the hearts of a lot of us orado Avalanche, to clinch the Western the Detroit Red Wings. They have been in Michigan. Conference title. an awesome team, remarkable players, And if I daresay, as I close, to all my The Red Wings’ roster features such and truly outstanding coach; and I will colleagues who have not been in the NHL superstars as team captain Steve just say that given that some Members Detroit metropolitan area recently, Yzerman, Brett Hull, Sergei Federov, have not had the opportunity to speak, there are more Red Wing flags flying Chris Chelios, and goalie Dominik with some trepidation, I am going to from cars than you will see such flags Hasek. ask for a rollcall vote and know that anywhere else in America. If we who I would specifically like to congratu- my House Members from different are candidates for office had just one- late Detroit Head Coach Scotty Bow- hockey towns will have the good na- fiftieth of the flags that fly from the man for his impressive leadership this ture and goodwill to make this a unan- cars supporting the Red Wings, we season and throughout his frankly awe- imous resolution. could never lose an election. The Red some career. Coach Bowman has been Mr. TIERNEY. Mr. Speaker, I yield Wings maybe can lose a Stanley Cup with the team since 1993, and he has such time as he may consume to the contest in future years, but they won it guided the Red Wings to three Stanley gentleman from Michigan (Mr. LEVIN), again this year and all of us from Cup championships, including back-to- and we are honored to have in this Michigan are very, very proud of them. back wins in 1997 and 1998. Bowman is body today a member of this body who And I thank the House for bringing up retiring from the NHL and thus closing takes great pride in being from Michi- this resolution of congratulations. out a truly remarkable career, during gan. Mr. TIERNEY. Mr. Speaker, I have which he set many coaching records in- Mr. LEVIN. Mr. Speaker, I appreciate no further requests for time, and I cluding a record nine Stanley cup my friend from Massachusetts yielding yield back the balance of my time. championships during his tenure with me the time. Mr. SHAYS. Mr. Speaker, I yield my- the Montreal Canadians, the Pitts- I just want to say a few words about self such time as I may consume to burgh Penguins, and now with the De- the Red Wings as someone who has thank the gentleman from Michigan troit Red Wings. been a fan for quite a few years. The for his very thoughtful comments, and Mr. Speaker, for these reasons, I urge Red Wings are for Michigan more than to say whether you are a Bruin fan, or adoption of House Resolution 452. a hockey team, and I think that is the Ranger fan, like Mr. TIERNEY and me, Mr. Speaker, I reserve the balance of secret. you can still be very happy to support my time. A lot of us do care they are a success- this important resolution honoring the Mr. TIERNEY. Mr. Speaker, I yield ful hockey team. Some of us go back to Detroit Red Wings. myself such time as I may consume. the days when we played and there Mr. DINGELL. Mr. Speaker, I would like to I rise to also support House Resolu- were not any indoor rinks. Some of us take this opportunity to congratulate the entire tion 452 for consideration this after- who are Red Wings fans used to fool Detroit Red Wings organization for winning the noon. Obviously, all the things that the around with hockey on ponds, and 2002 Stanley Cup on June 13, 2002, and col- gentleman from Connecticut (Mr. sometimes because the winter was not lecting their 10th Cup by defeating the Eastern SHAYS) has already mentioned are on long enough, falling in while we were Conference Champion Carolina Hurricanes. my list of comments to make here on playing hockey. After 82 games, followed by perhaps the most behalf of the gentlewoman from Michi- But as I said, the Red Wings really grueling playoff setup in professional sports, gan (Ms. KILPATRICK) and the other are much more than a hockey team the Red Wings proved once again that talent members of the Michigan delegation and that has been especially true under and experience could triumph over more who, unfortunately, could not be here the ownership of Mike and Marion youthful competition. this afternoon to bring this matter for- Illitch. They understand what sports Marian and Mike Ilitch, the owners of the ward and speak to it. mean to Detroit and the whole metro- Red Wings and community leaders in Detroit, I do think it takes note again for the politan area in the State. They also un- have once again returned Lord Stanley’s Cup young people that are here that this is derstand, though, that sports can mean to ‘‘Hockeytown,’’ where it rightfully belongs. I not just about winning and losing a something more than just who wins would like to thank the Ilitch family for their hockey game, but more about the hard and who loses. dedication to the city of Detroit, State of Michi- work and determination and gan, and to all Red Wing fans. teamsmanship that goes into a cham- b 1530 Red Wing fans are indebted to retiring head pionship effort; and for that, the Red And the Red Wings, I think, have coach Scotty Bowman, who has brought the Wings are certainly to be congratu- such wonderful following because, espe- Red Wings to the playoffs 7 times in the last lated for the skill, tenacity, and domi- cially under the Ilitches, and the 8 years, won three Stanley Cups in the past nance with which they finished the reg- coaches there, led by Scotty Bowman, 6 years, and who, with this year’s victory, has ular season and then clinched the there has been continuity. We have earned his ninth Stanley Cup victory, sur- President’s trophy. come to know the players. I must say, passing his mentor Toe Blake for the most They have done a great job. They de- on some teams, the players change so championships in National Hockey League serve all the credit. For a Boston Bru- much every year, it is hard to identify history. This is truly an amazing accomplish- ins fan like myself, it is always dif- with them. But that has not been true ment and I wish him well in his retirement. ficult to understand that once again of the Red Wings. Finally, I express my congratulations to the the Stanley Cup slipped away, but it The team that won the championship Red Wing players for their incredible season, went to a team who had a great year, and the Stanley Cup really melded to- and for showing all of us how to perform was a very deserving; and we want to gether and became a family, taking in under great pressure. I applaud the hard work

VerDate May 23 2002 05:11 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00019 Fmt 4634 Sfmt 9920 E:\CR\FM\K15JY7.063 pfrm12 PsN: H15PT1 H4596 CONGRESSIONAL RECORD — HOUSE July 15, 2002 and dedication which made this victory pos- Cup under his leadership, with the back to Kirk Maltby, Boyd Devereaux, Fredrik sible, and would offer my personal apprecia- back wins in 1997 and 1998. I wish, Mr. Bow- Olausson, Steve Duchesne, Jason Williams, tion on behalf of Michigan’s 16th Congres- man, ‘‘the Winningest Coach in Hockey,’’ all Maxim Kuznetsov, Manny Legace, Jason El- sional District, to Captain Steve Yzerman, the best in his retirement and thank him for all liott, Sean Avery, Jiri Slegr, and Tomas Brett Hull, Igor Larionov, Brendan Shanahan, that he has brought to this great sport. Con- Holmstrom. Lue Robitaille, Sergei Federov, Darren gratulations to President and team owner Mike With the recent signing of Curtis Joseph and McCarty, Chris Chelios, Niklas Lidstrom, Ilitch and his wife, Marian, who have shown re-signing of Chris Chelios, I look forward to Dominik Hasek, Kris Draper, Jirri Fischer, steadfast support for the team and the City of seeing another Stanley Cup Parade in Jesse Wallin, Uwe Krupp, Mathieu Detroit and have been owners of the Red Hockeytown next year! Dandenault, Pavel Datsyuk, Ladislav Kohn, Wings franchise since 1982. Their commit- Mr. KNOLLENBERG. Mr. Speaker, I rise Kirk Maltby, Boyd Devereaux, Fredrik ment to the team and the City rings true ev- today in support of congratulating the Detroit Olausson, Steve Duchesne, Jason Williams, eryday. Red Wings for winning the 2002 Stanley Cup Maxim Kuznetsov, Manny Legace, Jason El- For all hockey fans out there and for anyone Hockey Championship. liott, Sean Avery, Jiri Slegr, and Tomas that knows even a little bit about hockey, As one of the Original Six hockey clubs, the Holmstrom. clinching the Stanley Cup is no easy feat. The Red Wings have proven time and time again With the recent signing of Curtis Joseph and Red Wings went through four grueling playoff that they are one of hockey’s premiere fran- re-signing of Chris Chelios, I look forward to rounds and defeated four very competitive and chises of all time. With their three to one vic- seeing another Stanley Cup Parade in skilled teams to win the Cup, including the tory over the Carolina Hurricanes in game five Hockeytown next year! 2001 Stanley Cup Championships, the Colo- of the 2002 Stanley Cup Finals, the Wings Mr. BONIOR. Mr. Speaker, today I rise in rado Avalanche in the Western Conference clinched their third Stanley Cup in six years, congratulations of the 2001–2002 Stanley Cup finals, and the valiant Caroline Hurricanes in totaling an impressive ten Cups since the team became a franchise in 1926. With a Champion Detroit Red Wings. the Stanley Cup finals. Although history will be the final judge, the The Red Wings faced strong opposition, but record like that, it makes sense that Detroit Detroit Red Wings are already being consid- showed their true grit and skill every step of has come to be known as Hockeytown USA. So congratulations and a special farewell go ered one of the greatest hockey teams ever the way, getting stronger as each playoff se- to Red Wing coach Scotty Bowman, who an- assembled. Led by the winningest coach in ries progressed. All the players on the Red nounced his retirement just before Steve NHL history, a team made up of truly great Wings contributed to the team’s success. De- Yzerman handed him the Cup after the final players—more than half a dozen prospective servedly, each player will have his name en- game. Congratulations also to Mike Illitch and Hall of Famers and a rookie class with seem- graved on the Stanley Cup, which is consid- Jimmy Devallano for putting this team to- ingly boundless potential—the Red Wings are ered to be the most conveted sports trophy in a team that is greater than the sum of its gether. Congratulations, obviously, to captain North America. Steve Yzerman, to the playoff MVP Nicklas parts. If there is one thing that can be said I would like to thank my Michigan col- Lidstrom, to Brendan Shanahan, to goalie about the team, it’s that they could never be leagues for cosponsoring this resolution. We Dominik Hasek, and to all the members of this counted out. congratulate the Detroit Red Wings on an Throughout the year and the playoffs, the great club for bringing yet another of Lord awesome year. Way to go Red Wings! stars stepped up and led when leadership was Stanley’s coveted chalices to Hockeytown. Hockeytown is proud. needed, and when the veterans had difficul- And congratulations to the Detroit fans that Mr. DINGELL. Mr. Speaker, I would like to ties, the rookies came through when it really stood behind their team through it all. Mr. take this opportunity to congratulate the entire mattered. Under Scotty Bowman, the Red Speaker, we have done it again. Detroit Red Wings organization for winning the Wings came together with an offense as quick Mr. SHAYS. Mr. Speaker, I yield 2002 Stanley Cup on June 13, 2002, and col- and precise as a surgeon’s scalpel, and a de- back the balance of my time. lecting their 10th Cup by defeating the Eastern fense as tenacious as the octopus that we in The SPEAKER pro tempore (Mr. Conference Champion Carolina Hurricanes. Detroit have adopted as our symbol for the CULBERSON). The question is on the mo- After 82 games, followed by perhaps the most playoffs. tion offered by the gentleman from The Red Wings have shown themselves to grueling playoff setup in professional sports, Connecticut (Mr. SHAYS) that the be outstanding role models both on and off the Red Wings proved once again that talent House suspend the rules and agree to the ice. They embody the values of teamwork, and experience could triumph over more the resolution, House Resolution 452. discipline and dignity, and their involvement youthful competition. The question was taken. with the community has brought it together. Marian and Mike Ilitch, the owners of the The SPEAKER pro tempore. In the For our young people becoming passionate Red Wings and community leaders in Detroit, opinion of the Chair, two-thirds of about the sport of hockey, they couldn’t look have once again returned Lord Stanley’s Cup those present have voted in the affirm- up to a better group of players. to ‘‘Hockeytown,’’ where it rightfully belongs. I ative. And so today I join with my colleagues in would like to thank the Ilitch family for their Mr. SHAYS. Mr. Speaker, on that I congratulating the Detroit Red Wings for their dedication to the city of Detroit, State of Michi- demand the yeas and nays. Stanley Cup victory. This team has guts, de- gan, and to all Red Wings fans. The yeas and nays were ordered. The SPEAKER pro tempore. Pursu- termination and finesse. Sports Illustrated has Red Wings fans are indebted to retiring ant to clause 8 of rule XX and the called them the New York Yankees of Hockey, head coach Scotty Bowman, who has brought Chair’s prior announcement, further but I’m not so sure that’s appropriate. They’re the Red Wings to the playoffs 7 times in the proceedings on this motion will be the Detroit Red Wings of Hockey, and that last 8 years, won three Stanley Cups in the postponed. speaks volumes more. past 6 years, and who, with this year’s victory, Ms. KILPATRICK. Mr. Speaker, I would like has earned his ninth Stanley Cup victory, sur- f to thank the Representatives for bringing up passing his mentor Joe Blake for the most BLACKWATER NATIONAL WILD- H. Res. 452, a resolution that I, along with championships in National Hockey League LIFE REFUGE EXPANSION ACT support from the entire Michigan delegation, history. This is truly an amazing accomplish- ment and I wish him well in his retirement. Mr. GILCHREST. Mr. Speaker, I introduced congratulating the Red Wings on a move to suspend the rules and pass the tremendous year that culminated in winning Finally, I express my congratulations to the Red Wings players for their incredible season, bill (H.R. 4807) to authorize the Sec- the 2002 Stanley Cup Championship. retary of the Interior to acquire the As a native Detroiter, I am so proud of the and for showing all of us how to perform property in Cecil County, Maryland, Red Wings for bringing the Stanley Cup back under great pressure. I applaud the hard work known as Garrett Island for inclusion to the City of Detroit and the State of Michi- and dedication which made this victory pos- in the Susquehanna National Wildlife gan. They showed true heart, dominance, skill, sible, and would offer my personal apprecia- Refuge, as amended. tion on behalf of Michigan’s 16th Congres- and tenacity throughout regular and post-sea- The Clerk read as follows: sional District, to Captain Steve Yzerman, son play in the National Hockey League. More H.R. 4807 importantly, they showed all of us that any- Brett Hull, Igor Larionov, Brendan Shanahan, Be it enacted by the Senate and House of Rep- thing is possible with hard work, determina- Luc Robitaille, Sergei Federov, Darren resentatives of the United States of America in tion, and a strong team spirit. The Red Wings McCarty, Chris Chelios, Niklas Lidstrom, Congress assembled, are true champions. Dominik Hasek, Kris Draper, Jiri Fischer, SECTION 1. SHORT TITLE. Thank you to head coach Scotty Bowman, Jesse Wallin, Uwe Krupp, Mathieu This Act may be cited as the ‘‘Blackwater who led the Red Wings to their third Stanley Dandenault, Pavel Datsyuk, Ladislav Kohn, National Wildlife Refuge Expansion Act’’.

VerDate May 23 2002 03:50 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00020 Fmt 4634 Sfmt 0634 E:\CR\FM\A15JY7.085 pfrm12 PsN: H15PT1 July 15, 2002 CONGRESSIONAL RECORD — HOUSE H4597 SEC. 2. FINDINGS. within the National Wildlife Refuge service’s full and unbiased consider- The Congress finds the following: system. As a Nation, we can ill afford ation. (1) Garrett Island, located at the mouth of to allow unique places like Garrett Is- H.R. 4807 is a noncontroversial bill. I the Susquehanna River in Cecil County, land to be lost forever. Maryland, is a microcosm of the geology and also urge all Members to support this geography of the region, including hard rock While I was disappointed to hear the legislation to help protect fish and piedmont, coastal plain, and volcanic forma- U.S. Fish and Wildlife Service’s initial wildlife habitat in the Chesapeake Bay. reaction to the idea was that it op- tions. Mr. Speaker, I reserve the balance of posed its inclusion, I am pleased they (2) Garrett Island is the only rocky island my time. in the tidal waters of the Chesapeake. will be visiting the island next month (3) Garrett Island and adjacent waters pro- to evaluate its trust resources. I am Mr. GILCHREST. Mr. Speaker, I vide high-quality habitat for bird and fish confident that once a comprehensive yield myself such time as I may con- species. review has been concluded, as promised sume to mention just one other item. (4) Garrett Island contains significant ar- There is a family in Cecil County, the cheological sites reflecting human history by the end of the summer, the service and prehistory of the region. will join me in enthusiastically urging Kilbys, that live and work on a dairy SEC. 3. AUTHORITY TO ACQUIRE PROPERTY FOR the protection of Garrett Island. farm, and they have been strong sup- INCLUSION IN THE SUSQUEHANNA The Cecil Land Trust has done every- porters of the concept of Garrett Island NATIONAL WILDLIFE REFUGE. thing they can to protect the impor- being included in the National Wildlife (a) ACQUISITION.—The Secretary of the In- tant property, contributing $150,000 to- Refuge system. There are broad and terior may use otherwise available amounts ward the purchase of the island. And varied opportunities for this island to to acquire the area known as Garrett Island, based on our hearing, Federal acquisi- be included, and so I urge not only my consisting of approximately 198 acres located colleagues to vote aye on this legisla- at the mouth of the Susquehanna River in tion costs would be less than $400,000, Cecil County, Maryland. and little, if any, maintenance or per- tion, but I also urge the Interior De- (b) ADMINISTRATION.—Lands and interests sonnel will be required for the future of partment, when they are visiting the acquired by the United States under this sec- this inclusion. island, to recognize those varied oppor- tion shall be managed by the Secretary as The Chesapeake Bay Foundation had tunities. the Garrett Island Unit of the Blackwater it right when they wrote that steps The United States often sends biolo- National Wildlife Refuge. must be taken to ensure protection of gists, zoologists, ornithologists, you (c) PURPOSES.—The purposes for which the this largely unspoiled historical and name it, to vast areas of the world to Garrett Island Unit is established and shall geological gem. I would urge my col- be managed are the following: study ecosystems. We have in our back (1) To support the Delmarva Conservation leagues to vote aye on H.R. 4807. This is yard, here in Maryland, a magnificent Corridor Demonstration Program. an important and necessary inclusion Chesapeake Bay watershed ecosystem, (2) To conserve, restore, and manage habi- in our National Wildlife Refuge sys- and this island can be one of those fa- tats as necessary to contribute to the migra- tem, which will celebrate its hundredth cilities that will be included in what tory bird populations prevalent in the Atlan- birthday next year. could be known as an island corridor in tic Flyway. This is exactly the type of place that (3) To conserve, restore, and manage the the Chesapeake Bay so that people Teddy Roosevelt had in mind when the from the University of Maryland or the significant aquatic resource values associ- unique system of public lands was cre- ated with submerged land adjacent to the Baltimore Zoo or the Baltimore Aquar- unit and to achieve the habitat objectives of ated. ium, or other universities and commu- the agreement known as the Chesapeake 2000 Mr. Speaker, I reserve the balance of nity colleges and even high schools do Agreement. my time. not have to travel to Brazil or South- (4) To conserve the archeological resources Mrs. CHRISTENSEN. Mr. Speaker, I east Asia or regions of Africa to show on the unit. yield myself such time as I may con- their interns or their students the (5) To provide public access to the unit in sume. kinds of ecosystems that make commu- a manner that does not adversely impact (Mrs. CHRISTENSEN asked and was natural resources on and around the unit. nities drive. They can send them to the given permission to revise and extend island corridor, Garrett Island being The SPEAKER pro tempore. Pursu- her remarks.) the jewel of that concept. ant to the rule, the gentleman from Mrs. CHRISTENSEN. Mr. Speaker, Maryland (Mr. GILCHREST) and the gen- we on this side have no objection to So I urge my colleagues to vote for tlewoman from the Virgin Islands (Mrs. this legislation that would authorize this legislation. I also want to thank CHRISTENSEN) each will control 20 min- the Secretary of the Interior to acquire the gentlewoman from the Virgin Is- utes. Garrett Island for its future inclusion lands for her support and the staff for The Chair recognizes the gentleman as part of the Blackwater National their work on this legislation. from Maryland (Mr. GILCHREST). Wildlife Refuge in Maryland. Mr. GILCHREST. Mr. Speaker, I have Mr. GILCHREST. Mr. Speaker, I Certainly the protection of the last no further requests for time, and I yield myself such time as I may con- undeveloped island in the lower reach yield back the balance of my time. sume. of the Susquehanna River is a positive Mrs. CHRISTENSEN. Mr. Speaker, I I am pleased to present this legisla- step toward preserving the remaining have no further requests for time, and tion to the House of Representatives to fish and wildlife habitat found near the I yield back the balance of my time. expand the boundaries of Blackwater headwaters of the Chesapeake Bay. I The SPEAKER pro tempore. The National Wildlife Refuge, which is lo- want to applaud the gentleman from question is on the motion offered by cated in my Congressional District in Maryland (Mr. GILCHREST) for this bill the gentleman from Maryland (Mr. Maryland. and for his leadership on this sub- GILCHREST) that the House suspend the Garrett Island, which consists of ap- committee on this and many other rules and pass the bill, H.R. 4807, as proximately 198 acres, was the site of issues. amended. Maryland’s second settlement in the The U.S. Fish and Wildlife Service 1600s. It is the only rocky island in the has voiced some minor reservations The question was taken; and (two- tidal waters of the Chesapeake Bay concerning the legislation, as we have thirds having voted in favor thereof) system, and it is a vital link between just heard. These concerns are mostly the rules were suspended and the bill, the Susquehanna River and the Chesa- due to the administration’s ongoing ef- as amended, was passed. peake Bay. It also provides habitat to fort to reevaluate current land acquisi- The title of the bill was amended so 44 different bird species, including ea- tion policies governing the refuge sys- as to read: gles, common loons, tundra swans, and tem. However, the technical changes ‘‘A bill to authorize the Secretary of the 14 kinds of ducks. made to the bill, I think, will help to Interior to acquire the property in Cecil I have visited Garrett Island a num- address these minor concerns. And the County, Maryland, known as Garrett Island ber of times, and there is no question relatively low cost of acquisition for inclusion in the Blackwater National that its rich history, geographic loca- should warrant a new assessment of Wildlife Refuge.’’. tion and wildlife resource values make Garrett Island by the Fish and Wildlife A motion to reconsider was laid on it an excellent candidate for inclusion Service. The island is deserving of the the table.

VerDate May 23 2002 03:50 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00021 Fmt 4634 Sfmt 0634 E:\CR\FM\A15JY7.056 pfrm12 PsN: H15PT1 H4598 CONGRESSIONAL RECORD — HOUSE July 15, 2002 HONORING AMERICAN ZOO AND and veterinarian standards for zoos and Mr. Speaker, I yield back the balance AQUARIUM ASSOCIATION aquariums in addition to supporting of my time. Mr. GILCHREST. Mr. Speaker, I programs that protect, conserve, and Mr. GILCHREST. Mr. Speaker, I move to suspend the rules and agree to restore wild animal populations. yield myself such time as I may con- the concurrent resolution (H. Con. Res. Mr. Speaker, H. Con. Res. 408 com- sume. 408) honoring the American Zoo and mends the American Zoo and Aquar- Mr. Speaker, the Virgin Islands is a Aquarium Association and its accred- ium Association for all the great work beautiful place in the Caribbean; that ited member institutions for their con- they have done, and I urge Members to is its own AZA. tinued service to animal welfare, con- support passage of this bill. Mr. GILCHREST. Mr. Speaker, I servation education, conservation re- Mr. Speaker, I reserve the balance of yield back the balance of my time. search, and wildlife conservation pro- my time. The SPEAKER pro tempore (Mr. grams. Mrs. CHRISTENSEN. Mr. Speaker, I CULBERSON). The question is on the mo- The Clerk read as follows: yield myself such time as I may con- tion offered by the gentleman from H. CON. RES. 408 sume. Maryland (Mr. GILCHREST) that the (Mrs. CHRISTENSEN asked and was Resolved by the House of Representatives (the House suspend the rules and agree to Senate concurring), That the Congress recog- given permission to revise and extend the concurrent resolution, H. Con. Res. nizes and honors the American Zoo and her remarks.) 408. Aquarium Association and its member insti- Mrs. CHRISTENSEN. Mr. Speaker, I The question was taken; and (two- tutions of zoological parks and aquariums rise also in support of this concurrent thirds having voted in favor thereof) for their dedicated service in animal welfare, resolution recognizing the American the rules were suspended and the con- conservation education, conservation re- Zoo and Aquarium Association for its current resolution was agreed to. search, and wildlife conservation programs. outstanding role in the conservation of The SPEAKER pro tempore. Pursu- A motion to reconsider was laid on the world’s biodiversity and for its ad- the table. ant to the rule, the gentleman from vancement of zoos and aquariums here Maryland (Mr. GILCHREST) and the gen- and abroad. f tlewoman from the Virgin Islands (Mrs. Collectively, AZA member institu- CELEBRATING 50TH ANNIVERSARY CHRISTENSEN) each will control 20 min- tions draw over 135 million visitors OF CONSTITUTION OF COMMON- utes. each year. This affords the AZA facili- WEALTH OF PUERTO RICO The Chair recognizes the gentleman ties a huge opportunity and responsi- Mr. GILCHREST. Mr. Speaker, I from Maryland (Mr. GILCHREST). bility to instruct the public on the Mr. GILCHREST. Mr. Speaker, I move to suspend the rules and agree to need to protect and conserve the won- yield myself such time as I may con- the concurrent resolution (H. Con. Res. ders of the natural world. sume. 395) celebrating the 50th anniversary of Mr. Speaker, founded in 1924, the b 1545 the constitution of the Commonwealth American Zoo Association is a non- The wide variety of public education of Puerto Rico, as amended. profit organization dedicated to the ad- and interpretive programs made avail- The Clerk read as follows: vancement of zoos and aquariums. AZA able through AZA institutions admi- H. CON. RES. 395 institutions draw over 135 million visi- rably fulfills this mission, and I ap- Resolved by the House of Representatives (the tors annually and have more than 5 plaud the AZA for their important Senate concurring), That the Congress cele- million zoo and aquarium members. work towards developing the next gen- brates the 50th anniversary of the Constitution These institutions teach more than 12 eration of wildlife conservation. of the Commonwealth of Puerto Rico. million people each year in living In closing, H. Con. Res. 408 is non- The SPEAKER pro tempore. Pursu- classrooms, dedicate an estimated $50 controversial, and I urge its adoption ant to the rule, the gentleman from million annually to education pro- by the House. Maryland (Mr. GILCHREST) and the gen- grams, invest an estimated $50 million Mr. Speaker, I reserve the balance of tlewoman from the Virgin Islands (Mrs. annually to scientific research, and my time. CHRISTENSEN) each will control 20 min- support over 1,300 field conservation re- Mr. GILCHREST. Mr. Speaker, I utes. search projects in 80 countries. yield myself such time as I may con- The Chair recognizes the gentleman AZA member institutions are a crit- sume. from Maryland (Mr. GILCHREST). ical component in the conservation of Mr. Speaker, I thank the gentle- Mr. GILCHREST. Mr. Speaker, I marine mammals in the wild through woman from the Virgin Islands and the yield myself such time as I may con- broad-based education research and staff on both sides of the aisle for sup- sume. standing recovery rehabilitation pro- porting this legislation in recognizing (Mr. GILCHREST asked and was grams. all of those people, whether it is a tiny given permission to revise and extend Additionally, many AZA facilities zoo in Cecil County, Maryland, or his remarks.) and scientists collaborate with re- Salisbury, Maryland, or the magnifi- Mr. GILCHREST. Mr. Speaker, I rise searchers from colleges, universities, cent aquarium in Baltimore, Maryland, today in support of H. Con. Res. 395. and other scientific institutions to con- to zoos and aquariums all across this The gentleman from Utah (Mr. HAN- duct studies important to species con- country by trying to understand, and SEN), the gentleman from West Vir- servation and health. AZA facilities doing a pretty good job of it, of under- ginia (Mr. RAHALL), and Resident Com- have developed species survival plans standing the nature of the magnifi- missioner ANIBAL ACEVEDO-VILA´ which are cooperative long-term breed- cence of where people fit into the nat- worked together to compose this non- ing and conservation programs that ural environment on this blue planet. partisan and status-neutral resolution provide many species with an insur- Mr. Speaker, I reserve the balance of celebrating the 50th anniversary of the ance policy against extinction. Some of my time. constitution of the Commonwealth of the species covered by these plans in- Mrs. CHRISTENSEN. Mr. Speaker, I Puerto Rico. clude all the great apes, Africa and yield myself such time as I may con- H. Con. Res. 395 celebrates the 50th Asian elephants, Siberian and Suma- sume. anniversary of this important histor- tran tigers, and black, white Sumatran Mr. Speaker, I thank the chairman of ical event in our Nation’s history by and greater one-horned rhinos. the subcommittee for the gentleman’s listing some highlights Puerto Rico’s These cooperative conservation pro- leadership and the work he has done to local constitution went through in be- grams support both field and institu- accommodate the needs and unique coming adopted. The resolution is non- tional research to ensure that these considerations of the territories as we controversial, and I ask Members to animals are carefully managed and work on the Committee on Resources. join me in its support. maintain a healthy self-sustaining pop- We have no members of AZA, but we do Mr. Speaker, I reserve the balance of ulation that is genetically diverse and have Coral World in St. Thomas, and I my time. demographically stable. am hoping at some point in the near Mrs. CHRISTENSEN. Mr. Speaker, I AZA institutions across the United future they will be a member of this yield myself such time as I may con- States have maintained high curatorial wonderful organization. sume.

VerDate May 23 2002 03:50 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00022 Fmt 4634 Sfmt 0634 E:\CR\FM\K15JY7.049 pfrm12 PsN: H15PT1 July 15, 2002 CONGRESSIONAL RECORD — HOUSE H4599 (Mrs. CHRISTENSEN asked and was Mr. Speaker, I yield such time as he colony in the world, having been a col- given permission to revise and extend might consume to the gentleman from ony of Spain for over 400 years until her remarks.) New York (Mr. SERRANO). 1898 and now a colony of the U.S. for Mrs. CHRISTENSEN. Mr. Speaker, H. (Mr. SERRANO asked and was given over 100 years. Con. Res. 395 is a resolution authored permission to revise and extend his re- To celebrate any colonial status is to by the gentleman from Puerto Rico marks.) promote and prolong it. And I cannot, (Mr. ACEVEDO-VILA´ ) in close collabora- Mr. SERRANO. Mr. Speaker, I rise and I refuse to do that, however benign tion and with the full support of both with utmost respect for my colleagues this resolution may seem. the chairman and ranking member, the and with some sadness in my heart be- This Congress should not be cele- gentleman from Utah (Mr. HANSEN) and cause I rise in opposition to this reso- brating nor promoting the continued the gentleman from West Virginia (Mr. lution. I do so because in our profes- colonialism of Puerto Rico, and it is RAHALL). sion, perception is a strong weapon. time we did something about it. The The gentleman from Puerto Rico And the perception of this weapon or United Nations recognizes two options (Mr. ACEVEDO-VILA´ ) regrets that he is the result will be that we are in fact for decolonization: Puerto Rico be- not here for the House consideration of celebrating the relationship between comes the 51st State of the Union and the resolution commemorating the Puerto Rico and the United States. joins the other States with full powers 50th anniversary of the constitution of While that relationship has had some and responsibilities; or Puerto Rico be- the Commonwealth of Puerto Rico, but wonderful moments, it has never cause a sovereign nation unto itself a long-standing commitment in his dis- stopped, in my opinion, being a colo- and takes its place among other na- trict this morning made it impossible nial relationship, in fact. tions of the world. for him to be here until later today. He I do not think the Congress should at Under separation, there is also the has already submitted a statement for this moment or at any other moment option for free association where Puer- the RECORD on his support of this his- celebrate and encourage continued co- to Rico could negotiate with the toric occasion. lonial relationships. Now, why do I be- United States, common currency, post- I take this opportunity, also, Mr. lieve that Puerto Rico is a colony of al service, military service; but all ne- Speaker to commend the resident com- the United States? Because while citi- gotiated as equals, not as it exists missioner, the gentleman from Puerto zenship has been granted since 1917, the today. Rico (Mr. ACEVEDO-VILA´ ) for his work same rights as other American citizens Rather than celebrating and pro- on this resolution. H. Con. Res. 395 have not been granted to the American moting this status, we should let the 4 commemorates the 50th anniversary of citizens who live in Puerto Rico. I million American citizens of Puerto the constitution of the Commonwealth often startle some of my colleagues by Rico know that the only option real to of Puerto Rico. Mindful of the spirited reminding them that if any of us were them is not the present option, but the debate over Puerto Rico’s political sta- to move back to Puerto Rico right option of statehood or independence. Most importantly and most urgently, tus, the resolution was crafted to be now, we could not serve in Congress we must move forward to put an end to nonpartisan and status neutral. with a vote, we could not vote for The adoption of Puerto Rico’s con- this colonialism that shames both our Members of Congress, we could not stitution began in 1950 with the enact- Nation and Puerto Rico and brings in- vote for the President, or have full rep- ment of the U.S. law which permitted dignity to the over 4 million fellow resentation. Yet our citizenship sup- Puerto Rico to draft its own constitu- citizens living in Puerto Rico. posedly would stay intact. I find it tion. A referendum held in March of Mr. Speaker, I come to this discus- very difficult to do what I am doing, 1952 ratified the work of a constitution sion as a person who feels emotion on but I think it needs to be done so we convention 6 months in the making. In both sides. I grew up in New York City can continue once and for all to discuss July 1952, Congress approved Puerto since I was a little boy coming from Rico’s constitution, and it was there- this issue and bring it to the front of Puerto Rico. I was born in Puerto Rico. after signed by President Harry S. Tru- the political discussion in this country. I grew up in a State called New York. A few years ago I joined with the man as Public Law 82–447. I know the dignity and strength and The relationship between Puerto gentleman from Indiana (Mr. BURTON) democracy of being a State. I grew up Rico and the United States predates in the so-called Young bill, which I in an independent Nation called the the adoption of their constitution. think was the first real attempt for our United States. I know the dignity and Their contribution to the diversity of country to tell the place where I was strength of that. That is all I ask for the U.S. along with their economic and born what to do about its political fu- the place I was born in. social development begins in 1898 and ture. What the Young bill did was say Let me say for those on the island continues today. The constitution is here are your options, take a vote, and who may not care for these comments, but yet a milestone for Puerto Rico, 180 days from the time you take the I do not approach it as someone who and they look forward to greater polit- vote, we will respond. That bill passed was born there only. I approach it as a ical progress. the House, never passed the Senate. Member of the United States Congress Mr. Speaker, Puerto Ricans living in That is sad because that bill in my who, looking at the Caribbean, says my district, the U.S. Virgin Islands, opinion would have put this thing in today, 2002, 104 years later, Puerto Rico and particularly my home island of St. motion. should no longer be a colony of the Croix, have contributed significantly Mr. Speaker, it is clear today that United States. to the development of the Virgin Is- Puerto Rico remains a U.S. territory I respect my colleagues, and I know lands. They are now an integral part of subject to the absolute powers of the that their intent is to celebrate the re- the fabric of every facet of life in our U.S. Congress under the territorial lationship. However, I have some prob- community. clause of the United States Constitu- lems, serious problems, with the rela- I am sure that all of the residents of tion in spite of the level of internal tionship. Statehood or independence, the U.S. Virgin Islands join me in con- self-government given by the U.S. Con- that is the way to go. gratulating the esteemed Governor, gress. Mrs. CHRISTENSEN. Mr. Speaker, I Sila Calderon, and our neighbors, When in 1952 the Jones Act was re- yield myself such time as I may con- friends and oft times family, the people placed by Public Law 447, which is sume. of Puerto Rico, on this 50th anniver- what we are celebrating today, which Mr. Speaker, the constitution that sary and wish them God’s continued approved the constitution of Puerto we are celebrating the 50th anniversary blessings not only during this celebra- Rico, the law governing Puerto Rico of is really a milestone for Puerto tion but as they continue to realize changed. However, the territorial rela- Rico. As we have heard, this is but a their dreams and aspirations for the fu- tionship previously existing did not step on their road to progress and a fu- ture. change at all. And a territory, as we all ture status yet to be determined by the Mr. Speaker, I encourage Members to know, is neither a State of the Union people of the Commonwealth of Puerto support this resolution. We look for- nor a nation of the world. It is simply Rico. I appreciate the remarks of the ward to expeditious consideration in a colony. In fact, Puerto Rico holds the gentleman and his sentiment on this the other body. dubious distinction of being the oldest issue.

VerDate May 23 2002 03:50 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00023 Fmt 4634 Sfmt 0634 E:\CR\FM\K15JY7.076 pfrm12 PsN: H15PT1 H4600 CONGRESSIONAL RECORD — HOUSE July 15, 2002 Mr. Speaker, I yield back the balance that the current arrangement has had its day, to be held in accordance with the laws of of my time. although in careful words. The Governor re- Puerto Rico. Upon the approval of this Act by b 1600 cently said that ‘‘fifty years ago’’ the arrange- a majority of the voters participating in such ment ‘‘fared quite well when compared with referendum, the Legislature of Puerto Rico is Mr. GILCHREST. Mr. Speaker, I the prevailing colonial arrangements then ex- authorized to call a constitutional convention yield myself such time as I may con- isting in the Caribbean. Half a century later to draft a constitution for the said island of sume. there are areas where that is no longer the Puerto Rico.’’ I do want to say that the gentleman case.’’ Puerto Rico accepted the offer and a con- ´ from Puerto Rico (Mr. ACEVEDO-VILA) Mr. Speaker, with all due respect to the dis- stitutional convention drafted the new constitu- asked us to propose this resolution for tinguished gentleman from the territory and tion and in March 1952, the people of Puerto the 50th anniversary of the constitu- the Governor who were elected with a plu- Rico ratified it. Months later, the President tion of Puerto Rico with the full intent rality; they are not in a position to speak for signed Public Law 447, approving the Con- of giving the people of Puerto Rico a the people of Puerto Rico on the issue. While stitution of the Commonwealth. In that Joint great deal of dignity. It is about that a plurality is adequate for conducting day-to- Resolution, Congress expressed that Public that we are discussing this issue here day government functions, it is not enough to Law 600 had been approved ‘‘as a compact this afternoon. act on behalf of the islands on questions that with the people of Puerto Rico.’’ Finally, in I urge my colleagues to vote ‘‘aye’’ can change the complete status of the terri- July 25, 1952, Governor Luis Mun˜oz Marõ«n on the resolution. tory. For issues of paramount importance a proclaimed the Constitution of the Common- Mr. GILMAN. Mr. Speaker, while I do not majority is required. wealth. have any objections to this resolution, it does Puerto Rico has a tradition of handling all This Constitution established a republican not paint the complete picture regarding the such questions on a tri-partisan basis. This form of government, provided for a broad Bill status of Puerto Rico. H. Con. Res. 395, does resolution was not the subject of consultations of Rights that followed not only the US Con- not represent the views of the majority of our with the two minority parties, which together stitution but also the Universal Declaration of fellow citizens in Puerto Rico. represent a clear majority of the vote and the the Rights of Man. This Constitution also pro- It is important that my colleagues are aware majority of citizens’ views on status matters. It vided for the election of all members of the that most of our fellow citizens in Puerto Rico is important to note that spokesmen for the legislature by the people. and many of our citizens of Puerto Rican de- two parties have criticized the resolution be- As expected, democratic rule, paved the scent do not share the sentiments of this reso- cause of the status that it symbolizes. way for cultural growth and economic develop- lution. Many of our constituents do not support Mr. Speaker, while I do not object to H. ment. After 1952, under the Commonwealth continuation of Puerto Rico’s current political Con. Res. 395, we should recognize that a status, Puerto Rican culture flourished, and a status. majority of Puerto Ricans would not be stronger sense of identity grew. Our symbols The constitution enshrined Puerto Rico’s pleased by our passage of this Resolution. were brought back to our public landscape, status as a U.S. territory. Its approval at- Mr. ACEVEDO-VILA´ . Mr. Speaker, I want to our flag, our anthem, etc. The Commonwealth tempted to legitimize the status, but it was thank Chairman Hansen and Ranking Member allowed Puerto Ricans to fully and freely ex- controversial from the start. This subject to Rahall and the leadership of both parties for press their identity and their pride. Moreover, many is visceral, and several years ago na- their support of this Concurrent Resolution under Commonwealth, our economic founda- tionalists were so enraged by this often-divi- celebrating the 50th anniversary of the Con- tions have grown stronger and the relationship sive issue that they fired shots in this very stitution of the Commonwealth of Puerto Rico. has been very beneficial for both Puerto Rico chamber. Their violence was unjustified and In order to fully appreciate the historical sig- and the United States. Today Puerto Rico reprehensible, and world events clearly show nificance of the Constitution of the Common- consumes more U.S. goods per capita than that resorting to violence to have your voice wealth proclaimed in 1952, I will share with my any jurisdiction in the world and represents the heard does not advance one’s cause. Advo- colleagues some of the pertinent historical 9th largest market for U.S. goods in the world. cates of the constitution were disappointed facts. In 1999, Puerto Rico purchased $16 billion with the final result of an effort that was in- In 1917 Congress approved the Jones Act, worth of US products, which translates into tended to enable Puerto Ricans to choose a conferring the US citizenship to all Puerto over 320,000 jobs in the mainland U.S. Today permanent, non-territorial status as well as Ricans. While citizenship has always been I want my colleagues to recognize that Puerto draft a local constitution. It only accomplished and remains cherished by Puerto Ricans, the Rico purchases more from the U.S. than much the latter goal. In fact, the counsel to the gov- Jones Act did not provide increased local rule larger countries such as China, Italy, Russia ernor at the time who had a significant role in or a democratic process through which the and Brazil. drafting not only the laws that authorized and people of Puerto Rico could exercise their Clearly the Commonwealth Constitution has approved the constitution but the constitution right to self-determination. served well the people of Puerto Rico and the itself, recently wrote that even the constitution While the Jones Act included a bill of rights, status of Commonwealth has benefited the was ‘‘mauled’’ in Congress. The counsel the central principle of a democratic system— United States. called the vents of fifty years ago that we rise consent by the governed—was non-existent in While the Commonwealth alternative has to celebrate today ‘‘a tawdry record.’’ Puerto Rico. Puerto Rico was therefore treat- won every referendum held on the Island In fact, approving the equivalent of a state ed at this time like a colony. For decades, the since 1952, the issue of Puerto Rico’s status constitution for a territory was a democratic in- Puerto Rican people struggled to achieve self- is not settled. It is actually a highly divisive novation in territorial governance at the time, determination, and democratic rule. After issue. As the representative of Puerto Rico in even though Puerto Ricans were already World War II, the colonial regime founded Congress I will continue working to make sure electing their own governor as well as legisla- under the Jones Act became difficult to sus- that the will of the people of Puerto Rico is ture. tain in Puerto Rico and in Washington. In heard and respected in Washington, and to The current governing arrangement is a sad 1947 Congress responded to Puerto Rico’s make sure that any petition to improve the anachronism in this era. It no longer has the claim for democracy, by enacting the Elective Commonwealth be properly addressed. support of our fellow citizens in Puerto Rico. A Governor Act. This statute provided for the Notwithstanding the current debate of status 12-year governor from the party that is gen- election, every 4 years, of the governor of in Puerto Rico, there is no doubt that the Con- erally associated with the current status wrote Puerto Rico by the people of Puerto Rico. stitution of the Commonwealth of Puerto Rico a few years ago ‘‘all factions do agree on the There years later, with Public Law 600 of represents the greatest democratic achieve- need to end the present undemocratic ar- 1950, Congress began a process through ment of the Puerto Rican people, in the 20th rangement, whereby Puerto Rico is subject to which the people of Puerto Rico would exer- century. It is this historical achievement that the laws of Congress but cannot vote in it.’’ cise their right to self-determination by drafting we celebrate on July 25th. In the most recent referendum on the is- their own constitution. It is important to note The Commonwealth is the result of the lands’ status options, in December 1998, the that Congress did not impose this Act upon pragmatic genius and the progressive spirit of current status received .06% of the vote. The the people of Puerto Rico, but rather it made a great generation of leaders in Puerto Rico party that has been associated with the cur- an offer to Puerto Ricans that could be ac- and in the United States. I quote President rent status abandoned that losing propo- cepted or rejected. Section 2 of the Act pro- Harry Truman on April 22, 1952, regarding the sition—and never really wanted it. vides: ‘‘This Act shall be submitted to the approval by Congress of the Puerto Rican Even the most ardent defenders of the sta- qualified voters of Puerto Rico for acceptance Constitution: ‘‘The Commonwealth of Puerto tus quo, like the current Governor, recognize or rejection through an island-wide referendum Rico will be a government which is truly by

VerDate May 23 2002 05:46 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00024 Fmt 4634 Sfmt 9920 E:\CR\FM\K15JY7.077 pfrm12 PsN: H15PT1 July 15, 2002 CONGRESSIONAL RECORD — HOUSE H4601 consent of the governed. No government can I also want to commend the gentleman from ple of Puerto Rico on this anniversary and en- be invested with higher dignity and greater Puerto Rico, Mr. ACEVEDO-VILA«, for his dili- courage my colleagues to support this meas- worth than one based upon the principle of gence in bringing this measure to our atten- ure. consent. The people of the United States and tion, and working to have it considered by the Mr. GILCHREST. Mr. Speaker, I the people of Puerto Rico are entering into a House of Representatives in a timely fashion. yield back the balance of my time. new relationship that will serve as an inspira- During my tenure in Congress, I’ve come to The SPEAKER pro tempore (Mr. tion to all who love freedom and hate tyranny. appreciate the passionate deliberations over CULBERSON). The question is on the mo- We are giving new substance to man’s hope Puerto Rico’s future political status. Anyone tion offered by the gentleman from for a world with liberty and equality under law. who is familiar with this history will recognize Maryland (Mr. GILCHREST) that the Those who truly love freedom know that the how studious one must be in crafting legisla- House suspend the rules and agree to right relationship between a government and tion, or otherwise, that makes mention of the concurrent resolution, H. Con. Res. its people is based on mutual consent and es- Puerto Rico’s political status. In this regard, I 395, as amended. teem. The Constitution of the Commonwealth offer my deep appreciation to Mr. ACEVEDO- The question was taken. of Puerto Rico is a proud document that em- VILA« for working collaboratively with both The SPEAKER pro tempore. In the bodies the best of our democratic heritage. I Chairman HANSEN and myself to compose a opinion of the Chair, two-thirds of recommend its early approval by the Con- nonpartisan and status-neutral resolution rec- those present have voted in the affirm- gress.’’ ognizing this milestone for Puerto Rico. ative. Some fifty year have passed since Con- It is times such as this occasion that we are Mr. SERRANO. Mr. Speaker, on that gress ratified the Constitution of Puerto Rico. given good cause to step back and appreciate I demand the yeas and nays. I am very proud to represent my people and all that the relationship between Puerto Rico The yeas and nays were ordered. to recognize and celebrate this historic event and the United States has meant to each The SPEAKER pro tempore. Pursu- through this resolution today. It is an honor to other over the years. The U.S. has benefitted ant to clause 8 of rule XX and the work with my colleagues in Congress and to from Puerto Rican achievements in business, Chair’s prior announcement, further celebrate with all Americans the Common- the arts, government, and athletics. More im- proceedings on this motion will be wealth Constitution and our ongoing commit- portantly, the U.S. has been enriched by Puer- postponed. ment to democracy, liberty, progress and self- to Rican history, culture, and language. I determination. would also emphasize the in time of war the f I thank my colleagues for their support of people of Puerto Rico have also shed their GENERAL LEAVE this Resolution. blood in defense of the United States of Amer- Mr. RAHALL. Mr. Speaker, as the ranking ica. Mr. GILCHREST. Mr. Speaker, I ask Democrat on the Resources Committee I want For her part, Puerto Rico has capitalized on unanimous consent that all Members to begin by thanking JIM HANSEN for his work the access to economic opportunities provided have 5 legislative days in which to re- in getting this important resolution celebrating to her from the U.S. relationship. The result of vise and extend their remarks and in- the 50th Anniversary of the Constitution of the this, being a prosperous economy and society. clude extraneous material on H.R. 4807, Commonwealth of Puerto Rico before the The relationship will be perfected. The de- H. Con. Res. 408, and H. Con.Res. 395, House of Representatives. termination of the people of Puerto Rico will the legislation just debated. While it is true that Chairman HANSEN and make it so. I have a special fondness for the The SPEAKER pro tempore. Is there I often have a difference of opinion when it people of Puerto Rico. I have found them to objection to the request of the gen- comes to issues involving Puerto Rico, on the be a hard working and diligent people with tleman from Maryland? matter before us today we stand united. deep passions. Today, I congratulate the peo- There was no objection.

N O T I C E Incomplete record of House proceedings. Except for concluding business which follows, today’s House proceedings will be continued in the next issue of the Record.

REPORT ON RESOLUTION PRO- Ms. KILPATRICK (at the request of Mr. Mrs. THURMAN, for 5 minutes, today. VIDING FOR CONSIDERATION OF GEPHARDT) for today on account of offi- Mr. TAYLOR of Mississippi, for 5 min- H.R. 5093, DEPARTMENT OF THE cial business. utes, today. INTERIOR AND RELATED AGEN- Mr. MASCARA (at the request of Mr. The following Members (at the re- CIES APPROPRIATIONS ACT, 2003 GEPHARDT) for today on account of per- quest of Mr. PORTMAN) to revise and ex- Mr. HASTINGS of Washington (during sonal reasons. tend their remarks and include extra- Mr. HASTINGS of Florida (at the re- the Special Order of Mr. MCINNIS), from neous material: the Committee on Rules, submitted a quest of Mr. GEPHARDT) for today and Mr. BURTON of Indiana, for 5 minutes, privileged report (Rept. No. 107–577) on July 16 on account of personal reasons. today and July 16, 17, and 18. the resolution (H. Res. 483) providing f f for consideration of the bill (H.R. 5093) SPECIAL ORDERS GRANTED EXTENSION OF REMARKS making appropriations for the Depart- By unanimous consent, permission to ment of the Interior and related agen- address the House, following the legis- By unanimous consent, permission to cies for the fiscal year ending Sep- lative program and any special orders revise and extend remarks was granted tember 30, 2003, and for other purposes, heretofore entered, was granted to: to: which was referred to the House Cal- The following Members (at the re- Mr. JACKSON of Illinois to include extra- endar and ordered to be printed. quest of Mr. DEFAZIO) to revise and ex- neous material, notwithstanding the fact f tend their remarks and include extra- that it exceeds two pages of the RECORD and is estimated by the Public Printer to cost neous material: LEAVE OF ABSENCE $9,630. Mr. BROWN of Ohio, for 5 minutes, By unanimous consent, leave of ab- today. f sence was granted to: Mr. DEFAZIO, for 5 minutes, today. BILLS PRESENTED TO THE Mr. BECERRA (at the request of Mr. Mr. GEORGE MILLER of California, for GEPHARDT) for today on account of offi- 5 minutes, today. PRESIDENT cial business in the district. Ms. NORTON, for 5 minutes, today. Jeff Trandahl, Clerk of the House re- Ms. HARMAN (at the request of Mr. Mrs. MINK of Hawaii, for 5 minutes, ports that on June 12, 2002 he presented GEPHARDT) for today on account of at- today. to the President of the United States, tending a memorial service. Mr. SHOWS, for 5 minutes, today. for his approval, the following bills.

VerDate May 23 2002 05:46 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00025 Fmt 4634 Sfmt 0634 E:\CR\FM\A15JY7.092 pfrm12 PsN: H15PT1 H4602 CONGRESSIONAL RECORD — HOUSE July 15, 2002 Number and Title 107—244); to the Committee on Appropria- Education and Rehabilitative Services, De- H.J. Res 87. Approving the site at tions and ordered to be printed. partment of Education, transmitting the De- Yucca Mountain, Nevada, for the devel- 7908. A letter from the Principal Deputy, partment’s final rule — Rehabilitation Engi- Department of Defense, transmitting an an- opment of a repository for the disposal neering Research Centers (RERC) Program nual report on the STARBASE Program for — received June 21, 2002, pursuant to 5 U.S.C. of high-level radioactive waste and FY 2001; to the Committee on Armed Serv- 801(a)(1)(A); to the Committee on Education spent nuclear fuel, pursuant to the Nu- ices. and the Workforce. clear Waste Policy Act of 1982. 7909. A letter from the Legislative and Reg- 7920. A letter from the Assistant Secretary H.R. 2362. To establish the Benjamin ulatory Activities Division, Comptroller of of Labor for Mine Safety and Health, Depart- Franklin Tercentenary Commission. the Currency, Department of the Treasury, ment of Labor, transmitting the Depart- transmitting the Department’s final rule — ment’s final rule — Diesel Particulate Mat- H.R. 3871. To provide for an inde- International Banking Activities: Capital pendent investigation of Forest Service ter Exposure of Underground Metal and Equivalency Deposits [Docket No. 02-10] Nonmetal Miners (RIN: 1219-AB28) received firefighter deaths that are caused by (RIN: 1557-AC05) received June 21, 2002, pur- June 26, 2002, pursuant to 5 U.S.C. wildfire entrapment or burnover. suant to 5 U.S.C. 801(a)(1)(A); to the Com- 801(a)(1)(A); to the Committee on Education mittee on Financial Services. f and the Workforce. 7910. A letter from the Assistant General 7921. A letter from the Director, Corporate ADJOURNMENT Counsel for Regulations, Office of Housing, Policy and Research Department, Pension Department of Housing and Urban Develop- Benefit Guaranty Corporation, transmitting Mr. MCINNIS. Mr. Speaker, I move ment, transmitting the Department’s final the Corporation’s final rule — Benefits Pay- that the House do now adjourn. rule — Nonprofit Organization Participation able in Terminated Single-Employer Plans; The motion was agreed to; accord- in Certain FHA Single Family Activities; Allocation of Assets in Single-Employer ingly (at 10 o’clock and 34 minutes Placement and Removal Procedures [Docket Plans; Interest Assumptions for Valuing and p.m.) under its previous order, the No. FR-4585-F-02] (RIN: 2502-AH49) received Paying Benefits — received June 24, 2002, House adjourned until tomorrow, Tues- June 24, 2002, pursuant to 5 U.S.C. pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- 801(a)(1)(A); to the Committee on Financial day, July 16, 2002, at 10 a.m., for morn- mittee on Education and the Workforce. Services. 7922. A letter from the Inspector General, ing hour debates. 7911. A letter from the Director, FDIC Of- Environmental Protection Agency, transmit- fice of Legislative Affairs, Federal Deposit f ting the Agency’s Annual Superfund Report Insurance Corporation, transmitting the to the Congress for Fiscal 2001, pursuant to Corporation’s final rule — Prohibition EXECUTIVE COMMUNICATIONS, 31 U.S.C. 7501 note; to the Committee on En- Against Use of Interstate Branches Pri- ETC. ergy and Commerce. marily for Deposit Production (RIN: 3064- 7923. A letter from the Secretary, Depart- Under clause 8 of rule XII, executive AC36) received June 26, 2002; to the Com- ment of Energy, transmitting the Depart- communications were taken from the mittee on Financial Services. 7912. A letter from the General Counsel, ment’s report entitled, ‘‘Fleet Alternative Speaker’s table and referred as follows: Fuel Vehicle Acquisition Report For Fiscal 7902. A letter from the Administrator, De- Federal Emergency Management Agency, Year 2000’’; to the Committee on Energy and partment of Agriculture, transmitting the transmitting the Agency’s final rule — Changes in Flood Elevation Determinations Commerce. Department’s final rule — Oranges, Grape- 7924. A letter from the Principal Deputy [Docket No. FEMA-P-7610] received June 21, fruit, Tangerines, and Tangelos Grown in Associate Administrator, Environmental Florida; Modifying Procedures and Estab- 2002, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Financial Services. Protection Agency, transmitting the Agen- lishing Regulations To Limit the Volume of cy’s final rule — Approval and Promulgation Small Red Seedless Grapefruit [Docket Nos. 7913. A letter from the General Counsel, Federal Emergency Management Agency, of Implementation Plans Georgia: Approval FV01-905-1 FIR; FV01-905-2 FIR] received of Revisions to State Implementation Plan June 17, 2002, pursuant to 5 U.S.C. transmitting the Agency’s final rule — Changes in Flood Elevation Determinations [GA-50; GA-53; GA-56; GA-58; GA-59-200230(a); 801(a)(1)(A); to the Committee on Agri- FRL-7244-5] received June 9, 2002, pursuant to culture. — received June 21, 2002, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Financial 5 U.S.C. 801(a)(1)(A); to the Committee on 7903. A letter from the Administrator, Energy and Commerce. Farm Loan Program, Department of Agri- Services. 7914. A letter from the General Counsel, 7925. A letter from the Principal Deputy culture, transmitting the Department’s final Federal Emergency Management Agency, Associate Administrator, Environmental rule — Streamlining of the Emergency Farm transmitting the Agency’s final rule — Protection Agency, transmitting the Agen- Loan Program Loan Regulations; Correction Changes in Flood Elevation Determinations cy’s final rule -Approval and Promulgation (RIN: 0560-AF72) received June 21, 2002, pur- [Docket No. FEMA-D-7523] received June 21, of Implementation Plans Georgia; Approval suant to 5 U.S.C. 801(a)(1)(A); to the Com- 2002, pursuant to 5 U.S.C. 801(a)(1)(A); to the of Revisions to State Implementation Plans mittee on Agriculture. Committee on Financial Services. [GA-49-200232(a); FRL-7244-7] received June 9, 7904. A letter from the Administrator, Ag- 7915. A letter from the General Counsel, 2002, pursuant to 5 U.S.C. 801(a)(1)(A); to the ricultural Marketing Service, Fruit and Veg- Federal Emergency Management Agency, Committee on Energy and Commerce. etable Programs, Department of Agriculture, transmitting the Agency’s final rule — Final 7926. A letter from the Chief Financial Offi- transmitting the Department’s final rule — Flood Elevation Determinations — received cer and Assistant Secretary for Administra- Raisins Produced From Grapes Grown in June 21, 2002, pursuant to 5 U.S.C. tion, Department of Commerce, transmitting California; Additional Opportunity for Par- 801(a)(1)(A); to the Committee on Financial the Department’s inventory of functions pur- ticipation in 2002 Raisin Diversion Program Services. suant to the Federal Activities Inventory [Docket No. FV02-989-5 IFR] received June 7916. A letter from the General Counsel, Reform Act of 1998; to the Committee on 25, 2002, pursuant to 5 U.S.C. 801(a)(1)(A); to Federal Emergency Management Agency, Government Reform. the Committee on Agriculture. transmitting the Agency’s final rule — Final 7927. A letter from the Inspector General, 7905. A letter from the Administrator, Ag- Flood Elevation Determinations — received Environmental Protection Agency, transmit- ricultural Marketing Service, Fruit and Veg- June 21, 2002, pursuant to 5 U.S.C. ting a report on the ‘‘EPA’s Inventory of etable Programs, Department of Agriculture, 801(a)(1)(A); to the Committee on Financial Commercial Activities’’; to the Committee transmitting the Department’s final rule — Services. on Government Reform. Vidalia Onions Grown in Georgia; Revision 7917. A letter from the General Counsel, 7928. A letter from the Chairman, Federal of Reporting and Assessment Requirements Federal Emergency Management Agency, Housing Finance Board, transmitting the [Docket No. FV02-955-1 IFR] received June transmitting the Agency’s final rule — semiannual report on the activities of the 25, 2002, pursuant to 5 U.S.C. 801(a)(1)(A); to Changes in Flood Elevation Determinations Office of Inspector General ending March 31, the Committee on Agriculture. — received June 21, 2002, pursuant to 5 U.S.C. 2002, pursuant to 5 U.S.C. app. (Insp. Gen. 7906. A communication from the President 801(a)(1)(A); to the Committee on Financial Act) section 5(b); to the Committee on Gov- of the United States, transmitting his re- Services. ernment Reform. quests for FY 2003 budget amendments for 7918. A letter from the Deputy Secretary, 7929. A letter from the Chairman, Federal the Securities and Exchange Commission Securities and Exchange Commission, trans- Mine Safety and Health Review Commission, and for the Departments of Agriculture, mitting the Department’s final rule — Tech- transmitting a copy of the annual report in Commerce, and Housing and Urban Develop- nical Amendments to Rules and Forms Due compliance with the Government in the Sun- ment; (H. Doc. No. 107—243); to the Com- to the National Securities Markets Improve- shine Act during the calendar year 2001, pur- mittee on Appropriations and ordered to be ment Act of 1996 and the Gramm-Leach-Bli- suant to 5 U.S.C. 552b(j); to the Committee printed. ley Act [Release Nos. 34-46106 and IC-25621] on Government Reform. 7907. A communication from the President (RIN: 3235-AI53) received June 26, 2002, pursu- 7930. A letter from the Director, Office of of the United States, transmitting his re- ant to 5 U.S.C. 801(a)(1)(A); to the Committee Personnel Management, transmitting the Of- quest to make available funds for the dis- on Financial Services. fice’s final rule — Pay for Administrative aster relief program of the Federal Emer- 7919. A letter from the Acting Assistant Appeals Judge Positions (RIN: 3206-AJ44) re- gency Management Agency; (H. Doc. No. General Counsel for Regulations, Special ceived June 21, 2002, pursuant to 5 U.S.C.

VerDate May 23 2002 05:46 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00026 Fmt 4634 Sfmt 0634 E:\CR\FM\A15JY7.103 pfrm12 PsN: H15PT1 July 15, 2002 CONGRESSIONAL RECORD — HOUSE H4603 801(a)(1)(A); to the Committee on Govern- 060] (RIN: 2115-AA97) received June 20, 2002, ment’s final rule — Safety Zone; Ohio River ment Reform. pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- Miles 252.0 to 253.0, Middleport, Ohio [COTP 7931. A letter from the Assistant Adminis- mittee on Transportation and Infrastruc- Huntington-02-006] (RIN: 2115-AA97) received trator, Office of Oceanic and Atmospheric ture. June 20, 2002, pursuant to 5 U.S.C. Research, National Oceanic and Atmospheric 7940. A letter from the Chief, Regulations 801(a)(1)(A); to the Committee on Transpor- Administration, transmitting the Adminis- and Administrative Law, USCG, Department tation and Infrastructure. tration’s final rule — Ballast Water Treat- of Transportation, transmitting the Depart- 7950. A letter from the Program Analyst, ment Technology Demonstration Program; ment’s final rule — Regulated Navigation Federal Aviation Administration, Depart- Request for Proposals for FY 2002 [Docket Area, Safety and Security Zones; Long Is- ment of Transportation, transmitting the No. 020418091-2091-01] (RIN: 0648-ZB20) re- land Sound Marine Inspection and Captain of Department’s final rule — Standard Instru- ceived June 20, 2002, pursuant to 5 U.S.C. the Port Zone [CGD01-01-187] (RIN: 2115- ment Approach Procedures; Miscellaneous 801(a)(1)(A); to the Committee on Resources. AA97) received June 20, 2002, pursuant to 5 Amendments [Docket No. 30311; Amdt. No. 7932. A letter from the Acting Director, Of- U.S.C. 801(a)(1)(A); to the Committee on 3007] received June 24, 2002, pursuant to 5 fice of Sustainable Fisheries, NMFS, Na- Transportation and Infrastructure. U.S.C. 801(a)(1)(A); to the Committee on tional Oceanic and Atmospheric Administra- 7941. A letter from the Chief, Regulations Transportation and Infrastructure. tion, transmitting the Administration’s final and Administrative Law, USCG, Department 7951. A letter from the Program Analyst, rule — Fisheries of the Exclusive Economic of Transportation, transmitting the Depart- Federal Aviation Administration, Depart- Zone Off Alaska; Yellowfin by Vessels Using ment’s final rule — Drawbridge Operation ment of Transportation, transmitting the Trawl Gear in Bycatch Limitation Zone 1 of Regulations; Atlantic Avenue Bridge (SR Department’s final rule — Establishment of the Bering Sea and Aleutian Islands Manage- 806), Atlantic Intracoastal Waterway, mile Class E Airspace; Calipatria, CA [Airspace ment Area [Docket No. 011218304-1304-01; I.D. 1039.6, Delray Beach, FL [CGD07-02-062] re- Docket No. 01-AWP-18] received June 24, 2002, 051702C] received June 20, 2002, pursuant to 5 ceived June 20, 2002, pursuant to 5 U.S.C. pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- U.S.C. 801(a)(1)(A); to the Committee on Re- 801(a)(1)(A); to the Committee on Transpor- mittee on Transportation and Infrastruc- sources. tation and Infrastructure. ture. 7933. A letter from the Director, Office of 7942. A letter from the Chief, Regulations 7952. A letter from the Program Analyst, Sustainable Fisheries, NMFS, National Oce- and Administrative Law, USCG, Department Federal Aviation Administration, Depart- anic and Atmospheric Administration, trans- of Transportation, transmitting the Depart- ment of Transportation, transmitting the mitting the Administration’s final rule — ment’s final rule — Safety Zone; Ohio River Department’s final rule — Standard Instru- Atlantic Highly Migratory Species; Commer- Miles 269.0 to 270.0, Gallipolis, Ohio [COTP ment Approach Procedures; Miscellaneous cial Shark Management Measures [Docket Huntington-02-007] (RIN: 2115-AA97) received Amendments [Docket No. 30314; Amdt. No. No. 011218303-1303-01; I.D. 110501B] (RIN: 0648- June 20, 2002, pursuant to 5 U.S.C. 3010] received June 24, 2002, pursuant to 5 AP70) received June 20, 2002, pursuant to 5 801(a)(1)(A); to the Committee on Transpor- U.S.C. 801(a)(1)(A); to the Committee on U.S.C. 801(a)(1)(A); to the Committee on Re- tation and Infrastructure. Transportation and Infrastructure. sources. 7943. A letter from the Chief, Regulations 7953. A letter from the Program Analyst, 7934. A letter from the Program Analyst, and Administrative Law, USCG, Department Federal Aviation Administration, Depart- FAA, Department of Transportation, trans- of Transportation, transmitting the Depart- ment of Transportation, transmitting the mitting the Department’s final rule — Air- ment’s final rule — Safety Zone; Silver Dol- Department’s final rule — Standard Instru- worthiness Directives; McDonnell Douglas lar Casino Cup hydroplane races, Lake Wash- ment Approach Procedures; Miscellaneous Model DC-9-81, -82, -83, and -87 Series Air- ington, WA [CGD13-02-007] (RIN: 2115-AA97) Amendments [Docket No. 30312; Amdt. No. planes, Model MD-88 Airplanes, and Model received June 20, 2002, pursuant to 5 U.S.C. 3008] received June 24, 2002, pursuant to 5 MD-90-30 Series Airplanes [Docket No. 2001- 801(a)(1)(A); to the Committee on Transpor- U.S.C. 801(a)(1)(A); to the Committee on NM-44-AD; Amendment 39-12176; AD 2001-07- tation and Infrastructure. Transportation and Infrastructure. 10] (RIN: 2120-AA64) received June 17, 2002, 7944. A letter from the Chief, Regulations 7954. A letter from the Program Analyst, pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- and Administrative Law, USCG, Department Federal Aviation Administration, Depart- mittee on Transportation and Infrastruc- of Transportation, transmitting the Depart- ment of Transportation, transmitting the ture. ment’s final rule — Security Zone; Port of Department’s final rule — Modification of 7935. A letter from the Chief, Regulations Tampa, Tampa, FL [COTP TAMPA 02-046] Class E Airspace; Athens, OH [Airspace and Administrative Law, USCG, Department (RIN: 2115-AA97) received June 20, 2002, pur- Docket No. 01-AGL-17] received June 24, 2002, of Transportation, transmitting the Depart- suant to 5 U.S.C. 801(a)(1)(A); to the Com- pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- ment’s final rule — Security Zone; Ohio mittee on Transportation and Infrastruc- mittee on Transportation and Infrastruc- River Mile 34.6 to 35.1, Shippingport, Penn- ture. ture. sylvania [COTP Pittsburgh-02-005] (RIN: 2115- 7945. A letter from the Chief, Regulations 7955. A letter from the Program Analyst, AA97) received June 20, 2002, pursuant to 5 and Administrative Law, USCG, Department Federal Aviation Administration, Depart- U.S.C. 801(a)(1)(A); to the Committee on of Transportation, transmitting the Depart- ment of Transportation, transmitting the Transportation and Infrastructure. ment’s final rule — Security Zone Regula- Department’s final rule — Airworthiness Di- 7936. A letter from the Chief, Regulations tions; St. Croix, U.S. Virgin Islands [CGD07- rectives; Air Tractor, Inc. Models AT-502, and Administrative Law, USCG, Department 02-052] (RIN: 2115-AA97) received June 20, AT-502A, AT-502B, and AT-503A Airplanes of Transportation, transmitting the Depart- 2002, pursuant to 5 U.S.C. 801(a)(1)(A); to the [Docket No. 2002-CE-10-AD; Amendment 39- ment’s final rule — Special Local Regula- Committee on Transportation and Infra- 12764; AD 2002-11-03] (RIN: 2120-AA64) received tions for Marine Events; Back River, Hamp- structure. June 24, 2002, pursuant to 5 U.S.C. ton, Virginia [CGD05-02-029] (RIN: 2115-AE46) 7946. A letter from the Chief, Regulations 801(a)(1)(A); to the Committee on Transpor- received June 20, 2002, pursuant to 5 U.S.C. and Administrative Law, USCG, Department tation and Infrastructure. 801(a)(1)(A); to the Committee on Transpor- of Transportation, transmitting the Depart- 7956. A letter from the Program Analyst, tation and Infrastructure. ment’s final rule — Security Zone; San Juan, Federal Aviation Administration, Depart- 7937. A letter from the Chief, Regulations Puerto Rico [CGD07-02-047] (RIN: 2115-AA97) ment of Transportation, transmitting the and Administrative Law, USCG, Department received June 20, 2002, pursuant to 5 U.S.C. Department’s final rule — Airworthiness Di- of Transportation, transmitting the Depart- 801(a)(1)(A); to the Committee on Transpor- rectives; Boeing Model 777-200 and -300 Series ment’s final rule — Safety Zone; Fort Van- tation and Infrastructure. Airplanes [Docket No. 2002-NM-38-AD; couver Fireworks Display, Columbia River, 7947. A letter from the Chief, Regulations Amendment 39-12714; AD 2002-08-06] (RIN: Vancouver, Washington [CGD13-02-009] (RIN: and Administrative Law, USCG, Department 2120-AA64) received June 24, 2002, pursuant to 2115-AA97) received June 20, 2002, pursuant to of Transportation, transmitting the Depart- 5 U.S.C. 801(a)(1)(A); to the Committee on 5 U.S.C. 801(a)(1)(A); to the Committee on ment’s final rule — Safety Zone; Buffalo Transportation and Infrastructure. Transportation and Infrastructure. River, Buffalo, NY [CGD09-02-029] (RIN: 2115- 7957. A letter from the Program Analyst, 7938. A letter from the Chief, Regulations AA97) received June 20, 2002, pursuant to 5 Federal Aviation Administration, Depart- and Administrative Law, USCG, Department U.S.C. 801(a)(1)(A); to the Committee on ment of Transportation, transmitting the of Transportation, transmitting the Depart- Transportation and Infrastructure. Department’s final rule — Airworthiness Di- ment’s final rule — Security Zones; Lique- 7948. A letter from the Chief, Regulations rectives; Bell Helicopter Textron, Inc. Model fied Hazardous Gas Tank Vessels, San Pedro and Administrative Law, USCG, Department 205A, 205A-1, 205B, 212, 412, 412EP, and 412CF Bay, California [COTP Los Angeles-Long of Transportation, transmitting the Depart- Helicopters [Docket No. 2001-SW-37-AD; Beach 02-010] (RIN: 2115-AA97) received June ment’s final rule — Safety Zone; Racine Har- Amendment 39-12737; AD 2002-09-04] (RIN: 20, 2002, pursuant to 5 U.S.C. 801(a)(1)(A); to bor, Lake Michigan, Racine, Wisconsin 2120-AA64) received June 24, 2002, pursuant to the Committee on Transportation and Infra- [CGD09-02-010] (RIN: 2115-AA97) received 5 U.S.C. 801(a)(1)(A); to the Committee on structure. June 20, 2002, pursuant to 5 U.S.C. Transportation and Infrastructure. 7939. A letter from the Chief, Regulations 801(a)(1)(A); to the Committee on Transpor- 7958. A letter from the Program Analyst, and Administrative Law, USCG, Department tation and Infrastructure. Federal Aviation Administration, Depart- of Transportation, transmitting the Depart- 7949. A letter from the Chief, Regulations ment of Transportation, transmitting the ment’s final rule — Security Zones; Ports of and Administrative Law, USCG, Department Department’s final rule — Airworthiness Di- Jacksonville and Canaveral, FL. [CGD07-02- of Transportation, transmitting the Depart- rectives; Boeing Model 767-200, -300, and -300F

VerDate May 23 2002 03:58 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00027 Fmt 4634 Sfmt 0634 E:\CR\FM\L15JY7.000 pfrm12 PsN: H15PT1 H4604 CONGRESSIONAL RECORD — HOUSE July 15, 2002 Series Airplanes [Docket No. 2002-NM-133- U.S.C. 801(a)(1)(A); to the Committee on centives related to long-term care; with an AD; Amendment 39-12772; AD 2002-11-11] (RIN: Ways and Means. amendment (Rept. 107–572). Referred to the 2120-AA64) received June 24, 2002, pursuant to 7968. A letter from the Chief, Regulations Committee of the Whole House on the State 5 U.S.C. 801(a)(1)(A); to the Committee on Unit, Internal Revenue Service, transmitting of the Union. Transportation and Infrastructure. the Service’s final rule — New York Liberty Mr. HANSEN: Committee on Resources. 7959. A letter from the Program Analyst, Zone Questions and Answers [Notice 2002-42] H.R. 3048. A bill to resolve the claims of Federal Aviation Administration, Depart- received June 26, 2002, pursuant to 5 U.S.C. Cook Inlet Region, Inc., to lands adjacent to ment of Transportation, transmitting the 801(a)(1)(A); to the Committee on Ways and the Russian River in the State of Alaska; Department’s final rule — Airworthiness Di- Means. with an amendment (Rept. 107–573). Referred rectives; Eurocopter Deutschland Model 7969. A letter from the Chief, Regulations to the Committee of the Whole House on the EC135 Helicopters [Docket No. 2001-SW-69- Unit, Internal Revenue Service, transmitting State of the Union. AD; Amendment 39-12762; AD 2002-11-01] re- the Service’s final rule — Application of Em- Mr. HANSEN: Committee on Resources. ceived June 24, 2002, pursuant to 5 U.S.C. ployment Taxes to Statutory Stock Options H.R. 3401. A bill to provide for the convey- 801(a)(1)(A); to the Committee on Transpor- [Notice 2002-47] received June 26, 2002, pursu- ance of Forest Service facilities and lands tation and Infrastructure. ant to 5 U.S.C. 801(a)(1)(A); to the Committee comprising the Five Mile Regional Learning 7960. A letter from the Program Analyst, on Ways and Means. Center in the State of California to the Clo- Federal Aviation Administration, Depart- 7970. A letter from the Chief, Regulations vis Unified School District, to authorize a ment of Transportation, transmitting the Unit, Internal Revenue Service, transmitting new special use permit regarding the contin- Department’s final rule — Security Consider- the Service’s final rule — Tax on Prohibited ued use of unconveyed lands comprising the ations for the Flightdeck on Foreign Oper- Transactions [Rev. Rul. 2002-43] received Center, and for other purposes; with an ated Transport Category Airplanes [Docket June 26, 2002, pursuant to 5 U.S.C. amendment (Rept. 107–574). Referred to the Committee of the Whole House on the State No. FAA-2002-12504; Amendment No. 129-33] 801(a)(1)(A); to the Committee on Ways and of the Union. (RIN: 2120-AH70) received June 24, 2002, pur- Means. suant to 5 U.S.C. 801(a)(1)(A); to the Com- Mr. ISTOOK: Committee on Appropria- 7971. A letter from the Chief, Regulations tions. H.R. 5120. A bill making appropria- mittee on Transportation and Infrastruc- Unit, Internal Revenue Service, transmitting ture. tions for the Treasury Department, the the Service’s final rule — Determination of United States Postal Service, the Executive 7961. A letter from the Program Analyst, Issue Price in the Case of Certain Debt In- Federal Aviation Administration, Depart- Office of the President, and certain Inde- struments Issued for Property [Rev. Rul. pendent Agencies, for the fiscal year ending ment of Transportation, transmitting the 2002-40] received June 26, 2002, pursuant to 5 Department’s final rule — Airworthiness Di- September 30, 2003, and for other purposes U.S.C. 801(a)(1)(A); to the Committee on (Rept. 107–575). Referred to the Committee of rectives; Raytheon Aircraft Company Model Ways and Means. 390 Airplanes [Docket No. 2002-CE-19-AD; the Whole House on the State of the Union. 7972. A letter from the Chief, Regulations Mr. TAYLOR of North Carolina: Com- Amendment 39-12763; AD 2002-11-02] (RIN: Unit, Internal Revenue Service, transmitting mittee on Appropriations. H.R. 5121. A bill 2120-AA64) received June 24, 2002, pursuant to the Service’s final rule — Amounts received making appropriations for the Legislative 5 U.S.C. 801(a)(1)(A); to the Committee on under Accident and Health Plans (Rev. Rul. Branch for the fiscal year ending September Transportation and Infrastructure. 2002-41) received June 26, 2002, pursuant to 5 30, 2003, and for other purposes (Rept. 107– 7962. A letter from the Program Analyst, U.S.C. 801(a)(1)(A); to the Committee on 576). Referred to the Committee of the Whole Federal Aviation Administration, Depart- Ways and Means. House on the State of the Union. ment of Transportation, transmitting the 7973. A letter from the Chief, Regulations Mr. HASTINGS of Washington: Committee Department’s final rule — Airworthiness Di- Unit, Internal Revenue Service, transmitting on Rules. House Resolution 483. Resolution rectives; Gulfstream Aerospace LP Model the Service’s final rule — Health Reimburse- providing for consideration of the bill (H.R. Galaxy and Gulfstream 200 Airplanes [Dock- ment Arrangements (Notice 2002-45) received 5093) making appropriations for the Depart- et No. 2002-NM-123-AD; Amendment 39-12755; June 26, 2002, pursuant to 5 U.S.C. ment of the Interior and related agencies for AD 2002-10-09] (RIN: 2120-AA64) received June 801(a)(1)(A); to the Committee on Ways and the fiscal year ending September 30, 2003, and 24, 2002, pursuant to 5 U.S.C. 801(a)(1)(A); to Means. for other purposes (Rept. 107–577). Referred the Committee on Transportation and Infra- 7974. A letter from the Chief, Regulations to the House Calendar. structure. Unit, Internal Revenue Service, transmitting 7963. A letter from the Program Analyst, f the Service’s final rule — Constructive Sales Federal Aviation Administration, Depart- Treatment for Appreciated Financial Posi- PUBLIC BILLS AND RESOLUTIONS ment of Transportation, transmitting the tions (Rev. Rul. 2002-44) received June 24, Department’s final rule — Standard Instru- Under clause 2 of rule XII, public 2002, pursuant to 5 U.S.C. 801(a)(1)(A); to the ment Approach Procedures; Miscellaneous bills and resolutions of the following Committee on Ways and Means. Amendments [Docket No. 30313; Amdt. No. titles were introduced and severally re- 7975. A letter from the Chief, Regulations 3009] received June 24, 2002, pursuant to 5 Unit, Internal Revenue Service, transmitting ferred, as follows: U.S.C. 801(a)(1)(A); to the Committee on the Service’s final rule — Renewable Elec- By Mr. RANGEL: Transportation and Infrastructure. tricity Production Credit, Publication of In- H.R. 5115. A bill to suspend temporarily the 7964. A letter from the Chief, Regulations flation Adjustment Factor and Reference duty on Polymenthylpentene (TPX); to the and Administrative Law, USCG, Department Prices for Calendar Year 2002 [Notice 2002-39] Committee on Ways and Means. of Transportation, transmitting the Depart- received June 24, 2002, pursuant to 5 U.S.C. By Mr. HASTINGS of Washington: ment’s final rule — Regulated Navigation 801(a)(1)(A); to the Committee on Ways and H.R. 5116. A bill to designate the facility of Area; Chesapeake Bay Entrance and Hamp- Means. the United States Postal Service located at ton Roads, VA and Adjacent Waters [CGD05- 7976. A letter from the Chief, Regulations 608 2nd Avenue in Zillah, Washington, as the 01-066] (RIN: 2115-AE84) received June 20, ‘‘Sid Morrison Post Office Building’’; to the Unit, Internal Revenue Service, transmitting 2002, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Government Reform. the Service’s final rule — Changes in ac- Committee on Transportation and Infra- By Mr. YOUNG of Florida: counting periods and methods of accounting structure. H.R. 5117. A bill making supplemental ap- (Rev. Proc. 2002-46) received June 21, 2002, 7965. A letter from the Chairman, Federal propriations for the Department of Defense pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- Maritime Commission, transmitting the for the fiscal year ending September 30, 2002, mittee on Ways and Means. Commission’s final rule — Update of Exist- and for other purposes; to the Committee on 7977. A letter from the Chief, Regulations ing and Addition of New Filing and Service Appropriations. Unit, Internal Revenue Service, transmitting Fees [Docket No. 02-05] received June 21, By Mr. SENSENBRENNER (for him- the Service’s final rule — Qualified Pension, 2002, pursuant to 5 U.S.C. 801(a)(1)(A); to the self, Mr. SMITH of Texas, Mr. GOOD- Profit-sharing and Stock Bonus Plans (Rev. Committee on Transportation and Infra- LATTE, Mr. GEKAS, Mr. TAUZIN, Mr. Rul. 2002-45) received June 26, 2002, pursuant structure. COBLE, Ms. HART, and Mr. HYDE): 7966. A letter from the Chairman, Surface to 5 U.S.C. 801(a)(1)(A); to the Committee on H.R. 5118. A bill to provide for enhanced Transportation Board, transmitting the Ways and Means. penalties for accounting and auditing impro- Board’s final rule — Arbitration-Various f prieties at publicly traded companies, and matters relating to its use as an effective for other purposes; to the Committee on the means of resolving disputes that are subject REPORTS OF COMMITTEES ON Judiciary, and in addition to the Committee to the Board’s jurisdiction [STB Ex Parte PUBLIC BILLS AND RESOLUTIONS on Financial Services, for a period to be sub- No. 586] received June 24, 2002, pursuant to 5 Under clause 2 of rule XIII, reports of sequently determined by the Speaker, in U.S.C. 801(a)(1)(A); to the Committee on committees were delivered to the Clerk each case for consideration of such provi- Transportation and Infrastructure. for printing and reference to the proper sions as fall within the jurisdiction of the 7967. A letter from the Chief, Regulations committee concerned. Unit, Internal Revenue Service, transmitting calendar, as follows: By Mr. ISSA: the Service’s final rule — Modification of Mr. THOMAS: Committee on Ways and H.R. 5119. A bill to make technical correc- Tax Shelter Rules III [TD 9000] (RIN: 1545- Means. H.R. 4946. A bill to amend the Inter- tions in patent law; to the Committee on the BA62) received June 17, 2002, pursuant to 5 nal Revenue Code to provide health care in- Judiciary.

VerDate May 23 2002 03:58 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00028 Fmt 4634 Sfmt 0634 E:\CR\FM\L15JY7.000 pfrm12 PsN: H15PT1 July 15, 2002 CONGRESSIONAL RECORD — HOUSE H4605

By Mr. BACA (for himself, Mr. SIMP- By Ms. DELAURO (for herself, Mrs. H.R. 664: Mr. HILLeary. SON, Mr. SABO, Mr. BURR of North BIGGERT, Ms. MILLENDER-MCDONALD, H.R. 858: Mr. KLECZKA. Carolina, Mr. WALSH, Mr. TIAHRT, Ms. EDDIE BERNICE JOHNSON of Texas, H.R. 1037: Mr. HOEKSTRA. Mr. KELLER, Mr. MURTHA, and Mrs. Ms. BROWN of Florida, Ms. MCCARTHY H.R. 1109: Mr. GOSS. MYRICK): of Missouri, Mrs. CLAYTON, Mrs. H.R. 1122: Mr. CLYBURN, Mrs. CHRISTENSEN, H.R. 5122. A bill to provide for the award of CAPPS, Mrs. MINK of Hawaii, Mr. Mrs. JONES of Ohio, Mr. KUCINICH, Ms. BROWN a gold medal on behalf of Congress to Arnold FROST, Ms. WATERS, Mr. LARSON of of Florida, Mr. OWENS, Mr. CUMMINGS, and Palmer in recognition of his service to the Connecticut, Ms. WOOLSEY, Mrs. Mr. FALEOMAVAEGA. Nation in promoting excellence and good CHRISTENSEN, Ms. SANCHEZ, Ms. H.R. 1184: Mr. CALVERT, Mr. SHAYS, Mr. sportsmanship in golf; to the Committee on MCCOLLUM, Mrs. MALONEY of New KANJORSKI, Mr. THOMPSON of Mississippi, and Financial Services. York, Ms. PELOSI, Mr. BACA, Ms. KIL- Mr. FRANK. By Mr. HUNTER: PATRICK, Mr. GONZALEZ, Mr. ROTH- H.R. 1296: Mr. BROWN of Ohio and Mr. H.R. 5123. A bill to address certain matters MAN, Ms. DUNN, Ms. BALDWIN, Ms. SWEENEY. related to Colorado River water management CARSON of Indiana, Mr. FILNER, Ms. H.R. 1305: Mr. BAIRD. and the Salton Sea by providing funding for NORTON, Mr. PAYNE, Mr. KENNEDY of H.R. 1425: Mr. MCGOVERN. habitat enhancement projects at the Salton Rhode Island, Ms. WATSON, Mrs. H.R. 1433: Mr. HOLT. H.R. 1452: Mr. BROWN of Ohio. Sea, and for other purposes; to the Com- JONES of Ohio, Mr. FOLEY, Mr. H.R. 1475: Mr. PRICE of North Carolina. mittee on Resources. GRUCCI, Mrs. MEEK of Florida, Mrs. H.R. 1541: Mr. FROST. By Mr. LUTHER (for himself, Mr. LOWEY, Mr. KILDEE, Ms. ROYBAL-AL- H.R. 1604: Ms. MCCARTHY of Missouri. OBERSTAR, Mr. RAMSTAD, Mr. PETER- LARD, and Ms. SCHAKOWSKY): H.R. 1861: Mr. WEXLER. SON of Minnesota, and Ms. MCCOL- H. Res. 485. A resolution recognizing the H.R. 1990: Mrs. MALONEY of New York. LUM): importance of sports in fostering the leader- H.R. 2035: Mr. KANJORSKI. H.R. 5124. A bill to provide for the estab- ship ability and success of women; to the H.R. 2322: Mr. BAIRD. lishment of a National Organ Donor Reg- Committee on Government Reform. H.R. 2349: Mr. SPRATT. istry, and for other purposes; to the Com- By Mr. SULLIVAN (for himself, Mr. H.R. 2380: Mr. FROST. mittee on Energy and Commerce, and in ad- OTTER, Mr. BRADY of Texas, Mr. RYUN H.R. 2484: Mr. BACA. dition to the Committee on Ways and Means, of Kansas, and Mr. POMBO): H.R. 2638: Mr. PAYNE. for a period to be subsequently determined H. Res. 486. A resolution amending the H.R. 2677: Ms. BALDWIN. by the Speaker, in each case for consider- Rules of the House of Representatives to es- H.R. 2807: Mr. HULSHOF. ation of such provisions as fall within the ju- tablish a discretionary spending ledger and a H.R. 2820: Mr. PASCRELL. risdiction of the committee concerned. mandatory spending ledger; to the Com- H.R. 3109: Mr. SOUDER, Mr. BAIRD, and Mr. By Mr. GARY G. MILLER of California mittee on Rules. BACA. (for himself, Mr. RADANOVICH, Mr. f H.R. 3131: Mrs. THURMAN. MOLLOHAN, Mr. WICKER, Mr. BACHUS, H.R. 3201: Mr. GEKAS. and Mr. DUNCAN): MEMORIALS H.R. 3320: Mr. MCHUGH and Mr. JONES of H.R. 5125. A bill to amend the American Under clause 3 of rule XII, memorials North Carolina. Battlefield Protection Act of 1996 to author- were presented and referred as follows: H.R. 3360: Ms. MCCARTHY of Missouri. ize the Secretary of the Interior to establish 327. The SPEAKER presented a memorial H.R. 3368: Mr. STARK, Ms. DELAURO, Ms. a battlefield acquisition grant program; to of the General Assembly of the State of Wis- BROWN of Florida, and Mrs. DAVIS of Cali- the Committee on Resources. consin, relative to Assembly Resolution No. fornia. By Mr. PAUL: 46 memorializing the United States Congress H.R. 3388: Mr. WILSON of South Carolina H.R. 5126. A bill to prohibit the provision of to take the following actions: to insist that and Mr. GRUCCI. Federal funds to the housing-related govern- the United States abide by the Anti-Ballistic H.R. 3407: Mr. GALLEGLY. ment-sponsored enterprises and to remove Missile Treaty; to respect the 1996 ruling of H.R. 3469: Mr. BLAGOJEVICH, Ms. EDDIE BER- certain competitive advantages granted the International Court of Justice on nuclear NICE JOHNSON of Texas, and Mr. BONIOR. under law to such enterprises; to the Com- weapons; to ratify the CTBT; to fulfill all of H.R. 3552: Mr. FILNER and Mr. SANDERS. mittee on Financial Services. the United States’ pledges made at the May H.R. 3580: Mr. KENNEDY of Minnesota. By Mr. SMITH of New Jersey: 2000 Nuclear NPT review; and to reject the H.R. 3612: Mr. NADLER. H.R. 5127. A bill to amend title 38, United national administration’s ‘‘Nuclear Posture H.R. 3771: Mr. KING. States Code, to provide for payment by the Review’’; to the Committee on International H.R. 3831: Mr. BOEHLERT. Secretary of Veterans Affairs of dependency Relations. H.R. 3834: Mrs. MINK of Hawaii. and indemnity compensation to the sur- 328. Also, a memorial of the Legislature of H.R. 3884: Mr. BERRY, Mrs. DAVIS of Cali- viving spouse of a deceased veteran who for the State of Kansas, relative to Senate Con- fornia, and Mrs. MCCARTHY of New York. at least one year preceding death had a com- current Resolution No. 1620 memorializing H.R. 3932: Mr. LUTHER. bination of service-connected disabilities the United States Congress to adopt United H.R. 3945: Mr. PAYNE, Mr. ACEVEDO-VILA, rated totally disabling that included a com- States House of Representatives Concurrent Mr. BRADY of Pennsylvania, Mr. CONYERS, pensable service-connected cold-weather in- Resolution No. 3 providing for a national Mrs. CHRISTENSEN, Mr. FROST, Mr. KUCINICH, jury; to the Committee on Veterans’ Affairs. holiday honoring Cesar Chavez and that this Mr. MCGOVERN, and Ms. BERKLEY. By Mr. ANDREWS: holiday be celebrated on Cesar Chavez’s H.R. 4010: Mr. LINDER and Mr. JEFF MILLER H. Con. Res. 441. Concurrent resolution ex- birthday, March 31; to the Committee on of Florida. pressing the sense of the Congress that the Government Reform. H.R. 4014: Mr. SAWYER. Children’s Internet Protection Act is con- 329. Also, a memorial of the Legislature of H.R. 4025: Mrs. EMERSON. stitutional as it applies to public libraries; the State of Wyoming, relative to a Joint H.R. 4026: Mr. RYAN of Wisconsin. to the Committee on the Judiciary. Resolution memorializing the United States H.R. 4046: Mr. BONIOR. By Ms. BROWN of Florida (for herself, Congress to request the Bureau of Land Man- H.R. 4066: Mr. MOORE. Mr. ABERCROMBIE, Ms. BALDWIN, Mr. agement to develop and implement a coordi- H.R. 4075: Mr. POMEROY. BLAGOJEVICH, Mr. BOEHLERT, Mrs. nated resource management plan for the H.R. 4084: Mr. GEORGE MILLER of California CAPPS, Mr. CAPUANO, Ms. CARSON of Jack Morrow Hills area that allows multiple and Ms. LEE. Indiana, Mr. FROST, Mr. HINCHEY, Mr. use in accordance with the Federal Land Pol- H.R. 4098: Mr. SCOTT. HINOJOSA, Mr. HOLT, Mr. HYDE, Mr. icy and Management Act of 1972; to the Com- H.R. 4515: Mr. LAHOOD. ISRAEL, Mr. JACKSON of Illinois, Mr. mittee on Resources. H.R. 4575: Mr. DIAZ-BALART and Mr. DIN- KENNEDY of Rhode Island, Mr. KIL- 330. Also, a memorial of the Legislature of GELL. DEE, Ms. KILPATRICK, Mr. KLECZKA, the State of Illinois, relative to House Joint H.R. 4582: Mr. TIBERI and Ms. RIVERS. Mr. LAMPSON, Mrs. MCCARTHY of New Resolution No. 54 memorializing the United H.R. 4600: Mr. LEWIS of Kentucky, Mr. REG- York, Mr. MCDERMOTT, Ms. MCKIN- States Congress to authorize funding to con- ULA, Mr. KOLBE, Mr. SENSENBRENNER, Mrs. NEY, Mrs. MEEK of Florida, Mr. struct 1,200-foot locks on the Upper Mis- NORTHUP, Mr. WALSH, and Mr. LAHOOD. MEEKS of New York, Ms. MILLENDER- sissippi and Illinois River System; to the H.R. 4643: Mr. CAPUANO. MCDONALD, Mrs. MORELLA, Mr. MUR- Committee on Transportation and Infra- H.R. 4646: Mr. DELAHUNT and Mr. ROTHMAN. THA, Mrs. NAPOLITANO, Mr. OWENS, structure. H.R. 4653: Mr. BENTSEN. Mr. PAYNE, Ms. ROS-LEHTINEN, Mrs. H.R. 4669: Mr. STARK. f ROUKEMA, Mr. RUSH, Mr. TANNER, Mr. H.R. 4693: Mr. ENGEL, Mr. FRELINGHUYSEN, TOWNS, Mr. TRAFICANT, Mr. WATT of ADDITIONAL SPONSORS Mr. SWEENEY, Mr. MATSUI, and Ms. BERKLEY. H.R. 4701: Mr. HOYER, Mr. HASTINGS of North Carolina, Mr. WAXMAN, and Under clause 7 of rule XII, sponsors Ms. WOOLSEY): Washington, Mr. STENHOLM, Mr. ENGEL, Mr. H. Res. 484. A resolution expressing the were added to public bills and resolu- PRICE of North Carolina, Mr. BALDACCI, Mr. sense of the House of Representatives with tions as follows: LEACH, Mr. BACHUS, Mrs. MYRICK, Mr. ROYCE, respect to epilepsy; to the Committee on H.R. 267: Mr. WYNN, Mr. LAHOOD, Mr. Mr. REYNOLDS, Mrs. BONO, Mr. SHAYS, Mr. Government Reform. EHLERS, and Mr. BOOZMAN. SHUSTER, Mr. MCKEON, and Ms. NORTON.

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H.R. 4711: Ms. SCHAKOWSKY. H. Res. 437: Mr. SCOTT, Mr. ISSA, Mr. PE- Hawaii for the costs incurred as a result of H.R. 4715: Mr. BACA. TERSON of Minnesota, and Mr. SMITH of the Compact of Free Association from in- H.R. 4720: Mr. PRICE of North Carolina. Texas. creased demands on educational and social H.R. 4738: Mr. HALL of Texas and Mr. H. Res. 448: Mr. REHBERG, Mr. OSBORNE, Mr. services to migrants from the Marshall Is- FOSSELLA. HINOJOSA, and Mr. BACA. lands, the Federated States of Micronesia, H.R. 4748: Mr. MCDERMOTT, Ms. MCCOLLUM, H. Res. 460: Mr. KILDEE, Mr. KENNEDY of and the Republic of Palau, $10,000,000. Mr. WU, and Ms. MCCARTHY of Missouri. Rhode Island, and Mr. OWENS. H.R. 5093 H.R. 4760: Mr. GREEN of Texas. H. Res. 482: Mr. GEKAS and Mr. STEARNS. OFFERED BY: MR. MORAN H.R. 4764: Mr. GUTIERREZ, Mrs. f NAPOLITANO, and Mr. BONIOR. AMENDMENT NO. 6: At the end of the bill, H.R. 4793: Mr. TOWNS. DELETIONS OF SPONSORS FROM insert after the last section (preceding the H.R. 4840: Mr. PETERSON of Minnesota and PUBLIC BILLS AND RESOLUTIONS short title) the following new section: Mr. HAYWORTH. SEC. ll. None of the funds made available H.R. 4857: Ms. HARMAN and Ms. WATSON. Under clause 7 of rule XII, sponsors in this Act may be used to implement any H.R. 4865: Mr. DOYLE. were deleted from public bills and reso- sanction imposed by the United States on H.R. 4939: Mr. SHOWS. lutions as follows: private commercial sales of agricultural H.R. 4964: Mr. ENGLISH. H.R. 1577: Mr. LUCAS of Oklahoma. commodities (as defined in section 402 of the H.R. 4965: Mr. FLETCHER, Mr. LAHOOD, Mr. Agricultural Trade Development and Assist- f BALLENGER, Mrs. CUBIN, Mr. SHADEGG, Mr. ance Act of 1954) or medicine or medical sup- COOKSEY, and Mr. RILEY. AMENDMENTS plies (within the meaning of section 1705(c) H.R. 5022: Mr. CAMP and Mr. COSTELLO. of the Cuban Democracy Act of 1992) to Cuba Under clause 8 of rule XVIII, pro- H.R. 5033: Mr. CALVERT, Mrs. NORTHUP, Mr. (other than a sanction imposed pursuant to YOUNG of Florida, Mr. HEFLEY, Mr. PENCE, posed amendments were submitted as agreement with one or more other coun- and Mr. BARR of Georgia. follows: tries). H.R. 5047: Mr. DOYLE. H.R. 5093 H.R. 5093 H.R. 5050: Mr. KOLBE. OFFERED BY: MR. BLUMENAUER OFFERED BY: MS. NORTON H.R. 5064: Mr. BLUNT, Mr. PENCE, Mr. MENDMENT O AMENDMENT NO. 7: Page 113, line 24, after SOUDER, Mr. DELAY, Mr. RYUN of Kansas, and A N . 1: Add at the end, before the dollar amount, insert the following: ‘‘(re- Ms. PRYCE of Ohio. the short title, the following new section: duced by $5,500,000)’’. H.R. 5070: Mr. SKELTON, Mrs. CAPPS, Mr. SEC. ll. None of the funds appropriated WEXLER, and Mr. BARRETT. or otherwise made available by this Act may H.R. 5093 H.R. 5076: Ms. SCHAKOWSKY. be used to enter into any new commercial OFFERED BY: MR. SANDERS agricultural lease on the Lower Klamath and H.R. 5081: Mr. LEWIS of California. AMENDMENT NO. 8: Page 95, line 14, insert Tule Lake National Wildlife Refuges in the H.R. 5082: Mr. RAHALL. ‘‘(reduced by $3,000,000) (increased by States of Oregon and California that permits H.R. 5090: Mr. RYUN of Kansas, Mr. OTTER, $3,000,000)’’ after ‘‘$984,653,000’’. the growing of row crops or alfalfa. and Mrs. MYRICK. H.R. 5093 H.R. 5095: Mr. MCINNIS. H.R. 5093 OFFERED BY: MS. SLAUGHTER H.R. 5100: Mrs. ROUKEMA. OFFERED BY: MRS. CAPPS H.R. 5107: Mr. DINGELL, Ms. KILPATRICK, AMENDMENT NO. 9: Under the heading ‘‘DE- AMENDMENT NO. 2: At the end of the bill, and Ms. EDDIE BERNICE JOHNSON of Texas. PARTMENTAL MANAGEMENT–SALARIES AND EX- insert after the last section (preceding the H.R. 5112: Mr. FROST and Ms. BROWN of PENSES’’ in title I, insert after the dollar short title) the following new section: Florida. amount on page 49, line 16, the following: SEC. ll. None of the funds provided in H.R. 5113: Mr. YOUNG of Alaska. ‘‘(reduced by $9,000,000)’’. this Act may be expended by the Department H.J. Res. 21: Mrs. CHRISTENSEN. Under the heading ‘‘NATIONAL FOREST SYS- of the Interior to approve any exploration H.J. Res. 97: Mr. JACKSON of Illinois. TEM’’ in title II, insert after the dollar plan, any development and production plan, H. Con. Res. 60: Mr. LIPINSKI, and Ms. amount on page 76, line 13, the following: any application for permit to drill or to per- EDDIE BERNICE JOHNSON of Texas. ‘‘(reduced by $6,000,000)’’. mit any drilling on Outer Continental Shelf H. Con. Res. 114: Mr. RUSH and Ms. BERK- Under the heading ‘‘NATIONAL ENDOWMENT Southern California Planning Area leases LEY. FOR THE HUMANITIES–GRANTS AND ADMINIS- numbered OCS–P0443, OCS–P0445, OCS–P0446, H. Con. Res. 127: Mr. KING Mr. NEAL of TRATION’’ in title II, insert after the dollar OCS–P0449, OCS–P0499, OCS–P0500, OCS– Massachusetts, Mr. WEXLER, Mr. MCNULTY, amount on page 114, line 18, the following: P0210, OCS–P0527, OCS–P0460, OCS–P0464, Mr. DAVIS of Illionis, Mrs. CHRISTENSEN, Mr. ‘‘(increased by $5,000,000)’’. OCS–P0409, OCS–P0396, OCS–P0397, OCS– MCGOVERN, Mr. HONDA, and Ms. BERKLEY. Under the heading ‘‘CHALLENGE AMERICA P0402, OCS–P0403, OCS–P0408, OCS–P0414, H. Con. Res. 182: Mr. FALEOMAVAEGA, Mr. ARTS FUND–CHALLENGE AMERICA GRANTS’’ in OCS–P0319, OCS–P0320, OCS–P0322, OCS– PAYNE, Mr. ENGLISH, Mrs. CHRISTENSEN, AND title II, insert after the dollar amount on P0323–A, OCS–P0426, OCS–P0427, OCS–P0432, MRS. JONES of Ohio. page 115, line 14, the following: ‘‘(increased OCS–P0435, OCS–P0452, OCS–P0453, OCS– H. Con. Res. 199: Ms. NORTON, Mr. BROWN of by $10,000,000)’’. P0425, OCS–P0430, OCS–P0431, OCS–P0433, Ohio, Ms. LEE, Mr. LYNCH, Mr. STRICKLAND, H.R. 5120 OCS–P0434, OCS–P0415, OCS–P0416, OCS– Mrs. CHRISTENSEN, Mr. WATT of North Caro- P0421, and OCS–P0422. OFFERED BY: MR. FLAKE lina, and Mr. BACA. AMENDMENT NO. 1: At the end of the bill, H.R. 5093 H. Con. Res. 269: Mr. LEVIN and Mr. insert after the last section (preceding the SPRATT. OFFERED BY: MR. ISSA short title) the following new section: H. Con. Res. 291: Mr. ROTHMAN. AMENDMENT NO. 3: At the end of the bill SEC. ll. (a) None of the funds made avail- H. Con. Res. 349: Ms. SLAUGHTER, Mrs. (before the short title), insert the following: able in this Act may be used to administer or CAPPS, and Mr. BONIOR. SEC. ll. Of the funds appropriated in title enforce part 515 of title 31, Code of Federal H. Con. Res. 367: Mr. RYUN of Kansas, Mr. I under the heading ‘‘Insular Affairs—Assist- Regulations (the Cuban Assets Control Regu- SMITH of New Jersey, Mr. PETRI, Mr. HAYES, ance to Territories’’, not more than lations) with respect to any travel or travel- and Mr. HUNTER. $23,012,058 may be made available before Sep- related transaction. H. Con. Res. 385: Mr. BACHUS. tember 30, 2003, for grants to the Government (b) The limitation established in sub- H. Con. Res. 396: Ms. KAPTUR, Mr. PAYNE, of American Samoa. section (a) shall not apply to the issuance of Mr. ACEVEDO-VILA, Mr. BRADY of Pennsyl- H.R. 5093 general or specific licenses for travel or trav- vania, Mr. DAVIS of Illinois, and Mr. BACA. el-related transactions, and shall not apply OFFERED BY: MR. ISSA H. Con. Res. 410: Mr. EHLERS and Mr. to transactions in relation to any business MEEKS of New York. AMENDMENT NO. 4: At the end of the bill travel covered by section 515.560(g) of such H. Con. Res. 439: Mrs. THURMAN, Mr. ROSS, (before the short title), insert the following: part 515. Mr. SWEENEY, Mrs. EMERSON, Mr. WATTS of SEC. ll. Of the funds appropriated in title H.R. 5120 Oklahoma, Ms. KAPTUR, Mrs. BONO, and Mr. I under the heading ‘‘Insular Affairs—Assist- KILDEE. ance to Territories’’, not more than OFFERED BY: MR. FLAKE H. Res. 50: Mrs. MEEK of Florida, Mr. HILL- $22,012,058 may be made available before Sep- AMENDMENT NO. 2: At the end of the bill IARD, and Mr. CLYBURN. tember 30, 2003, for grants to the Government (before the short title), insert the following: H. Res. 126: Mr. FROST, Mrs. CHRISTENSEN, of American Samoa. SEC. ll. None of the funds made available Ms. WATSON, Mr. KING, Ms. BROWN of Florida, in this Act may be used to provide any grant, H.R. 5093 Mr. SABO, Mr. OWENS, Mr. MCGOVERN, Ms. loan, loan guarantee, contract, or other as- BERKLEY, and Mr. BACA. OFFERED BY: MRS. MINK sistance to any entity (including a State or H. Res. 253: Ms. BERKLEY. AMENDMENT NO. 5: Page 74, after line 23, in- locality, but excluding any Federal entity) H. Res. 410: Mr. GILMAN, Mr. LANTOS, Mr. sert the following new section: identified specifically by name as the recipi- MCGOVERN, Mr. ACKERMAN, Mr. DOYLE, Mr. SEC. 142. To the Office of Insular Affairs, ent in a report of the Committee on Appro- BERMAN, and Mr. ENGLISH. for partial reimbursement to the State of priations of the House of Representatives or

VerDate May 23 2002 05:46 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00030 Fmt 4634 Sfmt 0634 E:\CR\FM\A15JY7.099 pfrm12 PsN: H15PT1 July 15, 2002 CONGRESSIONAL RECORD — HOUSE H4607 the Senate, or in a joint explanatory state- (ii) in subsection (a)— Committee on Agriculture of the House of ment of the committee of conference, accom- (I) by striking ‘‘PROHIBITION’’ and all that Representatives and the Committee on Agri- panying this Act unless the entity is also follows through ‘‘(1) IN GENERAL.—’’ and in- culture, Nutrition, and Forestry of the Sen- identified specifically by name as the recipi- serting ‘‘IN GENERAL.—’’; ate a report containing the results of the ent in this Act. (II) by redesignating paragraph (2) as sub- study conducted under subsection (a). H.R. 5120 section (b) (and conforming the margin ac- SEC. 157. In this title, the term ‘‘agricul- cordingly); and tural commodity’’ has the meaning given the OFFERED BY: MR. MORAN (IV) by redesignating paragraph (3) as sub- term in section 102 of the Agricultural Trade AMENDMENT NO. 3: At the end of title I of section (c) (and conforming the margin ac- Act of 1978 (7 U.S.C. 5602). the bill, insert after the last section (pre- cordingly); and H.R. 5120 ceding the short title) the following: (iii) in subsections (b) and (c) (as redesig- OFFERED BY: MS. NORTON ADDITIONAL GENERAL PROVISIONS— nated), by striking ‘‘paragraph (1)’’ each AMENDMENT NO. 4: AT THE END OF THE BILL DEPARTMENT OF THE TREASURY place it appears and inserting ‘‘subsection (BEFORE THE SHORT TITLE), INSERT THE FOL- (a)’’; and SEC. 151. Section 620(a)(1) of the Foreign LOWING: Assistance Act of 1961 (22 U.S.C. 2370(a)(1)) is (C) in section 910— SEC. ll. None of the funds made available amended— (i) in subsection (a), by striking ‘‘The Sec- in this Act may be used to maintain the clo- (1) in the first sentence, by striking the pe- retary of the Treasury’’ and all that follows sure to public traffic of E Street, NW, in the riod at the end and inserting the following: and inserting ‘‘The Secretary of the Treas- District of Columbia, south of the White ‘‘, except as needed to promote and facilitate ury shall authorize travel to, from, or within House. Cuba for purposes of the marketing, sale, de- commercial exports of agricultural commod- H.R. 5120 ities from the United States to Cuba.’’; and livery, or financing of a sale of agricultural OFFERED BY: MR. RANGEL (2) in the second sentence, by striking the commodities to Cuba, and any related trans- AMENDMENT NO. 5: At the end of the bill, period at the end and inserting the following: actions thereto, without the issuance of a insert after the last section (preceding the ‘‘, except that any such embargo shall not specific license therefor.’’; and short title) the following new section: apply with respect to the commercial export (ii) in subsection (b)(2), by adding at the SEC. ll. None of the funds made available of any agricultural commodity or with re- end before the period the following: ‘‘or that in this Act may be used to implement, ad- spect to travel or financing (or other trans- does not relate to travel to, from, or within minister, or enforce the economic embargo actions) incident to the commercial mar- Cuba incident to the marketing, sale, deliv- of Cuba, as defined in section 4(7) of the keting, sale, or delivery of agricultural com- ery, or financing of a sale of agricultural Cuban Liberty and Democratic Solidarity modities. As used in this paragraph, the commodities to Cuba, or any related trans- (LIBERTAD) Act of 1996 (Public Law 104–114), term ‘agricultural commodity’ has the actions thereto’’ except those provisions that relate to the de- meaning given the term in section 102 of the (b) SANCTIONS UNDER CUBAN DEMOCRACY nial of foreign tax credits or to the imple- Agricultural Trade Act of 1978.’’. ACT OF 1992.— mentation of the Harmonized Tariff Sched- SEC. 152. Upon the enactment of this Act, (1) INAPPLICABILITY.—Section 1706(b) of the ule of the United States. any regulation, proclamation, or provision of Cuban Democracy Act of 1992 (22 U.S.C. law, including Presidential Proclamation 6005(b); prohibiting certain vessels from en- H.R. 5120 3447 of February 3, 1962, the Export Adminis- tering United States ports) shall not apply OFFERED BY: MR. RANGEL tration Regulations (15 CFR 730 and fol- with respect to vessels that transport agri- AMENDMENT NO. 6: In title I, in the item re- lowing), the Cuban Assets Control Regula- cultural commodities to Cuba on a commer- lating to ‘‘TAX LAW ENFORCEMENT’’, after the tions (31 CFR 515), and section 102(h) of the cial basis or that transport persons whose aggregate dollar amount, insert the fol- Cuban Liberty and Democratic Solidarity travel is incident to the delivery of agricul- lowing: ‘‘(increased by $9,000,000)’’. (LIBERTAD) Act of 1996 (22 U.S.C. 6032(h)), tural commodities to Cuba on a commercial In title I, in the item relating to ‘‘EARNED that authorizes sanctions with respect to, basis. INCOME TAX CREDIT COMPLIANCE INITIATIVE’’, prohibits, or otherwise restricts exports to (2) CONFORMING AMENDMENTS.—Section after the aggregate dollar amount, insert the Cuba or transactions involving exports to 1705(b) of the Cuban Democracy Act of 1992 following: ‘‘(reduced by $10,000,000)’’. Cuba and that is in effect on the date of the (22 U.S.C. 6004(b)) is amended— H.R. 5120 (A) in the subsection caption by striking ‘‘, enactment of this Act, shall not apply with OFFERED BY: MR. SANDERS respect to the commercial export to Cuba of DONATIONS’’ and inserting ‘‘, EXPORTS’’; and AMENDMENT NO. 7: At the end of the bill be- agricultural commodities, with respect to (B) by striking ‘‘donations of food to non- fore the short title, insert the following new travel or financing (or other transactions) governmental organizations or individuals in section: incident to the commercial marketing, sale, Cuba’’ and inserting ‘‘commercial exports of agricultural commodities to Cuba’’. SEC. ll. None of the funds appropriated or delivery of agricultural commodities, or by this Act may be used by the Internal Rev- with respect to the receipt of payment for SEC. 155. Subparagraph (A) of section 901(j)(2) of the Internal Revenue Code of 1986 enue Service for any activity that is in con- agricultural exports. travention of Internal Revenue Service No- SEC. 153. After the enactment of this Act, (relating to denial of foreign tax credit, etc., with respect to certain foreign countries) is tice 96-8 issued on January 18, 1996, section the President may not restrict the commer- 411(b)(1)(H)(i) or section 411(d)(6) of the Inter- cial exportation to Cuba of agricultural com- amended by adding at the end thereof the following new flush sentence: nal Revenue Code of 1986, section 204(b)(1)(G) modities— or 204(b)(1)(H)(i) of the Employee Retirement (1) under the Export Administration Act of ‘‘Notwithstanding the preceding sentence, Income Security Act of 1974, or section 1979; or this subsection shall not apply to Cuba with 4(i)(1)(A) of the Age Discrimination in Em- (2) under section 203 of the International respect to income or excess profits taxes paid ployment Act of 1967. Emergency Economic Powers Act. to Cuba that are attributable to activities H.R. 5120 SEC. 154. (a) TRADE SANCTIONS REFORM AND with respect to articles permitted to be ex- EXPORT ENHANCEMENT ACT OF 2000.— ported to Cuba, or travel or financing (or OFFERED BY MR. WYNN (1) INAPPLICABILITY.—The Trade Sanctions other transactions) incident thereto that is AMENDMENT NO. 8: At the end of the bill Reform and Export Enhancement Act of 2000 permitted, by virtue of the enactment of the (before the short title), insert the following (title IX of H.R. 5426, as enacted into law by Treasury Department Appropriations Act, new section: section 1(a) of Public Law 106–387, and as 2003. The preceding sentence shall apply SEC. ll. (a) CENTRALIZED REPORTING SYS- contained in the appendix of such Public after the date which is 60 days after the date TEM.—Not later than 180 days after the date Law) shall not apply with respect to com- of the enactment of this sentence.’’. of the enactment of this Act, each agency mercial exports to Cuba of agricultural com- SEC. 156. (a) STUDY.—The Secretary of Ag- shall establish a centralized reporting sys- modities. riculture shall conduct a study of United tem in accordance with guidance promul- (2) CONFORMING AMENDMENTS.—The Trade States agricultural export promotion and gated by the Office of Management and Sanctions Reform and Export Enhancement credit programs in effect as of the date of en- Budget that allows the agency to generate Act of 2000 is amended— actment of this Act to determine if changes periodic reports on the contracting efforts of (A) in section 906(a)(2)— to current law are needed to improve the the agency. Such centralized reporting sys- (i) by striking ‘‘export of agricultural com- ability of the Secretary of Agriculture to tem shall be designed to enable the agency modities’’ and inserting ‘‘commercial export utilize United States agricultural export pro- to generate reports on efforts regarding both of agricultural commodities to Cuba, or with motion and credit programs with respect to contracting out and contracting in. respect to the export of agricultural com- the consumption of United States agricul- (b) REPORTS ON CONTRACTING EFFORTS.—(1) modities’’; and tural commodities in Cuba, and to otherwise Not later than 180 days after the date of the (ii) by adding at the end the following: enhance, assist, and remove any limitations enactment of this Act, every agency shall ‘‘The commercial export of agricultural com- on, commercial sales and other agricultural generate and submit to the Director of the modities to Cuba shall be allowed without exports to Cuba. Office of Management and Budget a report the issuance of a specific license therefor.’’; (b) REPORT.—Not later than 90 days after on the contracting efforts of the agency un- (B) in section 908— the date of enactment of this Act, the Sec- dertaken during the 2 fiscal years imme- (i) by striking subsection (b); retary of Agriculture shall submit to the diately preceding the fiscal year during

VerDate May 23 2002 05:46 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00031 Fmt 4634 Sfmt 0634 E:\CR\FM\A15JY7.106 pfrm12 PsN: H15PT1 H4608 CONGRESSIONAL RECORD — HOUSE July 15, 2002 which this Act is enacted. Such report shall each contracting in effort undertaken by the (5) The term ‘‘privatization’’ means the comply with the requirements in paragraph agency: end result of the decision of an agency to (3). (A) A description of the type of work in- exit a business line, terminate an activity, (2) For the current fiscal year and every volved. or sell Government owned assets or oper- fiscal year thereafter, every agency shall (B) A statement of why the contracting in ational capabilities to the non-Federal sec- complete and submit to the Director of the effort was undertaken. tor. Office of Management and Budget a report (C) The names, addresses, and telephone (6) The term ‘‘outsourcing’’ means the end on the contracting efforts undertaken by the numbers of the officials who supervised the result of the decision of an agency to acquire agency during the current fiscal year. Such contracting in effort. services from external sources, either from a reports shall comply with the requirements (D) The cost of performance at the time non-Federal source or through interservice in paragraph (3), and shall be completed and the work was contracted in. support agreements, through a contract. submitted not later than the end of the first (E) The current cost of performance by (7) The term ‘‘contracting out’’ means the fiscal quarter of the subsequent fiscal year. Federal employees or military personnel. conversion by an agency of the performance (3) The reports referred to in this sub- (d) REPORT ON EMPLOYEE POSITIONS.—Not of a function to the performance by a non- section shall include the following informa- later than 30 days after the end of the cur- Federal employee under a contract between tion with regard to each contracting effort rent fiscal year and every fiscal year there- an agency and an individual or other entity. undertaken by the agency: after, every agency shall report on the num- (8) The term ‘‘contracting in’’ is the con- (A) The contract number and the Federal ber of Federal employee positions and posi- version of the performance of a function by supply class or service code. tions held by non-Federal employees under a non-Federal employees under a contract be- contract between the agency and an indi- (B) A statement of why the contracting ef- tween an agency and an individual or other vidual or entity that has been subject to fort was undertaken and an explanation of entity to the performance by employees. public-private competition. what alternatives to the contracting effort (9) The term ‘‘contracting’’ means the per- (e) COMMITTEES TO WHICH REPORTS MUST were considered and why such alternatives formance of a function by non-Federal em- BE SUBMITTED.—The reports referred to in were ultimately rejected. ployees under a contract between an agency (C) The names, addresses, and telephone this section shall be submitted to the Com- mittee on Government Reform of the House and an individual or other entity. The term numbers of the officials who supervised the ‘‘contracting’’, as used throughout this Act, contracting effort. of Representatives and to the Committee on Governmental Affairs of the Senate. includes privatization, outsourcing, con- (D) The competitive process used or the tracting out, and contracting, unless other- statutory or regulatory authority relied on (f) PUBLICATION.—The Director of the Of- fice of Management and Budget shall wise specifically provided. to enter into the contract without public- promptly publish in the Federal Register no- (10)(A) Subject to subparagraph (B), the private competition. tices including a description of when the re- term ‘‘critical for the provision of patient (E) The cost of Federal employee perform- ports referred to in this section are available care’’ means direct patient medical and hos- ance at the time the work was contracted to the public and the names, addresses, and pital care that the Department of Veterans out (if the work had previously been per- telephone numbers of the officials from Affairs or other Federal hospitals or clinics formed by Federal employees). whom the reports may be obtained. are not capable of furnishing because of geo- (F) The cost of Federal employee perform- (g) AVAILABILITY ON INTERNET.—After the graphical inaccessibility, medical emer- ance under a Most Efficient Organization excision of proprietary information, the re- gency, or the particularly unique type of plan (if the work was contracted out through ports referred to in this section shall be care or service required. OMB Circular A–76). made available through the Internet. (B) The term does not include support and (G) The anticipated cost of contractor per- (h) REVIEW.—The Director of the Office of administrative services for hospital and clin- formance, based on the award. Management and Budget shall review the re- ic operations, including food service, laundry (H) The current cost of contractor perform- ports referred to in this section and consult services, grounds maintenance, transpor- ance. with the head of the agency regarding the tation services, office operations, and supply (I) The actual savings, expressed both as a content of such reports. processing and distribution services. dollar amount and as a percentage of the (i) DEFINITIONS.—As used in this section: cost of performance by Federal employees, (1) The term ‘‘employee’’ means any indi- (j) APPROPRIATION.—There is appropriated based on the current cost, and an expla- vidual employed— $2,000,000 for fiscal year 2003 to carry out this nation of the difference, if any. (A) as a civilian in a military department section, to be derived by transfer from the (J) A description of the quality control (as defined in section 102 of title 5, United amount appropriated in title I of this Act for process used by the agency in connection States Code); ‘‘Internal Revenue Service—Tax Law En- with monitoring the contracting effort, iden- (B) in an executive agency (as defined in forcement’’. The Director of the Office of section 105 of title 5, United States Code), in- tification of the applicable quality control Management and Budget shall allocate such standards, the frequency of the preparation cluding an employee who is paid from non- amount among the appropriate accounts, of quality control reports, and an assessment appropriated funds; of whether the contractor met, exceeded, or (C) in those units of the legislative and ju- and shall submit to the Congress a report failed to achieve the quality control stand- dicial branches of the Federal Government setting forth such allocation. ards. having positions in the competitive service; (k) APPLICABILITY.—(1) The provisions of (K) The number of employees performing (D) in the Library of Congress; this section shall apply to fiscal year 2003 (E) in the Government Printing Office; or the contracting effort under the contract and each fiscal year thereafter. and any related subcontracts. (F) by the Governors of the Federal Re- (c) REPORT ON CONTRACTING EFFORTS.—(1) serve System. (2) This section— For the current fiscal year and every fiscal (2) The term ‘‘agency’’ means any depart- (A) does not apply with respect to the Gen- year thereafter, every agency shall complete ment, agency, bureau, commission, activity, eral Accounting Office; and submit to the Director of the Office of or organization of the United States, that (B) does not apply with respect to depot- Management and Budget a report on the con- employs an employee (as defined in para- level maintenance and repair of the Depart- tracting efforts undertaken by the agency graph (1)). ment of Defense (as defined in section 2460 of during the current fiscal year. Such reports (3) The term ‘‘non-Federal personnel’’ title 10, United States Code); and shall comply with the requirements in para- means employed individuals who are not em- (C) does not apply with respect to con- graph (2), and shall be completed and sub- ployees, as defined in paragraph (1). tracts for the construction of new structures mitted not later than the end of the first fis- (4) The term ‘‘contractor’’ means an indi- or the remodeling of or additions to existing cal quarter of the subsequent fiscal year. vidual or entity that performs a function for structures, but shall apply to all contracts (2) The reports referred to in paragraph (1) an agency under a contract with non-Federal for the repair and maintenance of any struc- shall include the following information for personnel. tures.

VerDate May 23 2002 03:58 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00032 Fmt 4634 Sfmt 0634 E:\CR\FM\A15JY7.109 pfrm12 PsN: H15PT1 E PL UR UM IB N U U S Congressional Record United States th of America PROCEEDINGS AND DEBATES OF THE 107 CONGRESS, SECOND SESSION

Vol. 148 WASHINGTON, MONDAY, JULY 15, 2002 No. 95 Senate The Senate met at 12 noon and was U.S. SENATE, Without objection, the clerk will called to order by the Honorable JON S. PRESIDENT PRO TEMPORE, read the titles of the bills. CORZINE, a Senator from the State of Washington, DC, July 15, 2002. The assistant legislative clerk read New Jersey. To the Senate: as follows: Under the provisions of rule I, paragraph 3, of the Standing Rules of the Senate, I hereby A bill (H.R. 4954) to amend Title XVIII of PRAYER appoint the Honorable JON S. CORZINE, a the Social Security Act to provide for a vol- The Chaplain, Dr. Lloyd John Senator from the State of New Jersey, to untary program for prescription drug cov- Ogilvie, offered the following prayer: perform the duties of the Chair. erage under the Medicare Program, to mod- ernize and reform payments and the regu- Almighty God, strong source of ROBERT C. BYRD, President pro tempore. latory structure of the Medicare Program, strength for those who stretch the and for other purposes. human limits and go beyond, we praise Mr. CORZINE thereupon assumed the A bill (H.R. 4635) to amend title 49, United You for courage to stand firm for truth Chair as Acting President pro tempore. States Code, to establish a program for Fed- as You have revealed it to us. Give us f eral flight deck officers, and for other pur- convictions that require Your courage. poses. RECOGNITION OF THE ACTING We know that courage is fear that has A bill (H.R. 5017) to amend the Temporary MAJORITY LEADER said its prayers. Here we are, Lord, re- Emergency Wildlife Suppression Act to fa- The ACTING PRESIDENT pro tem- cilitate the ability of the Secretary of the linquishing any fears that may cripple Interior and the Secretary of Agriculture to us in being bold leaders. We can take pore. The Senator from Nevada is rec- enter into reciprocal agreements with for- hold of courage because You have ognized. eign countries for the sharing of personnel to taken hold of us. You give us power to f fight fires. overcome rather than overreact. We ac- SCHEDULE The ACTING PRESIDENT pro tem- cept the admonition of the psalmist: pore. Objection to further proceedings Wait on the Lord, be of good courage, and Mr. REID. Mr. President, the Chair having been heard, the bills will be He shall strengthen your heart. Wait, I will announce that the time until 1 placed on the calendar. o’clock will be evenly divided between say, on the Lord—(Psalm 27:14). f Bless the women and men of this Republicans and Democrats, with the Senate as You solidify their convic- Republicans having the first hour and RESERVATION OF LEADER TIME tions and then give them the gift of Democrats having the second half The ACTING PRESIDENT pro tem- courage. You are our Lord and Saviour. hour. pore. Under the previous order, leader- Amen. At 1 o’clock, we will again go to the ship time is reserved. resumption of the accounting reform f f bill, with 5 hours remaining under postcloture proceedings. MORNING BUSINESS PLEDGE OF ALLEGIANCE f The ACTING PRESIDENT pro tem- pore. Under the previous order, there MEASURES PLACED ON THE CAL- The Honorable JON S. CORZINE led the will now be a period for the transaction ENDAR—H.R. 4954, H.R. 4635, H.R. Pledge of Allegiance, as follows: of morning business not to extend be- 5017 I pledge allegiance to the Flag of the yond the hour of 1 p.m., with Senators United States of America, and to the Repub- Mr. REID. Mr. President, it is my un- permitted to speak therein for up to 10 lic for which it stands, one nation under God, derstanding there are three bills at the indivisible, with liberty and justice for all. minutes each. desk that have been read for the first Under the previous order, the first time. They are H.R. 4954, H.R. 4635, and f half of the time shall be under the con- H.R. 5017. trol of the Republican leader or his des- The ACTING PRESIDENT pro tem- ignee. APPOINTMENT OF ACTING pore. The Senator is correct. The Senator from Wyoming is recog- PRESIDENT PRO TEMPORE Mr. REID. I ask unanimous consent nized. The PRESIDING OFFICER. The that it be in order, en bloc, for these f clerk will please read a communication bills to receive a second reading, but I to the Senate from the President pro object to any further proceedings at THE USE OF SNOW MACHINES IN tempore (Mr. BYRD). this time. YELLOWSTONE NATIONAL PARK The assistant legislative clerk read The ACTING PRESIDENT pro tem- Mr. THOMAS. Mr. President, I will the following letter: pore. Is there objection? take a few minutes to talk about an

∑ This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor.

S6729

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VerDate Jun 13 2002 06:16 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00001 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.000 pfrm17 PsN: S15PT1 July 16, 2002 S6730 CONGRESSIONAL RECORD — SENATE July 15, 2002 important issue specifically to Wyo- the problems of that exit, and rather ternatives, that was pretty evenly di- ming, the Yellowstone National Park. than to eliminate them, we think there vided between those who want to con- In a broader sense, it is an issue that ought to be a way to change them. tinue and those who do not. affects all kinds of parks and Federal Indeed, during the course of this We are down now to making some de- public lands. It has to do with the ques- time, there have been a number of cisions, and I think that is what we tion of access to these lands. Particu- changes being made, partly by the ought to do, and we are in this process. larly, I am very interested in national manufacturers. Of course, there can be I am disappointed that since then, a parks, having grown up just outside of a regulation and a standard as to how bill has been introduced in the Senate Yellowstone. I served as chairman of the machines would be allowed to re- to eliminate snow machines in the the National Parks Subcommittee for a duce emissions they have had in the park. It seems to me that is entirely long time. So I am very interested in past. They would also reduce the noise, inappropriate when we go through this parks. which has been something people have whole process that has been laid out We are in the process of working on been concerned about. where people can be involved in this an issue that I think has broader impli- So we are prepared—and the manu- decision, and then suddenly we decide cations. It is the ability to use snow facturers are prepared—to go into the we are going to make the decision here. machines to see Yellowstone National market with machines, probably four- I hope that is not the case. I think we Park in the wintertime. It is some- cycle engines rather than two, that have had, as I said, an opportunity, and thing that has been done, of course, for would change both the emissions and we can continue to talk about it and a number of years, and certainly there the noise. we ought to certainly let that process have to be changes that take place As this went on, of course, as the work its way through, which I think it with use, and, as people are involved, Clinton administration pushed their will. unfortunately, those changes have not regulation, there were lawsuits Everyone is for the protection of our taken place as much as they should. brought. Then there was a change in parks. We all want to do that, and we Now we find ourselves in a dilemma the administration. The original EIS can do that. We have had this sort of a with efforts made to eliminate the op- that was done was extended, and we problem in public lands, where you portunity for people to use these ma- took action in the Congress to extend have to get a balance between useful- chines in the wintertime. the use period for another couple of ness and protection, and we can do As I mentioned, I think the purpose years, and another supplemental EIS that. of the park is to maintain the resource, was held so there could be some addi- We are into another thing now on and all of us would agree to that. It is tional alternatives. limiting roads in the forests. Obvi- one of the national treasures that we The alternatives, of course, could be: ously, there ought to be some limita- have. We spend a lot of time here on Continue as it is now; eliminate it en- tion, but there also has to be access. It parks—to establish new parks, and so tirely; allow for coaches rather than is not only access to people who want on. individual snow machines; or change to hunt or do those kinds of things. I The second purpose of having a park, the rule so there could be some com- have received lots of communications of course, in addition to saving the re- bination of the two. from veterans, for instance, who say: source, is to give the opportunity for The time is down now pretty close to Gosh, I cannot hike 5 or 10 miles to get the park’s owners to enjoy it—the peo- where there should be, in this month, there. ple of America. And of course it needs as a matter of fact, a reestablishment So we have to find a balance, and this to be done in an orderly way so there is of the options that would be available, is one of the areas in which a balance not a problem with destroying those any favored option by the administra- is necessary—not the only one. But I resources. tion. am saying that our resources of public As I mentioned, snow machines in I met recently with the superintend- lands and public uses also have to have Yellowstone Park have been used for a ents of the two parks, both the Grand access for a number of reasons. It also good numbers of years. They are lim- Teton and Yellowstone, and they are is an economic issue for people who ited to the roads that are prepared for prepared to do that. I think they are live around the parks, as we do in Wyo- snow machining. You cannot go off the prepared to favor the option that would ming. So we hope we can go ahead with road; you stay on those roads. That has allow for the changes to be made in the this and that the administration will been the rule through the years. They machines and also for additional noise, continue to pursue the idea of having a enter, basically, in three of the but they could potentially have limita- resolution that provides for manage- entryways that come into Yellowstone tions on the numbers that could travel. ment, provides for protection, but pro- Park, which is fewer than there are in It is kind of interesting because vides people an avenue to still continue the summer. those who oppose it, of course, do not to enjoy the park. Of course, the wildlife remains in the want to include any machines, regard- I thought it was kind of interesting park in the winter, for a good part of less of the situation. There are now that one of the complaints about the the time at least, and so one of the machines that have less emissions than noise—and I understand that—is people problems or complaints has been that an automobile. There are only about who go there do not want to have noise the idea of preparing the roads for the 600,000 of these machines and 1.6 mil- in the wintertime. Well, there is no- use by snow machines provides an exit lion cars in the summer, so it is quite body there unless they go on machines for the buffalo, and they go into Mon- hard to figure out how they are going because there is no place they can go tana. There are concerns about brucel- to do extensive damage. without them. It is too far away. I losis, and so on, and they don’t like to As I mentioned, there was a lawsuit. wanted to raise that point. I feel very have that happen. The snowmobile manufacturers, the strongly about it, of course, as do The fact is that the roads are going State of Wyoming, and others brought many of us. to be prepared for use, whether visitors a suit over the ban last summer. The We certainly hope we can go on can use them or others, because they settlement was agreed to. It called for through this process and end up with have to be used by the rangers and the a supplemental EIS, which I men- an alternative that allows for the use people who are in the park. tioned, which now has been done, and of visitors to Yellowstone Park in the In any event, this issue kind of came it called for some reasonable and com- winter. It is a beautiful place. When to a head about 2, 3 years ago when the monsense resolutions and changes to one goes up there by Old Faithful and Clinton administration had prepared a the debate. goes up the river, talk about the wild- regulation that there would be no more The public process has been open. life. One of the things that is sort of in- use of snow machines in the winter- There have been lots of responses. Be- teresting is you drive along and if you time. Well, many of us do not agree cause the environmentalists organized want to stop, there is a buffalo right with that. We think there can be ways it, they had more people against it alongside the road in about 2 or 3 feet in which snow machines can be man- send in a card than those who were for of snow, and they move right along in aged so that they can be changed if it, but those who really took time to this little place pushing the snow out they need to be, that would take away examine the issue and come up with al- of the way so they can eat what is left

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00002 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.007 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6731 of the grass below. They are not con- A little history will show this is not Supreme Court Justice Kennedy, a cerned whether someone is there with a the first attempt to solve the crisis of former member of the Ninth Circuit for snow machine. the Ninth Circuit. I believe the need for 12 years, testified before a Senate Ap- I see my friend from Alaska is change, however, has never been great- propriations Committee and stated he present to speak, and I yield the floor. er. The Ninth Circuit has grown so has increasing doubts about the wis- The ACTING PRESIDENT pro tem- large and has drifted so far from pru- dom of retaining the circuit’s current pore. The Senator from Alaska. dent legal reasoning that sweeping size. Arguments in support of a divided f changes are in order. Congress has al- ready recognized that the change is Ninth Circuit are both qualitative and LEGAL SYSTEM REFORM needed. Back in 1997, we commissioned quantitative. The magnitude of cases Mr. MURKOWSKI. Mr. President, I a report on structural alternatives for filing in the Ninth Circuit creates a wish to indicate my concern about the the Federal court of appeals. The com- slow and cumbersome docket. In 2001, recent ruling of the Ninth Circuit mission was chaired by the former Su- the caseload of the Ninth Circuit Court Court of Appeals in regard to the reci- preme Court Justice, Byron R. White. of Appeals was 10,342 filings. tation of the Pledge of Allegiance in They found numerous faults within the I refer now to a chart which shows school as unconstitutional, noting its Ninth Circuit. In its conclusion, the the filings of the court relative to the reference to ‘‘one nation under God.’’ commission recommended major re- Ninth Circuit. We have the various cir- I think we were all a bit surprised at forms and a drastic reorganization of cuits: The First, Second, Third, that particular ruling. Perhaps for the court. Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, and Eleventh Circuits. more years than I care to acknowledge, This legislation divides the Ninth The Ninth has a population of 54 mil- I have witnessed one bizarre decision Circuit into two independent circuits. lion; the caseload is 10,000 filings. The after another arising from what I con- The new Ninth would contain basically nearest would be the Eleventh Circuit. sider a very troubled court. During California. I understand there is an in- Clearly, the workload is significant in terest from Nevada to stay with Cali- that time, a number of us in the Senate this court. have worked to bring about funda- fornia. Basically, we propose to leave I refer you now to chart 2, which mental reform in our legal system, in- the Ninth containing California and shows the current size of the court. cluding a wholesale restructuring of perhaps Nevada. A new Twelfth Circuit This gives a better understanding the Ninth Circuit. would be composed of the following: showing the makeup of the Ninth Cir- I quote from the court’s decision on Arizona, Alaska, Hawaii, Idaho, Mon- cuit covering Alaska, Washington, the pledge, and this was Judge Alfred tana, Oregon, Washington, Guam, and Idaho, Montana, Oregon, California, T. Goodwin who wrote: the Northern Marianna Islands. Imme- Nevada, and Arizona. It covers a popu- A profession that we are a nation ‘‘under diately upon enactment, concerns of lation of 54 million. The caseload is God’’ is identical, for establishment clause the White commission would be ad- 10,000 cases. The Ninth Circuit area is purposes, to a profession that we are a na- dressed. A more cohesive, efficient, and 1.4 million square miles. tion under Jesus, a nation under Vishnu, a predictable judicial group would It is interesting to reflect on the east nation under Zeus, or a nation under no god, emerge. coast. On the east coast, we have because none of these professions can be neu- The circuit serves a population of Maine, the eastern States, with their tral without respect to religion. more than 54 million, almost 60 percent own court in red on the chart in the I find that troubling because it is to- more than are served by the next larg- First Circuit. The green is the Second tally inconsistent. It tries to establish est circuit. By 2010, the Census Bureau District. Third is in the raspberry a parallel that there is virtually no dif- estimates that the population of the color. The Fourth Circuit includes the ference whether we are under Zeus, Ninth Circuit will be more than 63 mil- Carolinas. We have five circuit courts under Vishnu, or under no god because, lion people. How many people does this covering a significant population. as is stated in the opinion, none of court have to serve before the Congress Clearly, this chart points out the dif- these professions can be neutral with of the United States realizes the Ninth ference between the size of the area of respect to religion. This is a type of ex- Circuit is overwhelmed by its popu- the Ninth and the caseload. tremism carried out by individuals who lation? Congressional Members are not I will quote from various Justices want to eradicate any reference to reli- alone in advocating a split. relative to their views on splitting the gion in public life. It is clearly wrong. In 1973, a congressional commission court. It is imperative we reflect on I am confident this ruling will be over- on the revision of Federal Court Appel- those who have studied this issue and turned. After all, it is quite common late System Commission, commonly evaluated it on its merits. for a ruling from the Ninth Circuit to known as the Hruska Commission, rec- From retired U.S. Supreme Court be overturned. ommended the Ninth Circuit be di- Chief Justice Warren Burger: I strongly It is fair to take a few minutes and vided. Also that year, the American believe the Ninth Circuit is far too look at the record of the Ninth Circuit. Bar Association adopted a resolution in cumbersome and it should be divided. Part of the problem is the Ninth Cir- support of the split. In 1990, the U.S. Justice Anthony M. Kennedy: cuit is simply too large. It extends Department of Justice endorsed legis- I have increasing doubts and increasing from the Arctic Circle to the Mexican reservations about the wisdom of retaining lation to split the Ninth Circuit in a the ninth circuit in its historic size, and border and spans the tropics from Ha- surprising reversal of the official ‘‘no with its historic jurisdiction. We have very waii, Guam, the Marianna Islands, the position’’ approach it had previously dedicated judges on that circuit, very schol- International Date Line, back to Mon- assumed. That is significant in rela- arly judges. . . . But I think institutionally, tana and encompasses some 14 million tionship to a fair evaluation based on and from the collegial standpoint, that it is square miles. It is the largest circuit facts in the White commission on the too large to have the discipline and control by any measure. It is larger than the need for splitting the court. that’s necessary for an effective circuit. First, Second, Third, Fourth, Fifth, In 1995, a bill was reported from the We go to the Honorable Diarmuid Sixth, Seventh, and Eleventh Circuits Senate Judiciary Committee to go O’Scannlain, a Ninth Circuit judge: combined. ahead and split the Ninth Circuit. We—the ninth circuit—cannot grow with- For these reasons and more, I am There were objections. Most of those out limit. . . . As the number of opinions in- going to be introducing legislation in objections came from California and creases, we judges risk losing the ability to know what our circuit’s law is. In short, big- the balance of this Congress to split were simply based on the theoretical ger is not necessarily better. The ninth cir- the Ninth Circuit. I will now be offer- concept that California has been the cuit will ultimately need to be split. . . . ing an amendment to all legislation for headquarters of the Ninth, and there is Former Alabama Supreme Court the remainder of this Congress to enact a certain amount of prestige associated Chief Justice Howell Heflin, one of our this commonsense legislation until with having the largest court, so it is former colleagues: such time as I can get a vote. I am quite natural that there should be such Congress recognized that a point is reached joined by a number of our colleagues: a response from California. But it was where the addition of judges decreases the ef- Senators STEVENS, BURNS, CRAIG, GOR- not necessarily based on what is good fectiveness of the court, complicates the ad- DON SMITH, INHOFE, and CRAPO. for justice. ministration of uniform law, and potentially

VerDate Jun 13 2002 05:13 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00003 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.009 pfrm17 PsN: S15PT1 July 16, 2002 S6732 CONGRESSIONAL RECORD — SENATE July 15, 2002 diminishes the quality of justice within a opinions. As a consequence, the case- Clearly, you see the significant over- Circuit. load is simply too big to allow, not for whelming evidence that most of the Last, former U.S. Senator Mark O. leisure, but it is a necessity, given the cases, of course, are from California. Hatfield, State of Oregon: manner in which judges reflect upon As a consequence, this need for great- The increased likelihood of intracircuit their observation. er regional representation is dem- conflicts is an important justification for I would like to point out to my col- onstrated by the fact that the east splitting the court. leagues an article from the June 30 coast of the United States is composed These are gentlemen who have re- New York Times entitled ‘‘Court That of five Federal circuits. I wonder what viewed this issue and evaluated it ob- Ruled on Pledge Often Runs Afoul of the justification for that was. Clearly, jectively on its merits. Justices.’’ I would like to read high- it was justified in the sense of good ju- We see here the Supreme Court lights. Obviously, there is too much dicial decision. But here we have on agrees that reform is needed. Here is a material in it, but specifically I quote: the west coast one court. The division quote from Justice Scalia: . . . judges on the court said that they did of the Ninth Circuit would enable The disproportionate segment of this not have time to read all of the decisions it judges, lawyers, and parties to master court’s discretionary docket that is consist- issued. a more manageable and predictable According to the commission’s 1998 report, ently devoted to reviewing ninth circuit 57 percent of judges in the Ninth Circuit, universe of relevant case law. judgments, and reversing them by lop-sided compared with 86 percent of federal appeals Establishing a circuit comprised margins, suggests that this error-reduction court judges elsewhere, said they read most solely of States in the West would ad- function is not being performed effectively. or all of their court’s decisions. here certainly to congressional intent. That is a pretty strong statement on That does not take place in the Ninth Alaska, Washington, Oregon, Hawaii, the manner in which the Ninth Circuit Circuit. Idaho, and perhaps Nevada—although I has been conducting itself. As the ref- Critics say the Ninth Circuit’s procedure understand Nevada, in the minds of erence is from Justice Scalia, he cites for full-court review accounts for much of some, is in the State of California. In a disproportionate segment of the Su- the reversal rate. All other circuits sit as any event, we share similar land-based preme Court’s discretionary docket one to hear full-court, or en banc, cases. The populations and economics. Each State that is devoted to reviewing Ninth Cir- Ninth Circuit sits in panels of 11. contains a high percentage of public cuit judgments reversing them by lop- The procedure injects randomness into de- land, a fairly comparable population, is cisions. If a case is decided 6 to 5, there is no sided margins. That is certainly a cri- financially dependent on tourism and tique against the Ninth Circuit’s per- reason to think it represents the views of the majority of the court’s 23 active members. is blessed with an abundance of natural formance. Critics say the Ninth Circuit’s procedure resources. Supreme Court Justice Sandra Day for full-court review accounts for much of In conclusion, while I may believe O’Connor: the reversal rate. All other circuits sit as even more sweeping changes are in With respect to the ninth circuit in par- one to hear full-court, or en banc, cases. The order, I strongly urge that this body ticular, in my view the circuit is simply too Ninth Circuit sits in panels of 11. address the crisis in our judiciary sys- large. The procedure injects randomness into de- cisions. If a case is decided 6 to 5, there is no tem. It is the 54 million residents of Finally, Supreme Court Justice John reason to think it represents the views of the the Ninth Circuit who suffer from our Paul Stevens: majority of the court’s 23 active members. inaction. These Americans wait years In my opinion, the arguments in favor of One only needs to review the appall- before their cases are heard, and, after dividing the circuit into either two or three ingly high reversal rate of Ninth Cir- those unreasonable delays, justice may smaller circuits overwhelmingly outweigh not even be served by an overstretched the single serious objection to such a change. cuit cases to appreciate the severity of the problem. and out of touch judiciary. So there you have three Justices in- During the 1995–1996 session, the Su- Congress has known about the prob- dicating that in their opinion the court preme Court overturned an astounding lem in the Ninth Circuit for a long is too large, there have been too many 83 percent of the cases heard from the time. Justice has been delayed too reversals coming to the Supreme Ninth Circuit—83 percent, Mr. Presi- long. The time for reform has come. I Court. It is the criticism of the func- dent, a figure which is 30 percent high- urge action on this legislation. I will be tion of the court. er than the national average reversal offering it on every bill until we obtain Let me continue because I think it is rate. a vote on this issue. important to reflect on just what these In the 1996–97 session alone, an as- I thank the Chair. I yield the floor. figures are, relative to the filings and tounding 95 percent of its cases re- The PRESIDING OFFICER. The Sen- the increase. The number of filings viewed by the Supreme Court were ator from New Jersey is recognized. continues to increase in the Ninth, overturned. This number should raise Mr. CORZINE. Thank you, Mr. Presi- from 8,415 in 1995 to 9,070 in 1998, and more than a few eyebrows. dent. now 10,342 in the year 2001. We have A split in the circuit would enable a f seen the chart with the caseloads in- more complete and sound review, ECONOMIC SECURITY FOR ALL creasing. Here is a vivid comparison of thereby reducing the circuit’s rate of AMERICANS the years, as this caseload jumps, par- reversal before the Supreme Court. ticularly from 2000 to 2001, as one can The uniqueness of the Northwest can- Mr. CORZINE. Mr. President, today I see, in the red. not be overstated. An effective appel- want to talk about the corporate scan- The ever increasing, expanding dock- late process demands mastery of State dals and financial problems we have et in the Ninth Circuit creates an in- law and State issues relative to geo- been experiencing, and discuss how herent difficultly in keeping abreast of graphic land mass, population, native these problems highlight the impor- legal developments within its own ju- cultures that are unique to the rel- tance of keeping the ‘‘security’’ in So- risdiction, rendering inconsistency in evant region, and particularly public cial Security. constitutional interpretation within land issues. Last week, American financial mar- the court. Interestingly, the statistical Presently, California is responsible kets plunged dramatically in response opportunities for inconsistency on a 28- for almost 50 percent of the appellate to the ongoing litany of corporate panel court calculate out to about 3,276 court’s filings, which means that Cali- scandal and earnings restatements. combinations of panels that could re- fornia judges and California judicial The New York Times called the current solve any given issue. philosophy dominate judicial decisions 21⁄2-year slide in the stock market the I have had conversations with judges on issues that are fundamentally ‘‘worst bear market in a generation.’’ on the Ninth Circuit who have indi- unique to the Pacific Northwest. For ordinary investors, retirees, and cated the caseload is such that it is im- Let me show on this chart the spe- near-retirees—last week, and certainly possible for them to communicate cifics of where all the cases come from. the year—the post-bubble environment among themselves on the activities Nearly half of them—46 percent—come has been a financial nightmare. What going on within the court, as opposed from California; Arizona, 7 percent; felt like a hard-earned, secure retire- to the usual process of judges having Alaska 1.3 percent; Hawaii, 1.9 percent; ment for many became an open ques- an opportunity to review other judges’ Idaho, Montana, Nevada, 5.6 percent. tion filled with uncertainty for many

VerDate Jun 13 2002 05:13 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00004 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.011 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6733 Americans. People are feeling com- corporate fraud. We need not define the ican population retired and living in pelled to go back to work and evaluate SEC by who is leading the SEC, but we poverty down to almost 10 percent in when they will retire, continue their need to make sure we speak to the recent years. In my view, moving away careers, or cut back on their standard scope of the resources they have and from that would be a mistake. of living. They are experiencing a real the tools they have to deal with the For 50 percent of working Americans, sense of economic insecurity. issues that are involved in problems the whole of their retirement security U.S. equity markets have lost nearly that have led to the crisis of consumer is Social Security; they have no other $7.5 trillion since the peak of the mar- confidence that we have today. means of retirement security. And for ket—that is a mind-boggling number, Many of my colleagues have ex- about 70 percent, the primary means of frankly—and roughly $2.5 trillion in pressed similar concerns in recent their retirement security is Social Se- market value has been lost this year days, and I believe the American peo- curity. So we are really talking about alone. ple are watching us closely today, and putting at risk something that I think That loss has created a profound will see how this process unfolds as the is very vital for most Americans. sense of insecurity among American 107th Congress proceeds to completion, Ever since Franklin Roosevelt signed families. We are seeing it in the real and whether we can put this strong re- it into law, Social Security has been economy, we are seeing it in consumer form legislation on the President’s critically important for our Nation’s confidence, and in a whole series of desk not only by passing a strong bill seniors. Its importance has grown even measures. in the Senate but by making sure that more in recent years. That is because Trees don’t grow to the sky. We when we get to conference, we put the fewer and fewer Americans now have sometimes lost track of that in the public’s interest ahead of special inter- access to traditional defined-benefit 1990s. Markets will not fall to zero ei- ests. pension plans. Those plans have de- ther. But markets pose real risk and With that said, there is another very clined from 175,000 programs in 1983 to real challenges to the economic secu- important question that is reinforced just about 50,000 programs today. There rity of all Americans. That is, of by these events. It is really where the has been a dramatic decline in these course, why we must pass the account- dots connect and what I will focus on defined-benefit programs—ones that ing reform measure before the Senate, today. That is something I have been were secure. Increasingly, companies the Investor Protection Act. I hope we speaking about often here on the have switched from traditional plans, will do that today. We must also stand floor—the implications of a market under which the company bears the in- firm on the principles and elements of meltdown and the President’s drive to vestment risks, to defined-contribution this legislation as we continue in the move toward the privatization of So- plans, under which workers and retir- conference committee, which will try cial Security. ees are themselves the risk takers— to piece together this strong piece of For anyone who has any doubt about market risk takers. reform legislation with a fairly weak the importance of providing a guaran- Proponents of privatizing Social Se- and tepid response in the House. teed safety net—a bedrock safety net— curity would compound those defined- Obviously, investors are deeply af- for America’s retirees, recent events contribution or 401(k) market risks by fected by the wave of corporate scan- prove how that is absolutely necessary. making Social Security benefits equal- dals and financial restatements that In just the past week, millions of ly dependent on the uncertainties of infect too much of the corporate world: Americans have seen the value of their the stock market. In my view, that The so-called Enron Syndrome, 401(k)s plunge dramatically. For some, would be a cruel betrayal of America’s WorldCom, Global Crossing, to this decline will mean their retirement senior citizens and a denial of the Adelphia—the litany goes on, and, un- will have to be delayed. For others al- promise of Social Security. fortunately, appears to be lengthening. ready retired, it will bring a real de- Consider what has happened to the I think we may just be at the head of cline in their standard of living. I have employees at MCI. MCI is another tele- this wave. read about and talked to people who communications company that was What we have is not merely a few bad will have to return to work. And for merged into WorldCom about 21⁄2 years apples but a systemic breakdown—a millions of Americans, recent events ago. Before the takeover by WorldCom, breakdown in our accounting system, a have highlighted the risk of relying on MCI maintained a traditional defined- breakdown in our auditing structures, the stock market as the primary guar- benefit plan; that is, the retirement se- and, more fundamentally, a breakdown antor of retirement security. curity risks were borne by MCI and in the trust that is the foundation of We have always talked in this Nation guaranteed by a Government institu- our entire market-based economic sys- about a three-legged stool to support tion called the Pension Benefit Guar- tem—trust in our corporate leadership people in their retirement: Certainly, anty Corporation. But that plan was and trust in the truthfulness of their individual savings, and some of that abolished after WorldCom merged, ex- word. undoubtedly is well spent in the stock cept, by the way, for senior manage- As a former businessman and a CEO, market; then there are pension benefits ment; they continued to have defined- I must say I am ashamed of this wave that are provided by employers; and benefit programs for their retirements. of corporate corruption. As a Senator, then there has always been this bed- Instead, MCI employees, as most I am appalled at the continuing at- rock of Social Security. That is the WorldCom employees, were offered tempt of some lobbyists and too many three-legged stool. only one type of retirement program, a in public office to substitute a token I think we need to make sure we re- 401(k) plan. response for a strong and effective gov- inforce that fundamental leg, Social I am not against 401(k) plans. They ernmental response. Security. The purpose of Social Secu- are a great idea for an additional ele- Frankly, I was disappointed with rity is to ensure, despite the inherent ment, on top of Social Security, a President Bush’s response last week, uncertainties of the marketplace, that guaranteed benefit. But I think when which was long on rhetoric and short retirees who have contributed to our we mix apples and oranges, we under- on reform. Nothing was really said Nation will be guaranteed a basic level mine economic security for Americans. about the accounting industry con- of retirement income. In other words, By the end of 1999, over 103,000 work- flicts, the conflicts with regard to re- the Social Security system guarantees ers and retirees participated in this search in investment banks, as Attor- a degree of certainty, a certainty that WorldCom 401(k) program. Their ac- ney General Spitzer has brought to will give people that sense of security. counts at that time held more than $1.1 light, the expensing of options, or Privatizing the program, as the Bush billion of WorldCom stock, about one- about many other serious steps that Social Security Commission has pro- third of the plan’s assets. At that time, will be needed to restore public con- posed, will undermine that security the stock was worth $54 a share. fidence. and tear apart a program that has been Today, that stock and their retire- The President also failed to face up successful—enormously successful—for ment funds are almost worthless. And to the urgent need for major strength- the American people for over 70 years. we read in the paper today that ening of the SEC, which today is dras- In fact, we have gone from where we WorldCom is about to file its bank- tically outgunned in the battle against had more than 50 percent of the Amer- ruptcy petitions. After WorldCom’s

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00005 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.013 pfrm17 PsN: S15PT1 July 16, 2002 S6734 CONGRESSIONAL RECORD — SENATE July 15, 2002 massive accounting scam, the stock is workers would amount to 25 percent The fact is, in many instances where not at $54 a share but 3 cents a share. and future cuts could exceed 45 per- we continue to allow this without an The WorldCom stock in WorldCom cent. If anyone wants to apologize for acknowledgment of what is going on, 401(k) plans is not worth $1.1 billion, privatization by disputing these num- two things are happening: Earnings are but it is now worth $20 million. bers, I just encourage them to read the overstated, and there is an enormous By the way, the 401(k) plan isn’t report of the nonpartisan actuaries at amount of dilution going on to the guaranteed by the Pension Benefit the Social Security Administration ownership of shares. Guaranty Corporation. It is actually themselves. For more evidence, let me People may argue that you can de- imposing a cruel reduction in the secu- refer you to the recent economic anal- rive this from financial statements and rity of all those 104,000 folks. I say, as ysis by Professor Peter Diamond of footnotes that are highly complicated an aside, this situation certainly ar- MIT and Dr. Peter Orszag of the Brook- even for the most sophisticated inves- gues for diversification in pension ings Institution. tor to read. But I argue that there is no plans as well. The WorldCom plan The Bush Commission parades its common sense in making it as difficult started with about one-third con- proposals as promoting choice. But if to understand what the earnings state- centration in WorldCom stock. It now the Bush privatization plans were ever ments of a company state and, more has less than 1 percent in the approved, seniors would have no importantly, protecting investors from WorldCom stock, but that is just be- choice. Their benefits would be cut. the dilution that comes from the whole cause of the loss of value. It is really a They would be cut if they shifted to premise of issuing more stock without very difficult situation for a lot of privatized accounts, and they would be having an understanding of when that working Americans. cut if they did not. The only choice is is going to happen. This needs to be put These are not just numbers or ab- this: If they opted for privatized ac- in the context of the asymmetrical in- stract entries on a corporate balance counts, their guaranteed benefits centives it gives management that has sheet or somebody’s notification of would be cut more deeply. undermined confidence in our cor- what their 401(k) plan returns are, they The effective destruction of Social porate executives. represent the destruction of people’s Security’s guaranteed benefits rec- To be brief: We have a chance to ad- hopes and dreams for a secure retire- ommended by the Bush Commission is dress this issue in a very serious man- ment life, after working responsibly bad economics and bad social policy. ner in the next few hours before we and contributing responsibly to their Fifty Senators have written the Presi- take our final vote on this legislation. retirement. dent urging him to publicly reject his I compliment Senator LEVIN and all Last week we had one WorldCom em- Commission’s proposals. So far, his re- those who stand to straighten out and ployee say: sponse has been the same kind of si- put into responsible format what needs I put all my money in WorldCom stock, lence we heard for months after the to be done with option accounting. We and I’m pretty sure I’ve lost everything. I corporate scandals first broke with should do that not by writing option knew what happened at Enron, but I thought Enron. rules, at which I do not think the Sen- we [at WorldCom] were different. Sometimes facts and reality ought to ate has the capacity to be effective, but Management told them they were dif- bring about a change in thinking for making sure that an independent body, ferent, and, as most people, employees individuals, for corporations, and for which we will independently finance, trusted the executives they worked for an administration on important topics has the ability to deal with a very com- and wanted to be proud of their com- of the day. plicated issue. I hope with the help of all my col- pany and its leadership. Cutting guaranteed Social Security leagues, we can get around to straight- The experience of WorldCom employ- may have sounded like a good idea ening out something that, as we saw ees, and those of hundreds of other when the stock market was only going today in news reports, even corporate companies—some of them, by the way, up, but now the fallacy of that assump- executives understand can lead to not falling prey to the whims of fraud tion is clear to everybody. I hope the misallocation of resources and cer- but just simply market realities— Bush administration will reconsider its tainly misunderstanding of the per- shows that diversification is an abso- plans to privatize and cut Social Secu- formance of companies. We ought to lute essential in pension reform. I hope rity. get to real economic performance being we have that debate also on the floor. Let’s not take the security out of So- reflected, not accounting performance. When retirees lose all their money cial Security. I am glad to see Coca-Cola take the through no fault of their own, when Mr. President, before I leave the steps they did. We need to move firmly nothing is left in their retirement port- floor, I would like to take a few min- and surely by passing the Levin amend- folio, one thing, and one thing only, utes to discuss a different matter but ment which would facilitate a solution stands in the way of total economic one that I believe is fundamentally im- that would make this permanent for devastation. Social Security. Because portant as we seek to address the everyone. no matter the state of the stock mar- structural problems facing our econ- All three of these are important ket, Social Security is always there— omy and what we need to face in the fi- issues—accounting reform and cor- not with enough to live in luxury but nancial world to straighten out some of porate responsibility, the treatment of enough to make a real difference for the problems we have. We need to bet- stock options, and protecting Social millions who have little or no savings ter account for employee stock op- Security and rejecting privatization. on which to rely. Social Security is the tions. The stakes are high for our economy. I ultimate safety net. We must not let This, too, is an issue that regardless hope we will move swiftly and cer- the administration shred it. of where one may have been histori- tainly to reform and provide economic Privatization schemes would irre- cally, facts and reality ought to bring security to all Americans. sponsibly gamble with the guarantee of about a change in reasonable folks’ security for retirees, present and fu- thought with regard to options. f ture. The average Social Security ben- While the depth of liquidity and effi- CONCLUSION OF MORNING efit last year was only about $10,000 a ciency of our markets is still BUSINESS year—not the princely sums received unrivaled, our markets need to make The PRESIDING OFFICER. Morning by executives who have failed their sure they are based on a presumption business is closed. of integrity and accuracy in the infor- companies—and not enough in some f parts of our country to have a secure mation provided to the country. Our retirement. In New Jersey, for in- entire financial system depends on the PUBLIC COMPANY ACCOUNTING stance, $10,000 a year can only get you broad availability of timely, truthful REFORM AND INVESTOR PRO- so far given the high cost of living in and transparent information. To secure TECTION ACT OF 2002 our part of the country. that and restore the confidence of in- The PRESIDING OFFICER. Under Yet President Bush’s Social Security vestors, it is absolutely urgent that we the previous order, the Senate will now Commission called for substantial cuts address this treatment of employee resume consideration of S. 2673, which in guaranteed benefits. Cuts for some stock options. the clerk will report.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00006 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.016 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6735 The assistant legislative clerk read tion is whether or not the intent of Now we are doing something dif- as follows: those rules is going to be carried out, ferent in this bill. We are saying to the A bill (S. 2673) to improve quality and which is to allow those of us who have board that we are going to give you an transparency in financial reporting and inde- germane amendments to have a vote on independent source of funding. We are pendent audits and accounting services for those amendments. not going to make you dependent di- public companies, to create a Public Com- The amendment on which I would rectly for your funding from the very pany Accounting Oversight Board, to en- like to have a vote cannot be voted on people you are seeking to regulate hance the standard setting process for ac- because there is a pending first-degree counting practices, to strengthen the inde- through your accounting standards. So pendence of firms that audit public compa- amendment and a pending second-de- we are making some progress now by nies, to increase corporate responsibility and gree amendment. So the second-degree giving them an independent source of the usefulness of corporate financial disclo- amendment would have to be laid aside funding. sure, to protect the objectivity and inde- in order to allow a vote. As long as the What my amendment would do is pendence of securities analysts, to improve opponents of this stock option account- take what is the most significant post- Securities and Exchange Commission re- ing amendment don’t allow the first- Enron issue that is left open, which is sources and oversight, and for other pur- and second-degree amendments that poses. accounting for these huge amounts of are pending to come to a vote, we are stock options that go mainly to execu- Pending: foreclosed from offering germane tives, and direct this board that now Edwards modified amendment No. 4187, to amendments. has an independent source of funding address rules of professional responsibility That is not the intent of our for attorneys. to review—‘‘review’’ is the key word— Reid (for Carnahan) modified amendment postcloture rule. I believe it is an abuse this matter and make an appropriate No. 4286 (to amendment No. 4187), to require of the intent of our postcloture rule. I decision within 1 year. timely and public disclosure of transactions hope it will not happen here. I am hop- Mr. MCCAIN. Will the Senator yield involving management and principal stock- ing against hope that there will not be for a question? holders. an objection to my unanimous consent Mr. LEVIN. I wonder if I can yield on The PRESIDING OFFICER. Under request so that this most critical issue the time of the Senator from Arizona, the previous order, the Senator from can be addressed by the Senate. because time is so limited here that I Michigan, Mr. LEVIN, is recognized. If we don’t address this issue, it am going to have very little. I think Mr. LEVIN. Mr. President, I wonder seems to me we are leaving a signifi- the Senator has a half hour and, as- if I might inquire as to how much time cant gap in the reforms we are strug- suming that the Senator can be recog- I have on my allotted time under gling so hard to adopt to try to restore nized, I believe that I only have about postcloture rules. honesty to accounting rules. 10 or 15 minutes of time remaining. I The PRESIDING OFFICER. The Sen- In 1994, the Financial Accounting wonder if the Senator from Texas ator has 36 minutes remaining. Standards Board issued a tentative would permit that I be allowed to yield Mr. LEVIN. I thank the Chair. rule which said that stock options to the Senator from Arizona, if the I will at a later time ask unanimous should be expensed like all other forms consent that the pending second-degree of compensation. That is what they de- Senator from Arizona is willing to ask amendment be laid aside so I can offer cided was the right thing to do. a question to be taken out of his own a germane second-degree amendment Well, Congress intervened. The ex- time. relative to stock options. ecutives intervened strongly, beat back Mr. GRAMM. Reserving the right to My amendment, which is at the desk, FASB with huge pressure, all set out in object, the Senator started out with a would direct the independent account- the FASB account of its rule. By the unanimous consent request and then ing standards board to review the ac- way, one of the most extraordinary launched into a speech. counting rule on stock options and documents I have ever read, as a mat- The PRESIDING OFFICER. There is adopt an appropriate rule within 1 ter of fact, in 24 years in the Senate, is no request pending. year. that Financial Accounting Standards Mr. GRAMM. Maybe if the Senator It should not be necessary to seek Board history of their effort to bring would do his unanimous consent re- unanimous consent. The whole purpose honesty to accounting for stock op- quest and then yield, that would be of our postcloture rules is to allow tions, in their judgment, and how that fine. those of us who have germane amend- effort was beaten back by pressure Mr. LEVIN. I would rather do my ments such as this one to offer that from executives and from Congress so unanimous consent request at the end amendment, to have it voted on. It is a that their very existence was at stake of the time, rather than at the begin- frustration of the clear intent of our if they proceeded in a way which they ning of the time. I make a parliamen- rules to not allow germane amend- thought was right. All set forth in the tary inquiry. If I make a unanimous ments to be voted on after cloture is record. It is quite an amazing docu- consent— invoked. ment. Mr. GRAMM. I don’t object to the We have a strict rule. It is called clo- So what FASB did was, they said: We Senator yielding. I wanted to be sure ture. It ends debate. When cloture was can’t survive if we do what we think is we had the time we were supposed to invoked, I had pending an amendment right. So what we will do instead is we have. which would have given the Securities will urge people to expense options. We Mr. LEVIN. I ask unanimous consent and Exchange Commission greater will urge corporations to expense their that the Senator from Arizona, if he is powers to impose civil fines adminis- options, but we will not mandate it. willing, be able to ask a question on his tratively. It is an important addition FASB said: If you don’t expense op- time. I yield to the Senator from Ari- to SEC powers. They now have that tions, at least disclose the cost of the zona for that question and then I retain power over brokers, but they don’t options as a footnote in your financial the floor. have it over corporate directors. They statements. The PRESIDING OFFICER. Without don’t have it over corporate managers. That was the way they decided to objection, it is so ordered. They ought to have the power to im- survive. This body voted, put some of Mr. MCCAIN. Mr. President, I will be pose civil fines administratively—sub- the pressure on FASB, basically told very brief, due to the shortness of time. ject, of course, to appeal to the them to leave stock option accounting I wonder if the Senator from Michigan courts—relative to corporate directors alone. So we intervened on an account- remembers my comments last Thurs- and corporate officers. ing issue with a vote of something like day when I referred to an old boxing That amendment, as relevant as it is 90 to 10 or thereabouts. term, ‘‘the fix is in.’’ There was no vote to this bill, was frustrated when clo- The executives weighed in. I was at allowed on my amendment, which is a ture was invoked and when all the time one of the meetings in Connecticut clearcut, absolutely unequivocal state- up to that vote was utilized so that my when the executives weighed in heavily ment about the use of stock options for SEC amendment was not allowed to on this issue. So I saw the pressure accounting. Does the Senator really be- come up for a vote. that was brought to bear on what lieve that, since my amendment was Now we are in postcloture. Now we should be an independent accounting blocked by that side, his amendment is are under postcloture rules. The ques- standards board. not going to be blocked by this side?

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00007 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.019 pfrm17 PsN: S15PT1 July 16, 2002 S6736 CONGRESSIONAL RECORD — SENATE July 15, 2002 The fix is in, I say to the Senator think that the Congress should get into Mr. LEVIN. It would be FASB’s call. from Michigan. I hope he knows that. the business of trying to legislate ac- Mr. SARBANES. Mr. President, I This is a terrible mistake, a terrible counting standards. I don’t think we simply want to say I am supportive of mistake, because we are not addressing have the expertise or the competence this amendment. I think this is the what every observer knows is a vital to do it. And it turns established ac- right way to go about it. and critical aspect of reforming this counting standards into a straight-out Let me repeat, I do not think the system, which continues to so badly political exercise, and I don’t think Congress itself should be in the busi- erode the confidence of the American that is wise. ness of legislating accounting stand- people, the investors, which is over half As I understand the Senator’s amend- ards, but this amendment does not do of the American people. ment, it would simply reference the that. It references the issue to the very I wonder if the Senator from Michi- issue of the treatment of stock options body that has been established to ac- gan remembers what I said last week, to the financial accounting standards complish that, which has the expertise that the fact is the fix is in. I didn’t get board, for them to make their own and the competence. The amendment a vote on my amendment and the Sen- independent judgment as to how this also helps to underscore the independ- ator from Michigan won’t get one on matter should be treated, is that cor- ence of FASB and a congressional per- his. Very frankly, since that side rect? ception that they should call it as they blocked my vote, I can understand Mr. LEVIN. The Senator is correct. see it. I hope at the appropriate time them blocking this vote. I think it is Mr. SARBANES. And I understand the Senator will be able to obtain per- wrong on both sides. that the terms of reference are such mission to bring his amendment before The American people deserve to that it does not presuppose a particular the body. know how we stand on the issue of substantive conclusion; it is, in effect, I thank the Senator for yielding. stock options. Does the Senator under- left open, or even level, however you The PRESIDING OFFICER. The ma- stand that? want to describe it—a level playing jority leader is recognized. Mr. REID. Will my friend yield for a field for FASB, the expert body that Mr. DASCHLE. I am sorry. I think question on my time? has been established to make these the Senator from Michigan has the Mr. LEVIN. I am happy to. judgments to make its own inde- floor. Mr. REID. The Senator will recall pendent judgment as to how these mat- The PRESIDING OFFICER. The Sen- the Senator from Arizona talking ters should be addressed, is that cor- ator from Michigan has the floor. about the fix being in, and the RECORD rect? Mr. LEVIN. I ask unanimous consent will clearly reflect that the Senator Mr. LEVIN. The amendment directs that I yield to the majority leader for from Arizona asked that his amend- FASB to review the issue and adopt an whatever time he wishes to take and ment be in order postcloture, and, as appropriate standard. Those are the that time not be taken from the few the Senator from Michigan will recall, words in the amendment. I must tell minutes I have remaining, and that the I objected to that because at that time my good friend from Maryland, how- floor be returned to me at that time. we had 56 other amendments that were ever, that there is a history here that The PRESIDING OFFICER. Without pending. They also wanted them to be cannot be ignored. objection, it is so ordered. in order. The history is that FASB tried to Mr. DASCHLE. Mr. President, I will Mr. MCCAIN. If the Senator will adopt a standard in 1994. They said use my leader time so as not to take yield, that is not correct. Mine was a what the right standard was. They any time still allotted to the Senator motion to recommit. were beaten back and brow-beaten and from Michigan. Mr. REID. I am talking about the ob- pressured, so they had to give up what I hope we can get the unanimous con- jection about which I was involved, and they believed is right. That is in their sent request that the Senator from does the Senator from Michigan recall own history. Then they recommended Michigan is propounding. I will also that objection to the unanimous con- to corporations to expense options, be- say that this is not a question of if he sent request by the Senator from Ari- cause that is the right thing to do. But can get consent and ultimately bring zona? the amendment to the floor. One way Mr. LEVIN. I believe I do recall the they offered an option to corporations or the other we will have a vote on the objection to the request, and I would to simply disclose the value of options in their financial statement in a foot- Levin amendment. It may not be on rather let the RECORD speak for itself this bill this afternoon if we fail, but as to the other matters because I think note. They left that option open. our colleagues need to know we will the issue before us is a somewhat dif- So I have two hopes here. One is that have a vote on this amendment. This ferent issue than we faced on the there will not be an objection to a vote will occur. If I have to offer it myself, McCain-Levin amendment last week. on this amendment. For the life of me, we will have a vote on this amendment. Now we have a Levin-McCain-Corzine I cannot see how anybody can object to So we can do it this afternoon, we can amendment, which is somewhat dif- a vote on an amendment, which simply tells the independent accounting stand- do it tomorrow, or we can do it next ferent. I supported Senator MCCAIN’s week. We are going to have a vote on amendment, and, indeed, I have been ards board to reach an appropriate de- this amendment. Senators need to take very active in trying to get this ac- cision. Now, we did intervene 8 years ago, that into account before they object. counting rule adopted in the way the and I believed it was wrong for us to in- Let me say as strongly as I can, this independent accounting board wants to tervene. Nine of us voted no; 90 voted amendment belongs on this bill. This is have it adopted. That is the key em- yes. We told them: Do not change the exactly what I think we ought to be phasis. doing, and I think on a bipartisan basis Mr. SARBANES. Will the Senator rule; do not expense options. there is strong support for what Sen- yield on my time for a question? In my judgment, it was wrong proce- Mr. LEVIN. I am happy to yield. durally and it was wrong in terms of ator LEVIN is proposing. Mr. SARBANES. As I understand the the substance. But it is my hope that, I want to speak briefly this after- Senator’s amendment—the one he will No. 1, we will be allowed to have a noon, in my leader time, on the amend- be seeking to offer. vote, and, No. 2, it would be my expec- ment itself. I think it is important, as Mr. LEVIN. I will be seeking unani- tation, however, if it is left to the inde- my colleagues have been noting, that mous consent to have the second-de- pendence of FASB, that FASB would the Levin amendment contains pre- gree amendment laid aside so that I continue to do what they said was the cisely the right solution to the difficult can do so. right thing, which is to expense op- problems of determining the proper ac- Mr. SARBANES. As I understand it, tions. counting treatment for stock options. this amendment is not the Congress It is left to their independent judg- It reserves that judgment for the ap- trying to legislate what the accounting ment to reach an appropriate conclu- propriate body, the Financial Account- standard should be; is that correct? sion under the language of my amend- ing Standards Board. They are the ones Mr. LEVIN. The Senator is correct. ment. given the authority, they are the ones Mr. SARBANES. I think that is im- Mr. SARBANES. So it would be with the credibility, they are the ones portant because I, frankly, do not FASB’s call? with the standing to make the right

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00008 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.021 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6737 decisions about this very important company’s. Opponents contend they re- Robert Samuelson, an economist, and complex matter. sult in a ‘‘pump and dump’’ mentality, said the following: I argue this is the heart of our ability with senior executives seeking to in- The point is that the growth of stock op- to deal with the accounting reforms flate their stock prices at any cost so tions has created huge conflicts of interest that are in the Sarbanes and Leahy they can quickly and cynically enrich that executives will be hard-pressed to avoid. bills. themselves. Indeed, many executives will coax as many It has become all too clear that ac- In contrast to those complex ques- options as possible from their compensation counting standards are complex and tions, the Levin amendment is sim- committees, typically composed of ‘‘outside’’ can be easily manipulated by aggres- plicity itself. It is one sentence. It says directors. But because ‘‘directors are [manip- sive and sometimes unscrupulous cor- ulated] by management, sympathetic to that FASB shall: them, or simply ineffectual,’’ the amounts porate executives. Unfortunately, Review the accounting treatment of em- may well be excessive. . . . FASB’s weak, dependent condition has ployee stock options and shall, within one Stock options are not evil, but unless we contributed to those manipulations. In year of enactment, adopt an appropriate gen- curb the present madness, we are courting fact, it is arguable that the under- erally-accepted accounting principle for the continual trouble. treatment of employee stock options— mining of FASB’s independence was This is what a retired vice president End of issue. the necessary precondition to the crisis at J.P. Morgan and Company said: in confidence afflicting our capital The business of setting accounting standards is lodged, by the Levin There can be no real reform without markets today. honest accounting for stock options. A One of the many virtues of the Sar- amendment, in the board that the Sar- banes bill expressly seeks to strength- decade ago, the Financial Accounting banes bill is that it corrects that situa- Standards Board recommended options tion. It provides for a new, improved en and improve. I fully support the Levin amendment and the philosophy be counted as a cost against earnings FASB, giving it for the first time full like all other forms of compensation, financial independence from the ac- behind it. Congress should not be en- but corporate lobbyists resisted and counting industry. That certainly is gaged in setting technical accounting Congress did their bidding. Alan Green- the first and most vital improvement rules. We should be seeking to do the span and Warren Buffett, among oth- we need with respect to establishing reverse: Establish an independent ers, are calling for the same change clarity and regularity of accounting FASB that can help restore confidence standards. in the accuracy of financial informa- now, but it remains to be seen whether Another needed improvement is for tion. the accounting profession can act with- those of us in Congress to allow FASB I observe in this context that because out congressional interference. Treat- to do its job. In 1994—and my col- of that principle, as I said a moment ing options like other forms of pay leagues have referenced this—when ago, while well intended, I believe the would make executive compensation this issue was last taken up by the McCain amendment went too far and transparent, diminish the temptation Senate, I am proud to say I was one of did exactly what we were trying to do to cook the books, and make managers nine Senators who voted against the in 1994 but on the flip side. Restoring less inclined towards excessive risk Senate intruding itself on FASB’s deci- independence to the accounting stand- taking. sionmaking process. That is the only ards is one of the overriding objectives Warren Buffett, who was quoted by reason I opposed my colleague’s of the Sarbanes bill, and that is one of Senator MCCAIN last week, said the fol- amendment last week. As well intended my main reasons for supporting it as lowing: If options aren’t a form of com- as it is, in my view it did the same strongly as I do. That was my primary pensation, what are they? If compensa- thing on the other side that they were reason for voting in 1994 against a pre- tion isn’t an expense, what is it? If ex- trying to do 9 years ago. It asserts vious attempt to direct FASB in its de- penses shouldn’t go into the calcula- Congress’s authority to undermine the cision about expensing, and it is the tion of earnings, where in the world independence of that board. I opposed primary reason for supporting the should they go? it 9 years ago, and I oppose it today, Levin amendment today. A New York Times editorial of March but for obviously different results. So I will end on this particular issue 31 of this year stated: At the same time, the Senate was where I began. There will be a vote on We have no quarrel with the business coming at the options issue from the the Levin amendment. It will be today, lobby’s claim that stock options have helped direction of prohibiting expenses back tomorrow, next week, or at some point fuel America’s entrepreneurship, particu- in 1994, and as I said today the momen- in the future, but Senators should not larly in Silicon Valley. But in the interest of tum is the opposite, but the right be misled. If there is an objection truthful accounting and greater financial in- course is the same. Let the experts on today, it by no means ends the debate. tegrity, options should be treated as what We might as well have it. We might as they are, a worthy form of compensation the accounting standards board do that companies must report as an expense. their job and make the appropriate de- well get it. We might as well include it cision. Eight years ago, the technical in the Sarbanes bill because it will be Robert Felton, director of McKinsey accounting questions were essentially included in one fashion or another, ul- & Company’s Seattle office, said: the same as they are today, although timately, before the work has been Because they have so much at stake with obviously 8 years have given us an en- done in the Senate on this very impor- these huge grants, options are likely to have tant, complex, and comprehensive encouraged some managers to cheat and tirely different perspective than the cook the books. one we had back then. Nonetheless, the challenge we face. questions are still real. Accountants The PRESIDING OFFICER. The Sen- Allan Sloan of Newsweek: still debate the relative merits of the ator from Michigan is recognized. . . . options are a free lunch for companies. opposing sides. We still have expert Mr. LEVIN. How much time do I have ... opinion going both ways. On the one remaining? I’m all in favor of employees becoming The PRESIDING OFFICER. The Sen- millionaires via options—I’m an employee, hand, the argument is made that if op- after all—but I’m also in favor of companies tions are not expensed, bottom lines ator has 25 minutes remaining. Mr. LEVIN. Mr. President, I quote providing profit-and-loss statements that look far more attractive than they ac- show the real profit and loss. Ignoring op- tually should be, and the investors can from a few observers what the stakes tions’ costs and low-balling CEO packages be deceived by the distorted financial are in this vote and what the stakes are simply outrageous. When campaigns pictures that result. have been in terms of the way in which start expensing options and disclosing true On the other hand, we hear that it is stock options have not been expensed, CEO and director compensation numbers, I’ll inherently impossible to value options have been stealth compensation, have believe that they’ve seen the light. with no concrete reality behind what fueled the incredible increase in terms According to the Economist, last year, the options will actually be worth of executive pay, and have been a driv- stock options accounted for 58 percent of the ing force behind the deceptive account- pay of chief executives of large American when they are exercised. There is also companies. So over half the compensation of a real debate about the incentive ef- ing practices which have bedeviled this our CEOs of major companies now comes fects of options. Nation and undermined public con- from stock options. To leave that expense off Supporters argue that they better fidence in the credibility of our finan- the financial statements’ bottom line is to align an employee’s interests with the cial statements. distort what is going on at companies. It is

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00009 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.023 pfrm17 PsN: S15PT1 July 16, 2002 S6738 CONGRESSIONAL RECORD — SENATE July 15, 2002 part of the reason we have not had accu- simple. If you made top executives and man- Stock options are not evil, but unless we rately reflective financial statements at our agers into owners, they would act in share- curb the present madness, we are courting corporations. It is part of the reason for the holders’ interests. Executives’ pay packages continual trouble. Here are three ways to soup we are in right now. became increasingly skewed toward options. check the overuse of options. Where financial statements have In 2000, the typical chief executive officer of (1) Change the accounting—count options one of the country’s 350 major companies as a cost. Amazingly, when companies issue been giving a false picture of what a earned about $5.2 million, with almost half of company’s financial situation is, it has stock options, they do not have to make a that reflecting stock options, according to deduction to profits. This encourages compa- provided stealth compensation in huge William M. Mercer Inc., a consulting firm. nies to create new options. By one common amounts to executives, it has watered About half of those companies also had accounting technique, Enron’s options would down the value of stock to the owners stock-option programs for at least half their have required deductions of almost $2.4 bil- of a corporation. That is why now we employees. lion from 1998 through 2000. That would have Up to a point, the theory worked. Twenty virtually eliminated the company’s profits. have such tremendous support from the years ago, America’s corporate managers organizations which represent stock- were widely criticized. Japanese and German (2) Index stock options to the market. If a holders. companies seemed on a roll. By contrast, company’s shares rise in tandem with the That is why, for instance, TIAA– their American rivals seemed stodgy, com- overall stock market, the gains don’t reflect CREF, the largest pension fund in the placent and bureaucratic. Stock options any management contribution—and yet, most options still increase in value. Execu- United States for teachers is sup- were one tool in a managerial upheaval that refocused attention away from corporate em- tives get a windfall. Options should reward portive of changing the accounting for only for gains above the market. stock options. It is why the Council for pire-building and toward improved profit- ability and efficiency. (3) Don’t reprice options if the stock falls. Institutional Investors, which is the All this contributed to the 1990’s economic Some corporate boards of directors issue new leading shareholders organization for revival. By holding down costs, companies options at lower prices if the company’s pension funds, now favors expensing restrained inflation. By aggressively pro- stock falls. What’s the point? Options are stock options in order to give an accu- moting new products and technologies, com- supposed to prod executive to improve the rate reflection of what a company’s fi- panies boosted production and employment. company’s profits and stock price. Why pro- nancial statement is. It is why the But slowly stock options became corrupted tect them if they fail? AFL–CIO supports the amendments of- by carelessness, overuse and greed. As more Within limits, stock options represent a executives developed big personal stakes in useful reward for management. But we lost fered last week and the amendment options, the task of keeping the stock price those limits, and options became a kind of which hopefully will be offered today if rising became separate from improving the free money sprinkled about by uncritical we are allowed to have a vote on this. business and its profitability. This is what corporate directors. The unintended result Alan Greenspan says this is the top seems to have happened at Enron. was a morally lax, get-rich-quick mentality. post-Enron reform. Expensing stock The company adored stock options. About Unless companies restore limits—prodded, if options is the top post-Enron reform. 60 percent of employees received an annual need be, by new government regulations— That is the Chairman of the Federal award of options, equal to 5 percent of their one large lesson of the Enron scandal will base salary. Executives and top managers have been lost. Reserve. Paul Volcker, former Federal got more. At year-end 2000, all Enron man- Reserve Chairman, supports a change agers and workers had options that could be [From the Washington Post, April 18, 2002] in stock option accounting. Arthur exercised for nearly 47 million shares. Under Levitt, former SEC Chairman, supports a typical plan, a recipient gets an option to MONEY TALKS the change; Warren Buffett, as we men- buy a given number of shares at the market Alan Greenspan, perhaps the nation’s most tioned; and a host of economists. price on the day the option is issued. This is revered economist, thinks employee stock Standard & Poor’s believes you have to called ‘‘the strike price.’’ But the option usu- options should be counted, like salaries, as a ally cannot be exercised for a few years. If expense stock options if you are going company expense. Warren Buffet, perhaps the stock’s price rises in that time, the op- the nation’s foremost investor, has long ar- to show an accurate earnings calcula- tion can yield a tidy profit. The lucky recipi- gued the same line. The Financial Account- tion; Citizens for Tax Justice; Con- ent buys at the strike price and sells at the ing Standards Board, the expert group that sumer Federation of America; Con- market price. On the 47 million Enron op- writes accounting rules, reached the same sumers Union, and on and on. tions, the average ‘‘strike’’ price was about conclusion eight years ago. The London- The Washington Post of April 18 says $30, and at the end of 2000, the market price based International Accounting Standards the following: was $83. The potential profit was nearly $2.5 Board recently recommended the same ap- billion. proach. In short, a rather unshort list of ex- . . . expert consensus favors treating options Given the huge rewards, it would have been as a corporate expense, which would mean perts endorses the common-sense idea that, astonishing if Enron’s managers had not be- whether you get paid in cash or company that reported earnings might actually reflect come obsessed with the company’s stock reality. . . . But nobody wants to ban this cars or options, the expense should be re- price and—to the extent possible—tried to corded. Yet today’s Senate Finance Com- form of compensation; the goal is merely to influence it. And while Enron’s stock soared, have it counted as an expense. mittee hearing on the issue is likely to be why would anyone complain about account- filled with dissenting voices. There could That is the end of that particular ing shenanigans? Whatever the resulting hardly be a better gauge of money’s power in quote. I would like the entire quote abuses, the pressures are not unique to politics. printed in the RECORD, and I ask unani- Enron. It takes a naive view of human na- Why does this matter? Because the current ture to think that many executives won’t mous consent that all the editorials rules—which allow companies to grant ex- strive to maximize their personal wealth. ecutives and other employees millions of dol- and comments that I referred to be This is an invitation to abuse. To influence printed in the RECORD in full. stock prices, executives can issue optimistic lars in stock options without recording a There being no objection, the mate- profit projections. They can delay some dime of expenses—make a mockery of cor- rial was ordered to be printed in the spending, such as research and development porate accounts. Companies that grant stock options lavishly can be reporting large prof- RECORD, as follows: (this temporarily helps profits). They can en- its when the truth is that they are taking a [From the Washington Post, Jan. 30, 2002] gage in stock buybacks (these raise per-share earnings, because fewer shares are out- large loss. In 2000, for example, Yahoo re- STOCK OPTION MADNESS standing). And, of course, they can exploit ported a profit of $71 million, but the real (By Robert J. Samuelson) accounting rules. Even temporary blips in number after adjusting for the cost of em- As the Enron scandal broadens, we may stock prices can create opportunities to un- ployee stock options was a loss of $1.3 bil- miss the forest for the trees. The multi- load profitable options. lion. Cisco reported $4.6 billion in profits; the plying investigations have created a massive The point is that the growth of stock op- real number was a $2.7 billion loss. By re- whodunit. Who destroyed documents? Who tions has created huge conflicts of interest porting make-believe profits, companies may misled investors? Who twisted or broke ac- that executives will be hard-pressed to avoid. have conned investors into bidding up their counting rules? The answers may explain Indeed, many executives will coax as many stock prices. This is one cause of the Inter- what happened at Enron but not necessarily options as possible from their compensation net bubble, whose bursting helped precipi- why. We need to search for deeper causes, be- committees, typically composed of ‘‘outside’’ tate last year’s economic slowdown. ginning with stock options. Here’s a good directors. But because ‘‘directors are [manip- It is not surprising, therefore, that the ex- idea gone bad—stock options foster a corro- ulated] by management, sympathetic to pert consensus favors treating options as a sive climate that tempts many executives, them, or simply ineffectual,’’ the amounts corporate expense, which would mean that and not just those at Enron, to play fast and may well be excessive, argue Harvard law reported earnings might actually reflect re- loose when reporting profits. professors Lucian Arye Bebchuk and Jesse ality. But the dissenters are intimidated by As everyone knows, stock options exploded Fried and attorney David Walker in a recent neither experts nor logic. They claim that in the late 1980s and the ’90s. The theory was study. the value of options is uncertain, so they

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00010 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.026 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6739 have no idea what number to put into the ac- duced by nearly a quarter if the companies It’s easy to see why companies would have counts. But the price of an option can actu- had reported their stock options as expenses been upset at having to count options as ally be calculated quite precisely, and man- on financial statements. compensation. In most pay filings I see these agers have no difficulty doing the math for A decade ago, the accounting industry pro- days, the economic value of CEO and direc- the purposes of tax reporting. The dissenters posed a sensible rule to make companies re- tors’ options exceeds their cash payments. also claim that options are crucial to the port options as expenses, but it was beaten So counting options would more than double health of young companies. But nobody back by fierce corporate lobbying. Now Sen- the typical package. wants to ban this form of compensation; the ators John McCain and Carl Levin have pro- To see how this works, let’s look at Dell goal is merely to have it counted as an ex- posed a bill that would end the double stand- Computer and Knight Ridder, two companies pense. Finally, dissenters say that options ard, disallowing the tax deduction for any I just happen to have looked at recently. need not be so counted because granting company that fails to report options as an Dell’s most recent statement shows that Mi- them involves no cash outlay. But giving expense. chael Dell, its billionaire owner and founder, employees something that has cash value They are backed in that effort by investors earned $2.6 million in salary and bonus. Not amounts to giving them cash. like Warren Buffet and big institutions like starvation wages, but not much for a big- The dissenters include weighty figures in pension plans, which are rightly incensed by time CEO. On a different page, you see that both parties. Sen. Joe Lieberman (D–Conn.) abusive executive compensation schemes. he got options the company valued at $26 is the chief opponent of options sanity in the They are tired of unseemly practices like the million. That’s major moolah. Dell directors Senate, and last week President Bush him- repricing of options to ensure that execu- were paid a $40,000 annual retainer fee, but self declared that Mr. Greenspan is wrong on tives still get windfalls if the stock price also got options on $850,000 worth of Stock. this issue. What might be behind this? Many falls. Making interest-free loans for execu- The option’s economic value: around $300,000. of the corporate executives who give gener- tives to acquire stock (often forgiven if the Note that I’m not accusing Dell of hiding ously to politicians are themselves the bene- bet does not pay off) is another dubious com- anything—it’s following the rules. ficiaries of options—often to the tune of mil- pensation practice. Dell shows why options have economic We have no quarrel with the business lions of dollars. High-tech companies, an im- value when they’re granted, even if the stock lobby’s claim that stock options have helped portant source of campaign cash, are fight- subsequently falls. The directors got their fuel America’s entrepreneurship, particu- ing options reform with all they’ve got. But options when Dell stock was about $52, dou- larly in Silicon Valley. But in the interest of if these lobbyists are allowed to win the ar- ble today’s price. By getting options on truthful accounting and greater financial in- $850,000 of stock rather than buying 16,298 gument, they will undermine a key principle tegrity options should be treated as what shares, directors avoided losing money—and of the financial system. Accounting rules are they are: a worthy form of compensation didn’t have to tie up $850,000. Meanwhile, meant to ensure that investors get good in- that companies must report as an expense. formation. Without good information, they Congress must end the dot-com-era notion they had the same upside as regular inves- cannot know which companies will best use that options equal free money. That would tors who risked $850,000. The company says capital, and the whole economy suffers in be a first step toward reassuring investors its compensation packages are skewed to- the long run. that top executives cannot treat publicly ward options, so that employees and direc- traded companies as Ponzi schemes created tors don’t make out unless regular stock- [From the New York Times, March 31, 2002] for their own enrichment. holders do. Now to Knight Ridder, which has been on a STOCK OPTION EXCESSES [From Newsweek, May 20, 2002] cost-cutting kick for years. Last year chair- In his Congressional testimony last month, man Tony Ridder got $935,720 in salary and SHOW ME THE MONEY (ALL OF IT) Jeffrey Skilling, Enron’s former chief execu- no bonus. He also got options on 150,000 tive, offered a primer on the misuses of stock (By Allan Sloan) shares. Knight Ridder values the options at options. Options, he said, are the most egre- Watching corporate America these days is about $1.6 million, but by most rules of gious way for companies to pump up their like watching drunks at a revival meeting. thumb, they were worth twice that much. profits artificially. They also netted him a They’re vowing to sin no more, to tell share- Knight Ridder directors got a $40,000 annual tidy $62.5 million in 2000 and helped Enron holders the straight truth instead of playing fee—and 4,000 options. The options were pay no income taxes in four of the last five accounting games, to embrace ‘‘trans- worth about $42,500 by Knight Ridder’s math, years. parency’’ so outsiders can see what’s going about $85,000 by conventional math. Knight Stock options, in theory, aren’t a bad idea. on. But talk is cheap. When it comes to ac- Ridder says its figures are lower because it By giving employees the chance to buy a tion on two key reforms—accounting for assumes its options are exercised much company’s stock in the future at today’s stock options, and showing the value of chief quicker than other analysts assume. price, corporations can provide an extra in- executives’ compensation packages—cor- I’m all in favor of employees becoming centive for hard work and can augment com- porations are as opaque as ever. millionaires via options—I’m an employee, pensation. The New York Times Company The accounting first. As things stand now, after all—but I’m also in favor of companies awards option to its top executives. But like options are a free lunch for companies—em- providing profit-and-loss statements that other rational business practices that got ployees place a high value on them, but com- show the real profit and loss. Ignoring op- out of hand during the boom years of the panies can issue as many as they want with- tions’ costs and low-balling CEO pay pack- late 1990’s, options have been abused by some out hurting corporate profits. That’s because ages are simply outrageous. When companies companies and are in need of reform. companies don’t have to count options value start expensing options and disclosing true A good place to start would be for Congress as an expense. With reform in the air because CEO and director compensation numbers, I’ll to end the conflict between how the tax laws of Enron, old-math types like Warren Buffett believe they’ve seen the light. Until then, I’ll and the accounting rules treat employees op- and Alan Greenspan are pushing to change assume that they’re still on the bottle. tions. Alan Greenspan, the Federal Reserve accounting rules to force companies to count chairman, has identified that as one of the the value of stock options as an expense in [From the Wall Street Journal, May 3, 2002] most pressing post-Enron reforms affecting their profit-and-loss statements. Accounting ACCOUNTING FOR OPTIONS corporate governance. rule makers proposed this a decade ago, but That conflict creates a loophole that has backed down under political pressure gen- (By Joseph E. Stiglitz) allowed companies to treat stock options as erated by corporations, especially in options- De´ja` vu. The post-Enron imbroglio over essentially free money during the recent dot- happy Silicon Valley. Then there’s a second, stock options is a reminder that history—if come bubble. A company does not have to re- little-known aspect of the options-account- forgotten—does indeed repeat itself. Eight port grants of stock options as an expense on ing debate. If companies have to count the years ago, while serving on President Clin- its profit-and-loss statements, as it does value of options as an expense, they would ton’s Council of Economic Advisers, I was in- with other forms of compensation, but it can come under huge pressure to report their volved in a heated debate over information deduct the options as an expense from its tax value as compensation to the CEO, and to disclosure. The Financial Accounting Stand- liability when employees exercise them. members of the board. Under current rules, a ards Board had proposed a new standard that As a result, corporate executives can company has to show shareholders a table would require firms to account for the value award themselves oodles of stock options that includes how much it gave the CEO in of executive options in their balance sheets without fear of denting their profit reports. salary, bonus, long-term compensation and and income statements. Once the options are exercised, the company other benefits. But the table has to show When FASB made its proposal for what can treat the appreciation in the shares’ only the number of options granted to the would have clearly been an improvement in value—the employees’ profit—as an expense CEO, not their economic value. To find that, accounting practices, Silicon Valley and for tax purposes. At Enron, stock option de- you have to hunt on other pages—and you Wall Street were united in their opposition. ductions alone turned what would have been may not find it at all if the company opts to The arguments put forward then are the a federal income tax bill of $112 million in report a different way. ‘‘The original idea same as those put forward today, and they 2000 into a $278 million refund. Mr. Green- was to have the value of options in the table, are as specious and self-serving now as they span said last week that Federal Reserve not the number of options,’’ says Graef Crys- were eight years ago. Board research found that the average earn- tal, a compensation expert who worked on OUTRAGEOUS ings growth rate of the S&P 500 companies the disclosure rules. But, he says, the SEC The most outrageous argument—but the between 1995 and 2000 would have been re- backed down after companies objected. one that had the greatest impact—was that

VerDate Jun 13 2002 06:12 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00011 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.003 pfrm17 PsN: S15PT1 July 16, 2002 S6740 CONGRESSIONAL RECORD — SENATE July 15, 2002 disclosing the information would adversely estimates are of the market value of the de- such a conclusion and should reach affect share prices. That is, if people only clines in asset values that come with use and such a conclusion. But as our col- knew how much their equity claims on the obsolescence—something which is a line leagues have pointed out, that is up to firm could be diluted by options, they would item on every accounting framework in cor- the board under this amendment. We pay less for their shares! True, and that is porate America and most of the world. Of precisely why the disclosure is so important. this much we can be sure: zero, the implied would not be adopting a standard. Markets can only allocate resources effi- valuation used by companies now when de- In all honesty, I expect they would ciently when prices accurately reflect under- scribing the cost of options in their balance continue on the same course they were lying values, and that requires as good infor- sheets and income statements, is a vast un- on 8 years ago when they were vio- mation as possible. If markets overestimate derestimate. lently thrown off course by people who the value of a particular set of ventures, re- Those who argue against including options had control over the purse strings of sources will mistakenly flow in that direc- within the standard accounting frameworks the organization. I would expect that tion. This is partly what caused the dot-com try to have it both ways: They believe that would happen. But under this amend- and telecom bubbles. Irrational exuberance market participants are smart enough to played its part, but so too did bad account- read through dozens of footnotes to figure ment, it is their call, not ours. ing—i.e., distorted information. out the implications of options for the value I support the McCain amendment be- To be sure, information will never be per- of their shares, but so dumb that they would cause I believe, as I believed then, that fect and asymmetries of information are per- be misled by the more accurate numbers the accounting standards board wanted vasive. But one of the key insights of the that would be provided under the reform pro- to expense options and that we, in ex- modern theory of information is that partici- posals, and unable to redo the calculations ecutive pressure, interfered with that pants do not always have an incentive to dis- themselves. decision on their part. That is why I close fully and accurately all the relevant TRANSPARENCY believe Senator MCCAIN’s amendment information, and so it is important to have There is one more reason for the U.S. to be is also appropriate. But we cannot even standards. resolute in improving our accounting stand- This is where the second specious argu- get a vote on that amendment. Last ards by including better accounting for op- ment enters: Critics of FASB‘s proposal week, we were not able to bring that tions. During the East Asia crisis the U.S. claimed that it is impossible to value op- preached the virtues of transparency but amendment to a vote. tions accurately, and accordingly, it would then refused to do anything about regulating But this amendment is different. be misleading to include the options within the murky world of offshore banking. Amer- This amendment says to the inde- the standard accounting frameworks. To bet- ica also preached the virtues of our account- pendent board: review this issue. Make ter understand the falsity of this argument, ing standards only to find that the world was let’s take a closer look at how stock options an appropriate decision within a year. laughing at Enron and Arthur Andersen. really work. For the life of me I not only do not The basic economics of stock options are Tightening our rules on accounting of op- see how folks—regardless of the side of simple. Issuing stock options does not create tions would signal that the U.S. is serious this particular issue that they are on— resources out of thin air. Executives like about openness, serious about improving its could vote against such an amendment stock options because they have value. But accounting standards—despite the special in- terests opposed to changes—and willing to when it does not tell them what to do the value however measured, comes at the but just asks them to review it and de- expense of other shareholders. The right of learn from its mistakes. Many of the same forces that allied them- cide within a year as to what the ap- managers to buy shares is the right to dilute selves in the 1990s against changes in ac- the ownership claims of existing share- propriate accounting method is. I do counting for options are now trying to sup- holders. When markets work well—when in- not understand why, in the middle of a press this attempt to make our market econ- formation is good—the market will value debate on the reforms which are essen- omy work better. In the earlier episode, the today the issuance of a right to dilute, even tial to restore public confidence after National Economic Council, the U.S. Treas- when that dilution may never occur, and if it ury, and the Department of Commerce inter- the Enron fiasco, this Senate should does occur, would happen sometime in the vened in what was supposed to be an inde- not be allowed to vote on this issue on future. pendent accounting board, and put pressure this bill. The existing owners of the firm will par- When the majority leader announced ticipate less in the upside potential of the on FASB to rescind its proposed regulations. market them they would have in the absence They won, and the country lost. Today, there that one way or another we will get to of the options. In principle, they can cal- is a risk once again of political intervention. a vote on this amendment, I was glad culate the circumstances when the execu- At least this time, the voices of responsible to hear that. I didn’t know he was tives are likely to exercise their options, and economic leadership, such as Alan Green- going to say that, but I certainly was therefore can calculate the diminution in span, are speaking out. I only hope that this glad he said that. But it seems to me time they will succeed. their potential gains from owning shares in that adds a reason we ought to vote for the company. That is why when this infor- Mr. LEVIN. Mr. President, the Re- this amendment on this bill. mation is disclosed in ways that can easily This is the right place. Surely it is be understood by investors, it will lead to a publican staff of the Joint Economic fall in the company’s share price. Committee put out a report called, the right time. There has perhaps Making such calculations, however, is not ‘‘Understanding the Stock Option De- never been a more critical moment in easy or costless. In principle, each share- bate.’’ our economic history in the last few holder could go through each of the items in They have gone through a lengthy decades than we are facing right now, the firm’s accounts to construct his own ‘‘es- analysis dated July 9, 2002, in which to help us restore public confidence. It timates’’ but that would be a foolish waste of they conclude the following: will be an additional contribution to resources, and the transaction costs would that restoration of public confidence if put a major damper on capital markets and Existing accounting principles provide an the market economy. That is why we have unambiguous answer. Stock option awards we take this action. If we say yes, 8 accounting standards. Such information is should indeed be treated as a cost in finan- years ago we did intervene, but now we like a public good: Better standards—more cial statements. don’t want to tell the accounting transparency—lead to better resource alloca- It is quite clear to me that two standards board that they should not tion and better functioning markets; and if things are true. No. 1, that how we expense options. That was 8 years ago. participants have more confidence in mar- treat stock options is an essential part What we are telling them now is: Do kets, they will be more willing to entrust of the post-Enron reform effort. That is the right thing. their money to markets. No. 1. No. 2, it seems clear to me that We know what they tried to do 8 Which brings us back to the argument that it is ‘‘impossible’’ to value options. Compa- there is at least a likelihood that a ma- years ago. It is laid out in the record nies do, of course, have ways of calculating jority of this body, if allowed to vote by them. They wanted to do what they the value of options and do it themselves all on this amendment, will vote to refer believed was the right thing. If they the time for their own internal planning pur- this matter to an independent account- had done so, they would have been put poses. ing standards board which has its own out of business. AS for the question of whether an estimate source of revenue, free from the kind of Now we have an opportunity, it based on a publicly-disclosed formula would pressure which it was under in 1994 and seems to me, to do the right thing our- be misleading, because it is only an esti- selves, which is to tell the board that mate, that is true of many line items that 1995, to reach an appropriate conclu- are central to our accounting frameworks, sion. has the responsibility to adopt ac- such as depreciation, ‘Calculations about the Do I believe that conclusion will be counting standards, to adopt what they value of options would be just as, or even the same as they reached in 1994? I do. believe is the appropriate standard. more, accurate than standard depreciation It is very clear to me they would reach That is the right thing to do.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00012 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.007 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6741 Mr. REID. Will the Senator yield for The PRESIDING OFFICER. The Sen- would get a vote on his amendment, a question on my time? ator from Michigan has the floor. and where Senator ENZI would get a Mr. LEVIN. I will be happy to. Mr. LEVIN. Mr. President, the only vote on his amendment. Then we would Mr. REID. Is the Senator aware that way we are going to get to debate and have a range of choices. the stock market, the Dow as of now is votes is if we allow the pending amend- I would be amenable to such an down 338 points as of today? ments which are the first- and second- agreement if the Senator wanted to Mr. LEVIN. I was not aware of that. degree amendments to be voted on so shop that around on his side of the But it surely adds an additional ur- we can move to other amendments aisle. We could do a hotline and see if gency, if we need additional urgency, without having one gatekeeper denying it would fly. But in the absence of some for why we should do everything in our opportunity for all the others on this agreement where the other two grada- power to restore public confidence in floor to offer amendments and have tions on this spectrum of opinion the financial systems in this country. them voted on. That is not the inten- would have their day to debate this I left off one of my cosponsors before. tion of cloture and postcloture. amendment and have it voted on, I Senator BIDEN is a cosponsor of the I do not believe this process has been don’t think we are going to be able to amendment, which is at the desk. used in this way before, where, do that. It might very well be that we I will ask unanimous consent we be postcloture, germane amendments are need a separate bill to deal with this able to vote on that at a later moment. supposed to be taken up and voted on, issue. If a Senator were to offer this I wonder if I could ask the Chair how where first- and second-degree amend- amendment in earnest, I would want an much time I have remaining. ments have not been disposed of so opportunity to amend it. I think hav- The PRESIDING OFFICER. The Sen- they can be used, not with the consent ing FASB look at this issue—which ator has 12 minutes remaining. of their sponsors, but they are used by they are certainly going to do after Mr. LEVIN. I understand Senator others to block consideration of the this bill is agreed to because this is MCCAIN would like to speak at this amendments. going to be a self-funded agency, and time. I see the Republican manager on The Senator from Texas says he they are going to have greater inde- the floor, so I do not know if this fits would like to have a debate and vote. pendence—I think having them look at his particular timetable or not. There is one way to do it. Let’s dispose I ask unanimous consent I be allowed it is something that we ought to do. of the second-degree amendment, take But I think we shouldn’t pretend to to yield to Senator MCCAIN on his—— Mr. REID. I object. up the Carnahan amendment and vote ourselves that the Levin amendment is The PRESIDING OFFICER. Objec- on it, take up the Edwards amendment a neutral amendment. tion is heard. and vote on it. Asking them to look at it when it Mr. LEVIN. Mr. President, at this Mr. GRAMM. Will the Senator yield? mandates by law after having looked at time I ask unanimous consent to lay Mr. LEVIN. I will be happy to yield it that within 12 months they adopt in aside the pending second-degree on the Senator’s time. appropriate generally accepted ac- amendment, No. 4286, and call up for The PRESIDING OFFICER. Is there counting principles for the treatment consideration my amendment 4283, on objection? of employee stock options—there is stock options, which is a second-degree Mr. DORGAN. Reserving the right to nothing neutral about that; in other amendment to the Edwards amend- object, Mr. President, the Senator from words, study it and within a year adopt ment No. 4187. Michigan is claiming his 1 hour. I un- a rule. The PRESIDING OFFICER. Is there derstand he has been yielding back and As I understand it, Senator ENZI and objection? forth. I assume we could, under these others would have the SEC do a study Mr. GRAMM. Mr. President, reserv- circumstances, have one Senator run and make a recommendation based on ing the right to object, let me say the entire 30 hours, as long as they their study. there is something on which I agree keep yielding to other Senators. If this amendment were going to be with the majority leader. That is, at There are others of us, of course, who dealt with in isolation, I would want an some point we are going to make a want to be heard and who want to offer opportunity to at least leave it to judgment on this issue. But we are cur- amendments. FASB as to what they determine rath- rently in a situation where we have 97 Mr. GRAMM. I think that is fair. I er than mandating that they ought to first-degree amendments that have withdraw my request. issue a new accounting principle. It been filed. We have 24 second-degree Mr. LEVIN. I yield the floor. may be that they would determine not amendments. We have 3 different ap- The PRESIDING OFFICER. The Sen- to do that. proaches to this issue. ator from Texas is recognized. Let me reiterate that I don’t have Senator MCCAIN wants to make a de- Mr. GRAMM. Mr. President, I think any concern about voting on this issue. cision and set a policy. if we want to deal with this issue Maybe I should reserve my time. I Senator LEVIN, as I read it, wants a today, probably the way to deal with it want to speak on this at some point. fair trial and then a hanging. is to have a unanimous consent agree- We have several Members here who are And Senator ENZI and others would ment and have a vote on all three going to speak. I have to be here for simply like to have a fair trial. amendments—have a vote on Senator the whole time. What is the right outcome? I think MCCAIN’s amendment, have a vote on I reserve the remainder of my time. that is subject to debate. That is why I the Levin amendment, have a vote on The PRESIDING OFFICER. The Sen- think we ought to have the debate. The Senator ENZI’s amendment so that we ator from Nevada is recognized. idea that when we have three different would have the full range of choices. Mr. REID. I don’t think this is nec- approaches, we are going to decide that But to suggest that nothing is standing essary. But so there is no question one of them is going to be debated on, in the way except a few obstacles to ev- about it, I ask unanimous consent that voted on, but not all three of them is erybody having their will is to neglect the time Senator DASCHLE used be something we should not expect to hap- the fact that 97 amendments have been counted against the 30 hours. pen. filed as first-degree amendments and 24 The PRESIDING OFFICER. Is there I do not support Senator MCCAIN’s second-degree amendments. objection? amendment, but he has every right, it So, therefore, by definition, I assume Mr. GRAMM. Reserving the right to seems to me, to have it considered. And if I suggest and ask unanimous consent object, I did not hear. I am certainly willing to vote on it. that each and every amendment be Mr. REID. I wanted Senator There may be people who do not want voted on, someone would object since DASCHLE’s time to be counted against to vote on this issue, but I am not one our leadership has plans for this week the 30 hours. of them. So I certainly do object. I ob- and next week. I think it might be pos- Mr. GRAMM. Yes. ject. sible if we want to deal with this issue The PRESIDING OFFICER. Without The PRESIDING OFFICER. Objec- today to have a unanimous consent objection, it is so ordered. tion is heard. agreement where Senator MCCAIN The Senator from North Dakota. Several Senators addressed the would get a vote on his amendment, Mr. DORGAN. Mr. President, we are Chair. where the Senator from Michigan in a postcloture period of some 30

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00013 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.028 pfrm17 PsN: S15PT1 July 16, 2002 S6742 CONGRESSIONAL RECORD — SENATE July 15, 2002 hours. I understand we will complete the company of any net proceeds of stock Senate who, in the future, will consider that at 6 o’clock or so this afternoon. sales or option exercises within six-months this and find ways to avoid our being What is happening here is really an or a year prior to bankruptcy filing. put in this position again. outrage, from my standpoint. We are in That is Mr. Breeden, former SEC But what I would like to do is have a postcloture. I have a germane amend- Chairman. debate about this amendment at some ment. I have been here every single day Henry Paulson, CEO, Goldman Sachs, point. And perhaps there are people in since this bill came to the floor of the who worked in the Nixon administra- the Senate who want to stand up and Senate prepared and ready to offer my tion, said: say: Do you know what I think? I think amendment. Now, postcloture, I have a The business community has been given a if somebody takes home $50 or $80 mil- germane amendment. And the only black eye by the activities of and behavior of lion 6 months before bankruptcy, in way, apparently, that I can offer my some CEOs and other notable insiders who the form of incentive payments and bo- sold large numbers of shares just before dra- amendment is if the Senator from nuses, they ought to be able to keep it, matic declines in their companies’ share even if they drove this company right Texas is willing to allow me to offer it. prices . . . in the case of CEOs and other in- That is not the way the Senate should side directors, we should raise the bar and straight into the ground. work. mandate a one year ‘‘claw-back’’ in the case Is there one person who will stand up I want to briefly describe my amend- of bankruptcy, regardless of the reason. in the Senate today to support that? ment. He is right. This bill doesn’t require Does one person want to support that My amendment requires the it. There is no ‘‘claw-back’’ in this bill. position? Well, we will see. In the year before the Enron Corpora- disgorgement of profits, bonuses, in- There ought to be 1 year prior to bank- tion filed for bankruptcy, Kenneth centives and so on that the CEOs of ruptcy. corporations receive 12 months prior to I don’t mean to diminish the impor- Lay, the chairman of that company, bankruptcy. tance of other issues that we have just and 140 other company officials re- That is not in the bill at the present discussed. The other issues are very ceived $310 million in salaries, bonuses, time. It ought to be in the bill. important. On the issue of how stock long-term incentives, loan advances, and other payments. The bill contains a disgorgement pro- options are treated, in 1994, I was one Does anybody here want to stand up vision requiring the return of incen- of nine Senators who voted against the and say: ‘‘That makes a lot of sense.’’? tives and bonus payments received proposal back then that would hand- Anybody? Does anybody agree they prior to a restatement of earnings. I cuff FASB. I come to that issue with should keep all that money? Do we support that being in the bill, but there fairly clean hands. hear nothing because they don’t have is nothing about the requirement to di- Let me say that while that issue is the floor, or is it that nobody here be- vest all those bonuses and incentive important, I have been here every sin- lieves the top officials of Enron should gle day this bill has been on the floor payments 12 months prior to bank- keep $310 million prior to filing for to offer this simple amendment on ruptcy. That ought to be in this bill. bankruptcy, where their employees Let me describe some of the problems disgorgement in the face of bank- lost they jobs, lost their life savings in that we are dealing with. We have been ruptcies. If there are people in corpora- their 401(k)s, their investors lost their holding some hearings over in the Com- tions at the top of those companies money? merce Committee on the subject of who make $100 million or $70 million or How about NTL, Incorporated? It is a Enron. Here is what some Enron offi- $50 million, and then the company files Manhattan TV cable operator that cers got before Enron went bankrupt: for bankruptcy, do you not believe that filed for bankruptcy in May, just sev- Kenneth Lay, $101 million; Ken Rice, some of that ought to be required to be eral months after it gave its chief exec- $72.7 million; Jeffrey Skilling, $66.9 given back? The folks at the bottom utive officer $18.9 million. It made him million; Stan Horton, $45 million; Andy lost everything they had. They lost one of the 30 highest paid CEOs in New Fastow, $30.4 million. their life savings. They lost every- York, putting him ahead of IBM’s They did pretty well at the top. Of thing, and the folks at the top got rich. Louis Gerstner. That company had $14 course, they have already filed bank- Shouldn’t there be a requirement in billion in losses. And the CEO, Mr. ruptcy with their corporation. this bill to disgorge those profits? Does Knapp, had a salary of $277,000, a bonus Should some of this be given back? anybody think that is unreasonable? of $561,000, and stock options worth $18 I have a constituent in North Dakota The Senator from Texas left the million. who wrote to me and said: I worked for Chamber as I was beginning to speak. I So does anybody here think he ought Enron for a good many years. I built up was hoping I might get his attention. to keep all that money, just let the in- a retirement fund of $330,000. It is now But as I understand where we are, we vestors and the employees lose, but the worth $1,700. That was my family’s re- have a first- and a second-degree people at the top keep it—just walk tirement fund. What am I to do? I have amendment. The first-degree amend- away on some gilded, golden carpet? lost it all. ment is the Edwards amendment. It is There are plenty of other examples, But not everybody lost it all with re- followed by a second-degree amend- of course. spect to Enron. Those close to the top ment, which is the Carnahan amend- In recent months, we have heard all made a fortune, and the folks at the ment. of these discussions about what has bottom lost their shirts. Most of the In order for anyone to offer an happened at the top in the boardroom investors and employees lost every- amendment postcloture today, we must by companies that wanted to find the thing. ask consent to set aside these amend- line, and then go right to it, and then The question I ask with my amend- ments so we can offer our amendment. go across it, if they could. And there ment is, Should we include a provision My understanding is, if someone here are accounting firms that were the in this bill that requires the give-back does not agree with that, then he can enablers, who said: Yes, go ahead and of this unwarranted compensation in prevent that from happening. My un- do that. And the law firms were on the the form of bonuses, incentives, and derstanding is that that is precisely side, collecting big fees, saying: Yes, go various things 12 months prior to bank- what would happen. ahead and do that—and the CEOs with- ruptcy? The answer is, of course, we So the result is, for the next 5 hours, out moral conscience. The result is, should require it. We ought not to be we will have gatekeepers who require they got rich and the little folks got debating this. This amendment ought us to say: Captain, may I? May I offer broke. to be accepted. an amendment? And they will say: No, My amendment is very simple. My Let me describe some of the other you may not. We will not allow the set- amendment says that 1 year prior to folks who believe this ought to be done. ting aside of the pending amendments. bankruptcy, if you are getting the big Mr. Richard Breeden, former SEC So we will limp along to the end of bucks, big bonuses, big incentives, big Chairman from 1989–1993 says: the 30 hours not being able to offer ger- stock options, and you want to take off We have long required officers and direc- mane amendments to this bill. It is with $50 or $100 million, and leave ev- tors to disgorge ‘‘short-swing’’ profits for outrageous, simply an outrageous proc- erybody else flat on their back, you purchases and sales within a six-month pe- ess that puts us here. I think there will cannot do it; you have to give it back. riod . . . we should consider disgorgement to be a good number of Members of the Very simple.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00014 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.030 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6743 No one can misunderstand the no one in the Senate has a right to would require them to disgorge them- amendment. This amendment is not offer an amendment because someone selves of that profit? Why should that strange or foreign to anyone. This bill has set himself up as a gatekeeper say- ill-gotten gain not be used to help the will fall short of the mark, this bill ing: I will object to setting aside the employees, help the investors, help will be incomplete, if we just proceed Carnahan second-degree amendment. others recover, who lost everything? now to the final vote this afternoon What kind of a way is that to legis- Why should one group in this cir- and we are told: You cannot offer this late? Is someone afraid he will lose on cumstance walk off into the sunset amendment. We will not consider this this amendment, that he will lose the with a pocketful of gold, leaving every- amendment. And we do not want to re- vote? Is that the purpose of the objec- one in their wake, employees, inves- quire the give-back of millions of dol- tion, that he is afraid we will have a tors, and others who lost everything lars by CEOs who receive that money vote, Senators will vote for my amend- they had? prior to bankruptcy. ment, and therefore he will lose, so the Perhaps in the next hour or so, I will If that is the message this Senate words ‘‘I object’’ become a proxy for find someone in the Chamber or in the sends from this bill this afternoon, this avoiding a loss on an important amend- anterooms who will say: I am the one Senate has a lot of explaining to do. ment? who decided you should not get a vote We came to this debate with great How many votes do you think would because I believe that those CEOs promise. I have been to the floor a cou- exist in the Senate for saying: We want ought to be able to get away with that ple of times complimenting the Bank- to enable CEOs, who ran the corpora- money; that is the American way. ing Committee, complimenting all on tion into the ground and took $20 mil- My guess is the Senator from Vir- the Banking Committee who worked to lion out and then filed bankruptcy, to ginia was right when he shook his put this bill together. But I said there keep the money; we want them to keep head. I think this amendment passes were areas where it needed to be im- the bonus, to keep the stock option, to 100 to nothing or very close to that, proved. This is one of them. This is the keep the commission payment, to keep and I hope he and others will help me lightest load you will ever be asked to the money? How many votes do you get it to a vote before 6 o’clock. carry, in my judgment, to support an think exist for that? Ten, maybe 12? Obviously I am a little irritated amendment of this type: The Probably zero. about the process. It stinks. That is disgorgement of ill-earned profits by I think the Senator from Virginia is not a genteel way to say that. But postcloture, if we have germane CEOs who led their corporations to correct. Probably no one would stand amendments, we should be able to be bankruptcy but waltzed off with mil- up and support that proposition. So the here to offer those amendments. That lions of dollars in their pockets and question is why are we not allowing is not now the case. amendments to be voted on this after- left everyone else—the bondholders, I will be here the next couple of the stockholders, the employees—hold- noon? I would be happy to yield to hours trying to see if we can find a way ing the bag. someone to answer that. Is there some- to cause enough trouble in as short a This is not heavy lifting, to do this one who can answer that? Perhaps we time as possible to allow these amend- amendment. It is absurd if the Senate could find out on whose behalf the Sen- ments to be offered. says: No, we will have nothing to do ator from Wyoming objected. I yield the floor. with that. Our position is, let’s call How much time do I have remaining? The PRESIDING OFFICER. The Sen- this corporate responsibility. Let’s The PRESIDING OFFICER. The Sen- ator from Virginia. change the accounting standards. But, ator from North Dakota has 29 minutes Mr. ALLEN. Mr. President, I would by the way, let’s let those people who remaining. like to use a portion of my 1 hour of essentially looted the corporation from Mr. DORGAN. Parliamentary in- time to say I agree with the purpose the top—drove it into bankruptcy, and quiry: Are we entitled, as a Senator, to and the intent of the Dorgan amend- then left town—let’s give them a big 1 hour postcloture, those of us who are ment. I understand Senator GRASSLEY wave and say: So long, God bless you, recognized? of Iowa has a similar amendment that and I hope your future is a good one The PRESIDING OFFICER. The Sen- would disgorge or claw back into some with all those millions of dollars. If we ator from North Dakota is correct. ill-gotten gains of executives for the do that, this Senate has a lot of ex- Mr. DORGAN. Several of my col- benefit of creditors and victims of their plaining to do. leagues wish to speak. I want them to malfeasance or illegal acts. A good many corporate leaders, re- be able to speak. I hope they will offer I wish to speak not on process. Al- spected business officials in this coun- amendments. though, process seems to drive a lot of try, have said this must be in a bill, I will guarantee them this: I will not what happens in this body. this should be in a bill, there is no ex- be objecting to an amendment if they I would like to talk to my colleagues cuse for it not being in a bill. want to offer them. They have a right and the American people about the So I have amendment No. 4214 at the to offer an amendment today. They merits of certain ideas or the demerits desk. Let me ask unanimous consent have a right to get a vote on the of certain ideas that have been raised. that we set aside the Carnahan amend- amendment. I will not object to that. There have been several measures deal- ment, which is a second-degree amend- The parliamentary inquiry is, I have ing with the issue of stock options. ment to the Edwards amendment, for just made a unanimous consent request Senator MCCAIN’s measure was a di- the purpose of allowing consideration that has been objected to. Am I pre- rect hit. I don’t like it, but it was an of amendment No. 4214. Let me make vented from making an identical re- accountable approach in getting rid of the first unanimous consent request quest following the presentation by the or killing stock options. We had Sen- first. two Senators on the floor? ator LEVIN’s amendment, with Senator I ask unanimous consent that we set The PRESIDING OFFICER. The Sen- MCCAIN, which was more of an indirect aside the Carnahan second-degree ator is not prevented from making or ricochet killing of stock options by amendment for the purpose of consid- unanimous consent requests. granting that study to FASB, when ev- ering my amendment. Mr. DORGAN. That will give me eryone knows what FASB’s position is. The PRESIDING OFFICER (Mr. some time then to snoop around the There is another option regarding WYDEN). Is there objection? cloakrooms and the corners and the stock options which I would like to dis- Mr. ENZI. On behalf of the ranking nooks and crannies in the Capitol to cuss as the approach that ought to be member of the Banking Committee, I find out who won’t come to the floor taken. The majority leader, Senator object. and answer the question I have asked. DASCHLE, mentioned that we may have The PRESIDING OFFICER. Objec- Why will we not get a vote on the a vote on it today. We may have a vote tion is heard. simple proposition that those cor- on it tomorrow, but some day we will Mr. DORGAN. Mr. President, let me porate leaders who run their corpora- have a vote. There ought to be a full say, again, I think the process is an tion into bankruptcy and who take $10, and fair discussion of the approach we outrage—an outrage. We are in a situa- $20, $30, or $50 million out of it just ought to take as well as what the po- tion today where we have 4 or 5 hours prior to bankruptcy—why will we not tential adverse impacts could be if ei- left postcloture, and we are told that allow a vote on an amendment that ther the study by FASB or the direct

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00015 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.032 pfrm17 PsN: S15PT1 July 16, 2002 S6744 CONGRESSIONAL RECORD — SENATE July 15, 2002 killing of stock options, as far as re- reaches the strike price, or $10, and it only take a deduction up to the quiring the expensing of them, were to may never get to $10. It may take 5 amount they expense at the time of the occur. years before that share value gets grant. Since the expense would be The more wise and prudent approach above $10 a share, where somebody taken at the time of the grant, the tax is one that was chiefly sponsored by would exercise the option. So it is very deduction would be taken at the time my good friend Senator ENZI of Wyo- difficult to determine what is the ac- of the exercise. If the value was too low ming, along with Senators LIEBERMAN, tual value of that stock option when it at the time of the grant, then you are BOXER, myself, and others who joined is granted. not going to get the full extent of your with us, Senators MURRAY, CANTWELL, The amendment Mr. LEVIN has pro- deduction. So the point is that if we BENNETT, WYDEN, LOTT, BURNS, FRIST, posed will affect current law. Currently are not careful here, with all these ap- CRAIG and ENSIGN. Our amendment is a employers are not required to expense proaches of changing the tax treat- more comprehensive, reasonable alter- stock option grants on their financial ment, changing the expensing rules, or native that has the Securities and Ex- statements. But they are permitted to having it be done by FASB, the result change Commission review and make deduct the employees’ gains at exer- is a convoluted tax increase on compa- regulatory or legislative recommenda- cise—that is, down the road—as a com- nies. tions to Congress. pensation expense. Now, what will happen if these tax Clearly, in today’s climate, with the Now, this makes good sense. After increases or this inability to actually stock market dropping again today, all, a stock option grant does not re- determine the value of the stock option with the scandals from Global Cross- quire a cash outlay like other expenses occurs, which may or may not be exer- ing, Enron, the crisis at WorldCom, it such as wages. cised at some unknown future date, all is axiomatic that there is a pressing Moreover, there is no transparency of this consternation, inaccuracy, un- need for accounting reform to address problem with failing to expense stock predictability—the potential of actu- the corporate abuses and accounting option grants because they are dis- ally a tax increase, in effect—many firm malfeasance. The bill, as it is pre- closed on the company’s financial companies will find this tax and ac- sented, is a very good bill. I think it statement. If somebody says there counting scheme is so onerous they addresses the two key areas that need ought to be better disclosure, or it will discontinue offering options to all to be addressed. should be in bolder print, or it should but maybe a few senior executives who It is focused, number one, on trans- be highlighted more and the disclosure can bargain for them. I think the idea of doing away with parency. That means that people can needs to be more clear, that is fine. But stock options, or making them less de- readily and easily discern the true fi- I don’t think it is necessary, in the sirable, is a substantial detrimental nancial condition of a company in midst of better disclosure and trans- impact on not only companies but which they may want to invest. parency, to kill this otherwise largely many, particularly those companies in Secondly, you need deterrence, stiff- salutary idea and beneficial idea of the high-tech sector and small er criminal and civil sanctions for ille- stock options. Nonetheless, the amend- startups. New businesses have powered gal actions by corporate officers. There ments by Senators MCCAIN and LEVIN our economy in the last decade and, may be a few things added to make it mandate that any company taking a hopefully, they will do so in the future. better, but this bill essentially address- deduction must report the stock option Small companies motivate employees es those two focused goals. Indeed, en- as an expense on their income state- with stock options. That is the way hanced transparency and improved cor- ment, profit and loss statement, and they keep employees. Especially the porate governance may restore some the deduction may not exceed the re- startups who will get folks to serve on investor confidence and foster proper ported expense. the board and pay them for that serv- disclosure for investment decisions. Mr. LEVIN. Will the Senator yield ice in stock options. More stringent penalties will provide a for a question? I think it is a good idea for people to deterrence and substantial disincentive Mr. ALLEN. I yield. care about a company doing well in the for the corporate wrongdoing that has Mr. LEVIN. Is the Senator aware future; not only looking for a pay- led to this understandable firestorm of that the Levin-McCain amendment he check, but also caring about how well a skepticism as a fallout from the scan- is referring to is not the amendment company will do. dalous, fraudulent misrepresentations being offered at this time? There is an- Indeed, in the last 10 years, the num- by executives in many companies. other amendment, and they are totally ber of workers who received stock op- In our effort to reform, we must not different matters involving the tax- tions has grown dramatically—from enact measures that stifle innovation ation issue. This is not a taxation about 1 million in 1992 to 10 million and endanger the American entrepre- amendment at all. Hopefully, it will today. First, as I said, the benefits of neurial spirit. Congress should not come before the Senate today. stock options has enabled companies to harm future opportunities for employ- Mr. ALLEN. Mr. President, I say to recruit and keep quality workers. Ab- ees to own a part of their company for the Senator from Michigan, I under- sent stock options, many smaller com- whom they work. Unfortunately, the stand his amendment offered today was panies lack the capital. They don’t Levin-McCain amendment does just one to have FASB study the issue. Sen- have the money to attract top-notch that by unjustifiably upsetting the cur- ator MCCAIN’s amendment was one to talent. Investors will be less likely to rent tax treatment of stock options. It require the expensing of stock options. invest in companies that retain stock is unnecessary and unwise to change I realize they are two different mat- option plans because the company’s these particular accounting policies. ters. earnings will be artificially deflated by It is virtually impossible to accu- Mr. LEVIN. And that neither one ad- this phantom expense. rately determine the worth or value of dresses tax issues. That is a totally Finally, and perhaps most important, a stock option. separate bill, not in either the McCain- stock options enhance productivity by Now, how are you going to predict Levin or the Levin-McCain accounting providing employees with a greater the future performance of a company? standard. stake in their company’s performance. How are you going to predict the fu- Mr. ALLEN. I say to the Senator Mr. President, these options are par- ture share value of a company, espe- that in the event you, in effect, require ticularly important to rank and file cially with the vicissitudes of the stock the expenses of stock options, that employees who receive relatively mod- market these days? For example, some- does affect the tax treatment and the est salaries and wages. There is one body is granted a stock option by a desirability of stock options. company that has a pretty good pres- company—a new company—and the Mr. LEVIN. Thank you. ence in Virginia—Electronic Arts— stock is trading, after an IPO, at $5 a Mr. ALLEN. I thank the Senator which recently told me that stock op- share. The option to this employee is from Michigan. tions enabled many of its employees to to be able to purchase 1,000 shares of Now, the problematic aspect of these purchase their first homes, to send that company at $10 a share. ideas is that, if you take away the cur- their children to college, or to provide Now, nobody is going to exercise a rent method of accounting and tax- for their aging parents. Thus, the desir- stock option until the share value ation of stock options, a company can ability of stock options as incentives is

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00016 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.034 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6745 readily apparent, and we should not support for the potential alternative sity and New York University, Dr. adopt any measure that would effec- amendment cosponsored by Senators Malkiel, professor of economics at tively eliminate their use as a form of LIEBERMAN, ENZI, BOXER, and ALLEN Princeton, and Dr. Baumol, professor employee compensation. that would direct the Securities and of economics at New York University, That is not to say that I oppose all Exchange Commission to examine the say this: stock option reform. In fact, I fully accounting treatment of stock options Warren Buffett and other critics suggest support President Bush’s proposal that and make recommendations. that the income statement should reflect an requires shareholder approval for stock The Information Technology Indus- expense to the firm measured by the cash option plans. I think the idea of equi- try Council stated that, in particular, equivalent value of options. There are two table treatment in the exercise of op- those entrepreneurial high-tech compa- problems with these views. First, if we were tions by employees or executives is nies that are willing to take the risk in to consider the expense of options to be equivalent to that of cash wages, there is no well founded. But I am joining with the pursuit of technological innovation way to measure that cost, the value of op- Senators LIEBERMAN, BOXER, ENZI, and have offered stock options as an incen- tions at the time they are issued, with any others in offering the amendment that tive to attract and retain employees. reasonable precision. The Nobel Prize win- directs the Securities and Exchange Unfortunately, the expensing of op- ning Black-Scholes model does an excellent Commission to conduct a comprehen- tions would end the practice of pro- job of predicting the prices at which short- sive study and to make recommenda- viding most employees with stock op- term options trade in the market, but the tions regarding the accounting treat- tions. The result would be a reversal of Black-Scholes formula does not provide reli- ment of stock options, which is the the trends toward employee ownership able estimates for longer term options such and a significant reduction in financial as those lasting 6 months to one year, and way to go. market prices often differ substantially from We may introduce this proposal as a opportunities for thousands of workers. predicted values. Because employee stock free-standing bill. Maybe we will not Let me share another observation, options have durations of 5 to 10 years, are vote on it today but here is the ap- and this comes from the Telecommuni- complicated by not investing immediately, proach that we ought to take. The SEC cations Industry Association, and I are contingent on continuing employment will conduct an analysis and make reg- read, in part: and subject to various restrictions, it is vir- ulatory and legislative recommenda- This sense of personal ownership referring tually impossible to put a precise estimate tions on the treatment of stock options to stock options helps develop the innovative on the options value. Moreover, employees’ in which the Commission shall analyze entrepreneurial spirit that has characterized options cannot be sold, violating one of the key Black-Scholes assumptions. the following: No. 1, the accounting the high tech industry over the last decade. treatment for employees’ stock op- Should the rules for options suddenly change They conclude by saying that by tar- and be treated as a cash expense, the number geting all stock options rather than tions, including the accuracy of avail- of employees that receive the benefit would able stock option pricing models; No. 2, stock option abuses, politicians are be drastically reduced, most likely leaving risking destruction of equity com- the adequacy of current disclosure re- only members of the top management as re- quirements to investors and share- cipients. pensation instruments that have been engines of innovation and entrepre- holders on stock options; No. 3, the They conclude with this comment: adequacy of corporate governance re- Adoption of this type of measure is a knee neurship. quirements, including shareholder ap- jerk reaction to situations such as occurred Finally, an observation today from proval of stock option plans; No. 4, any with Enron, which is not what we need. It is the Software Finance and Tax Execu- need for new stock holding period re- not in the best long-term interest of our tives Council. They call themselves by quirements for senior executives; No. 5, country. the acronym SoFTEC. the benefit and detriment of any new Another observation from a large SoFTEC believes that Senator LEVIN’s option expenses rules on, A, the pro- group of trade associations: American amendment essentially dictates a pre-deter- Electronic Association, Bankers Asso- mined result without requiring the FASB to ductivity and performance of large, analyze other relevant issues surrounding medium, and small companies and ciation, Alabama Information Tech- nology Association, the Arizona Soft- stock options. Rather than mandate FASB startup enterprises and, B, the recruit- to achieve a predetermined result, SoFTEC ment and retention of skilled workers. ware and Internet Association, Bio- believes that the SEC currently has the abil- The Commission shall submit its reg- technology Industry Organization, ity and authority to properly study all of the ulatory and legislative recommenda- Business Software Alliance, Informa- issues surrounding stock options and make tions to Congress and supporting anal- tion Technology Association of Amer- recommendations based upon not only the yses of those matters as far as any ica, National Association of Manufac- technical accounting issue but the public changes indicated in the treatment of turers, the Retail Federation, Semicon- policy implications as well. stock options within 180 days. ductor Equipment and Materials Inter- So I will conclude my time by re- In my view, this is the reasonable al- national, as well as the Semiconductor questing of my colleagues, whether we ternative we ought to be taking. I urge Industry Association, Software and In- vote on it today, this afternoon, this my colleagues to support this approach formation Industry Association, Soft- evening, or in the future, that we act rather than adopting, whether it is ware Finance and Tax Executives responsibly. It is fine to be worrying today or in the future, Senator Council, the Tax Council, the Tech- about the details of procedure and ac- MCCAIN’s measure that he introduced nology Network, and the U.S. Chamber counting minutia, but it is important last week or Senator LEVIN’s study of Commerce wrote me and said that also to understand the impact of this today. I think either of those would be the stock options tax bill—not the on our free enterprise system. While we harmful and damaging to both Amer- Levin amendment but, rather, the tax are doing a lot of good as far as greater ican industry and to working men and treatment changes—that legislation scrutiny, greater transparency, and women. would, if enacted, discourage broad- greater punishment for wrongdoers are The Senator from Michigan men- based rank and file access to stock op- concerned, let us make sure we do no tioned evidence, or observations, of tions. It would lead to investor confu- harm because the way that this stock others as to the impact of his rec- sion, less accurate financial state- market is going to change is with more ommendations and his amendment. I ments, and raise taxes on companies investment, more risk taking, more think it is very good for us to look at issuing stock options. jobs being created, and that entrepre- what people who will be affected say Now we have heard also some schol- neurial spirit that rewards people who about the measures that are passed in arly points of view. It is nice to hear take risks, who are creative, who are the Senate. I think it is important that what some of these esteemed individ- innovative. That is what is going to we be accountable to those who are af- uals may say from time to time on the improve our economy, our competitive- fected and we should listen to them. issue of stock options. Others in the ness as a country, as well as the stock I have some other observations, as body have quoted from Warren Buffett, market eventually. far as the issue of stock options is con- a person for whom we all have a great The point is we do not need to come cerned. This first I will share is the deal of respect. But in another schol- up with new, convoluted ways to in- views of the Information Technology arly work from two gentlemen, eco- crease taxes on companies that we Industry Council. They expressed their nomics professors at Princeton Univer- want to invest in and improve our

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00017 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.036 pfrm17 PsN: S15PT1 July 16, 2002 S6746 CONGRESSIONAL RECORD — SENATE July 15, 2002 country, and I hope we will support the probably no one else in this place is the outset—and I try never to over- free enterprise system and, in doing so, better prepared, to take on this issue. I promise what criminal law can do, even look at reasonable, logical, wise, and compliment the Senator and his quiet, though we are only now finally begin- fully comprehended decision-making as reasoned voice, and his profound under- ning to rectify and make our criminal we move forward in these very un- standing of the problem we face as well justice system reflect our values more charted waters of making major as his determination to move ahead clearly—that is not a solution. It is a changes in stock options. and try to restore confidence. It is a part of a solution. The Senator from The bill as it stands now is an out- welcome circumstance at the moment. Iowa and I conducted hearings in that standing bill. There can be improve- I compliment the Senator. subcommittee. We have asked for ments made to it, such as the amend- I realize from listening to him and stronger penalties. We have passed ments of Senator GRASSLEY and Sen- knowing him as well as I do, as a point them. One small example: If you were ator DORGAN, but let us not have the of personal privilege, some will dis- to violate the Federal law relating to perfect be the enemy of the very good, count my remarks because they know pension security, ERISA, it is a mis- and let us make sure we do no harm. the Senator and I are close personal demeanor that could cost someone By fouling up stock options for many friends and I admire him as much as their entire pension or 1,000 people men and women working in this coun- anyone I have served in all my years in their pensions, totaling hundreds of try, it would certainly do a great deal the Senate. I understand there are millions of dollars. It is a mis- of harm. other things that he may or may not demeanor. All you get is up to 1 year in I yield the floor. have wanted to put in the bill to jail. Yet if you steal my automobile—I Several Senators addressed the strengthen our position and the Na- live 2 miles from the Pennsylvania Chair. tion’s position and the economy, but he State line, in Delaware—and you drive The PRESIDING OFFICER. I think wants to make sure there is consensus across the State line into Pennsyl- the Senator from Delaware was first to and overwhelming support of whatever vania, you get 10 years under Federal seek recognition. we do. This is not a circumstance of law. Something is awry. Mr. BIDEN. Mr. President, I say to questioning motives and wondering Criminal penalties are not the an- my friend from Iowa if he has a time whether it is more for show than for se- swer. They are just rectifying this in- constraint, I will yield to him. Just so rious reconstruction of the cir- credible inequity within our system. he knows, I was in the Chamber before cumstances. Hopefully we are beginning to reestab- he came. I took a phone call and came I say at the outset, I have one dis- lish some sense of faith in the system back. But if the Senator has a time agreement with the President of the where average people think big guys constraint, I have 10 to 12 minutes, but United States. Although there prob- get away with it and little guys go to I will be happy to yield. ably, pray God, are only a ‘‘few really jail. Mr. GRASSLEY. If I only have to lis- bad apples’’—I think that was his Punishing and deterring corporate ten to a 10- or 12-minute speech, I will phrase—in the corporate world, I do crime, although it is a major part of be glad to wait. think we have a systemic problem. The our response to excesses committed by Mr. BIDEN. I hope the Senator lis- marvel is that there are so many men some of the most privileged and power- tens very closely. He may learn some- and women in corporate America who ful corporate executives, is not enough. thing. I know I learn when I listen, and have high moral standards and have We face another fundamental problem. I do not always listen enough. overcome a fairly overwhelming temp- It is the loss of trust in our system, Mr. President, let me begin where the tation that exists in the way business most apparent, perhaps, in the recent Senator from Virginia ended, and that is being done, the way in which we drop in the stock market. More than is that I think the bill fashioned by have loosened some of the not regula- 200 off the DOW in the days following Senator SARBANES and this committee tions, loosened some of the oversight the President’s speech, and when I does exactly what the Senator from on corporate America. It is a testa- came to the floor the DOW was down Virginia was suggesting. That would be ment to the fact that there are so 300 points. I don’t know where it is balanced; we do not do more harm than many honorable people running Amer- right now. I hope and pray to God it good. ica’s major corporations and multi- has moved up. If you look at other times—and I national corporations. The fact is, there is a profound lack have been a Senator for a while—we The fact is, we have a systemic prob- of confidence at the moment in our faced crises such as this, we have had lem which leads me to my friend from economy. There used to be a chairman occasion to overreact. We have found Michigan, Senator LEVIN. Senator of the board of the Dupont Company, a sometimes that the cure is worse than LEVIN, Senator MCCAIN, Senator big, old farm boy from Ohio. He had the disease. I note we probably did that CORZINE, Senator EDWARDS, myself, great big hands. I remember, he was a in my early days here with Senate and several others, in varying degrees, wonderful guy, a first-rate chemist, campaign financing and other issues. think what this debate is all about is first-rate scientist, as well as corporate There is a real balance that the Sen- fundamental fairness and efficiency of executive. I was meeting with him one ator from Maryland has struck. I com- our economy. A lot of what we read day and said: We have a problem; we pliment the Senator. I cannot think of about these days is focused on cor- are in the hole. And he turned and any Senator better positioned to be porate scandals, individual villains, looked at me and said: My father al- chief spokesman for the Senate and their schemes, their greed. There is ways said, Joe, when you get in the Congress on this issue, not only for the plenty of that and maybe more than I hole, stop digging. American people but all our allies and can remember any time in my Senate Maybe the President should stop the investors worldwide. career. making speeches for a couple of days. The dollar now has weakened dras- I believe we need to focus on the be- He has spoken twice and the market tically. In my capacity as chairman of havior of corporate executives who went down 500 points while he was the Foreign Affairs Committee, I have have betrayed their positions of power, speaking. It is not because of a lack of had occasion to meet with leading gov- recklessly endangering the careers of anything in the President, but people ernment officials from European coun- tens of thousands of employees and the are looking for real change. They as- tries and from Asia, asking me, as if I savings of millions of Americans. That sume that if there is any rhetoric, it were some kind of broker: Can we con- is why it was so important the Senate must not be likely to be followed by tinue to invest in your market? Is it unanimously adopted my amendment something real. real? What is going on? How much last week and the amendment which The Senator from Maryland has done more is coming? was contained in that of the Senator something real. What the Senator from We are fortunate to have the steady from Vermont for stronger penalties Utah and his committee has done is and always cautious voice of the Sen- for corporate crime. real. This is real. This underlying bill ator from Maryland, whose background In the hearings I have held in my is real; it is positive; it is substantial. academically as well as politically criminal law subcommittee in the Ju- The bottom line is, no pun intended, suits him well, and in this moment, as diciary Committee, I made clear from there is a profound lack of confidence

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00018 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.038 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6747 at the moment and that our economy damentally stronger than it was, not- product on the shelf, which I wish I can be shaken right now to the very withstanding what is going on now. had, that could increase productivity foundations of our market democracy. Productivity gains were real. Informa- and profit, or go home and do some- For a market democracy to work, we tion technology and corporate reorga- thing. The ‘‘do something’’ usually have to have faith in our economy that nization created real growth. It was meant go home and cut the number of will continue to create opportunities not imaginary. It was not like these employees you have, cut expenses. for job advancement and that our Gov- profit margins that people were sug- Guess what. I do not think these are ernment will continue to promote, as gesting they had on the balance sheets bad, evil, and venal people. They went our Constitution requires, the general that were a lie. There actually was home, and there is an easy way to do welfare. growth. it. Let’s make sure compensation is In recent months, to be reminded The economy, the marketplace has not reflected as an expense. So instead how much we have in common, how created real growth. In what econo- of paying the top executives an addi- much of our unique blessings we have mists like to call the real economy tional $15 million in compensation, come to take for granted prior to Sep- where jobs are created, where goods are give them stock options. Guess what. tember 11, we were reminded that in produced, the real economy is faster The bottom line looked $15 million bet- the end we are all in this thing to- and more efficient today than it was a ter than it did before. gether. Among those blessings we had decade ago. Even old industries in our That is not rocket science, and it come to take for granted was the most manufacturing sector have gained from may have been produced by Wall dynamic economy in the world, that advances in new materials, as well as Street’s desire for immediate gratifi- had just come off the longest, strongest improvement in information sharing cation, immediate response. Whatever expansion in history. In the new eco- and organization. the reason, it turned out to be as much nomic arena, we are now reminded how We also know that a lot of what of a liability in the literal sense, as much we depend on trust in each other looked like growth, particularly in the much as a damaging impact as the to make our markets work. financial sector, was only paper profits good things it could do by tying the That sounds silly. No one was using and a lot of it was written in dis- employees’ fate as well as the CEO’s the word trust before when we talked appearing ink. Profits and paper valu- fate to their company. of the market economy. We talked in- ations were all too often inflated by I see my friend from Utah standing. novation, the new economy, produc- wishful thinking, by self-dealing ana- Does he want to ask me a question? tivity, et cetera, but when you cut it lysts, by accounting gimmicks, and by Mr. BENNETT. Mr. President, will all aside, it is all based upon trust, outright fraud. the Senator yield for a question? which is based upon transparency. If The amendment I am proud to sup- Mr. BIDEN. I will be happy to yield. you cannot get out there and make port offered by Senators LEVIN and Mr. BENNETT. Mr. President, the your judgment to invest or not invest CORZINE and others addresses one of Senator is going into territory I will in a corporation with a clear sense that the most glaring problems behind those deal with in my statement, but to keep you have been told everything that is inflated profit statements that fueled it all in context as he is talking, I must reasonable to tell you about the state the stock boom that is now unwinding. raise this question. The Senator is one of affairs of that company, then you Stock options are, as advocates tell of the historians of the Senate. He has might as well play the lottery. us, a useful device. They can reward been around a good long time and prob- You might as well come on over to employees when companies are so ably will be around for longer than I Delaware and play the slot machines at young that they have little else to will. Delaware Park. You have about the offer. Of course, we all want to encour- Does the Senator from Delaware re- same shot, unless you are on the in- age startup companies in every respon- member that in 1993 when we increased side. sible way we can. Also, stock options taxes in the Clinton tax increase, we The task we are debating today is in theory, and sometimes in practice, also put a limit of $1 million on the how to restore the strength of our keep employees’ and corporate officers’ total amount of deductions a company economy, which is to restore the trust. incentives tied to the growth of their could take for salary for its employees? At the core of that task is revival of companies, but unlike virtually every In other words, that CEO could not confidence that consumers and inves- other kind of compensation the firm be paid over $1 million for his or her tors, including foreign investors, need can give its employees, stock options services and have the company deduct to get back into the market. do not have to be listed on annual re- that as a legitimate expense for tax This is going to turn around, Mr. ports as an expense, and that means purposes. President. You and I both know it. I the more stock options you give, the Mr. BIDEN. To be honest with the am absolutely sure it is going to turn less compensation you have to report, Senator, I do not remember that. around. The question is, how many the lower your reported expenses, the Mr. BENNETT. Will the Senator bodies will be littered along the way; higher your reported bottom line. agree that might have been part of the how many pensions will be lost; how That part is simple, and that is a big reason why companies, in an effort to many jobs will be lost; how long is it reason stock options became so attrac- attract and hold the best executive tal- going to take? It will turn around. tive not only for the good things they ent, would have moved away from tra- I am sure the greatest strength of our can do, but also for the convenient way ditional compensation, that the Sen- system continues to be its resiliency: they inflated earnings statements and I ator and I both understood when we Our ability to see change as oppor- would even say, if I want to go over- were growing up and applying for jobs, tunity. I am sure of that because we board and defend corporate America, and into the more esoteric area of have met this kind of adversity before. even defending those corporate execu- stock options because stock options Every time we have come out stronger. tives who when they take the train up were, in fact, not deductible; whereas, I remember when the Senator from to Wall Street and have some 30-year- good old-fashioned pay for services ren- Maryland and I were on the Banking odd or 35-year-old guy sitting around a dered was given a tax disadvantage as Committee in those dark days of the table saying: OK, what are you going to a result of the Clinton tax bill? savings and loan crisis. We made it do next quarter? And giant companies Mr. BIDEN. In response to the Sen- through. We made some very difficult that are strong and mature would say: ator, I have to check more closely. I decisions that, I might add, Japan and We are going to do as well as last quar- have great respect for my friend from other countries have not made, and it ter. That is not good enough. We are Utah. Based on what he says, it seems resulted in an even stronger economy. going to downgrade your stock and to me it would have had a negative im- So I am confident we can come out of your company. pact rather than a positive impact. this stronger. I remember one CEO of a major For- That is one of the things we talk about After the glare from all the glitter tune 10 company telling me, I have to at the front end. during the boom phase and as our vi- do one of three things: I have to say, so Whatever we do here should have a sion becomes a lot clearer, we know be it, and keep on the long-term course positive impact. There is something that our economy is, in fact, fun- or go out there and find some new else stock options do, too. Because

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00019 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.041 pfrm17 PsN: S15PT1 July 16, 2002 S6748 CONGRESSIONAL RECORD — SENATE July 15, 2002 stock options are predominantly This is not about Government inter- As I said, I congratulate my col- awarded to top executives, they are a vention this is about getting us out of leagues, Senators SARBANES and ENZI great way to give yourself a sweetheart the way of what every expert from on their hard work in moving S. 2673 deal, with a powerful incentive for ex- Alan Greenspan to Warren Buffett and out of Committee and bringing the bill ecutives to look for ways to inflate FASB itself says should be done. to the floor for further debate. The re- stock prices so their stock options, at It does nothing to interfere with the form bill is a great step in the right di- least for a while, are worth millions, issuing of stock options. rection for tackling some of the dif- even hundreds of millions of dollars. It is about giving shareholders and ficult accounting problems our Nation Here is what Business Week said investors the information they need to currently faces. Nevertheless, I believe about stock options back in March: reassert their control over America’s the reform bill isn’t quite tough Options grants that promised to turn care- corporations. That will help to pro- enough on several issues and should be taker corporate managers into multimillion- mote companies’ long-term value, and strengthened further, consequently, aires in just a few years encourage some to reduce the temptation to pump up the amendment. ignore the basics in favor of pumping up short-term stock prices. In my view, the recent rash of ac- stock prices. This amendment can help promote a counting scandals did not result from And pump they did. Here is how stronger form of stockholder democ- incompetency or lack of rigorous train- much stock options distorted the bot- racy, to cure a system that a greedy ing of accounting professionals. Nei- tom line for some of the biggest and few have turned to their own personal ther has the problem lied principally best companies in America. One study advantage. That kind of democracy with misguided auditing standards by a London-based consulting firm, needs openness and clarity—honest in- known as GAAS or ill-considered ac- Smither and Company, looked at the formation to make informed decisions. counting rules known as GAAP. use of stock options by 145 of the larg- This amendment is real reform, and I The Worldcom debacle, among oth- est U.S. companies. urge my colleagues to support it. ers, further demonstrated that the They found that those firms over- I thank my friend from Utah for his problem does not rest entirely with a stated profit by 30 percent in 1995, 36 intervention, and I thank my friend company’s external auditors—whose percent in 1996, 56 percent in 1997, and from Iowa for listening. best efforts may not detect financial 50 percent in 1998. I yield the floor. misrepresentations if fraud is repeat- The PRESIDING OFFICER. The Sen- Other analysts, including the Federal edly covered up by corporate insiders Reserve, have found the same thing. ator from Iowa. Mr. GRASSLEY. I yield to the Sen- or contrived to defeat established in- These are huge distortions in the pic- ator from Virginia, just to make a ternal controls. Instead, each of the ture the public was given about these unanimous consent request. most recent corporate accounting scan- companies and a huge distortion in in- The PRESIDING OFFICER (Mr. NEL- dals appear to have arisen from egre- formation investors were using to allo- SON of Nebraska). The Senator from giously bad behavior of corporate insid- cate capital. That kind of distortion Virginia. ers and internal accountants—with was clearly a big factor, maybe in addi- Mr. ALLEN. Mr. President, I yield varying degrees of complicity by those tion to what my friend from Utah says, the remainder of my hour to Senator companies’ external auditors. in driving up those stock prices that GRAMM, the Senator from Texas, who is Thus, as a matter of principle, I are now falling back to Earth. the Republican manager of this bill. agree with the ‘‘bad apples’’ theory This is no simple problem. The 200 The PRESIDING OFFICER. The Sen- being offered by many. However, I be- biggest firms now allocate more than ator has that right. Time is yielded. lieve addressing those bad apples re- 16 percent of their stock in options. Let The Senator from Iowa. quires additional oversight—and not me repeat that. Mr. GRASSLEY. Before I forget, Mr. just of a company’s external account- The 200 biggest firms now allocate President, I make the request that the ants but of the internal accounting more than 16 percent of their stock in unused portion of my hour that I will function itself. options, mostly for their very top ex- not be using here, I would like to also To that end, I further respond to the ecutives. have given to the Senator from Texas. President’s call for increased oversight The potential for distortion and the The PRESIDING OFFICER. The Sen- and would like to offer an amendment temptation to distort is great. ator has that right. that would strengthen the provisions Remember these stock options are Mr. GRASSLEY. Mr. President, I Sarbanes-Enzi bill by expanding the predominantly given to top executives. have five amendments I filed: (i) An powers of the oversight board to re- One study in 1998 found that 220 of amendment providing for a team of quire the performance of ‘‘spot audits.’’ the top managers at Fortune 500 firms oversight auditors, (ii) an amendment The underlying bill which focuses on received an average of 279 time the providing for prebankruptcy bonuses monitoring external auditors woud be number of stock options awarded to paid to top executives be pulled back amended to provide additional board each of the firms’ other employees. into the bankrupt corporation’s estate, oversight of internal corporate ac- Two hundred and seventy-nine times (iii) an amendment providing the Secu- counting. what ordinary employees got. rities Exchange Commission with Specfically, my amendment would Despite the increased use of stock op- disgorgement remedies, (iv) an amend- charge the Board with responisibility tions this is clearly a device top man- ment providing that auditors who sell for conducting oversight audits or agement has largely preserved for tax shelter products cannot opine on ‘‘spot audits’’ of public companies. The itself, and the kind of incentives they the financial effects of the tax shelter board would serve in a role analogous created are now all too clear. deal; and, (v) last, an amendment pro- to the Internal Revenue Service or the This amendment takes what I believe viding whistleblower protection to the Federal Bank Examiner. The IRS, for is the most restrained and most careful accountants and others who want to example, achieves voluntary public approach to the problem of stock op- disclose financial statement mis- compliance through review of a very tions. conduct. limited number of federal tax returns It does not legislate accounting I am pleased, in regard to the last each year. The IRS does not verify standards, and it does not dictate out- amendment I just announced about each and every tax return. Similarly, comes. whistleblowers, Senators LEAHY and the Federal Bank Examiner sporadi- It tells the Financial Accounting HATCH accepted that proposal as part cally and randomly audits various Standards Board that it is given new of their amendment which has been banks throughout the country. Such resources and new independence by the adopted. ‘‘spot auditing’’ has been an extremely underlying Sarbanes amendment. It I am not going to speak about the effective oversight tool for the banking provides for FASB to come up with ap- other four. I am just going to speak industry and one which has resulted in propriate techniques to account for about one of those. It is the first higher levels of regulatory compliance. stock options, it does not dictate a amendment I put on my list, an amend- In similar fashion, I believe that ac- one-size-fits-all at this moment, and it ment providing for a team of oversight countants and corporate America will gives them a year to do it. auditors. prepare more carefully their financial

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00020 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.044 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6749 statements if exposed to the risk of corporations. It occurs to me that by ously, I would be able to get a vote on compliance review by the board’s over- shifting exclusive focus and responsi- my amendment. sight auditors. bility to accounting firms, we ignore At this point, I ask unanimous con- Even in self-regulated form, the ac- the underlying behavior of corporate sent that the pending amendment be counting industry has long recognized wrongdoers who have principal respon- laid aside for the purpose of taking up the need for a second level of review. sibility for fair and accurate financial my amendment just described, which is To that end, 24 years ago the ACIPA es- reporting to corporate shareholders. amendment No. 4232. tablished the peer review process by Under my proposal, the newly cre- The PRESIDING OFFICER. Is there which one accounting firm would re- ated oversight board would be charged objection? view audit work of another accounting with reviewing the financial state- firm. For example, Deloitte & Touche ments of issuers and focusing its re- Mr. ENZI. In light of the discussions, was for many years the assigned peer sources on highest-risk audit areas and I have to object. reviewer of Arthur Andersen. Industry- questionable accounting practices of Mr. GRASSLEY. Was the President wide self-checking on top of industry which it is aware from the SEC Divi- going to put my unanimous consent be- self-regulation seems ill-conceived and sion of Enforcement or other sources fore the Senate? has been widely critized for its effec- such as whistleblowers under provi- The PRESIDING OFFICER. I did. tiveness by lawmakers and the SEC. sions I heartily supported. Mr. GRASSLEY. I did not hear the Over the past 25 years, a Big Five ac- Upon discovery, the board would President do that. counting firm has never issued a quali- refer findings of possible accounting or fied report against another Big Five ac- auditing irregularity to the Division of The PRESIDING OFFICER. The Sen- counting firm at the end of any peer re- Enforcement with respect to issuers or ator from Wyoming objects. view despite the subsequent discovery other appropriate federal and state en- Mr. GRASSLEY. Mr. President, be- of numerous irregularities including forcement officials such as the Presi- fore I yield the floor, I would like to numerous conflicts of interest from dent’s newly-created Fraud Task Force have just a short discussion of some- stock ownership in audit clients. This within the Department of Justice. This thing that bothers me. In the Senate recognized need for a second level of re- referral mechanism would ensure that we have a right to be, and a responsi- view is longstanding although the those agencies continue to have pri- bility to be, intellectually honest mechanism originally established by mary authority and responsibility for about these issues with which we are the accounting industry seems to have conducting comprehensive corporate faced here. proven largely inadequate. investigations of possible wrongdoing. I have heard so much during this de- Some may ask why the Board should The oversight board, of course, would bate—not so much during the debate, be granted powers which may be exer- have authority to conduct investiga- because that wouldn’t be fair, but more cised currently by the SEC. The answer tions of possible wrongdoing with re- probably in news conferences held by is simply resources. Providing an effec- spect to the involvement of accounting Senators on the other side of the tive mechanism for spot checking the firms within its jurisdiction. aisle—about the Democrats wishing to books of various issuers requires a That is a basic summary of what this use Enron and WorldCom events very dedicated audit staff to carry out those amendment would accomplish. I urge much as, I think, political issues. I purposes. Having resources dedicated my colleagues to support establish- think maybe the Democrats are hoping to a regulatory review process would ment of an oversight auditor as a for a ‘‘November storm’’ in which our allow the oversight board to take a means of improving the compliance of economy is weak and no progress is proactive approach in reviewing for ac- corporate issuers and their external ac- made on accounting reforms. counting irregularities and take the counting firms and detecting irregular- As this bill goes through the Senate, SEC out of a purely reactive posture ities at a much earlier point in the sys- through conference, and comes back, I with respect to corporate accounting tem when a shareholder value remains hope we will realize that there is fraud. The SEC has done a great job of salvageable. investigating corporate scandals once It seems to me that my amendment enough blame to go around. But, most detected. Unfortunately, by the time comes down to just a simple case of importantly, I think it is wrong. For many of the recent scandals were dis- common sense. As I think proven so instance, the distinguished majority covered, things had progressed too far. many times before, auditors need to be leader on ‘‘Face the Nation’’ recently We were unable to salvage the compa- audited in the same way the IRS does attributed the current crisis to the al- nies and the life savings of thousands it for tax returns and in the same way leged ‘‘permissive’’ attitude in the of employees and shareholders. I be- bank examiners do it in the case of Bush administration towards business. lieve the oversight auditor would pro- bank audits. If auditors know their I didn’t see any ‘‘permissiveness’’ in vide a deterrent to committing fraud work will itself be audited, they will the President’s speech last week. I when coupled with tougher criminal think twice about looking the other don’t think very many people did. sanctions. I further believe that earlier way on shady deals, as we have seen. But I think we also need to remem- detection could prevent the absolute My amendment would put some very ber, while a lot of this mischief was destruction of companies in which specific teeth in the Sarbanes-Enzi bill. going on by corporations, that during fraud remains uncovered for too long a At this point, I was hoping the Sen- the decades of the 1990s and now in the period of time. ator from Texas was going to be here 21st century there were 2 years in I note that the concept of an over- because I have done so much for him on which Democrats controlled Congress. sight auditor within the public over- a lot of Finance Committee bills. I’m In those two years, we had a Repub- sight board was rejected in the ac- referring to tax bills, including the re- lican President. That was the first counting reform proposal offered by cent CARE bill and the recent energy Bush Presidency. There was a period of the SEC and Harvey Pitt on June 20. bill. I have helped him with so many time when the Democrats controlled The draft emphasized that the SEC’s amendments that he wanted. I was sure both Houses of Congress and the White vision of a newly created public over- he would be willing to help me get House. That was 1993–1994. Then there sight board reassured corporate Amer- unanimous consent to get my amend- were 6 years that Republicans con- ica that the newly-created oversight ment up, particularly in light of the trolled the Congress—1994–2000, and the board would require the cooperation of fact that last week I was assured when Democrats controlled the Presidency. audited corporations ‘‘only to the ex- it wasn’t on the list that it would be on Then there were 135 days last year that tent necessary to further . . . reviews the list. Then I came back and found Congress was controlled by Repub- or proceedings regarding the [audit that it meant being last on the list. licans, and the President of the United corporation’s] accountant.’’ The draft Now we are getting down to the end. States, but only 135 days out of a 12- further promised that the new over- I would like to have what I consider year period of time, if you want to use sight board would not conduct ‘‘roving kind of a commitment, although it the 1990s plus now. And what has hap- investigations’’ of audited corporations probably is not an ironclad commit- pened has happened on the watch of nor would the board sanction those ment, that I be on the list, and, obvi- both Republicans and Democrats.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00021 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.011 pfrm17 PsN: S15PT1 July 16, 2002 S6750 CONGRESSIONAL RECORD — SENATE July 15, 2002 I think that to say a President has I made reference, in my colloquy pool. It was assumed that the pool was been President 18 months and this cri- with the Senator from Delaware, to the divided up in such a way that any one sis before us is because of a ‘‘permis- decision that was made by the Con- point in the pool was worth $1. So when sive’’ attitude in the Bush administra- gress back in 1993 to put a limit on the I went to work for the Penney Com- tion towards business just doesn’t hold amount of compensation that execu- pany in 1964, my salary was, as I recall, water. tives could receive in terms of tradi- $10,000 a year. I was not important I have a chart behind me. I hope I am tional dollar salary. And the limit was enough to get to the exalted $25,000 a very clear in making this more accu- $1 million. year stage. But I was given 2,500 points rate than what I just said. The yellow I remember some of the rhetoric that in the pool, which meant that if the is the 2 years of the Bush administra- flew around this floor at that time, company met its earnings objectives, I tion going back to 1994, and the other filled this Chamber—how terrible it would get another $2,500; in other color covers the Clinton administra- was that people were being paid these words, my real salary would be $12,500. tion. But let’s forget about the Bush outlandish salaries and that somehow So I did everything I could to make administration and the Clinton admin- it would benefit the people at the bot- sure that every point in the pool was, istration. Let’s just realize what the tom of our economic ladder if there in fact, worth $1. I did what I could to facts are. was a limit placed on those salaries. turn off the lights. I did what I could to In the case of Enron, it became pub- And so recognizing that they could not save expenses. I did what I could to lic in the year 2001, but the restated outlaw the salaries, Congress could do drive sales so that the company would earnings and the mischief went on all the next best thing—or, if I might say, meet its goal. the way back to at least the beginning the next worst thing—and say: All My memory is that in one of those of 1997 because 1997, 1998, 1999, 2000, and right, they can pay themselves these years each point was worth 93 cents; the first two quarters of 2001 were re- big salaries, but, by George, we will not that is, the company fell 7 percent stated earnings. allow a tax deduction for anything over short of its projection. And every one Adelphia: Half of 1998, all of 1999, all $1 million. of us in the company who was having of 2000—before they were public in Then, recognizing that would prob- that kind of a salary circumstance felt 2001—but restated earnings for all ably produce all kinds of difficulty, that 7 percent hit. In the example I those. Congress said: Except in a number of have just given, instead of getting an- Go down to Xerox. It was found by areas. And one of the areas of excep- other $2,500 at the end of the year, I the end of the year 2000 everything tions was that nonsalary compensation would have that $2,500 shaved by 7 per- that was done wrong in Xerox. The re- could exceed $1 million and be expensed cent. I would get my $10,000 salary, plus stated earnings of 1997, 1998, 1999, and if it were approved by the shareholders. 93 percent of the additional $2,500. 2000 came before there was ever a In my view, this was a strong incen- There were stories in the Penney President George Bush. Company that were legendary about There were restated earnings for Rite tive to move towards stock options. managers who would get transferred Aid for 1998, 1999, and 2000. You can go After all, if you are running a public from one Penney store to another. At down the list. What the chart says, bet- company and your services are worth the time, as I recall, the limit was not ter than I can say, is that it is not a $5 million or $10 million on the open $25,000, it was $10,000. So $10,000 per permissive attitude by this President market, you are not going to stay with year was the maximum anyone in the that has put us in this position. It is a company that will only pay you $1 because of the lack of transparency million in cash if a competing company company was paid. A store manager that was implied in what the account- will come along and offer you the $5 who was transferred from a relatively ing profession and audit committees million or $10 million you think you small store to a relatively large one in and boards of directors, who ought to are worth in the form of other com- a large city was sure he was going to be watching management, were doing, pensation. get a big raise. He got his first check, and the Securities Exchange Commis- So as we get lyrical around here and it was for $10,000 a year. And he sion under the spirit of the 1933 law of about how terrible stock options are, said: But my expenses are higher. I am what they should have been doing. I and how stock options lead to all kinds running a store that is two or three suppose there are a lot of others as of excess, we should remember that times bigger. It doesn’t matter; you get well. Congress, in its excess of enthusiasm $10,000 a year. At the end of the year, But now politics should be put to the for a form of wage and price controls, when they added up the profits of that side. We should not be making these helped contribute to this situation. store, he got a bonus based on the prof- statements. We ought to be correcting We do not like to have institutional its of the store he was managing, and the situation so that people have con- memory. We do not like to be held ac- the bonus was about $100,000. Well, he fidence and so that the crooks who are countable for our actions 4 our 5 years had an obvious incentive to see to it running our corporations and doing after those actions are taken. But, in that store was profitable. these things that are evidenced here. this case, I think it is appropriate for What does any of this have to do with When I say ‘‘crooks running our cor- us to remember the past while we are stock options? That system that was porations,’’ I mean the ones who would getting so exercised about what it is we followed by the Penney Company that do this sort of thing to their stock- plan to do in the future. helped drive its growth all those holders and to the country and to the If I might, Mr. President, be a little years—where compensation was tied to economy—so that they cannot get autobiographical for a moment, I performance, not only your personal away with that in the future. would like to trace my own experience performance as in the case of the store That is what this bill is all about. I with stock options. I have reflected on manager I described but in the com- complimented Senator SARBANES and this, and I think it has perhaps some pany’s performance, as in my own Senator ENZI about this bill. I think it value in this debate. case—that program was scrapped. We would have been improved with my I was working for the JC Penney went to a more traditional kind of amendment. But, quite obviously, that Company in the mid-1960s. I was inter- compensation. As part of the tradi- is not the way the game is being ested, when I went to work for the tional kind of compensation, we had played. So I am sorry that my amend- Penney Company, to find out that com- stock options. ment could not be put to a vote. pany had a tremendously innovative I got a little comfortable with the old The PRESIDING OFFICER. The Sen- and singular form of compensation; system because I remember 1 year ator from Utah. that is, no one in the company was where each point in the pool was worth Mr. BENNETT. Mr. President, I have paid more than $25,000 a year—no one. $1.23. The company did much better spent most of the afternoon in the The president, the chairman of the than it had anticipated, and I got a 23 Chamber listening to this debate, board, none of the vice presidents—no percent upward kick in my compensa- which I have found to be illuminating, one was paid more than $25,000 a year. tion. occasionally informative. I want to do There was a pool of profits that was I questioned: Why are we getting what I can to perhaps add to the infor- created, and in addition to your $25,000 away from this because it seems to me mation, if not to some of the light. salary, you were given points in the this works?

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00022 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.046 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6751 The answer was: Wall Street requires Options . . . hold out the promise of wealth counting, and they will determine how it. beyond imaging. All it takes is a set of books the public, the investing public, will Well, that wasn’t enough of an an- good enough to send a stock price soaring, if respond to the company that makes swer for me. I said: What do you mean only for a while. If real earnings are not them. Wall Street requires it? there, they can be manufactured—for long That raises the question of what They said: The analysts at Wall enough, in any case, for executives to cash out. This, in essence, is what happened at should those calls be and who should Street have said to us, until you give Enron, WorldCom, Xerox—indeed, at quite a determine what those calls should be. stock options, we are not going to be- long list of companies. There is a term we use. It is called lieve that you are serious about the fu- That is not congruent with the expla- GAAP. It stands for generally accepted ture of your company because stock nation about stock options I received accounting principles. The very phrase options are not tied to immediate prof- back in the 1960s, when I had my first itself defines what it is we are talking its. Stock options are tied to future opportunity to participate in stock op- about. If we want to make an account- profits. And until you put some of your ing decision as to what something is compensation to your executives and tions in a Fortune 500 company. That is something that is new, that has come worth, we should make the decision key employees in the form of stock op- within the parameters of GAAP; that tions, we will not believe that you be- along. So we are back to the fundamental is, we should make the decision on the lieve the future of your company is as basis that is generally accepted. bright as you say it is. We want them question of this bill, which is, How do we account for the performance of a Let me give an example of what hap- to have a stake in the future. pens when you go outside the basis of So as it was explained to me, in the company in a way that will allow in- vestors to make an intelligent judg- what is generally accepted accounting scrapping of this unique compensation principles. I was involved with an in- plan that I think the JC Penney Com- ment about the value of the company? That is the fundamental issue here. vestor and he put out appropriate bal- pany was the only company in the ance sheets, accounting information, country, if not the world, that followed It is fundamental enough that I think I ought to repeat it: How do we account profit and loss statements, and so on. it, in the scrapping of that plan, you He got a very angry call from one of had to adopt some form of stock op- for the performance of the company in an accurate enough manner to allow the subinvestors. This was the kind of tions. So they did adopt stock options. man who would sell shares in his over- I didn’t stay around long enough to investors to make an intelligent deci- all project primarily to doctors and take advantage of them. I entered the sion about the future of that company? Some will say to us: That is a very dentists. Nixon administration in 1969 and gave He said to me once: up my vesting in a number of cir- easy question to answer. Congressman I will not sell shares to lawyers. cumstances at the Penney Company. GEPHARDT has been quoted in the press Frankly, I was a little nervous about as suggesting that accounting is a I said: that because I thought I had a bright science. It is a simple matter of black Why not? Isn’t a lawyer’s money just as future financially if I had stayed at the and white, of adding 1 and 1 and get- good as a doctor’s or a dentist’s money? Penney Company. And again, as I say, ting 2. He said: at the end of the year, when they sent That is not the case, however much No, because lawyers are trained to find me the money that had been accumu- we would like to believe that is the problems and I don’t want sub-investors who lating in my behalf during the part of case. Yes, when you are talking about spend all of their time looking for problems. the year I worked there, each point was some aspects of accounting for a com- Well, he got a phone call from a phy- worth $1.23. That said to me, once pany’s performance, it is a simple mat- sician who said to him: again, how much more money I would ter of adding up the numbers and re- I have looked at your financial informa- have had if I had stayed with Penney porting them. But in a company as tion and you are lying to me. instead of coming with the Govern- complex as today’s modern industrial He said: ment. That is a separate issue. I will corporation, there are a whole series of What do you mean I am lying to you? not go down that road any further. I judgment calls that must be made. It is He said: am glad I made the decision I made. I not just a matter of adding up all of It is right here in your documents. You probably would not be a Senator if I the sales. It is not just a matter of add- said this particular venture made X hun- had not. ing up all of the costs. dreds of thousands of dollars last year. Now The point is, the compensation of Back to my example of the JC you have given me your financial statements employees should be tied to the future Penney Company, this is a matter of a and I have found out you didn’t make a and benefit and prosperity of the com- judgment call being made. What is the penny. pany, and stock options were created judgment of the value of this company The man said: with that in mind. What we have seen if it does not trust its executives What are you talking about? them become, since 1993, when they enough with stock options? He said: were not available as part of an intel- Analysts on Wall Street who are I have it right here. Here is a list of your ligent compensation mix, but they trained and experienced came to one assets and a list of your liabilities and they were made more valuable by tax treat- judgment call: that the Penney Com- match each other to the exact cent. You ment by the Congress making an ac- pany was not worth as much without didn’t make any money. counting decision, what we have seen is stock options as it would be with Well, generally accepted accounting that stock options have accumulated them—nothing whatever to do with the principles say that a balance sheet al- the bad name we have been hearing bottom line, nothing whatever to do ways has to balance, that the number about here on the floor. I am not sure with how many socks we sold or how on one side and the number on the I agree with everything that has been many shoes we sold or how many shirts other side must equal each other to the said about how terrible stock options we sold. It was a judgment call on the penny. This man did not understand are, but I do recognize they have led to value of the company based on ac- generally accepted accounting proce- some excesses. counting decisions. dures, he wanted to keep books a dif- In the New York Times, on July 12, Are we going to account for com- ferent kind of way, and he was misled. there was an editorial signed by Walter pensation strictly on the basis of the The solution, of course, was to educate Cadette, senior scholar at the Levy In- Penney Company’s system or are we him on what those generally accepted stitute of Bard College and retired vice going to make a judgment call based accounting procedures ought to be. president of J.P. Morgan. With a back- on stock options? Once he generally accepted what those ground at J.P. Morgan, in my view, he Well, the Penney Company did what procedures were, he could read the has a little bit more credibility than it believed it had to do under those cir- profit and loss statement, the balance some of the people who write editorials cumstances and, of course, went for- sheet, and he could discover that the for the New York Times. But he made ward in its history. man, in fact, was not lying to him and the same point that has been going The point here is that there are judg- that, in fact, the venture had made sev- around the floor here in some of the ment calls to be made every day in eral hundreds of thousands of dollars rhetoric when he says: every circumstance with respect to ac- that year.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00023 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.049 pfrm17 PsN: S15PT1 July 16, 2002 S6752 CONGRESSIONAL RECORD — SENATE July 15, 2002 Now, let’s come to Wall Street, let’s Congress and change them. But if the made out of around on the ice, for that come to Enron, let’s come to all of the rules are set by the regulatory bodies he is worth $20 million, $30 million, $50 things that we are talking about here. over which Congress exerts some over- million—whatever it was—a year? One of the things we have heard in sight responsibility, they can be The owner of the team came out of many of the hearings that I have at- changed much more easily as more in- some obscurity long enough to say: tended on this subject is that if you formation comes along and as people Yes, he is worth that much money, and were a sophisticated analyst of finan- begin to discover that what they did let me explain to you why. Then he cial statements, you could, in fact, find previously maybe doesn’t make as outlined what the ticket sales for his all of the information that you needed much sense. team were the year before he hired in the footnotes of the various finan- I offer as exhibit A Congress’s action Wayne Gretzky and what the ticket cial statements that were published. to outlaw the deductibility of cash sales for his team were the year he an- You did not need the kinds of disclo- compensation above a million dollars— nounced the hiring of Wayne Gretzky. sure that this bill is calling for. something that, in retrospect, now The number was several times the Well, I examined that, listened to looks like it was a pretty stupid thing total amount that Wayne Gretzky was that testimony, listened to the people for us to have done. But we have done being paid. who made that point, and came to the it, and the chances of trying to get a The owner said: On a percentage conclusion that they are right. If you bill through that would undo it are basis, he is a bargain. He is a steal at are sophisticated enough to be able to very slim. If we stay out of the busi- the price I got him. go through every single footnote, ex- ness—we in Congress—of making these These numbers are representative amine every single side comment, and kinds of accounting decisions, we will rather than absolute, but they stick in plow through all of the boilerplate that be better off, the economy will be bet- my memory that they were paying makes up a standard financial release, ter off, more people will keep their Gretzky something like $40 million or you could create an accurate picture of jobs, et cetera. $50 million and the increase in ticket that corporation—except in those cases Let me close on that particular sub- sales was going to be something like where there was outright fraud. In my ject with that particular idea in mind, $120 million to $150 million. The owner said: If I had to, I would opinion, Enron was a case of outright and that is that Congress from time to pay him twice as much because I am fraud, not a case of hiding things in time wants to step into the market- getting the benefit. place, repeal the law of supply and de- footnotes; it was a case of lying. People say: But that is measurable. Quite frankly, there is nothing we mand, and assert our judgment over Michael Jordan did the same thing for can do in this Chamber, or anywhere the judgment of the marketplace. I the Washington Wizards. We can figure else in a legislative forum, to stop peo- have said many times, and will say that out with accounting. But what ple who determine that they are going many times hence, if I could add to these chief executive officers are being to lie, who are determined they are what we have carved in marble around paid is obscene. going to commit fraud. That will hap- here, I would say: ‘‘You cannot repeal If you are a shareholder of General pen no matter what kind of a bill we the law of supply and demand.’’ But we Electric, Mr. President, and you looked pass. We can raise the penalty and keep trying to do it with wage and at what Jack Welch, the CEO of Gen- thereby discourage it a little more— price controls. We keep trying to re- eral Electric, did with that company and there are proposals to do that—but peal the law of supply and demand. during the time he had it in his stew- we cannot stop it. If someone is deter- We tried to do it in 1993 when we said ardship, would you look back on that mined he is going to break the law, and we will do something about the exces- total period and say we paid Jack he thinks he can lie and get away with sive compensation of executives. We Welch too much money? Or would you it, he will still do it regardless of the won’t say that the marketplace and look back on the amount of the value bills that we pass here. the law of supply and demand will de- of General Electric that was generated But what we can do, what we should termine what people get paid; we will under his stewardship and say he was a do, and what this bill is crafted to do is legislate it. We will legislate it with bargain; he was a steal; we could have to make it easier for the ordinary in- tax policy. We will do some social engi- paid him twice what we paid him and vestor to understand what a company neering through tax policy. We keep still come out well ahead? is worth, make it so that the generally trying to do that all the time, and it You say: But look at all of the execu- accepted accounting principles con- almost always produces a perverse ef- tives who flew their companies right form with generally understood activi- fect. into the sea. Look at the executives ties with respect to the business world. Let me address this question of over- who destroyed their firms. Yet they The question is, how can we establish whelmingly big salaries and compensa- got this same amount of money. accounting rules that will make it pos- tion—as if there was something really If I may go back again to the sports sible for the ordinary investor to un- evil about that, really corrupting world, have we not seen sports teams derstand what is going on and not re- about that. Maybe there is, in terms of pay very large salaries, responding to strict understanding to those who can the impact that that sort of compensa- the law of supply and demand, for read the footnotes, who can decipher tion has in the lives of an individual, coaches who had losing seasons? For all of the boilerplate. I don’t think we but it is the marketplace at work. quarterbacks who ended up being on will ever get there in a perfect world. Let me give an example with which I the waiver list? Those of us in the Life being what it is, with the lawyers think everybody might be familiar. I Washington, DC, area have had a lot of coming in and requiring careful terms am not talking about Jack Welch, the experience with quarterbacks. Does of art to be spelled out, we will never CEO of GE. I am not talking about Ken that mean we are going to stop trying get to the point where someone who Lay at Enron. Let’s talk about some- to get the right quarterback for the does not have any kind of legal under- body with whom most people can iden- Washington Redskins by saying we will standing of the terms of art can read tify. Let’s talk about Wayne Gretzky. pay them average salaries in the Na- this as easily as he or she could read Wayne Gretzky has been called, accu- tional Football League so that there Harry Potter. However, we can move in rately in my view, the greatest hockey will not be any more of these obscene that direction, and I feel this bill does player who ever lived. Along with that, salaries and failures? so move. Wayne Gretzky is the highest paid Several things will happen if the The one thing that we should be most hockey player who ever lived. At the Washington Redskins take that point careful of, however, is to avoid having time the decision was made by the of view. No. 1, they will start to lose Congress set the accounting rules. hockey team that brought Wayne even more than they have lost in the Why? If Congress sets the accounting Gretzky into the United States and past. And, No. 2, the fans will stop rules, it will—to use a phrase we use paid him an incredible sum of money, coming and the savings that you will here derisively sometimes—take an act there was a great hue and cry: How can make in buying a quarterback that you of Congress to turn that around. And one individual be worth this much can get for $400,000 or $500,000 a year, having set the rules, Congress is very money? For what? Knocking a solid compared to the one that you are gam- reluctant to come back in an act of piece of whatever hockey pucks are bling $10 million or $20 million on will

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00024 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.051 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6753 all disappear as the ticket sales fall off, Mr. GRAMM. I ask for the yeas and the compilation of work mainly that the television revenue disappears, and nays on the pending Edwards amend- Senator HAGEL and I have been doing people do not want to come anymore. ment. for the last couple of years. We think it Yes, there have been corporate execu- The PRESIDING OFFICER. Is there a is a proposal that deserves the atten- tives who have been vastly overpaid. sufficient second? tion of our colleagues, and I encourage There have been CEOs who have been There is a sufficient second. them to study this proposal. hired on the basis of their reputation, The yeas and nays were ordered. I want to start by reading an e-mail just as football coaches who have been Mr. GRAMM. I now ask for the yeas I received from a senior citizen back in hired on the basis of their reputation, and nays on the Carnahan amendment. Nevada. This e-mail came in at 11:21 who, to lure them into the company, The PRESIDING OFFICER. Is there a p.m. Pacific standard time, so obvi- have been given great packages and sufficient second? ously this person was up late at night then failed to deliver. But there are There is a sufficient second. thinking about the whole issue of pre- also the Jack Welches of this world The yeas and nays were ordered. scription drugs. Let me read it: who have turned out to be bargains no Mr. GRAMM. The Democrat floor matter how much they were paid. leader had a unanimous consent re- I urge you to ponder very honestly Who should make the decision as to quest he wants to propound. the proposed prescription coverage how much they should be paid? The an- Mr. REID. Mr. President, we are in with Medicare. Many social problems swer is, The marketplace should do it. the process of working that out now. I arise due to the fact that many persons The law of supply and demand should think we will be able to do that later. who need medication to maintain some do it. Someone who has demonstrated Several Senators addressed the sort of life existence are not able to that he or she has the capacity to Chair. purchase the needed medications. Must build, maintain, and expand a corpora- The PRESIDING OFFICER. The Sen- we continue to choose housing or our tion with tremendous value for the ator from Nevada. medications? Please step back and con- shareholders is someone who can de- Mr. ENSIGN. Mr. President, I ask sider if an elderly or disabled person in mand very high salaries because he or unanimous consent that I be allowed to your own family were in this precar- she is in very short supply. speak for up to 10 minutes as in morn- ious situation. Would you not step up We can complain all we want to ing business, with the time consumed to the moral plate and fight to find about the social inequity of a CEO who counting against the postcloture de- funding for Medicare covered prescrip- is earning $20 million, $30 million, $40 bate. tions? million a year and someone who is The PRESIDING OFFICER. Without I think this person summed up very working in that company for minimum objection, it is so ordered. well what a lot of seniors are feeling: wage, but it is the same principle as The Senator from Nevada. They are having to choose sometimes saying: Look at the difference between Mr. REID. Mr. President, it is also between the type of food they eat and Wayne Gretzky down on the ice earn- my understanding that the Senator prescription drugs; sometimes between ing $20 million, $30 million, $40 million from Nevada is going to yield an hour whether they can turn their air-condi- a year and someone selling hot dogs in to the manager of the bill; is that tioner on in the summertime or their the stands. If Wayne Gretzky were not right? heat on in the wintertime and prescrip- on the ice, there would not be anybody Mr. ENSIGN. If you require the 50 tion drugs; sometimes between rent in the stands to buy the hot dogs. minutes that will be left against. and prescription drugs. Wayne Gretzky and his skills are in Mr. REID. Or whatever time is left. There are several proposals, and I much shorter supply than someone who Mr. ENSIGN. Yes. commend the people who have been can stand in the stands and sell hot Mr. REID. Mr. President, I under- working on their proposals, but, frank- dogs. stand he has a right to do that; is that We should not in our frenzy in this ly, the reason we decided to introduce true? this bill is that some of the other bills, whole debate get so carried away with The PRESIDING OFFICER. The Sen- our desire to deal with those who have especially when one looks into the out- ator has a right to yield time. The years, are so costly that they literally damaged the system by their failure to manager of the bill may receive up to live up to their responsibilities that could bankrupt the Medicare system in 44 additional minutes. The Senator and of itself. we, once again, make any statements from Nevada. that would cause us to try to repeal the Mr. ENSIGN. Mr. President, at the Our bill does a few things. First, it is law of supply and demand. end of my remarks, I will yield what- available to every beneficiary, and it is I see my colleagues are seeking rec- ever time the Senator from Texas can also available faster than any of the ognition. I have carried on long receive. other prescription drug proposals. Our enough. I leave with this one last Mr. President, I want to talk about bill can be implemented as early as thought: If we are going to deal with something a little different than what January 1, 2004, whereas the earliest these issues, we should deal with them we have been talking about today, al- the other proposals can be imple- in the way this bill deals with them though I have very strong feelings mented is 1 full year later. and not in the proposal that Congress about the bill and think that both the Our bill is also the most affordable itself should set accounting standards managers of the bill, along with Sen- bill, especially to the taxpayer. We are or should set wages or caps or com- ator ENZI from Wyoming, have done a waiting for the final score from CBO, pensation. terrific job in addressing some very se- but we think it is going to come in Past history tells us Congress can act rious problems out there. I still believe somewhere around $150 billion over the in a hurry but repent at great leisure. there are a few problems with the bill next 10 years. The next cheapest pro- Mr. GRAMM. We have a unanimous we need to clean up in conference. posal, that we are aware of, is around consent request and a request for the I do think the overall legislation has $370 billion, and when one looks at the yeas and nays that I want to make some positive reforms that must be im- full cost of a 10-year program, other while we have at least a handful of plemented to try to restore some con- programs can be up to a trillion dol- Members here. I ask for the yeas and fidence back in the investing public. lars. nays on the Edwards amendment. A trillion dollars is not something The PRESIDING OFFICER. It is not PRESCRIPTION DRUGS this country can afford, especially in order to request the yeas and nays. Mr. ENSIGN. Mr. President, what I Mr. GRAMM. I ask unanimous con- want to talk about is something we are under current economic conditions, sent that it be in order to request the going to be dealing with later this and especially when we think about yeas and nays on both pending amend- week—as early as tomorrow from what young people who would like to see ments. I understand—and that is the whole Medicare as a benefit to them some- The PRESIDING OFFICER. Is there idea of prescription drugs within Medi- day. objection? care. Earlier today, Senators HAGEL, So we must enact a reform that not Without objection, it is in order to GRAMM, LUGAR, INHOFE, and I all intro- only America can afford but also senior seek the yeas and nays at this point. duced a new prescription drug bill. It is citizens can afford, and we think we

VerDate Jun 13 2002 06:12 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00025 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.054 pfrm17 PsN: S15PT1 July 16, 2002 S6754 CONGRESSIONAL RECORD — SENATE July 15, 2002 have come up with that balance. Basi- lems we have with our current health I will not object. cally, the way the program would work care system: There is no accountability The PRESIDING OFFICER. The Sen- is, every senior on a voluntary basis with patients. They are receiving the ator from Georgia. would be able to get a prescription benefit regardless of the cost, and so Mr. CLELAND. Madam President, I drug discount card. For a $25 annual they do not think about shopping be- ask recognition to discuss my amend- fee, they would sign up and get this cause somebody else is paying the bill. ment No. 4236. This amendment ad- prescription drug discount card. They We do not have market forces work- dresses the accountability of corporate would then go buy their prescription ing in the health care field today, and officers and directors. I strongly sup- drugs, and all seniors would save be- if we enact a prescription drug benefit port the legislation before us which ad- cause of volume discount buying. We without utilizing market forces, some- dresses the critical need to create an would use the private sector to do this. day we are really going to regret it be- environment of accountability within They would save, on average, 25 to 40 cause we will have severely out of con- corporate America. We need to send a percent on their drugs. That is a huge trol costs. strong message to corporate executives savings right upfront that every senior The bill we have introduced, we be- that the days of living large while could achieve. lieve, is more fiscally responsible and lying, cheating, and stealing from the On top of that savings, seniors up to targets most of the benefit for those American people are over. Control of a 200 percent of poverty would next who truly need it the most. We can company certainly has its advantages, spend, on average, about $100 a month enact it a lot more quickly than some but it also carries important obliga- out-of-pocket; then after that, other of the other programs, and it is perma- tions and duties. My amendment would than a very small copay, the Federal nent. It is because of those factors that address a situation like Enron where Government would cover the rest of we believe this bill is the bill that our officers cashed in on bonuses, sever- their prescription drug costs. colleagues should take a look at sup- ance packages and millions of dollars This is what seniors are looking for. porting. in stock sales as they saw the light of In my campaign in the year 2000, I took We would be happy to meet with any- the train coming through the tunnel. this plan all over the State of Nevada body to talk to them about the bill and Unfortunately for thousands of Enron and talked to low-income, moderate-in- possibly about cosponsoring the bill. employees and investors, they had no come, and higher income seniors Do not be turned off because one polit- similar warning and were not able to groups about it. I told them that peo- ical party may be offering one bill and bail themselves out before many lost ple who are in the lower income brack- the other party offering another bill. not just their jobs, but their life sav- et are going to get most of the benefit, We are offering an alternative to either ings as well. My amendment would and for people in the higher income of those bills, and we think this bill, make sure that officers and directors bracket, it is going to cost them more with its fiscal responsibility to the tax- who know what is happening, who money, as it should. payer, is the bill that people should know that financial reports are being In some of the other programs, no support. manipulated, can’t cash in on this matter whether one is a lower income In closing, I look forward to engaging knowledge while leaving employees or higher income senior, they basically in a meaningful debate on prescription and investors holding the bag. It is the are treated the same. I personally do drugs after we deal with this account- duty of officers and directors to know not think Ross Perot or somebody in ing reform issue—and this issue is so what is happening in the corporation his income category should be treated important, and I see my friend from and to blow the whistle when they the same as somebody who makes Wyoming who has done so much work know there is wrongdoing. $15,000 a year. There should be some on the bill, and I applaud him and the In the case of Enron, 10 executives or difference. Under our bill, there is a others who have worked on this bill. directors joined CEO Ken Lay and great difference in the way those two But later in the week as we are debat- Chief Financial Officer Andrew Fastow categories of people would be treated. ing this prescription drug benefit pro- in siphoning off company proceeds and The reason our bill is less costly to posal, we need to take a serious look reaping millions of dollars when they the taxpayer is one simple fact: All the and not play politics because seniors sold their Enron shares high. Together other bills give a percentage of first cannot afford for us to play politics these 12 individuals made stock profits dollar coverage. Whether it is 50 per- with the prescription drug issue. We totaling more than $30 million before cent or whatever the coverage, after a need to work together in a bipartisan, the company took a public nose dive at very small deductible, they all start rather, in a nonpartisan fashion, so the end of last year. These corporate covering right away. Our bill says the seniors can get the help they so de- high rollers were reaping huge profits senior is going to pay about the first serve. at the same time thousands of hard $100 a month out of pocket, and then I ask unanimous consent that under working Americans were losing more after that, our coverage kicks in. the provisions of rule XXII, I may yield than a billion dollars in retirement About 50 percent of the seniors do not whatever time I can yield back to Sen- savings, including $127 million in lost have $1,200 worth of prescription drug ator GRAMM. I understand it is 44 min- retirement savings in my home State costs per year, so about half the sen- utes, and I yield that amount of time alone by teachers and State employees. iors, other than the discounts they will to Senator GRAMM. Corporate greed, should not be re- get because of the prescription drug The PRESIDING OFFICER (MS. warded. The underlying bill requires discount card, actually will not use it. CANTWELL). The Senator has that that when a corporation has to file a But, frankly, most seniors can afford right. restated financial report because of about $100 a month for prescription The Senator from Georgia. misconduct in the original report, the drugs. It is for that diabetic patient or Mr. KENNEDY. Will the Senator CEO and CFO have to give back any that heart patient or that cancer pa- yield? profits they have made from bonuses tient who has maybe about $500, or Mr. CLELAND. I am happy to yield. and stock sales for a year after the $300, or $400, or whatever it is, a month Mr. KENNEDY. We have had two original report. My amendment would that they are paying in current pre- speakers from the other side. I ask expand on the bill by calling into ac- scription drug costs. These are the peo- unanimous consent to follow the Sen- count all officers and directors who ple that really cannot afford their pre- ator from Georgia. know about the misconduct in filing scription drugs, and our bill helps that The PRESIDING OFFICER. Without the financial report and through that person much more than most of the objection, it is so ordered. knowledge abuse the company’s trust other plans. The Senator from Wyoming. and the trust of their employees. It The reason our bill saves so much Mr. ENZI. Reserving the right to ob- would also mandate that officers and money is that we keep the patient ac- ject, and I will not object, some of us directors who have knowledge of countable for the drugs they are get- have been on the floor all this time wrongdoing in their financial reports ting. They do not have somebody else waiting to speak, as well. We hope for would not only have to give up bonuses paying for it and as they get the ben- a chance to speak before we reach the and profits but also their severance efit. That is one of the biggest prob- end of the day. packages. Why should someone like

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00026 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.056 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6755 Jeff Skilling get a parachute as he important this legislation move for- year, new investments in stock funds bails out of a disaster he helped to cre- ward. declined by nearly two-thirds from the ate? Actions speak louder than words. previous month. As foreign investors This amendment, my amendment, de- This administration has to do more lose confidence in the transparency of serves support. It is endorsed by Arthur than talk about what needs to be done. U.S. corporations, these investors are Levitt, one of this nation’s most distin- They have to work with us in solving pulling out of the U.S. market and the guished financial authorities. It is high the problems of corporate America value of the dollar is now falling time we call corporate executives on today. against foreign currency. With an un- the carpet and hold them accountable. The PRESIDING OFFICER. The Sen- employment rate of 5.9 percent, Amer- It is time we create an atmosphere ator from Massachusetts. ica’s workers can ill afford to have that encourages responsible behavior Mr. KENNEDY. Madam President, their economic prospects dimmed by and restores the confidence of the there are many important provisions in corporate corruption. American people in the economy of the legislation before the Senate to in- Its time—in fact its long past time— this country. crease corporate accountability. I had to pass tough new laws to prevent fu- The PRESIDING OFFICER. Under hoped to offer an amendment to make ture abuses of corporate power. We the previous order, the Senator from workers’ retirement plans whole again must reform our accounting system, Massachusetts is to be recognized. when the corporate executives cheat. enact criminal penalties for corporate Mr. KENNEDY. I am happy to yield. After the collapse of Enron—the larg- wrongdoers, and pass new protections Mr. REID. I will take a couple of est bankruptcy in U.S. history—the for workers. minutes. President and many Republicans in Senator SARBANES’ accounting bill is Mr. KENNEDY. I guess I just yielded Congress suggested that it was an iso- critical to reforming our public ac- the floor. lated example of corporate wrongdoing. counting system and ensuring trans- I yield to the Senator and ask rec- Since that time, the nation has wit- parency and accountability for cor- ognition afterwards. nessed a continuing series of corporate porations in the United States. The Mr. REID. We have had some very scandals which have demonstrated oth- legislation creates an independent long speeches by those on the other erwise. oversight board; it restricts the non- side and I thought it appropriate we re- The lack of corporate responsibility audit services than an accounting firm spond. in the United States has undermined can provide to the public companies The ranking member of the Finance the credibility of our markets and dev- that it audits; it holds corporate execu- Committee had all these charts indi- astated the retirement savings of mil- tives responsible for the accuracy of cating that all the problems were not lions of Americans. This widespread corporate financial statements; it re- the problems of this administration. abuse of corporate power has also jeop- quires corporate insiders to report The fact is, we realize there is a lot of ardized our nation’s economic recovery stock sales and corporate loans to the blame to go around. With do not try to and hurt the legitimacy of our funda- SEC; and it provides additional re- whitewash this issue. mental institutions. We must take bold sources to the SEC to improve its in- The fact is, the President of the action this week to ensure that cor- vestigation and enforcement capabili- United States appointed the SEC Com- porations are made accountable and ties. We all owe a debt of gratitude to missioner, who stated in the hearings that workers and investors are pro- our colleague, Senator PAUL SARBANES, he wanted a friendlier, a more gentle tected against these abuses. for shepherding this legislation Securities and Exchange Commission. In the past month, we have seen a through the Banking Committee and That statement speaks for itself. jury criminally convict the Arthur An- bringing it before the Senate. We also have to understand that ac- dersen accounting firm for engaging in In addition to these accounting re- tions speak louder than words. What I the obstruction of justice to cover up forms, we must hold corporate execu- mean is, we have a Federal Govern- the Enron debacle. We have seen tives accountable when they mislead ment today, this administration, that WorldCom admit that it wrongly re- workers and undermine their retire- is basically run like corporate Amer- ported its true financial condition by ment security. At Enron, executives ica. That has to change. That is what nearly $4 billion. Just last week, the cashed out more than a billion dollars this legislation is all about. Wall Street Journal reported that of stock while Enron workers lost near- When there is a situation where the Merck recorded $12.4 billion in revenue ly a billion dollars from their 401(k) re- President of the United States is being from a subsidiary that it never actu- tirement plans. Thousands of Enron written up in editorials all over the ally collected. workers lost virtually all of their re- country and news articles throughout In response to these scandals the tirement savings. Enron executives got the country over his dealings with President gave a speech last week, rich off stock options even as they stock, borrowing money that basically which the White House likened to the drove the company into the ground and he did not have, to pay back the prin- words of former President Teddy Roo- systematically misled workers about ciple until you sell your stock—no one sevelt. Unlike our nation’s great trust- the true financial state of the com- else gets deals like that. The com- buster, the President failed to lay out pany. Ken Lay now has a pension of mentators are looking at that, as they a comprehensive plan to restore Amer- nearly half a million dollars a year for should. Of course, the dealings that the ica’s confidence in our economic sys- life. Many Enron workers have nothing Vice President had with Halliburton, tem. at all. we would like to know more about Hard-working Americans and their These are all statements that were that. But the Vice President is treating families have suffered immensely as a made by Mr. Lay. Ken Lay’s lies en- that like he treated his energy task result of these scandals and the failure couraged workers to buy Enron stock force: in complete secrecy, contrary to of the Administration to take decisive at $49. He ‘‘never felt better about the how we should be running this Govern- action. Workers have lost their jobs, prospects of the company.’’ He pre- ment. their health benefits, and their retire- dicted to employees a ‘‘significantly I believe we have a situation that ment savings. Today, over 47 million higher stock price,’’ saying it was ‘‘an cries out for passing this legislation as workers rely on 401(k) plans and the incredible bargain’’ as it was going quickly as possible. This administra- stock market for retirement security. down. Mr. Lay has a pension of nearly tion must step forward and recognize We can’t wait for the next report of half a million dollars a year. At they are part of the problem, until corporate fraud, the next round of lay- WorldCom, the workers lost more than they start talking about supporting offs, and retirement losses before we half of their retirement savings as the this legislation, as I understand the take serious action. stock dropped from $60 to just 6 cents. President did today. I think that is This wave of corporate scandals is Workers across the country also lost wonderful. I understand he is going to undermining the confidence of inves- big as a result corporate wrongdoing at help us get this through conference. I tors in the U.S. economy. Mutual fund WorldCom. The brave firefighters and think that is important. I would like to investors have lost about $700 billion in police officers of New York City lost see it before the August recess. It is just the last 15 months. In May of this $100 million from their pension fund.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00027 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.059 pfrm17 PsN: S15PT1 July 16, 2002 S6756 CONGRESSIONAL RECORD — SENATE July 15, 2002 Over 20,000 workers have been laid off amendment makes a corporate ‘‘in- It would just give them a cause of ac- in the last few weeks because of the ac- sider’’—an officer or director or the tion, a specific case, no punitive dam- tions of WorldCom executives. Yet, independent public accountant—re- ages. It would be a factual situation those same executives made out like sponsible under pension law if the in- which would have to be decided in the bandits. Former WorldCom CEO Bernie sider misleads workers about the com- courts of law. But it does seem to me Ebbers is guaranteed a million and a pany’s stock. to offer a real meaningful opportunity half dollars for the rest of his life while America’s workers need this amend- to protect workers and the savings of WorldCom workers face a bleak finan- ment to hold Ken Lay and other execu- workers from the kind of gross abuse cial future. tives engaged in wrongdoing account- we have seen currently here in the Sen- Sadly, Enron and WorldCom are not able. The amendment empowers work- ate. just isolated tales of corporate greed ers to seek restitution when executives Mr. DORGAN. Madam President, will that hurt America’s workers. At knowingly abuse workers’ pensions. If the Senator yield for a brief question? Kmart, 22,000 workers were laid off. At workers lose their retirement savings Mr. KENNEDY. I am glad to yield for Lucent, 16,000 workers were laid off. At due to deliberate corporate mis- a question. Xerox, over 13,000 workers were laid management, then they should have Mr. DORGAN. Madam President, the off. At Tyco, almost 10,000 workers the right under our laws to hold those Senator from Massachusetts has just were laid off. At Global Crossing, over top executives accountable in a court propounded a unanimous consent re- 9,000 workers were laid off. of law, and recover what they lost. quest on an amendment that makes These corporate debacles reveal a This right could make the difference good sense to me, and it certainly much deeper crisis of corporate values. for a family between an impoverished should be added to this bill. I assume it In America, people who work hard all retirement and a comfortable retire- is a germane amendment. We are their lives deserve retirement security ment that they earned. postcloture. At the very least, he in their golden years. It is wrong—dead The economic health of our nation should have gotten a vote on the wrong—to expect Americans to face depends on reigning in the abuses of amendment. But I wonder if the Sen- poverty in retirement after decades of corporate power which we have wit- ator from Massachusetts knows that working and saving. nessed in recent months. Restoring the this has gone on all afternoon. I offered For far too long, corporate execu- credibility of accounting standards, as an amendment a couple of hours ago tives have been obsessed with their the Sarbanes bill would do, is critical that was simple and germane. It should own compensation instead of the long- to restoring confidence in our markets. have had a vote. It said that if the term health of the companies they At the same time, we must also restore CEOs and directors of a corporation lead. Executives, like those at Enron basic fairness to our system. waltz out the door with millions of dol- and Wordcom, should not put their own When corporations like Enron fail be- lars of bonuses, stock options, and in- short-term gain ahead of the long-term cause of executive wrongdoing, cor- centive pay, and then the company interests of workers and shareholders. porate executives get golden para- goes bankrupt, they have to give it They must not be rewarded for doing chutes but workers are left with a tin back. I couldn’t get that amendment so. At Enron, workers were systemati- cup when it comes to their retirement. up for a vote because of the same objec- cally misled by Enron executives about Corporate criminals must be made to tion. pay for their misdeeds. the financial situation of the company. I wonder if the Senator from Massa- We see from this chart what has hap- For years, Enron, like many other chusetts might conclude from this that pened: Ken Lay, $457,000 a year for life, the things here in the final hour which companies, pushed its workers to buy retirement savings were decimated, are germane have a right to be consid- company stock with their own 401(k) 4,200 layoffs; former WorldCom CEO, ered and heard on behalf of the workers contributions. Bernard Ebbers, $1.5 million a year, re- Until the bitter end, Enron execu- and the shareholders and the folks who tirement savings decimated, 20,000 lay- tives continued to promote Enron didn’t get rich but the folks who lost offs; Richard McGinn, $12.5 million stock to workers in a series of e-mails. everything. I wonder if there is not a lump sum pay for Lucent, retirement On August 14, Enron CEO Kenneth Lay savings decimated, layoffs for 16,000; pattern here that the Senator from told workers that he ‘‘never felt better Charles Conway, $9 million lump sum Massachusetts sees and that others see about the prospects for the company.’’ pension, retirement savings decimated to shut down those amendments and On August 27, Lay predicted to workers 22,000 layoffs. protect the folks at the top while the a ‘‘significantly higher stock price.’’ This has to stop. Today we have a folks at the bottom lost everything. And on September 26, Lay called Enron critical opportunity to protect workers Mr. KENNEDY. Madam President, stock ‘‘an incredible bargain.’’ Even as and investors against future abuses of this amendment is relevant. But under they promised the moon, Lay and other corporate power. We must not let these the strict rules of the Senate, it would executives were cashing out their stock hard-working Americans down. not be considered germane, although I for a billion dollars. Madam President, I ask unanimous think a commonsense evaluation or re- If Enron and WorldCom scandals consent to temporarily lay aside the view of the amendment’s purpose and teach us anything, it’s that we must pending amendment in order that I what the underlying bill is about would stop rewarding corporate misbehavior. may offer the Kennedy-Gregg amend- certainly appear to I think most people Our amendment—it is cosponsored by ment, which I send to the desk at this to be an important strengthening pro- Senator Gregg of New Hampshire— time. vision if we are interested in corporate makes it clear that executives who The PRESIDING OFFICER. Is there responsibility and protection for work- give workers misleading information objection? ers. It is certainly relevant, but under about the company stock in their Mr. GRAMM. I object. the technical rules it is not germane. 401(k) plans face serious penalties. The The PRESIDING OFFICER. Objec- But I think anyone who knows what amendment is the civil law parallel to tion is heard. The Senator from Massa- this bill is really all about understands the Leahy criminal provisions, which chusetts retains the floor. what is happening in these cir- punish executives for defrauding inves- Mr. KENNEDY. Madam President, I cumstances. This would certainly be a tors. The amendment is also the have heard objection. We tried to get very strengthening provision in the un- ERISA civil law parallel to the Biden this amendment up during the period derlying provisions. We were unable to amendment, which increases the of the last week and were closed out. It get the opportunity to have the consid- ERISA criminal penalties. When execu- is a simple amendment. It is an amend- eration because we were foreclosed tives lie and mislead workers about ment that can do more to protect from that opportunity at the end of company stock, they must face real workers’ interests than many other last week and we are getting objections penalties. proposals. I think we ought to have this week. Under current pension law, Enron ex- some accountability for those who will- I think that is unfortunate. As I un- ecutives, like Ken Lay, and Arthur An- ingly mislead, willingly and knowingly derstand it, the most current support derson, cannot be held responsible for mislead workers, and then benefit from for this is overwhelmingly among Re- workers’ losses in their 401(k) plan. The insider information. publicans and Democrats alike across

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00028 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.015 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6757 this country. They understand. It sions in all three bills that affect the [From SEC website www.sec.gov, June 27, doesn’t take a lot of debate or discus- operations of pension plans, and will 2002, OMB Number: 3235–0569; Expires: Jan- uary 31, 2003] sion to understand what accountability clearly need to be worked out before is all about. Under the existing laws, the bill is sent to the President’s desk. Exhibit A—Statement Under Oath of Prin- cipal Executive Officer and Principal Fi- they can only have accountability, not Harmonizing these requirements will for those who are at the CEO level, who nancial Officer Regarding Facts and Cir- require a careful balance between the cumstances Relating to Exchange Act are really the ones making these judg- rights of pension participants and the Filings ments and decisions upon which work- financial burdens on plan administra- I, [Name of principal executive officer or ers are relying, but they would only be principal financial officer], state and attest able to sue lesser figures in the cor- tors. that: porate ladder. Therefore, this is not an Mr. KENNEDY. I certainly agree (1) To the best of my knowledge, based effective remedy for workers. with the remarks of my colleagues. My upon a review of the covered reports of [com- We are trying to provide an effective pany name], and, except as corrected or sup- bill provides pension plan participants plemented in a subsequent covered report: no remedy for workers who are being with written notice 30 days before a covered report contained an untrue state- shortchanged. It makes eminently good plan blackout begins, and prohibits ment of a material fact as of the end of the sense. It is eminently fair. It is emi- blackouts from continuing for an un- period covered by such report (or in the case nently responsible. It is eminently rel- of a report on Form 8–K or definitive proxy reasonable time. This important dis- evant. But there has been objection to materials, as of the date on which it was it. closure to pension plan participants is filed); and no covered report omitted to state I want to give assurance to the Sen- within the jurisdiction of the HELP a material fact necessary to make the state- ator that we look forward to offering Committee. ments in the covered report, in light of the circumstances under which they were made, this amendment at another time at the Mr. BAUCUS. I also agree with the not misleading as of the end of the period first opportunity. remarks of my colleagues. As chairman covered by such report (or in the case of a re- Mr. REID. Madam President, I ask of the Finance Committee, which also port on Form 8–K or definitive proxy mate- unanimous consent that Senator BYRD has jurisdiction over pension plans, I rials, as of the date on which it was filed). be recognized today at 5 until 15 after (2) I [have/have not] reviewed the contents join the chairman of the HELP Com- the hour to speak. of this statement with [the Company’s audit The PRESIDING OFFICER. Is there mittee and the ranking members of committee] [in the absence of an audit com- objection? both the Finance and HELP Commit- mittee, the independent members of the tees in urging the chairman and rank- Company’s board of directors]. Without objection, it is so ordered. (3) In this statement under oath, each of Mr. REID. Madam President, I sug- ing member of the Banking Committee the following, if filed on or before the date of gest the absence of a quorum. to work with us as you go to con- this statement, is a ‘‘covered report’’: The PRESIDING OFFICER. The ference on S. 2673, to ensure that the [identify most recent Annual Report on clerk will call the roll. blackout provisions are drafted in such Form 10–K filed with the Commission] of The assistant legislative clerk pro- [company name]; a way as to ensure the proper operation all reports on Form 10–Q, all reports on ceeded to call the roll. of the pension system. Mr. REID. Madam President, I ask Form 8–K and all definitive proxy materials unanimous consent the order for the Mr. SARBANES. I look forward to of [company name] filed with the Commis- consulting with both the Finance Com- sion subsequent to the filing of the Form 10– quorum call be rescinded. K identified above; and The PRESIDING OFFICER. Without mittee and the Health, Education, any amendments to any of the foregoing. objection, it is so ordered. Labor, and Pensions Committee as we GUIDANCE TO STATE REGULATORY AUTHORITIES INSIDER TRADING go to conference to make sure the pro- Mr. ENSIGN. Mr. President, the pur- Mr. GRAMM. S. 2673 includes provi- visions are appropriately drafted. pose of this amendment is to ensure sions prohibiting insider trading of that State regulators do not automati- company stock during so-called black- CORPORATE RESPONSIBILITY FOR FINANCIAL REPORTS cally apply the provisions of this bill to outs—or periods during which pension accounting firms, particularly small plan participants are unable to exercise Mr. GRAHAM. Section 302 of S. 2673 accounting firms and firms that service control over the assets in their ac- involves Corporate Responsibility for small businesses without first looking counts. In order to implement the in- Financial Reports. I am concerned that at the possible harmful unintended sider trading prohibition, it was nec- in subsection (b), where the CEO and consequences to those small busi- essary to provide a definition of a CFO sign documents to verify the accu- nesses. The standards applied by the blackout period. The Banking Com- racy of financial reports, the bill’s lan- board under this act could create mittee also provided a 30-day notice re- guage says they shall ‘‘certify’’ the ac- undue burdens and cost if applied to quirement prior to a blackout, so curacy of the financial documents. In nonpublic accounting companies and workers and executives alike would my view, this language should read other accounting firms that provide know when the insider trading prohibi- ‘‘certify under oath’’ in order to be services to small business clients. tion would be effective. Mr. GRAMM. I agree with my friend, consistent with current Securities and Mr. GRASSLEY. Mr. President, there the Senator from Nevada, and want to appears to be broad consensus that Exchange Commission, SEC, regula- add that what we need to avoid is a pension plan administrators should be tions. You can clearly see that the SEC possible cascading effect, starting with required to provide 30 days’ notice to currently requires that these state- the Federal Government, that could affected plan participants before lim- ments to be under oath. Let’s not cre- eventually hurt the small accounting iting their ability to exercise the ate a lower standard in this bill than businesses in this country. rights provided through their pension currently exists in regulation. Mr. ENSIGN. Many of these small plans. These advance blackout notices Mr. SARBANES. I appreciate the businesses rely on their CPA or auditor will become integral requirements for Senator’s interest, and I hope his con- to provide objective, trusted advice and how pension plans will operate in the counsel on a broad range of tax and cerns can be addressed in conference. future. Because of this, notice require- business related issues. Without this ments were included both in the pen- Mr. GRAHAM. I thank the Senator amendment, we will end up harming sion bill reported by the Health, Edu- for his assistance on this issue and his thousands of American accounting cation, Labor, and Pensions, HELP, leadership on this legislation. firms and their small business clients. Committee on March 21, and in the bill I ask unanimous consent that Ex- Mr. GRAMM. Mr. President, I think the Senator from Nevada is right about reported by the Finance Committee hibit A of the order be printed in the unanimously on July 11. the harmful affects this legislation RECORD. Mr. GREGG. I agree with the Senator could have on small businesses, not from Iowa. Although the general con- There being no objection, the mate- only the small accounting firms in this cepts are agreed upon, however, there rial was ordered to be printed in the country, but also the small business are differences between these provi- RECORD, as follows: clients of those companies. This

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00029 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.062 pfrm17 PsN: S15PT1 July 16, 2002 S6758 CONGRESSIONAL RECORD — SENATE July 15, 2002 amendment says to the State regu- That is why I support S. 2673, the today addresses this problem and re- lators to look very carefully at the ef- Public Accounting and Corporate Re- quires the SEC to adopt rules designed fects this legislation could have for form Investor Protection Act of 2002. to protect the independence and integ- smaller and medium-sized firms, and There are those who have said this rity of securities analysts. also on small businesses that may rely legislation is too strong. I disagree. I have no illusions that one bill will on larger firms for their audit work. This legislation will not have a nega- be the panacea for all that currently Mr. ENSIGN. I thank the Senator tive impact on people doing their jobs ails corporate America. For example, I from Texas for his comments. as they should. We have an obligation believe there is more we should do, be- Mr. KOHL. Mr. President, as a busi- to protect investors, employees, citi- yond the corporate disclosures in this nessman, I have been deeply concerned zens. We are saying to CEOs, their fel- bill, to address problems with cor- about the reports of fraudulent and low executives, and their boards: We porate boards. We have a responsi- even criminal behavior at prominent expect you to do your jobs correctly, bility, however, to restore confidence American corporations. When I worked with integrity, and if you don’t, you in our markets and in the solid busi- in business on a daily basis, this is not will be held accountable. nesses which make up these markets so the kind of behavior I saw or expected It is not enough to challenge cor- that our economy can thrive. Only de- from my peers. It is imperative that we porate America to do better. We must cisive action can prevent this fraud on respond to the corporate malfeasance make clear that there is a cost to en- the American people from happening which has been roiling our markets. gaging in accounting and securities again. The impact of these acts, all for the fraud. That is why I supported the sake of boosting short-term profits, has Leahy amendment, a version of the Mrs. MURRAY. Mr. President, over been broad, costing many their jobs Corporate and Criminal Fraud Ac- the past year as Americans have and others their savings. countability Act. This amendment worked hard to restart our economy, The free market is the underpinning strengthens existing criminal penalties we have been hit by report after report of our economic system, the key to the for corporate crime, creates a securi- of irregularities, misconduct, and bla- growth and development of our Nation ties fraud felony punishable by up to 10 tant conflicts of interest by corporate in the last two centuries. The many years in prison, and creates a new executives, auditors, and brokerage creative and dynamic businesses which crime for schemes to defraud share- firms. make up our democratic capitalism holders. The amendment also would es- The current corporate and auditing make important contributions in the tablish a new felony antishredding pro- scandals are hurting American fami- form of good paying jobs and the taxes vision and would protect corporate lies. Thousands of jobs and retirement which pay for critical services, such as whistleblowers. accounts have disappeared. Millions of our national defense. Above all, these The strength of the Sarbanes bill is current investors have watched their businesses are good citizens in their not in the penalties alone. The bill ad- gains evaporate. Our economic recov- communities. As a result, businessmen dresses conflicts of interest which have ery looks more distant. And most im- are important and highly valued people permitted these crimes to occur and is portantly for our long-term prosperity, in our society. The vast majority of a balanced approach which will help investors are no longer confident that businessmen act in good faith and with prevent corporate fraud from occurring the financial information provided by integrity. It is the bad apples who give in the first place. public companies and their auditors is the rest a bad name. The bill sets up a strong, inde- accurate. Our system has been abused. Unfor- pendent, and full-time oversight board Congress cannot restore the jobs and tunately, those who have raped the with broad authorities to regulate retirement savings caused by this wave system have reaped financial gain, auditors of public companies, set audit- of corporate and auditing scandals. It while the rest have lost jobs, savings ing standards, and investigate viola- can act to strengthen oversight of the and pensions. They and their boards tions of accounting practices. The Pub- accounting industry, to demand great- violated the public trust. lic Accounting Oversight Board pro- er responsibility from corporate execu- Those who are lucky enough to be in posed in the bill is a better alternative tives, and to address conflicts of inter- positions of leadership have an enor- to the part-time board currently being est in brokerage firms. mous responsibility to enhance and not pushed by the SEC. That board would Today I am voting for reform. We damage our economy. Unfortunately, leave standard setting to the account- need to send a strong message to work- the current system of regulation has ing profession and would most likely ing and retired Americans, to inves- not been sufficient to prevent bad ac- perpetuate the status quo. It is the tors, and to the executives and audi- tors from abusing their positions. That lack of clear standards coming from tors of publicly held companies that is why we are taking action today. We the current system of self-regulation this Senate will act to restore account- must build more accountability into which has been the root of many of the ability and faith in our free market our economy because the bad actors— frauds being revealed today. system. The Senate’s bipartisan ac- even if they are not in great numbers— The Sarbanes bill also restricts the counting reform bill will do just that. have impacted our whole economy. The nonaudit services a public accounting stock market is no longer the play- firm may provide to its clients that are First, the bill limits its scope to pub- ground of the rich: We are now in an public companies. These consulting licly held companies. The bill does not era when as many as 50 percent of the services are clear conflicts of interest attempt to federalize accounting over- American people have some of their as- for independent auditors. We cannot sight. Instead, it strengthens the Fed- sets in the stock market, meaning rely on auditors to serve as the watch- eral Government’s historic role of reg- enormous repercussions if companies dogs of publicly traded companies if ulating publicly traded companies and are misrepresenting their financial po- they are deeply invested in these same their auditors. The State boards of ac- sitions. companies. If we cannot rely on the countancy will continue their impor- I agree with the President that eth- auditors, than how are we to rely on tant role of regulating accountants ical behavior and corporate responsi- the markets? who audit private companies. bility are essential if we are to restore Finally, the Sarbanes bill addresses Second, the legislation establishes a the confidence of the American people the problem of stock analyst conflicts strong, independent Public Company in our free markets. However, the co- of interest. The Merrill Lynch case re- Accounting Oversight Board. The board lossal corporate wrongdoing we have cently settled in New York is an egre- is empowered to set auditing, quality seen uncovered—in 2001 alone, 270 pub- gious example of stock analysts push- control, and ethics standards, to in- lic companies had to restate the num- ing stocks that they actually thought spect registered accounting firms, to bers in their financial statements—re- had little value. Most often the motive conduct investigations, and to take quires that we step up to the plate and for pushing stocks of questionable disciplinary actions. As a check on the address some of the structural prob- value is to boost their own investment board’s power, its decisions are subject lems which have allowed these frauds banking departments which are under- to oversight and review by the Securi- to occur. writing these stocks. The bill before us ties and Exchange Commission, SEC.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00030 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.017 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6759 Third, this bill seeks to ensure that children’s education, count on business ed was some type of Investors’ Bill of auditors are fulfilling their public du- leaders to play by the rules. They also Rights. ties by ending potential conflicts of in- count on financial industry profes- I had worked with colleagues on both terest. Large accounting firms typi- sionals including accountants and re- sides of the aisle to come up with bi- cally provide both audit and nonaudit search analysis to produce reliable, partisan goals to prevent corporate services to their public company cli- professional, and honest work. abuse and protect investors. I feel that ents. The legislation would prohibit But recent business scandals at much of the bill on the floor fulfills auditors from performing specific non- Enron, Tyco, Merrill Lynch, WorldCom these goals. I feel that there are a few auditing services, unless those services and others are proving that without things that investors should see happen are approved on a case-by-case basis by strong government oversight and regu- when we pass this bill. I believe that the Public Company Accounting Over- lation, greed will lead executives, ac- much of this bill will help, and in other sight Board. All legal nonaudit services countants, and investment analysts to areas we may have to work further. would need to be approved by a public abuse the trust that American workers I believe that investors must have ac- company’s audit committee. and investors have placed in them. cess to information about a company. Fourth, the Senate legislation de- We have to restore that trust. This We should ensure that every investor mands that corporate leaders take bill is a good first step. It has the nec- has access to clear and understandable greater responsibility. The bill requires essary teeth to clamp down on cor- information needed to judge a firm’s fi- that chief executive officers, CEOs, and porate irresponsibility. First, it creates nancial performance, condition and chief financial officers, CFOs, certify a full-time independent board to set risks. The SEC will have the power to financial reports, outlaws fraud and de- ethical auditing standards. Second, it make sure companies provide investors ception by managers in the auditing prevents companies from providing a true and fair picture of themselves. A process, prevents CEOs and CFOs from most consulting services for the very company should disclose information benefitting from misstatements made same companies that they audit. Third, in its control that a reasonable inves- in their financial reports, and prohibits if enforced, it would send corporate ex- tor would find necessary to assess the corporate decisionmakers from selling ecutives who mislead shareholders to company’s value, without compro- company stock at a time when their jail. Fourth, it forces Wall Street in- mising competitive assets. employees are prohibited from doing vestment research analysts to disclose I believe that investors should be so. any conflicts of interest that they or able to trust the auditors. Investors Fifth, the Senate bill would limit the their financial institution might have rely on strong, fair and transparent au- growing pressure and conflicts of inter- in the investment recommendations ditory procedures and the concept of est that affect the independence of that they make. And finally, it pro- the Oversight Board in the Sarbanes stock analysts. Just as investors need tects whistleblowers who reveal uneth- bill is a sound one. to know that a company’s financial re- ical acts by the companies for which I believe investors should be able to ports are accurate, so should investors they work. trust corporate CEOs. Unlike share- expect objective opinions from stock I support this bill and would have holders or even directors, corporate of- analysts. supported even stronger legislation. I ficers work full-time to promote and Finally, the bill would authorize ad- remain concerned that the public mem- protect the well-being of the firm. A ditional funding for the SEC and would bers on the board created in this bill CEO bears responsibility for informing establish independent sources of fund- are not chosen according to specific the firm’s shareholders of its financial ing for the new oversight board and independence standards. I am also con- health. I support the concept of with- FASB. As a member of the Senate Ap- cerned that disclosure requirements do holding CEO bonuses and other incen- propriations Committee, I will support not include the holdings of family tive-based forms of compensation in full funding for the SEC. members of influential research ana- cases of illegal and unethical account- We need to work to prevent future lysts on Wall Street. And most impor- ing. Further, I do believe that CEOs scandals. We also need stronger crimi- tantly I had hoped we could do more to must vouch for the veracity of public nal laws and penalties to address fraud get funds to workers who lose their disclosures including financial state- and abuse by corporate executives and jobs as a result of executive mis- ments. auditors. During last week’s debate I conduct. Those concerns aside, this bill I believe that investors should be voted for three amendments, including is a good first step in restoring con- able to trust stock analysts. Investors an amendment by Senator LEAHY, that fidence in the system. should be able to trust that rec- would close gaps in current law. Unfortunately, the House recently ommendations made by analysts are I know some of my constituents in passed a bill that is weak and will not not biased by promises of profit de- the accounting and business commu- get the job done. It fails to establish a pendent on ratings. It is only common nities are concerned by a few of the full-time board to design and enforce sense that there should be rules of con- steps in the Senate bill. As I talk to auditing standards, does not mandate duct for stock analysts and that there certified public accountants in my jail time for securities fraud, and fails must be disclosure requirements that State, they have emphasized that it is to protect whistleblowers. On the con- might illuminate conflicts of interest. critical to encourage greater competi- flicts of interests that investment ana- Finally, I believe that we should be tion in the public accounting field. I lysts are forced to disclose in the Sen- able to rely on the Securities and Ex- agree investors would be better served ate bill, the House bill calls only for a change Commission to protect inves- by more competition. The bill requires study of the issue. tors and maintain the integrity of the the Comptroller General, in consulta- I urge the President to go beyond securities market. Current funding is tion with various agencies and organi- rhetoric and endorse the Senate ac- inadequate and should be increased to zations, to identify the factors that counting reform bill so that we can get allow for greater oversight, ensuring have led to the consolidation of public a strong bill out of conference. I also investors’ trust in good government. accounting firms since 1989, the impact urge the President to join us in fight- During the debate on this bill my at- of consolidation, and ways to address ing for meaningful pension reform to tention has been called to the plight of it. While a study does not guarantee ensure that American’s retirement sav- public pension systems, such as Or- action, I look forward to reviewing its ings are protected. egon’s Public Employment Retirement findings. Mr. SMITH of Oregon. Mr. President, System, known by the acronym PERS. It is time to restore confidence in I rise today to take a few moments to PERS you see was invested in both corporate financial statements. It is praise the Banking Committee for Enron and WorldCom stock and has time to hold people accountable who bringing the Public Company Account- been hit hard by the debacles that oc- violate the public trust. I urge my col- ing Reform and Investor Protection curred in each company. The PERS leagues to join me in supporting this Act of 2002 to the floor and all the hard system lost about $46 million after legislation. work they have done in the past week. Enron self-destructed and another $63 Mrs. BOXER. Individual investors, In the weeks before this bill came to million following the WorldCom scan- saving for their retirement or their the floor I thought that what we need- dal.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00031 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.074 pfrm17 PsN: S15PT1 July 16, 2002 S6760 CONGRESSIONAL RECORD — SENATE July 15, 2002 These losses occurred because false companies. There is a lingering fear the bill which I have worked closely profits were inflated and corporate that there will be additional revela- with the Committee staff in devel- books were doctored. Under the PERS tions of corporate fraud or misrepre- oping. The amendment would require system, an 8 percent rate of return is sentation. This has already harmed in- the General Accounting Office, GAO, to guaranteed for the 290,000 Oregon ac- vestor confidence and could continue conduct a study of the factors that tive and retired members of PERS. Or- to have an adverse impact on the finan- have led to consolidation in the ac- egon taxpayers have to make up the cial markets. counting industry and the impact that difference following an ENRON debacle I support this bill because it takes this has had on the securities markets. or WorldCom scandal, and my State’s the appropriate steps to help restore Since 1989, the Big 8 accounting firms budget is not prepared for this kind of public trust in the accounting industry have narrowed down to the Big 5 and loss. and financial markets. S. 2673 would may soon become the Final 4. This While this bill goes far in creating create an independent Public Account- study is necessary to evaluate the im- accountability, I am interested in find- ing Oversight Board to provide effec- pact that consolidation has had on ing out if there is more we can do and tive oversight over those in the ac- quality of audit services, audit costs, am asking the General Accounting Of- counting industry responsible for au- auditor independence, or other prob- fice, in consultation with the Securi- diting public companies. Previous at- lems for businesses. In addition, the ties and Exchange Commission and the tempts at regulation have been com- study is necessary to determine what Department of Labor, to report to Con- plex and ineffective. As the numerous can be done to increase competition gress on the extent to which Federal auditing failures demonstrate, there is among accounting firms and whether securities laws have led to declines in a need for an independent Board with federal or state regulations impede the value of stock in publicly traded authority to adopt and enforce audit- competition. companies and in public and private ing, quality control, ethics, and inde- I am pleased that the Senate has pension plans. pendence standards for auditors. worked in a strong bipartisan fashion I believe this study is necessary be- The legislation also requires addi- to strengthen this bill. Extremely valu- cause many public and private pension tional corporate governance procedures able amendments have been added to plans continue to rely on the continued to make Chief Executive Officers and the original committee bill. In par- stock growth in publicly traded compa- Chief Financial Officers more directly ticular, the Leahy and Biden amend- nies, much like the PERS system. I responsible for the quality of financial ments strengthen penalties for cor- hope this study will provide the needed reporting made to investors. After the porate fraud. These two amendments information so public and private pen- numerous misstatements and corporate will help provide much needed addi- sion plans can reevaluate future invest- abuses that have occurred, this is a tional protection for investors and re- ments in publicly traded companies. necessary step to ensure that corporate tirement plan participants. We cannot stand by and watch our executives are held accountable for the I encourage my colleagues to support hard working Americans ruin their financial statements of their compa- the Public Accounting Reform and In- pension systems while corrupt cor- nies. A particularly important provi- vestor Protection Act of 2002 to restore porate executives take advantage of in- sion in the bill would require that public trust in the accounting industry vestors. I am proud of the work the CEOs and CFOs forfeit bonuses, incen- and the financial markets. Senate has done in the last week in tive-based compensation, and profits Mrs. FEINSTEIN. Mr. President, I creating accountability and responsi- from stock sales if accounting restate- rise to offer my support and cosponsor bility in corporate America and look ments result from material noncompli- an amendment to S. 2673 offered by the forward to working on this issue in a ance with SEC financial reporting re- senior Senator from New York, which way that will help the investors and quirements. would prohibit all loans by a corpora- pensioners in the PERS system in Or- Rules to limit and disclose conflicts tion to its directors or executive offi- egon. of interests for stock analysts are in- cers. Mr. AKAKA. Mr. President, I rise cluded in the legislation. There is a Among the abuses committed by sen- today to express my support for the concern that firms pressure their ana- ior executives and directors at compa- Public Company Accounting Reform lysts to provide favorable reports on nies such as WorldCom, Enron, and and Investor Protection Act of 2002. I current or potential investment bank- Global Crossing is the practice of thank Chairman Sarbanes for his lead- ing clients. This provision would pro- issuing large, favorable loans to those ership and the Banking Committee’s vide protection to those individual in- executives and directors. staff for their efforts which have re- vestors who often depend on analysts Those loans can create conflicts of sulted in a measure which is fair, real- for making investment decisions with- interest that limit that the ability of istic, and protects investors. The out being aware of the potential con- outside directors, in particular, to steady disclosure of accounting scan- flicts of interest that the analysts may voice their criticism of the institution. dals and corporate misdeeds under- have with companies whose stock they Many years ago, I served on the scores the need for legislation to pro- evaluate. board of directors of a bank, and noted tect investors and to restore public The Public Company Accounting Re- that at the time, several of the direc- trust in the accounting industry and fi- form and Investor Protection Act also tors had hundreds of thousands of dol- nancial markets. Chairman Sarbanes authorizes additional appropriations lars worth of outstanding loans at that has been the leading voice for reform. for the Securities and Exchange Com- bank. Our Banking Committee held ten hear- mission in order to provide the re- At the time, this occurred to me to ings on accounting and investor protec- sources necessary to protect investors. be wrong, and I could not understand tion issues in February and March. According to the General Accounting why these directors did not take out These hearings produced extremely Office, approximately 250 positions loans at another bank, thereby avoid- valuable information from which S. were vacant last year because the Com- ing any conflicts of interest. 2673 was developed. mission was unable to attract qualified The only conclusion I could draw was Public confidence has been shaken by candidates. Additional funding is need- that the loans to these directors were the incidences of fraud and misrepre- ed to attract and retain qualified em- either easier to procure or made on sentations revealed in the financial ployees. S. 2673 would authorize appro- more favorable terms than loans from statements of companies. Enron, priations of $776 million for the Com- another bank would be. Xerox, and WorldCom are just a few ex- mission, which is much greater than I see no justification for providing amples of corporations which have mis- President Bush’s original budget re- loans to corporate directors or execu- led investors with their financial state- quest of $467 million. I am pleased that tive officers. The goal of the reforms ments. Since 1997, there have been al- the President is moving closer to sup- that we are currently debating should most 1,000 restatements of earnings by porting the dollar amount included in be to create an environment in which companies. Investors have suffered sub- the bill. outside directors and major corporate stantial financial losses and are unsure I also want to thank Chairman Sar- officers act in as pure and honest a of the validity of the audits of public banes for including an amendment in manner as possible.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00032 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.019 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6761 They should not enter into any ap- hearings, we watched and listened as clude the ability to investigate and pearance of conflict, such as the con- former Enron executives either chose punish any wrongdoing by companies flict that occurs when the corporation to remain silent, or pointed fingers of under SEC jurisdiction as well as their that they serve extends them a per- blame at everyone’s actions except auditors. The bill also disallows simul- sonal loan. their own. taneous auditing and consulting, while When an individual investor chooses Tragically, the bankruptcy of Enron providing for the Board to approve cer- to buy a stock, he or she does so with was no anomaly in the business sector. tain exceptions to non-specified non- the full knowledge that it might turn Rather, it was only the beginning. It audit services under this rule. out to be a bad investment. The stock ultimately proved to be a watershed The pending legislation also makes may appreciate in value, but it might event, as several other companies have important strides in ensuring that any also go sour. reevaluated their own business and ac- gain made by company executives be Anyone who makes that investment counting methods, and found signifi- subject to retrieval if the company has knows that the only way to be sure not cant indiscretions. Global Crossing, a to prepare an accounting restatement to lose any money is to keep the telecommunications company, is being due to certain noncompliance with SEC money in cash or buy a T-bill. investigated by the SEC and FBI in re- regulations. As Treasury Secretary But that is not the way it worked for gard to questionable accounting prac- Paul O’Neill so aptly states in response the CEOs and directors of some of the tices used to artificially inflate rev- to the actions of Enron executives, ‘‘I largest public companies in this coun- enue. Adelphia Communications, a really do believe that the CEO is in ef- try. cable company, is now in bankruptcy fect the steward for all the people who For example, Bernard Ebbers, the proceedings due to investigations by work in their organization. And that former CEO of WorldCom, took out $430 the SEC and two federal grand juries with that responsibility goes a com- million in loans from his company be- for off-balance sheet loans to the com- mitment that the people come first and tween September 2000 and the end of pany’s founders. that the practices are open and above 2001. More recently, Xerox announced that board and without reproach.’’ These ex- When the SEC began investigating it would restate 5 years of results ecutives should not be able to leave WorldCom earlier this year, $343 mil- which could affect the true nature of their beleaguered companies, pockets lion in loans were still outstanding, what had been reported as $6 billion in stuffed with profits from cashed out most of which may never be recovered revenues. And on June 25, WorldCom stock options, while investors and em- by WorldCom’s investors. announced that it had misrepresented ployees suffer the consequences of Those loans to Ebbers are far from $3.8 billion in expenses over five quar- questionable company practices. unique in corporate America today. ters, therefore allowing the company With the unanimous passage of the One of the most egregious examples of to report financial gain, when in re- Leahy amendment, the Senate recog- this type of abuse recent months is the ality, the company was experiencing a nized the need to strengthen penalties disclosure of $3.1 billion in loans ex- net loss. for the punishment of those involved in tended to family members and affili- While the downward spiral of each of corporate crime. For example, the ated business interests of the Rigas these companies was unique, common amendment created a new felony for family by Adelphia Communications, a threads are woven through each of persons involved in the destruction of publicly traded company controlled by their failures. First, the insistence by evidences—to address in the future the Rigas family. executives that, above all else, stock such indiscretions as the document These loans were never disclosed to price remain high was an integral part shredding perpetrated by Arthur An- shareholders, and were apparently used of the creation of the financial woes of dersen’s Enron Audit team. In addi- to shore up a wide variety of business each company; in essence, this short- tion, the Leahy amendment grants im- deals involving Rigas family members, term focus compromised the long-term portant whistleblower protections to including a golf course and an infusion viability of these entities. company employees—like Enron’s of cash into the Buffalo Sabres hockey What has also been disturbing as Sherron Watkins—who bravely report team. these revelations have come to light is wrongdoing occurring within their own On July 9, President Bush went to the role played by the so-called inde- corporation. The bottom line is that integrity and Wall Street and called for, among other pendent auditors of the companies trust are at the core of a successfully things, ‘‘an end to all company loans to under investigation. While the ac- functioning market system. These re- corporate officers.’’ countants are not the sole perpetrators cent business scandals have severely I believe that the President was of the financial deception that has oc- damaged this foundation. And as with right, and have cosponsored this curred, the apparent lack of scrutiny of any foundation in disrepair, leaving amendment with that goal in mind. the financial statements of the afore- unaddressed the damage caused by lost Investors have a right to know ex- mentioned companies has created an faith in the system will lead to contin- actly how much of their dividends are inherent mistrust in the accuracy and ued instability, or worse. going to pay for excessive pay pack- integrity of the true nature of cor- Therefore, we in Congress have an ob- ages. They also have a right to expect porate earnings. ligation to do what we can to maintain that the board of directors is truly Furthermore, the practice of allow- and build investor confidence and faith independent and that no directors are ing auditing companies to perform non- in our free market system. I believe tied too closely to the corporation they audit services can have the ultimate that the legislation we are considering serve because of loans they have re- effect of allowing such companies to today is a crucial first step toward that ceived from it. audit the work of their own personnel. end, as well as ensuring the full re- Ms. SNOWE. Mr. President, I rise This practice defeats the purpose of bound of our floundering economy. today to speak in support of the legis- having an unbiased entity objectively Mrs. FEINSTEIN. Mr. President, I lation we are considering, S. 2673, the reviewing the merits and accuracy of rise in support of S. 2673, the Public Public Company Accounting Reform financial statements. Company Accounting Reform and In- and Investor Protection Act of 2002. The legislation we are considering in vestor Protection Act of 2002. Last fall, we watched as a company the Senate includes crucial provisions Nearly every day, it seems, the front once in the top 10 of the Fortune 500 that will play a pivotal role in restor- pages of our newspapers are awash in imploded from the weight of its own ing confidence in our market system, stories about the latest corporate ac- complex efforts to mask debt and hide and enhancing the public and private counting scandal. Just 3 weeks ago we losses. We watched as the company sector controls that are in place to learned that WorldCom hid $3.8 billion stock-laden retirement plans of monitor the relevant entities. The leg- in expenses in the last five quarters Enron’s loyal employees dwindled by $1 islation creates a Public Accounting alone. billion. Meanwhile, company execu- Oversight Board, which will be an enti- And WorldCom is merely the latest tives cashed out their own shares while ty solely focused on companies that member of an increasingly large group these employees were barred from audit and account for publicly traded of public corporations that have know- doing so. And finally, in congressional firms. This oversight authority will in- ingly deceived shareholders, directors,

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00033 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.076 pfrm17 PsN: S15PT1 July 16, 2002 S6762 CONGRESSIONAL RECORD — SENATE July 15, 2002 and, in some cases, their own auditors. nies to bypass or trample over auditors sight, creating meaningful penalties WorldCom, Enron, Tyco, Global Cross- in attempt to produce inaccurate or de- for senior executives who defraud in- ing, Xerox—the list goes on and on. ceptive financial statements. vestors, and putting in place new dis- Much attention has been focused on For the first time, the Sarbanes bill closure requirements, this bill will dra- the huge sums that CEOs and other creates a truly independent accounting matically increase the quality and senior executives have extracted from oversight board, staffed with objective, timeliness of the information available these companies in the form of incen- unbiased overseers, who can enforce to individual investors. tive pay, but even those large sums rules and prosecute violators without The United States is blessed with the pale in comparison to the total share- having to vet their decisions elsewhere. best-regulated markets in the world, holder value that has been destroyed as Unlike the Public Oversight Board, and for that we have been rewarded a result of these disclosures. At its which depended on fees from the very with tremendous foreign investment peak, WorldCom’s market capitaliza- auditors it was meant to regulate, this and a leadership position in world fi- tion exceeded $190 billion, making it, new board will be funded by mandatory nancial markets. for a time, the most valuable tele- fees paid by all public companies. A vote in favor of this legislation is communications services company in These are fees that cannot be withheld a vote to strengthen our position and the world. Now, WorldCom shares are at the whim of those who have the avoid a wholesale loss of investor con- effectively worthless. greatest interest in undermining the fidence that would be perilously dif- Despite a slowdown in the telecom work of the board. ficult to restore. industry, some of the value of those The Sarbanes bill does not stop at Mr. HATCH. Mr. President, I wish shares might have been preserved had the creation of this new board, how- today to express my support for S. 2673, its executives relied on sound manage- ever. Rather, the bill strengthens areas the Public Company Accounting Re- ment, instead of deceptive accounting, of the law that have proven inadequate form and Investor Protection Act of to make their numbers. to prevent the fraudulent corporate be- 2002. I am pleased that the Senate is Who will suffer most from the im- havior that has become so prevalent acting decisively to impose harsh, swift mense value decline associated with today. punishment on those corporate execu- WorldCom and other companies that The Sarbanes bill prevents auditors tives who exploit the trust of their have deceived their investors? Not the from controling the entire financial re- shareholders and employees while en- senior executives, most of whom have porting system at an individual com- riching themselves. The recent cor- stashed away enough of their pay to let pany by both designing the internal porate scandals demonstrate just how them spend the rest of their days in audit system, and then purporting to important it is to hold corporate ex- comfort. The people who will really offer an unbiased external audit. The ecutives accountable. I believe it is suffer are the thousands of employees bill will also stiffen the resolve and equally important for prosecutors to be whose retirement savings were proudly oversight of board of director audit provided with the tools necessary to invested in company stock; or the mil- committees by requiring, among other aid in the investigation of these forms lions of public employees whose pen- provisions, that all committee mem- of fraud. sion funds held shares in these compa- bers be independent and that they be During this debate, our colleagues on nies. Those are the people who will given free reign to question auditors both sides have consistently called for bear the brunt of this value decline. without executive officers present. increased penalties for corporate fraud CalPERS, the pension fund set up to But rather than rely solely on in- offenses. This week, as the Dow Jones invest the retirement savings of 1.3 creased oversight, the bill moves to re- index plummeted nearly 300 points— million public employees in my home duce conflicts of interest at their representing the biggest single day State, has estimated that it suffered a source, by requiring the CEO and CFO point drop since the week following the $580 million loss on WorldCom stocks of a company that has had to restate attacks of September 11 we voted and bonds. That means that the aver- its financial accounts to disgorge any unanimously to adopt a series of age California public employee lost bonuses or other incentive pay they re- amendments that will strengthen over $440, not including any invest- ceived in the year prior to the criminal fraud penalties and create ments in WorldCom they may have misstatement. new criminal fraud offenses. I cospon- held independently. Moreover, under an amendment spon- sored an amendment with Senator To give you some perspective on that sored by Senator SCHUMER and myself, BIDEN to enhance white collar pen- amount, the amount of money lost by company loans to executive officers are alties. And I supported an amendment California public employees due to the now prohibited, sharply limiting the offered by Senator LOTT, which incor- WorldCom fraud alone is likely to ex- types of ‘‘hidden’’ compensation that porated the President’s proposal by en- ceed the entire sum of the tax rebate can be offered to executives without hancing white collar penalties, checks they received as part of the being fully disclosed to shareholders. supplementing existing criminal laws, President’s tax cut last year. Our amendment passed by a voice vote and increasing the Security and Ex- In fact, every American who invests and will go a long way toward pre- change Commission’s administrative in our stock markets will suffer as a venting the types of loan-related powers to enforce this nation’s securi- result of these scandals, because every abuses prevalent at WorldCom, Global ties laws. I also supported Senator scandal further tarnishes the reputa- Crossing, and other companies now LEAHY’s amendment, a measure I tion of American corporate honesty for under investigation by the SEC for worked to improve in committee. This investors around the world. In recent loan-related abuses. amendment includes new criminal and months, those investors have pulled When Senator SARBANES drafted this civil provisions that I believe will also billions of dollars in investments out of bill, he focused on the single reform assist in deterring and punishing fu- our country, further reducing the value that matters most: increased trans- ture corporate wrongdoing. of stocks and weakening the dollar. parency. Unfortunately, we may wit- Further, I am glad to see the Senate The only way that we can turn this ness more corporate failures like those finally considering legislation that will culture around is by fostering a cor- of Enron or WorldCom. These are fail- overhaul government regulation of the porate environment that rewards hon- ures that are brought on by over-in- accounting industry. I agree with my est management by senior executives vestment, the accumulation of exces- distinguished colleague from Maryland and severely punishes fraudulent ac- sive debt, or an ill-conceived belief in that there is an inherent conflict of in- tivities. That is exactly what would be markets or services that never live up terest between internal and external achieved by the bill proposed by Sen- to expectations. auditing. The same people should not ator SARBANES. What we cannot abide by, and what be installing the internal control sys- The Sarbanes bill tackles many of the Sarbanes bill goes a long way to- tem, performing the internal audits, the major problem areas associated ward preventing, is the ability of sen- and then reporting on the financial with recent corporate scandals. Most ior executives to hide those bad deci- statements. The external auditor some- importantly, the bill would make it sions in misleading financial state- times has to be tough as nails, and much more difficult for public compa- ments. By ensuring true auditor over- willing to disagree with its client’s top

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00034 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.077 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6763 executives. It is hard to be the bad cop tors, analysts, financial institutions, ber of the Senate about the vital need when you are also the personal trainer. and others could have intervened ear- to restore trust and transparency in However, Congress cannot always lier and helped to restructure these business practices so we can begin to second-guess the desires of investors. firms before all-out catastrophe threat- repair investors’ faith in the honesty of In some cases, stockholders, bond- ened. When it comes to business infor- our companies and in our markets. We holders, and other stakeholders will be mation, knowing sooner is always bet- need more transparency on a com- worse off if Congress imposes too strict ter than knowing later. pany’s books so that any person want- a barrier between consulting and audit- And even more importantly, if cor- ing to invest their hard-earned money ing. This is especially true for small porate officials had faced the threat of has a true financial picture of the com- businesses that may not be able to af- serious jail time and the certain pany they are planning to invest in. ford to hire both a consulting firm and knowledge that their financial and ac- This issue of expensing stock options a separate accounting firm. And, as the counting capers would be exposed to is not going to go away. Look at what President has noted, in our fast-chang- the world, they would have been much has just happened. Coca-Cola, a For- ing economy, Congressionally-imposed less likely to have overborrowed and tune 100 company, just announced that barriers between different business underdisclosed in the first place. Mr. it will begin in the fourth quarter to practices can end up becoming Con- President, the bill on which we will treat all employee stock options as an gressionally-imposed barriers to pro- vote today, on which Senator SAR- expense. And I believe more companies ductivity growth. BANES and many of our colleagues have will follow Coca-Cola’s lead. It is only I think the bill before us represents worked so hard, contains solid provi- a matter of time. an effort to strike a good balance be- sions that I believe will put real fear of Before I yield the floor, I would like tween these two competing goals of serious consequences into the minds of to read a quote from a July 22, 2002 auditor independence and business in- corporate wrongdoers. Weekly Standard article, ‘‘Big Busi- novation. It prevents internal and ex- Does this bill represent a perfect so- nesses Bad Behavior,’’ in which econo- lution to the corporate accountability ternal audit work from being done by mist Irwin Stelzer, Director of Regu- issues presently facing our country? Of the same firm, and it establishes clear latory Studies at the Hudson Institute, course not. I would have written a dif- lines of responsibility and account- eloquently explains why governmental ferent bill in several respects. However, ability. At the same time, the corpora- action is needed to restore faith in our I believe that the bill is a good attempt tion’s independent audit committee financial institutions. The ‘‘opposition to balance competing interests and dif- will be permitted to authorize certain of important segments of the business ferent political philosophies. As the consulting services if they are con- and accounting communities to re- bill goes to conference with a House- vinced it is in the shareholders’ best in- form,’’ he writes, ‘‘means that govern- passed bill that has some significant terest. This audit committee, con- ment must take on the burden of revis- differences, I expect the balance to im- sisting of members of the client’s board ing the institutional framework within of directors, will be required by law to prove even further. Strengthening corporate account- which business operates—setting the be completely independent of the cor- rules of the game that will allow mar- poration itself. This will mean that if ability is crucial to our nation’s long- term welfare. If Congress and the kets to do their job of allocating the CEO and other top corporate offi- human and financial capital to its cials believe it is in their company’s President can act together to help in- crease corporate transparency and re- highest and best uses. As Milton Fried- best interests to have their accounting man, no fan of big government, has firm help with, for example, tax con- store investor confidence, then busi- nesses will be better able to raise in- written, society needs rules and an um- sulting and preparation, the corporate vestment capital. Greater access to pire ‘to enforce compliance with rules officials will have to argue the merits capital will enable U.S. businesses to on the part of those few who would oth- of their case before the independent fund the groundbreaking research and erwise not play the game.’’’ I couldn’t audit committee. That kind of inde- to purchase the high-tech equipment agree more. pendence makes good sense, and it that is the foundation of America’s I ask unanimous consent that the fol- makes good law. long-term prosperity. And Americans lowing articles be printed in the The Federal Government needs to RECORD. help investors whether banks, pension from all walks of life will reap the re- wards. There being no objection, the mate- funds, or individual investors in their Mr. MCCAIN. Mr. President, I rise rial was ordered to be printed in the quest for accurate information about today as a proud cosponsor of amend- RECORD, as follows: the financial condition of America’s ment No. 4283 that is being offered by [From the Weekly Standard, July 22, 2002] businesses. Doing so is crucial for our Senator LEVIN. The amendment says economic long-term health. While BIG BUSINESS’S BAD BEHAVIOR that the standard-setting body for ac- (By Irwin M. Stelzer) Enron’s and WorldCom’s financial she- counting principles that is set up in nanigans contain many differences, the No sensible person can quarrel with what this bill shall review the accounting the president told the Wall Street biggies he similarities are far more important. treatment of employee stock options These were both firms that borrowed addressed last week. Crooks should be forced and shall within a year of enactment of to disgorge their ill-gotten gains, and should too much money during the expansion this act adopt an appropriately gen- go to a jail for extended periods. Enforce- years of the late 1990s. And when it erally accepted accounting principle ment agencies should be given adequate re- started getting tough to make the debt for the treatment of employee stock sources. Corporate executives should be held payments, both firms tried to hide options. responsible for the accuracy of what they their financial difficulties through cre- Unfortunately, this body is not going tell shareholders, disclose their compensa- ative bookkeeping, cooked up at com- to get the opportunity to vote on this tion in annual reports ‘‘prominently and in plain English,’’ and explain what their ‘‘com- pany headquarters. They succeeded for reform or the reform I proposed last a time, but the combination of investor pensation package is in the best interest of week requiring the expensing of stock the company’’ Board members should be vigilance, media investigations, and options. We want to help restore inves- independent and ‘‘ask tough questions.’’ government scrutiny are eventually tors’ confidence for the long run, but Shareholders should speak up. Most impor- bringing the facts to light. we are being denied an opportunity to tant, chief executive officers should crate a If there had been real financial trans- do this. A simple vote on this amend- ‘‘moral tone’’ that ensure the company’s top parency, both current stockholders and ment is all we ask. And yet, we are managers behave in accordance with the potential investors could pierce the being denied, and that is truly regret- highest ethical standards. veil of bookkeeping to immediately see table. I see no reason that a vote The quarrel comes not with what the presi- dent said, but with what he didn’t say. In the these companies’ true financial situa- should not be permitted on this amend- tion. This may not have prevented the game of matching his laundry list of reforms ment, but let’s face it—the fix is in. against the inevitably longer list generated painful layoffs and tragic loss of retire- I want to talk more about the ex- by the Daschle-Leahy-Sarbanes-Gephardt ment assets by thousands of employ- pensing of stock options. crowd the president inevitably loses, as last ees. However, with more accurate and Americans have heard from the week’s unanimous vote of Senate Repub- timely information, investors, direc- President and practically every Mem- licans for the Democrat’s bill proves. Longer

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00035 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.078 pfrm17 PsN: S15PT1 July 16, 2002 S6764 CONGRESSIONAL RECORD — SENATE July 15, 2002 sounds better if you’re just compiling a laun- high-tech companies to bow to Alan Green- placing some item off-balance-sheet might dry list of items aimed at punishing politi- span’s call for them to report their share op- be technically legal, but would obscure the cally unpopular corporate bad guys. Only if tions as the expenses they most certainly company’s true financial condition, or to in- there is a conceptual framework within are. Again, I recall a discussion that followed sist on access to documents that might have which specific reforms can be created and de- a similar proposal I made several years ago. revealed WorldCom’s recording of current ex- fended is there any hope that a sensible cor- One CEO said that he couldn’t place a value penses as capital investments. Rather than porate governance system will emerge from on these options for purposes of reporting to rely on such strength of character, some 70 the congressional legislation factory. shareholders, even though he could value percent of the directors surveyed by Start with the fact that it is important to those same options for the purpose of deduct- McKinsey & Co. now say they will in the fu- distinguish the role of government from that ing their cost from his profits for tax pur- ture oppose the granting of such contracts, a of the private-sector institutions that mon- poses. Another claimed that if he treated op- policy that Arthur Levitt, Bill Clinton’s SEC itor corporate America. The latter can be re- tions as an expense, he would wipe out his chairman, was unable to push through over lied upon to act when the integrity of the entire reported earnings, an argument, I sup- the massed opposition of the accountants’ system is threatened, not because these pri- pose, for refusing to account for almost any lobbyists. All of which makes Bush’s silence vate sector players are a bunch of goodie- expense that constitutes a threat to reported on this subject rather odd, and the Senate two-shoes, but for the more reliable reason profits—what might be called the WorldCom Democrats’ insistence on a broader prohibi- that honest markets and accurate profit re- excuse. (For the economy as a whole, experts tion on consulting than is contained in the porting are in their interest. Just as gam- estimate that expensing of options would re- House Republicans’ bill more likely to get blers won’t put their bets down when they duce aggregate corporate profits by about 8 the auditors’ incentives lined up with share- know a wheel to be rigged, so investors won’t percent.) Note that the issue is not whether holder interests. put their money into shares if prices can be companies, especially start-ups, should be al- Once those incentives are in place, other manipulated by inflated profit reporting or lowed to use options to attract talented provisions of the House and Senate bills be- special treatment of insiders. staff, but whether they should have to treat come unnecessary. Both bills call for still Hence we have a stream of quite sensible this compensation as an expense when re- more regulation of auditors, and create still reforms proposed by the Business Round- porting profits. As Greenspan points out, re- another regulatory body to set and oversee table and the New York Stock Exchange, fusing to deduct the cost of options diverts accounting standards. One need not be an some going beyond those being pushed by the capital and other resources from truly prof- apologist for the accounting profession to president. And we have companies scram- itable to only apparently profitable firms. suggest that such a move would merely con- bling to adopt governance rules and account- This opposition of important segments of tinue the failed practice of attempting to ing practices that will reassure investors the business and accounting communities to control auditors by closely supervising them. that the game is not rigged against them. No reform means that government must take on There is no reason to believe that such su- CEO wants to see his company’s stock bat- the burden of revising the institutional pervision will be any more successful in the tered by investors who fear that share values framework within which business operates— future than it has been in the past, espe- will evaporate as profits are restated to setting the rules of the game that will allow cially since in the end auditors are required eliminate the imaginative counting of reve- markets to do their job of allocating human only to say that they followed often complex nues (claim them now, before the customers and financial capital to its highest and best and arcane rules that necessarily involve the pays or even considers paying) and of costs uses. As Milton Friedman, no fan of big gov- exercise of judgment. (capitalize rather than expense every outlay, ernment, has written, society needs rules Instead of such ongoing regulation, includ- regardless of the life of the item purchased). and an umpire ‘‘to enforce compliance with ing half measures that merely restrict audi- Plummeting share prices are dangerous to rules on the part of those few who would oth- tors from engaging in some specified form of the careers of chief executives. erwise not play the game.’’ consulting activity, let’s get the incentives But, as the president recognized when he To keep rules to a Friedmanesque min- right by complete, mandated separation of called for higher ethical standards, self-in- imum, we need a conceptual framework for the audit and consulting businesses, as John terest cannot be relied upon to produce hon- reform rather than competing laundry lists. McCain proposes. Lead the CPAs not into est business dealings unless that self-interest The first step is to understand the limits of temptation, and reliance on porous Chinese includes what Adam Smith called a ‘‘desire criminal sanctions. Yes, it makes sense for walls becomes unnecessary. Auditors will to be both respected and respectable,’’ and the Senate to insist, as it did unanimously compete for business on the basis of their such esteem is seen to flow not from ‘‘wealth last week, that the crimes perpetrated by ability to provide a product that gives inves- and greatness’’ but from ‘‘wisdom and vir- some corporate managers and accountants tors confidence in the transparency and ac- tue.’’ Which may be what Bush had in mind be defined as precisely as possible. Yes, curacy of the company accounts, with the when he said that we need ‘‘men and women criminal sanctions can be used to make life uplifting effect that will have on the prices of character, who know the difference be- miserable for those caught with their fingers of their clients’ shares. (Audit firms are un- tween ambition and destructive greed’’ to in the till and to deter from evildoing those likely to compete on price, since the risks lead our major corporations. And it may be for whom Adam Smith’s ‘‘desire to be re- associated with the audit business have what he had in mind when, immediately spectable and to be respected’’ is insufficient risen. There are only four major firms, and after delivering talk, he returned to Wash- inducement to decent behavior. But, as law rotation of auditors on something like the ington to award the Presidential Medal of professors David Skeel and William Stuntz five-year basis favored by Senate Democrats, freedom—America’s highest civilian honor— recently pointed out in the New York Times, although necessary to prevent over-identi- not to the nations’ richest (Intel founder ‘‘Criminal laws lead people to focus on what fication between client and auditor, is a clas- Gordon Moore may have been the one excep- is legal instead of what is right. . . . In to- sic cartel market-sharing arrangement—all tion), but instead to folks who have enriched day’s world, executives are more likely to legal, in this case.) our national life with their sharp iconoclasm ask what they can get away with legally Analysts are another group who now face (Irving Kristol), gentle humor (Bill Cosby), than what’s fair and honest.’’ The Senate perverse incentives. Investors may have been and quiet devotion of family and good causes was pleased with itself for toughening the naive to believe that these students of in- (Nancy Reagan). laws under which executives will operate, come statements, balance sheets, and other Still, neither self-interest reform nor a but criminalizing bad behavior is no guar- economic data would provide honest advice new emphasis on business ethics can be re- antee of future good behavior—behavior that about a company’s financial condition and lied upon to save capitalism from the cap- is not merely indictment-avoiding, but is prospects. But they had a right to such a be- italists. Immediately after the president’s efficiency- and wealth-enhancing. lief, since the commissions they pay their speech the White House was bombarded with Instead, policymakers should turn to that brokers are supposed to be in return for such calls from CEOs protesting his demand that trusty guideline, ‘‘Get the incentives right.’’ advice. Along comes New York State Attor- they disclose their compensation packages The problems we are facing stem from the ney General Eliot Spitzer and revelations in easily accessible terms. I well recall the fact that we have provided the four guard- that some of these supposed agents of the reaction when, several years ago, I made a ians of shareholder interests—auditors, ana- shareholders’ interests are recommending similar suggestion at a think-tank-sponsored lysts, directors, and corporate managers— stocks they know to be ‘‘shitty’’ in order to meeting of top business and government offi- with the wrong incentives. win investment banking business for their cials. One captain of industry replied that he Auditors know that success or failure in partners and increased compensation for would not tell his shareholders how much he their profession depends not so much on the themselves. All of this in the presence of earns lest he encourage kidnappers (as if accuracy and realism of their audits, as on Chinese walls erected to separate bankers they would only become aware of his afflu- their ability to conduct themselves so as not from analysts. It took no Joshua-plus-trum- ence if he revealed it in his company’s an- to imperil the flow of consulting fees to their pet to bring these walls down; the prospect nual report). firms. Enron paid Arthur Andersen as much of hefty banking fees was quite enough. Jack Nor did anything the president said per- or more in consulting than in auditing fees; Grubman, the Salomon Smith Barney (a di- suade the accountants to call off their lobby- Andersen’s $12 million in consulting fees vision of Citigroup) analyst famous for his ists, who continue to oppose reforms that from WorldCom dwarfed its $4 million audit enthusiastic recommendations of WorldCom would make their devotion to the accuracy fee. It would have taken a brave auditor in- stock, last week told the House Financial of their audit statements unambivalent. Or deed to fly in the face of these clear incen- Services Committee, ‘‘No one can sit here on convince CEOs of Silicon Valley and other tives and tell Enron’s management that Wall Street and deny to anybody on this

VerDate Jun 13 2002 06:12 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00036 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.028 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6765 committee that banking is not a consider- duce managers to act in the interests of the should be expensed as other forms of com- ation in the compensation of analysts of a shareholders who own the business has be- pensation. full-service firm.’’ Forget the double nega- deviled students of corporate governance Republicans tried Friday to block the tive: Grubman was conceding that part of his ever since 1932, when Adolph A. Berle Jr. and measure, offered as an amendment to an ac- salary, which reached $20 million per year, Gardiner C. Means published their classic counting-overhaul bill. But Democrats say came from the $140 million in underwriting ‘‘The Modern Corporation and Private Prop- they will try again before final passage of fees that his firm received from WorldCom erty,’’ detailing the potential for managerial the underlying accounting bill, expected late over the past five years. abuse created by the separation of ownership today. Again, get the incentives right. One way, from control of large corporations. Managers ‘‘We are in a new environment,’’ Gary now preferred on Wall Street, is to write con- placing self-interest above the interests of Fayard, Coke’s chief financial officer, said in tracts that make analysts’ compensation owners were immune to retaliation by far- an interview. ‘‘There had been a loophole in independent of the fees flowing into the in- flung and essentially powerless shareholders. the accounting, and we thought it was the vestment banking divisions of the large That situation was partially corrected when right time to step up to the plate. firms. But just how analysts can prosper if Mike Milken and his debt-financed corporate ‘‘There’s no doubt that stock options are compensation,’’ he added. ‘‘If they weren’t, the banking division isn’t earning enough to raiders snatched control of many companies pay the rent is unclear. Besides, unless ana- none of us would want them.’’ from the worst abusers of shareholders’ in- lysts suddenly become willing to issue ‘‘sell’’ Coke said its decision, announced yester- terests, grounded fleets of corporate jets, recommendations just when their invest- day morning, will reduce earnings only sold off hunting lodges, and generally sweat- ment banking partners are pitching a com- slightly—by about a penny a share—for 2002. ed the fat out of expenses—a wonderful ex- pany for business, this proposed reform is That reflects the fact that Coke doesn’t unlikely to be effective, especially after the ample of markets working to correct abuses grant options as extensively as do some current heat is off and congressional atten- that seemed beyond the reach of regulators. other companies. And while Coke isn’t the tion turns to other matters. True or not, But nowadays there aren’t many people first public concern to make the accounting bankers believe that CEOs, being human who want to be like Mike, so it is incumbent change—Boeing Co. and Winn-Dixie Stores (yes, most are), are likely to take into ac- on policymakers to get managers’ incentives Inc. in recent years began calculating stock count what a firm’s analysts are saying right. President Bush’s proposal for publica- options as an expense—its high profile could about their stock when selecting an invest- tion of compensation arrangements in an ac- prompt other businesses to consider calls ment banker. It would be an unusual CEO, cessible format would be a step in the right from investors, regulators and politicians for indeed, who would cheerfully receive an in- direction, its effectiveness attested to by the greater financial candor. vestment banker after reading in the morn- howls of outrage it produced from some Last week, AMB Property Corp., a San ing papers that the banker’s analyst-partner CEOs. Truly independent boards, created Francisco-based owner of industrial real es- had just downgraded his company’s stock along the lines described above, would be an- tate, also said it would record stock options from a ‘‘buy’’ to a ‘‘sell.’’ Many investment other advance, since compensation commit- as an expense. bankers—not all, but many—will find ways tees not beholden to corporate managements Proponents of expensing say options are to persuade their partner-analysts to be are more likely to relate pay to performance compensation and should be treated as such, team players. Banking fees are large enough than the supine committees that now exist especially since generous option awards di- to give them an enormous incentive to do on some boards. Add in the requirement that lute the value of shares outstanding. Oppo- just that. options be treated as profit-reducing ex- nents say options are difficult to value and So, let’s get the incentives right and man- penses—another McCain proposal that so argue that expensing would confuse inves- date a separation of the investment banking horrified senators that it has for now been tors, not enlighten them. Changing account- and stock-picking businesses, another derailed—and you will have a new parsimony ing rules would reduce earnings at some McCain proposal. Analysts would then have that will keep salaries to levels commensu- companies. an unambiguous incentive to make the best rate with effort and performance. Under such In 1993, the Financial Accounting Stand- ‘‘buy’’ and ‘‘sell’’ recommendations they pos- a regime, executives would have a clear in- ards Board tried to mandate the expensing of sibly can, so as to build reputations that will centive to spend their time creating effi- options but retreated in the face of stiff op- attract investors to them. And investors will ciencies and new markets, rather than fig- position from business leaders and Congress. get something in return for their commis- uring out how to cash in options, and how to The issue flared up again after Enron Corp’s sion dollars—honest advice from men and persuade their boards to revalue options if demise late last year and has taken on new women expert in the analysis of corporate fi- poor company performance has driven the life with recent disclosures of earnings nancial data, competing with one another to stock price below the price at which the op- misstatements at WorldCom Inc. attract clients by creating a track record of tions may be exercised, rewarding executives Coke’s Chairman and Chief Executive picking winners. whether or not they have delivered long- Douglas Daft raised the idea of recording Which brings us to Directors. Again, we term value for shareholders. stock options as an expense about two have a case of skewed incentives. Directors This may sound like an awful lot of regula- months ago, Mr. Fayard said, as news of fi- are hired by managers to protect share- tion. But it is of a special, self-liquidating nancial scandals continued to unfold. About holders from, er, those same managers. To sort. If we adopt policies that get the incen- 10 days ago, with lawmakers calling for make sure the directors remain friendly, ex- tives of all the players right, government tougher accounting standards, Mr. Daft ecutives often shower them with perks and can then get out of the way so that the var- fielded the idea in phone calls to Warren Buf- consulting fees, the continuation of which ious actors can do their thing—audit, advise fet and some other Coke directors. Mr. Buffett, Coke’s largest shareholder, for years depend on the goodwill of the CEOs they are on investments, monitor management per- has been an outspoken proponent of expens- supposed to be supervising. It is the rare di- formance in the interests of owners, and ing options. rector who chooses to feast on the hand that manage the company in a world in which Mr. Daft pressed ahead with his proposal to feeds him, not merely because he is venal, managers’ interests coincide with those of make the accounting change last week after but because the courtesies lavished upon him shareholders. The right kind of regulation President Bush called in a speech for better genuinely persuade him that the CEO is a de- can be a model of minimal—and effective— corporate governance. Mr. Bush didn’t em- cent chap, deserving of every million he is government. brace the idea of forcing companies to ex- paid. Irwin M. Stelzer is a contributing editor to pense options, but numerous economists and To get the incentives right, directors must The Weekly Standard, director of regulatory financial experts, including Federal Reserve be selected by vigorously participating studies at the Hudson Institute, and a col- Board Chairman Alan Greenspan, have en- shareholders, most especially institutional umnist for the Sunday Times (London). shareholders, from a slate of demonstrably dorsed the move, and growing investor independent people who, although well com- [From the Wall Street Journal, July 15, 2002] unease sent stocks plummeting last week. pensated, have reputations worth protecting. LEADING THE NEWS: COKE TO EXPENSE Mr. Daft convened a meeting at 7 a.m. Nominations for that slate should come from EMPLOYEE OPTIONS Thursday in Sun Valley, Idaho, where he and several other directors were attending a con- sources other than the company manage- MOVE MAY SPUR OTHERS TO FOLLOW AND COULD ference. The discussion, over breakfast in the ment, to avoid a you-sit-on-my-compensa- SHAPE CURRENT TALKS IN SENATE tion-committee-and-I’ll-sit-on-yours, selec- condominium of director Herbert Allen, was (By Betsy McKay) tion process. The directors should not accept short. It wasn’t hard to win the directors’ anything within the gift of the CEO; their di- Atlanta—Coca-Cola Co. said it will begin in support; Mr. Buffett, in particular, ap- rectors’ fees should be compensation enough, the fourth quarter to treat all employee plauded the move. and high enough to provide an incentive to stock options as an expense, a move that ‘‘Our management’s determination to accumulate a record that will persuade could accelerate debate in corporate board- change to the preferred method of account- shareholders to reelect them at reasonably rooms over whether to adopt that account- ing for employee stock options ensures that regular periodic intervals—perhaps throwing ing practice. our earnings will more clearly reflect eco- in term limits to make sure that directors The beverage company’s decision also nomic reality when all compensation costs and management don’t develop too cozy a re- could shape the outcome of discussions today are recorded in the financial statements,’’ lationship. in the Senate over whether to instruct a new Mr. Daft said in a statement. A spokes- Finally, we come to the CEO’s and top accounting-oversight board to study the fate woman said he wasn’t available for further managers. How to create incentives to in- of stock options—in particular, whether they comment.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00037 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.029 pfrm17 PsN: S15PT1 July 16, 2002 S6766 CONGRESSIONAL RECORD — SENATE July 15, 2002 ‘‘I’m delighted,’’ Mr. Buffett said in a tele- But let us not forget, that despite Americans. American companies must phone interview. ‘‘This tells shareholders these terrible, unconscionable acts per- adhere to the highest standards of pub- what really happens in terms of costs.’’ The petrated by some CEOs on their work- lic accounting ethics. Despite these new plan, he said, also eliminates bias in ers and investors, the principles of our abuses, as I have said our economy re- structuring compensation packages, encour- free market economy remain the envy aging Coke to design packages that fit its mains strong and the vast majority of and employees’ needs without regard for ac- of the world. These principles have al- CEOs are honest and abide by the rules. counting. lowed our economy to be the most pro- Unfortunately, a few bad characters While Mr. Buffett said he never pushed ductive, most innovative, most cre- have tainted the reputation of our en- Coke to treat stock options as an expense, he ative system, that has created income terprise system. said he did encourage the company last week and employment only dreamed of in The President and the Congress are to take a further step and use independent other parts of the world. addressing reform. I will support these investment banks to determine the fair One of these principles is property reform efforts that are aimed at re- value of stock options that Coke grants. The rights. But it seems that some cor- gaining trust and confidence in our Na- move is intended to ease concerns over porate managers have forgotten that whether options that are expensed are being tion’s financial markets and ensure properly valued. Coke will ask two invest- the companies they run are not their that American workers are protected ment banks, Goldman Sachs & Co. and personal property to operate however from unscrupulous corporations. No Citibank, to price options, and will expense they see fit or for their own benefit. violation of the public’s trust can be the option value based on the average of The exuberance of the 1990s that Chair- tolerated. those firms’ quotes. man Greenspan warned us about and But I also believe more can be done, Coke said stock options will be expensed the extraordinary income and wealth and this bill before us moves us in that over the period in which they vest, based on generated during that period, allowed direction. I support: the value the day they are granted. Coke’s for unethical persons in our business Full and accurate disclosure: I en- 2002 options plan authorizes as many as 120 sector to exploit this time of growth million shares, or 4.8% of the company’s dorse the SEC’s proposals to require share outstanding. The company usually for their own selfish purposes and to CEOs to certify that their financial issues 25 million to 30 million shares a year, bend the rules for their own benefit. statements completely and accurately however. So as we pursue new rules to punish reflect the true condition of the com- For 2001, Coke’s top five officers received those who have betrayed a trust—and pany. options on 3.7 million shares, including op- we must—let us not allow the pen- Trust and accountability: Corporate tions on one million shares for Mr. Daft. dulum to swing so far that it jeopard- leaders must be held accountable for About 8,200 of Coke’s 38,000 employees re- izes the innovation and vitality of our any abuse of public trust. I believe that ceived options during 2001. economic system for the future. Rather Mr. Buffett predicted Mr. Daft’s move executives should be required to return than working against the principles moneys they received as a result of could make him ‘‘unpopular’’ among other that make our economic system so CEOs, but he also said that while business fraudulent accounting practices, as leaders had managed to quash efforts in 1993 great, our actions should affirm these embodied in the Senate bill. to force expensing of stock options, the cur- principles. Independence: Boards of directors rent environment could force them now to I am angry, shocked and extremely must exercise independent judgment accept it. concerned about the revelations that and a substantial majority of board ‘‘I’m sure a few others will do it,’’ he said. have emerged in the past 6 months con- members must be independent of man- ‘‘It may be that good practices drive out the cerning the accounting practices of a agement. bad.’’ number of public companies. To oper- Sen. John McCain (R., Ariz.) issued a state- Auditing reform: Strong oversight of ate efficiently our free market system the accounting profession is essential if ment applauding Coke’s decision and ex- requires a high level of honesty and pressing hope that ‘‘other companies will fol- we are to ensure independence of audi- trustworthiness among its partici- low suit.’’ tors and credibility of the auditing pants, especially among its key deci- Judy Fischer, managing director of Execu- process. tive Compensation Advisory Services, in Al- sionmakers. Pension protection: I fully support In the long run our economy—our exandria, Va., said she believes other cor- steps that will protect the retirement stand of living—reflects not only our porations will follow Coke. ‘‘If a corporation savings of American workers. Workers can do it without a lot of problems to their inventiveness and hard work but our bottom line, I think a lot will follow suit,’’ moral character. Corporate executives should have freedom to diversify and she said. have to be worthy of the key role they monitor their own retirement funds, However, it wasn’t clear how other compa- play. With all their wealth and high po- giving confidence that their invest- nies will react, particularly high-tech busi- sition comes responsibility. Sadly, ments will not fall prey to unethical nesses that rely heavily on stock options. A some executives were not worthy of executives. spokesman for Santa Clara, Calif., semicon- I urge the SEC to move forward with ductor maker Intel Corp., where all employ- this responsibility. Restoring the public’s trust is of the implementation of its proposed re- ees are eligible for stock options, said he forms. And, I strongly believe that the couldn’t comment on Coke’s move. One lob- paramount importance. America’s sys- byist was skeptical. ‘‘I doubt just because tem of corporate governance and its NYSE and the NASDAQ must proceed one company made this decision that other trust in our financial reporting mecha- to improve their listing standards. I companies will follow suit,’’ said Ralph nisms have been shaken and restoring support the reform that works to Hellmann, top lobbyist for the Information this trust is of critical importance. It strengthen our free enterprise system. Technology Industry Council, a high-tech will take more than words to restore It is our obligation as a Congress and trade association in Washington. ‘‘Each indi- that confidence and trust. It will take as a country to ensure that the uneth- vidual company is going to make its own de- something that I, Senator DODD and ical few that are causing hardship for termination.’’ Looking beyond 2002, Coke’s so many hard-working Americans, be Mr. Fayard said earnings per share will be others have been lecturing on for many reduced by about three cents in 2003, with years, and this is something not easily swiftly brought to justice and face jail the reduction gradually increasing to about legislated. It will take a renewed time. We will restore faith in our eco- nine cents a share by 2006, he said. But the awareness of the ethics of responsi- nomic system for it is the greatest in change won’t affect the company’s cash flow, bility. It will take a reaffirmation that the world. I support passage of the Sen- he said. ‘‘Character Counts.’’ ate bill. Mr. DOMENICI. Mr. President, I rise Reaffirming that ‘‘Character Counts’’ Mr. COCHRAN. Mr. President, while I first in support of our free market means not only encouraging our young support the passage of this bill, I think economy. The revelations over the last people to live by the six pillars—trust- we ought to recognize the role the Ad- few months of corporate officials hav- worthiness, respect, responsibility, ministration is already playing to deal ing betrayed the trust of their employ- fairness, caring, and citizenship—but with these serious problems of cor- ees and their investors is simply unac- expecting that our corporate leaders porate responsibility. ceptable. These corporate officials adhere to these traits and conduct I was pleased that President Bush an- must be prosecuted to the full extent of themselves accordingly. nounced last week his suggestions for the law and if additional penalties are Cooking the books has hurt thou- corporate accounting reform. The required, then we should enact them. sands and thousands of hard-working President forcefully argued that higher

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00038 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.031 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6767 ethical standards are an imperative to product is better and more complete Recent events have served as a stark restore confidence in corporate Amer- because of our joint work. Thank you reminder that we need to reexamine ica. Those standards should, in his Chairman SARBANES. our laws to make sure that they reflect words, ‘‘be enforced by strict laws and But the joint effort did not stop with our important and shared values of upheld by responsible business leaders’’ Senator SARBANES and myself. Sen- honesty and accountability. Enron has and that ‘‘corporations should not be ators BIDEN, HATCH and the Minority become a symbol for the torrent of cor- disconnected from the values of our Leader offered provisions that were porate fraud scandals that have hit the country.’’ also adopted by the Senate, adding as- front pages and battered our financial I also support the President’s execu- pects of the President’s recent pro- markets. Tyco, Xerox, WorldCom, tive order to create the Corporate posal. That is an impressive show of bi- Adelphia, Global Crossings, the list Fraud Task Force. Combined with new partisanship because those proposals goes on. criminal penalties for corporate fraud, were only made after the Senate had The things that happened at Enron this taskforce can help bring stability already begun debate on this bill. De- did not happen by mistake. They were to our Nation’s economy. The Presi- spite the White House’s refusal to help not the result of one or two ‘‘bad ap- dent has also asked the Securities and us shape our more comprehensive pro- ples.’’ Senior management at Enron, Exchange Commission to adopt new posal, we did not hesitate to include assisted by an army of accountants and rules to make sure that auditors are the President’s suggestions in our final lawyers spun an intricate web of de- truly independent from the businesses product. ceit. They engaged in a systematic which they audit. The bill was further perfected by fraud that allowed them to secretly We also need to be sure the SEC has Senator EDWARDS’ thoughtful amend- take hundreds of millions of dollars out the resources it needs to carry out its ment dealing with the conduct of cor- of the company. This kind of fraud is other important responsibilities. porate attorneys. Once again, we were not the work of a lone fraud artist. I am hopeful that the Appropriations able to draw on the expertise of a par- Rather, it is symptomatic of a cor- Committee will be able to provide the ticular Senator to enlist the help of porate culture where greed has been in- necessary amount of funding for the lawyers in stopping corporate fraud, flated and honesty devalued. SEC to hire the enforcement officers it not designing it. In short, we started Unfortunately, as I have said and as needs and to acquire state-of-the-art with a fine bill from Senator SAR- the experts warned at our February 6 technology that is necessary for the BANES, and have strengthened even fur- hearing, Enron does not appear to have performance of its duties. ther, never losing our strong bipartisan been alone. Each week we read of cor- With the passage of this bill by the support. poration after corporation that has en- Senate, we will be able, in conference, We need to remind ourselves of the gaged in misconduct, and these are not to work with the other body to produce underlying reasons for the bipartisan small or marginal corporations. These a good bill that deals effectively with support behind these measures. Enron are major mainstays of corporate the problems in this area of very legiti- brought it to light, but it goes deeper. America. The web of deceit woven by mate concern to our country. It’s about a basic fairness and equity such publicly traded companies en- Mr. LEAHY. Mr. President, I want to that transcends party lines. It’s about snares and victimizes the entire invest- compliment the majority leader for rewarding people who play by the rules ing public who depend on the trans- turning to the Sarbanes bill and the and punishing people who don’t. It’s parency and integrity of our markets issue of corporate responsibility. I also about the basic American ideal of for everything from their retirement want to thank Chairman SARBANES for treating all people equally under the nest eggs to their children’s college his leadership on the impressive bill law. funds. That is why this comprehensive that he has produced in the Banking We cannot have a system where a reform is urgently needed to restore Committee. pickpocket who steals $50 faces more accountability in our markets. So many times all that the public jail time than a CEO who steals $50 The Leahy-McCain amendment to hears about Congress is about turf and million. The integrity of our financial the Sarbanes bill, approved 97–0 by the partisanship. This comprehensive re- system depends on accountability. The Senate, provided important provisions form effort disproves those claims. mounting scandals and declining stock to ensure just such accountability. Thanks to the leadership of the Major- market have damaged the integrity of The Corporate and Criminal Fraud ity Leader and Senator SARBANES, the our public markets and we must re- Accountability Act which I authored bill that we are about to vote on is a store it. provides tough new criminal penalties tough, comprehensive reform package I was proud that the Judiciary Com- to restore accountability and trans- that enjoys broad bipartisan support in mittee, joined by the Majority Leader parency in our markets. It accom- the Senate. It brought together the and a bipartisan group of Senators in- plishes this in three ways: best ideas from many Senators, from cluding Senator MCCAIN and others was punishing criminals who commit many Committees, and from both par- able to make such an important con- fraud, preserving evidence to prove ties. tribution to this effort by contributing fraud, and protecting victims of fraud. From my standpoint, as Chairman of the provisions of S. 2010, the ‘‘Cor- Here are some of its major provisions the Judiciary Committee, this has been porate and Criminal Fraud Account- as adopted by the unanimous Judiciary an opportunity to benefit once again ability Act,’’ as it was unanimously re- Committee in April and the unanimous from the wonderful partnership that we ported out of the Judiciary Committee Senate last week: It establishes a new have forged between the Banking Com- in April, as an amendment to the Sar- crime of securities fraud, with a tough mittee and the Judiciary Committee. banes bill. Both in Committee in April ten year jail sentence. It breaks the After September 11, our two Commit- and again last week on the floor, not a ‘‘corporate code of silence’’ by pro- tees worked together to write the anti single Senator from either party has viding, for the first time, federal pro- terrorism provisions of the USA Pa- voted against the provisions of the Cor- tection for corporate whistleblowers triot Act that dealt with money laun- porate and Criminal Fraud Account- who report fraud to the authorities or dering. Here, with the 97–0 vote to ability Act. testify at trial. It closes loopholes and adopt of the provisions of the Cor- We worked hard to reach across toughens penalties for shredding docu- porate and Criminal Fraud and Ac- party lines on this measure, and I hope ments as we learned had occurred at countability Act, as a Leahy-McCain that the House of Representatives ac- Arthur Andersen. It requires audit doc- amendment to this bill, Senator SAR- knowledges that fact. I was glad to see uments to be preserved for 5 years and BANES and I have again united the in last Friday’s newspapers that provides tough criminal penalties for forces and expertise of our Commit- Speaker HASTERT also endorsed the their destruction. It protects victims tees. This time we have done so to joint Sarbanes-Leahy measure after its the right to recoup their losses by pre- craft comprehensive laws to deal with adoption. I hope that the President can venting fraud artists from hiding in financial wrongdoing, and again done follow the leadership of Speaker bankruptcy or concealing their crime so with bipartisan support in both HASTERT and support the Senate meas- and using an unfair statute of limita- Committees. I think that the final ure as this bill moves forward. tions to hide.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00039 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.021 pfrm17 PsN: S15PT1 July 16, 2002 S6768 CONGRESSIONAL RECORD — SENATE July 15, 2002 With these bipartisan provisions and for corporate misconduct. That is in ing the time available for Senator others incorporated, this bill we have our bill. Three, The President wants BYRD, be equally divided and controlled produced is truly a comprehensive the Sentencing Commission to raise between the two managers or their des- measure. It tightens regulation of cor- the penalties for the existing fraud ignees; that without further inter- porate misconduct, but it now also pro- laws. That is in our bill as well. vening action, the Senate proceed to vides an important deterrent to fraud I am glad the President adopted vote on or in relation to the Carnahan artists. This bill is going to send three proposals from my bill, even if he amendment No. 4286, to be immediately wrongdoers to jail and save documents will only say that he supports the ‘‘ followed by a vote in relation to the from the shredder, which sends a pow- goals.’’ As I said, we were also quick to Edwards amendment No. 4187, as erful and clear message to potential write up his ideas into concrete pro- amended, if amended; that upon dis- corporate wrongdoers ‘‘dont do it.’’ As posals and include them in our bill. Un- position of these amendments, the bill a former prosecutor, I have discovered fortunately, the President’s proposal be read a third time, and the Senate that nothing focuses attention to mo- failed to include many of the impor- vote on passage of the bill; that upon rality like the prospect of a long prison tant provisions in the bipartisan Leahy passage, the Banking Committee be sentence. amendment. It fails to create a new discharged from further consideration In the Senate, as we have been debat- crime to punish securities fraud to di- of H.R. 3763, the House companion, and ing and shaping specific and com- rectly punish corporate wrongdoers. It that the Senate then proceed to its prehensive reform proposals, we had fails to provide whistleblowers with consideration; that all after the enact- been trying for months unsuccessfully protection that will break the cor- ing clause be stricken and the text of to get the President’s support. The Ad- porate code of silence. Remember, you S. 2673, as passed, be inserted in lieu ministration had stayed on the side- can put whatever criminal laws you thereof; that the bill be read a third lines during this important debate . want on the books but unless there are time, passed, and the motion to recon- For whatever reason, perhaps the witnesses who are not scared to help sider be laid upon the table; that upon mounting scandals or the declining prosecutors prove what happened no passage of H.R. 3763, the Senate insist market, the President decided last one will be held accountable. It fails to on its amendment, request a con- week to speak out against corporate protect victims of fraud by allowing ference with the House on the dis- fraud. He spoke again today on our them to recover their losses from a agreeing votes of the two Houses, and economy. I welcome his participation fraud artist who declares bankruptcy. that the Chair be authorized to appoint and hope that he will follow up his It fails to establish a realistic statute conferees on the part of the Senate; speeches by supporting real reform. It of limitations to allow victims to re- that all succeeding votes in this vote is amazing to me that with such broad coup their losses when a fraud artist sequence, after the first vote, be lim- bipartisan support and now on the can manage to conceal his crimes for ited to 10 minutes; that there be up to verge of Senate passage, that the Ad- long enough, a change that has re- 2 minutes of explanation prior to each ministration has still not given a clear ceived strong bipartisan support dating vote, with no further intervening ac- statement supporting the bill on which back to the SEC under former Presi- tion or debate, with the 2 minutes we are now about to vote. dent Bush. equally divided in the usual form. Although I now understand that a As I said, I was glad to hear the The PRESIDING OFFICER. Is there White House official reportedly said President finally join this reform de- objection? that they agreed with the ‘‘goals’’ of bate. Now is not the time, though, for Mr. GRAMM. Madam President, re- this reform bill, I was disappointed half measures. We need comprehensive serving the right to object, I would like that the President has not yet voiced action. We were glad to include the to propound a parliamentary inquiry. his support for this bipartisan measure President’s proposals in the Senate Under this agreement, when 5:45 comes, about to pass the Senate. Supporting bill, but we unanimously agreed to we would begin to vote on the two the ‘‘goals’’ is a good first step but it is more comprehensive reform, including amendments, and then vote on final nonetheless a baby step. I read in the the Leahy bill. passage, and no other amendment paper last week that the President does Now I hope that the President will would be in order under the agreement; not want to ‘‘tip his hand.’’ This is not support such comprehensive reform as is that correct? a game of poker, however. This is the is found in this bill. I hope that his The PRESIDING OFFICER. The Sen- time for Presidential leadership with rhetoric is backed by action and that ator is correct. the integrity of our markets at stake. his generalities are backed with spe- Mr. GRAMM. Madam President, I do When there are specific proposals pass- cifics. not object. I think under this agree- ing the U.S. Senate by an over- Speaker HASTERT has now publicly ment we will have time to go back and whelming majority of Senators from supported the Sarbanes bill and the forth. I would say that if it saves any- both parties and the Speaker of the Leahy amendment. I hope that the one time, we do not need a vote on the House is supporting the measures as President will support the bill’s provi- two pending amendments. We could do well one wonders what it will take for sions as it moves forward to conference them by voice vote and proceed to final the President to express his opinion. and will appeal to other Republican passage. For those of us in the Senate, like House members not to water it down. Mr. REID. We will be happy to dis- myself, Senator SARBANES, Senator That will be the true test of his resolve cuss that after the UC is entered. MCCAIN, Majority Leader DASCHLE, and to restore accountability to our mar- The PRESIDING OFFICER. Is there others who have worked hard to come kets. objection to the request? up with specific and bipartisan reform It is time for action, comprehensive Without objection, it is so ordered. proposals, the ‘‘goals’’ have been clear action that will restore confidence and Mr. REID. Madam President, I ask for a long time. It is now time for com- accountability in our public markets. unanimous consent that upon disposi- prehensive action. The Sarbanes bill, including the unani- tion of H.R. 3763, passage of S. 2673 be While the President’s proposal was mously approved Leahy-McCain vitiated and the bill be returned to the short on details, some of it did sound amendment incorporating the Cor- calendar. familiar to those of us on the Judiciary porate and Criminal Fraud Account- The PRESIDING OFFICER. Is there Committee. Three of the President’s ability Act, provides just such action. objection? proposals are found in S. 2010, the Cor- Let’s pass this comprehensive bill Without objection, it is so ordered. porate and Criminal Fraud Account- and send the President a strong meas- The PRESIDING OFFICER. The Sen- ability Act, which we adopted 97–0 in ure to sign into law. Congress must act ator from Texas. the Senate: One, The President advo- to restore integrity in our capital mar- Mr. GRAMM. Madam President, I cates for strengthening the laws pun- kets to strengthen our economy. want to begin by very briefly respond- ishing document shredding and ob- Mr. REID. Madam President, I ask ing to Senator KENNEDY. I was some- struction of justice. That is in our bill. unanimous consent that at 5:45 p.m. what taken aback at his suggestion Two, The President wants the Sen- today all time postcloture expire, and that we set aside the two amendments tencing Commission to raise penalties that all the time available, not count- and allow a nongermane amendment to

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00040 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.081 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6769 be offered when, in fact, on a bipartisan compensation at that point was al- Senator SARBANES believes that we basis, earlier this week, we decided not ready substantially above the million- should write in law in some great de- to deal with pension reform. dollar mark. So because of what Con- tail what is entailed in auditor inde- So I want to make it clear to my col- gress did in 1994, having passed a law pendence. I believe the problem with leagues that I am perfectly happy to that said you could not pay people with that is that while the law might fit deal with pension reform. I think a bi- a paycheck above a certain level and General Motors, there are 16,254 pub- partisan consensus is evolving on pen- have it count as a business expense, we licly traded companies in America, and sion reform. But we made a decision, should not have been surprised that ac- I am concerned that there is no law on a bipartisan basis, earlier this week, countants and financial planners and that Congress can write that will fit all not to put pension reform on this bill. people who were smart enough to make 16,254 companies. Its day will come. I want to make that over $1 million a year found other ways My second problem is, if you make a clear. to receive compensation. mistake in writing the law, then you Madam President, let me try to re- So I want to make it clear that the have to go back and pass another law spond to several points that were made point I am making is, if you are look- to correct it. If we had set out Glass- earlier today. I will try to be brief so ing for somebody to point the finger of Steagall, separating banking and secu- that my other colleagues will have an blame at here—and many people are rities, by regulation, my guess is that opportunity to speak on my side of the trying to do that—I think Congress is a by the mid 1950s, we would have con- aisle. good institution to point at because cluded that that was a mistake, and we I want, first, to talk about stock op- Congress eliminated the ability of com- would have fixed it. But since it was tions. Then I want to talk about the panies to pay their executives the old- written into law, it couldn’t be fixed by bill before us and where we go from fashioned way. regulation. Regulators tried to make here. And I will try to be brief on all of A lot has been made about who is at marginal changes. We ended up with a them. fault in all this. I would just simply very unstable system, and we were First, let me make it clear that stock make the following points. If somebody only able to fix it by law in 1999. options are pretty important to the said to me: I know you don’t know A second problem with writing the American economy. More than 6 mil- what caused all these current prob- details of these different standards lion nonexecutive workers in America lems, but tell me; I am going to force such as auditor independence into law receive stock options every year. So you to tell me what you think the is if you make a mistake, it is hard to when we finally get around to having a cause was. I would say: The inadequacy fix it; whereas if you set up a board policy set on stock options—which I of GAAP accounting, which, in its cur- and, based on their expertise, they set hope will be done by FASB, the ac- rent incarnation, works very well for out a regulation, if they make a mis- counting board, based on logic and rea- old-style companies with assets that take, they can fix it. My final point on setting these son—we need to take into account that are written off. 6 million people who are not executives GAAP accounting fits the steel in- standards by law is, one size fits all of companies get stock options every dustry perfectly. It fits the automobile never works. What we need is the flexi- bility for this board to set a standard year. industry pretty well. But the problem We want to be sure that we are not in the 1990s—when productive power and then determine, based on the cir- endangering their ability to own a became knowledge, when companies cumstance of the individual company, what makes sense. piece of America with the reforms de- with relatively little in the way of as- I intend to vote for the bill on final signed to deal with a few people who sets gained huge market caps because passage. There are probably 10 things violated the law in some cases, who did of people’s assessment of their know- in the bill I am opposed to. But we are not act honorably in some cases. how and the technology embodied by going to conference with a House bill We want to be sure we do not deprive the company—was that GAAP account- that is very different. I am confident or preclude 6 million workers who are ing did not keep pace with the reality that in conference we can write a bill not executives—or people who did not of the world that we live in today and that will be supported by both Houses violate the law, did not act dishonor- that we lived in the 1990s. of Congress and signed by the Presi- ably—from the ability to get stock op- It is very complicated to try to figure dent. I think we can strengthen the bill tions. out what the values of these companies where it needs to be strengthened. I Let me also say, in areas such as actually are by any conventional meth- think we can provide flexibility where biotechology and the computer pro- od where you are adding up their acqui- it is needed to bring in reason and re- gramming industries, that 55 percent of sition cost of assets and depreciating sponsibility. rank and file employees get stock op- those assets. Our objective has to be to fix what is tions. This created a giant void in GAAP broken in American capital markets So I just want to urge, as we are accounting in the 1990s, and people and do it while minimizing the cost we going about our business here, with all pushed the envelope within that void. impose on businesses, investors, and this talk about people who have made In some cases, it appears they violated workers that did not violate the law millions, that we do not forget that the law; in other cases, they have cer- and did not act in a nonethical manner. millions of Americans benefit from tainly violated standards of ethics. The sooner we can get to conference, this, and we need to be careful about Nothing we are doing in this bill is the sooner we can write this bill and what we are doing. going to solve the problem in GAAP ac- see the bill signed into law. We have Let me say, secondly—and Senator counting. I am confident that over reached the point where we have a bill BENNETT made the point today; I made time we will find new ways of devel- before us that addresses the major it last week—if you listen to what is oping generally accepted accounting issues that we decided to address. being said in this debate, a big point is principles that don’t rely on concepts I know people have been unhappy made of the fact that in 1994 we saw an such as goodwill, which don’t make a about the inability to offer amend- explosion in the use of stock options lot of sense economically. But I do be- ments today. The plain truth is, we and low-interest loans and other non- lieve the bill before us is a step in the have 97 first-degree amendments that conventional forms of executive com- right direction. have been filed and 24 second-degree pensation. There are differences of opinion. Be- amendments, and there was never any What happened to trigger that is in fore we go to final passage, I want to possibility that those amendments 1993, as a gratuitous provision in the make clear what those differences are. could be offered. We tried to come up 1993 tax bill, we changed the law so Senator SARBANES and I both believe with amendments that were agreed to that if you are compensating an execu- that we should have an independent ac- and in the process, ended up excluding tive in corporate America and you pay counting board. We both believe that some people. that executive more than $1 million a that board should set and enforce eth- Let me conclude my remarks, at year, you cannot count that compensa- ics standards. We both believe that least for the time being, by congratu- tion as a business expense. Of the top part of setting ethics standards is look- lating Senator SARBANES on his leader- 30 companies in America, the level of ing at auditor independence. ship on this bill. Overall, he has done a

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00041 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.064 pfrm17 PsN: S15PT1 July 16, 2002 S6770 CONGRESSIONAL RECORD — SENATE July 15, 2002 good job. I do not agree with him on than $27 million or about 7 percent of tecting our people. Yet, we have been each and every part of it, but he has al- the Energy Department’s request. This met by objection after objection by ways been open. We have had many urgent supplemental bill contains $361 this administration. good discussions. I am confident that million for the Department to dedicate In March, the President insisted he in the end we will write a bill that will to securing these dangerous and vul- needed more money for national de- be broadly supported and that will be nerable materials. That is $334 million fense in an urgent supplemental. We in the interest of the country. above the amount requested by the gave him every dollar he requested. In The PRESIDING OFFICER. Under President. addition, the House and Senate pro- the previous order, the hour of 4:55 hav- Another striking omission from the vided more money for critical home- ing arrived, the Senator from West Vir- Bush supplemental request for home- land defense needs. ginia is recognized. land security involved efforts to deport Instead of letting the House and Sen- SUPPLEMENTAL BILL those individuals who entered the ate work out our differences and get Mr. BYRD. Madam President, there country on visas that have now ex- the funding out, the White House start- is a game being played with the critical pired. Currently there are an estimated ed issuing veto threats before the Sen- issue of homeland security. It is a po- 8 million undocumented immigrants in ate bill was even off of the floor. And litical game which could have disas- the United States and only 2,000 inte- last Thursday evening, just as all dif- trous consequences. rior immigration enforcement officers ferences appeared to be worked out, the The White House is talking big about nationwide. This is a very dangerous White House bomb throwers blew up homeland security, exhibiting strong situation. We know that terrorists live the agreement with new demands. presidential interest in homeland secu- and plot their crimes among us. The It makes one wonder how much the rity, trotting out proposals for a whole Immigration and Naturalization Serv- White House really needs that defense new Department of Homeland Security, ice requested $52 million for analysts money and it certainly causes one to and publicizing alerts. to help find, arrest and deport high- wonder how serious this administra- It is strange, then, strange indeed risk individuals who have disregarded tion really is about homeland security. that despite its public pronouncements the departure dates on their visas. Senator STEVENS and I have be- on homeland security, the White House OMB said no, nada, nix. It denied the seeched the White House over and over refuses to back the rhetoric up with re- entire request. The supplemental bill, again to have the Homeland Security sources. now stuck in conference because of the Director come before our Committee to Twice—once last year, and cur- administration’s latest demands, con- tell us about the needs for Homeland rently—large bipartisan majorities in tains $25 million that the Appropria- Security. Our requests were denied. We both Houses of Congress have with- tions Committee believes the INS can held days of hearings with administra- stood veto threats from this adminis- usefully spend this year to address the tion officials, local firefighters, police- tration and insisted on significant need to locate some of these individ- men, mayors and governors. We did our funding increases for homeland secu- uals. We also include $88 million for best and funded the needs as testimony rity. construction and equipping of border we heard indicated. President Bush’s own appointees facilities, and for improved border in- have all but begged the President’s We wrote a good bill, and we were spections. ready to convene the conference Fri- OMB Director for additional funds to Last fall, OMB denied $1.5 billion in day. But our efforts were blown up by fight the war on terrorism here at funding which the FBI requested in the the OMB Director, suddenly and com- home. Many of these requests are ur- wake of the attack on the twin towers pletely and with no warning until the gent and quite compelling, yet the in New York. Part of the FBI’s funding very last minute, Thursday evening. OMB has continually rejected a sur- request was for acceleration of a new prising number of these pleas. It is as if computer system that will be at the So needs go wanting in our military this administration has delivered an heart of all communications within the and in our homeland defense effort. internal unfunded mandate to its own bureau. Also included in the request There is no excuse for such irrespon- cabinet secretaries and Federal work- were funds to enhance the internal se- sibility. Such tactics are not in the ers. Fight the war on terrorism on curity of the FBI’s systems and proce- best interests of our people. Hollow every front here in the homeland. dures; for ‘‘cyber cops’’ and for haz- rhetoric on homeland security will Fight vigorously. Spare nothing, but ardous materials personnel. The Con- never replace solid funding for these make sure you do it on a shoestring. gress provided $212 million above the needs. Protect our people here at home, but President’s request to permit comple- Political gamesmanship over issues protect them on the cheap. tion of the new computer system much so critical to our Nation and our people The Department of Energy proposed earlier than would be allowed under is irresponsible, arrogant and totally a total of $380 million to fund projects the Bush plan. In addition, we have in- out of line. to enhance the security of radioactive cluded—the Appropriations Com- I deplore the arrogance with which materials here at home and overseas, mittee—$175 million for cyber security the good faith efforts of both Houses of including: better security measures to and counter terrorism in the supple- Congress have been treated by this safeguard the transport of nuclear mental that the White House is now de- White House. Apparently the security weapons within the United States; im- laying—delayed at the last minute last and safety of this nation and its people provements in the ways in which we se- Thursday evening. have taken a back seat to gamesman- cure and store plutonium; cleaning up, I could go on, but suffice it to say ship by a White House that has no re- transporting, and protecting low-level that this administration talks a good spect for the people’s representatives radioactive materials that could be game about homeland security but it is or for the people’s urgent needs. used in a ‘‘dirty bomb.’’ unwilling to put its money where its Under OMB Director Mitch Daniels’ For these and similar activities $380 mouth is. stewardship, the Federal budget has million was asked for by the Secretary Over this past weekend, during his gone from a surplus of $127 billion in of Energy. But do you know what? radio address, the President said that, FY 2001 to an estimated deficit for the That request fell on deaf ears at the Of- ‘‘Strengthening our economy and pro- current fiscal year of $165 billion. This fice of Management and Budget. De- tecting the homeland and fighting the is a swing of $292 billion in just one spite all of the worrying and nail biting war on terror are critical issues that year. about what would happen if some luna- demand prompt attention.’’ I agree. I The President is now threatening to tic obtained radioactive material and only wish that the same message would veto the urgent national defense and detonated a ‘‘dirty bomb’’ on the mall be made clear to the Office of Manage- homeland defense supplemental appro- in Washington or in some other large ment and Budget. priations bill based on Mr. Daniels rec- city, the OMB provided less than $27 We have worked diligently in the ommendation. Why? Because Mr. Dan- million or about 7 percent of the En- Congress to get these critical homeland iels asserts that the bill spends too ergy Department’s request. Let me say security monies out to federal and much money. Yet the conference re- that again: The OMB provided less local personnel charged with pro- port’s spending levels that have been

VerDate Jun 13 2002 06:12 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00042 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.067 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6771 agreed to on a bipartisan and bi- Mr. President, I ask unanimous con- $125 million for port security grants cameral basis would increase the def- sent that a memorandum be printed in through the Transportation Security Admin- icit by only about $600 million com- the RECORD which sets forth the high- istration. Last Fall, Congress approved $93 lights of the $7.2 billion for homeland million of unrequested funds for port secu- pared to the President’s request. rity grants. DOT received $692 million of ap- Mr. Daniels believes that the critical defense in conference funding levels. plications for the $93 million we provided. port security, border security, fire- There being no objection, the mate- Despite this, the President did not request fighting, law enforcement, nuclear se- rial was ordered to be printed in the additional funds. curity and other homeland defense pro- RECORD, as follows: $528 million for the Coast Guard for port grams funded in the supplemental can HIGHLIGHTS OF $7.2 BILLION FOR HOMELAND and maritime security, $273 million above wait because the bill would increase DEFENSE IN CONFERENCE FUNDING LEVELS the President’s request. Increased funds the deficit by about $600 million, when The tentative conference funding levels are would be used to: expedite vulnerability as- sessments at our nation’s ports, rather than his failed fiscal policy has resulted in a $1.9 billion above the President’s request. A summary of the $1.9 billion increase with ex- follow the Administration’s current plan to $292 billion swing in the deficit. amples of changes to the President’s home- do the assessments over the next five years; The OMB Director seems to have for- land defense proposal follows: add two new maritime safety and security gotten, or perhaps never learned, that $701 million for first responder programs, teams; purchase a total of six homeland se- the appropriations process is about $343 million above the President’s request, curity response boats; and expand aviation more than just numbers. Maybe at including: assets as well as the shore facilities to sup- OMB, they can be bean counters, but $150 million for firefighters, with the funds port them. $39 million for Customs to target and in- here in Congress we are responsible for going directly to the local firefighters. The President did not request supplemental funds spect suspect shipping containers at overseas understanding what the numbers mean despite the fact that over $3.0 billion in ap- ports before they reach U.S. ports. The Ad- for the American people. plications from 18,000 fire departments were ministration requested no funds for this ac- Mr. Daniels is cynically focused only received for the $360 million currently avail- tivity. on the bottom line. In an effort to able. $19.3 million, as requested for 34 additional make the supplemental bill look small- $100 million for State and local govern- personnel for improved background checks er, he has proposed rescinding the bal- ments for improving interoperability of com- for truck drivers, for improved fraud detec- tion for truck licensing and for improved ance of funds under the airline loan munications equipment for fire, police and emergency medical technicians, none of fraud detection for driver’s licenses. guarantee program. He asserts that which was requested. The funding flows $28 million of unrequested funding for the this would produce $1.1 billion of sav- through existing FEMA and Justice pro- Safe Commerce program to develop better ings. Yet these funds under the law can gram, rather than the new, centralized pro- procedures for securing the contents of the 6 not be spent. There are no real savings gram at FEMA, proposed by the President million containers that enter U.S. ports each here. The Congressional Budget Office for FY 2003. In addition, we are directing the year. National Institute of Standards and Tech- $251 million for bioterrorism funding, $251 would not score savings for this pro- million above the President’s request, in- posal. This is the kind of phony ac- nology to take the lead in developing uni- form standards for interoperable State and cluding: counting that is getting our nation’s local law enforcement, firefighting and $251 million for the Centers for Disease corporations in trouble. emergency medical communications equip- Control for improved and secure facilities, This phony accounting is proof that ment. including toxicology and infectious disease Mr. Daniels does not care about home- $151 million for the Justice Department, labs, an emergency operations center and for land defense or about our national de- $151 million above the President’s request to information technology security. $235 million, $209 million above the Presi- fense, or about fiscal discipline. This give to State and local governments for im- proved training and equipment for law en- dent’s request to improve security at our nu- phony accounting proves that the clear weapons facilities (Energy requested President’s veto threat is only about forcement personnel (rather than through FEMA). Funds would also be used to improve the funds, but the White House did not re- proving that he can force the Congress the processing of security clearances for quest them). Funding would be used to im- to hit some arbitrary bottom line. And state and local first responders so that State prove security of the nuclear weapons stock- the unmitigated gall of a high White and local governments can have information pile, the national nuclear labs and our nu- House official coming to the Congress on potential security risks and to promote clear weapons plants. Funds are included to mutual aid agreements to coordinate the re- establish a 911 system for local first respond- with an accounting gimmick at a time ers to call when confronted with nuclear when that same White House is decry- sponse of State and local governments to a terrorist attack. hazzards, enhanced funding for the National ing phony accounting practices and $193 million, $134 million below the request Center for Combating Terrorism, expansion scandals in the business community is for FEMA grants to State and local govern- of radiological search teams, and establish- beyond belief. ments to update their emergency operations ment of a National Capital Area Response We should not delay this conference plans and to improve State emergency oper- Team at Andrews Air Force Base. Funds one more day. There are some in Con- ations centers. $25 million is approved for a would also be used to consolidate nuclear gress who suggest that we should throw new, unauthorized program requested by the materials sites so fewer locations need to be President, $25 million below the request. The protected. Several requested items that are our hands up on this bill and wait until approved include funds to improve security the next fiscal year to address these proposal establishes a Citizen Corps within FEMA to promote volunteer service for on the electrical grid and funds to improve priorities. Such statements ignore the emergency preparedness. our capability to detect radiation. critical needs facing the nation for de- $54 million, $22 million above the Presi- $147 million, $128 million above the Presi- fense and homeland security. Our fight- dent’s request for FEMA’s search and rescue dent’s request for cyber security to help deal ing men and women need this money to teams. Currently, there are 28 FEMA search with the threat to Federal and private infor- prosecute the war on terrorism. Dr. and rescue teams around the country that mation systems. $82.6 million is provided to can be deployed to major disasters to assist Justice to improve the investigation and Dov Zakheim—the Defense Department prosecution of cyber crime, research to im- comptroller—said in a briefing on Fri- local first responders in search and rescue operations. Funding will be used to upgrade prove the detection of cyber crime, ‘‘data day that the Defense Department is equipment and training for responding to warehousing’’ and ‘‘data mining’’ to help ex- hitting a wall and that our people in events involving a biological, chemical or ra- pose cyber crime and for information shar- uniform cannot be paid if the Supple- diation attack. ing. $20 million is provided to Commerce to mental Bill is not enacted by the Au- $37.1 million of unrequested funding for the develop unified Federal guidelines and proce- gust break. He said in that briefing National Institute of Standards and Tech- dures for system security certification and to develop guidelines and benchmarks for se- that there is good will on Capitol Hill, nology for developing uniform guidelines for chemical, biological and radiation detection cure information systems. Funding is also and he is right. We are trying to do the equipment ($17.1 million) and for developing provided to improve wireless intrusion detec- right thing for our people here at home best practice guidance for homeland security tion systems. $25 million is provided to the and our fighting men and women in the technologies ($20 million). Energy Department to improve cyber secu- field. It is deplorable that good will, $15.9 million for the Federal Law Enforce- rity at our nuclear weapons plants and labs. hard work, and good intentions can be ment Training Center to expand training ca- $19.3 million, as requested, is included for trashed by OMB Director with reckless pacity for law enforcement personnel of the NSF for scholarships to develop cyber secu- abandon. I do not think this President new Transportation Security Administra- rity skills. tion. $120 million for border security, $78 million or this nation are well-served by tac- $739 million for port security programs, more than requested by the President, in- tics and gamesmanship when the $465 million above the President’s request, cluding $32 million for Immigration and Nat- stakes are so high. including: uralization Service Construction to improve

VerDate Jun 13 2002 06:12 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00043 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.070 pfrm17 PsN: S15PT1 July 16, 2002 S6772 CONGRESSIONAL RECORD — SENATE July 15, 2002 facilities on our nation’s borders, $25 million pand Secret Service capacity to combat elec- The House passed legislation a num- for better equipment for the additional per- tronic crimes; $23.6 million for the Legisla- ber of weeks ago, prior to a lot of the sonnel that are being hired with the funds tive branch for Capitol Police and for the Li- events that have unfolded over the last Congress provided at Fall and $5.7 million for brary of Congress to cover part of the lost 2 or 3 weeks. The argument today for a the Justice Department to deploy to 30 more copyright fees from the slowed mail and for ports the IDENT/IAFIS system for rapid re- costs associated with cleaning up the Hart stronger Senate bill hardly needs to be sponse criminal background checks by the building after the anthrax attack; $19 mil- made in light of events that occurred INS of suspect aliens prior to their admis- lion to improve response capacity to chem- over the past number of days. Just sion into the country. $57 million for INS for ical attacks and for research on the impact today, the Dow is down some 40 points; identifying and removing immigration felons of the release of toxic substances at the Nasdaq is even. But over the last week, from the country and for information tech- World Trade Center; $15 million for improved we have seen a continued decline in in- nology enhancements. bus safety; $7.2 million for NOAA to develop vestor confidence and, of course, how $140 million of unrequested funding for the back-up capacity for the supercomputers that is reflected in the stock markets. Department of Agriculture to enhance our that support our weather forecasting system; nation’s food safety capabilities and to pro- $17 million for security and renovations of Investors, both domestic and foreign, tect against devastating plant and animal the Federal courts, $3 million above the re- are losing confidence in our financial disease; to increase support for the Food quest; and $44 million for the District of Co- markets. Investor trust is contagious. I Safety and Inspection Service, especially to lumbia and the Washington Metro to im- also point out the corollary to that: In- ensure the safety of imported products; for prove security; consistent with the congres- vestor mistrust is also contagious. improved security at USDA labs in order to sionally-mandated District emergency oper- What we are watching is an erosion of secure bio-hazardous materials; funding for ations plan and FEMA’s emergency plan for trust that has begun and is almost im- the Extension Service to provide emergency the National Capital Region, and to con- possible to stop once it gets rolling. training for first response in rural areas; for struct decontamination and quarantine fa- FDA to improve the ability to inspect im- cilities at Children’s Hospital and the Wash- Obviously, a lot of factors will con- ported products such as medical devices that ington Hospital Center. tribute to stemming this tide of con- contain or are susceptible to being contami- The conference funding levels include $4.1 tinued erosion of investor trust and nated with radiation; and for vulnerability billion for the new Transportation Security confidence. assessments and security improvements to Administration, $331 million below the re- One of the things we can do is what protect rural water systems. quest ($439 million of which is for we are doing today. Other people will 471 million of unrequested funding for air- unrequested items highlighted under port se- have to add their voices to the debate. port security, including $150 million to in- curity and airport security). In my view, the President still has to sure that all small and medium hub airports The conference funding levels also include have all of the funds necessary to implement the $87 million President’s Budget request be stronger than he has been. The the FAA’s new airport security guidelines for the Postal Service to improve protection House will have to rise to the occasion and that large airports have some additional of postal customers and postal employees as we have endorsed in large measure funding to meet those requirements; $225 from a bioterrorist attack, the $52 million what we have accomplished here, but million is provided above the President’s re- President’s Budget request for improved se- our step, the first step, is the one we quest for explosives detection equipment; $42 curity of Federal buildings and $3.8 million are taking this afternoon. Therefore, I million is provided to improve the security for the Office of Homeland Security, $1.2 mil- think this is critically important. of the FAA air traffic control system; $17 lion below the President’s request. This is not just another bill we are million is provided to improve airport ter- Mr. BYRD. Mr. President, I yield the minal security for our nation’s airports; and passing. This is far more important. In $7.5 million is provided to FAA to repair long floor. fact, the impact of how people react range radar systems that the Department of The PRESIDING OFFICER (Mr. CAR- may be more important than the ac- Defense believe must be continued for sev- PER). The Senator from Maryland is tual wording and language of the bill. eral years because these assets are the only recognized. It is critically important we have as FAA radar capable of continually tracking Mr. SARBANES. Mr. President, I strong a vote as possible. aircraft with disabled transponders. In addi- yield 10 minutes to the distinguished If we fail to enact serious reforms— tion, $15 million is provided for improved air Senator from Connecticut. and this bill is serious reform—then I to ground communications for the air mar- The PRESIDING OFFICER. The Sen- shals, $4 million for radiation detection believe we endorse dangerous and dis- equipment for air cargo and $10 million is in- ator from Connecticut is recognized. credited accounting practices that we cluded for improved technology for air cargo Mr. DODD. Mr. President, I thank have seen in the last 7 months alone safety and other cargo modes. the chairman of the committee. Let me cost shareholders and workers billions $100 million for unrequested nuclear non- begin by stating that which I have said of dollars in their savings and pensions. proliferation programs. The best opportunity on several occasions: We are all deeply The Nasdaq has fallen over 37 per- to stop a potential ‘‘dirty’’ bomb is to mini- indebted to the Senator from Maryland cent, and the Dow has fallen 17 percent mize the opportunity for terrorists to get for the tremendous work he has done since the beginning of the year. Both their hands on nuclear material. Funds are as the chairman of the Banking Com- included to protect fissile material abroad, Nasdaq and the Dow have dropped over purchase radiation detectors and to establish mittee in fashioning this legislation. 10 percent each in the past week alone. international standards for securing fissile He has worked with many of us to put So Congress must act today, Mr. Presi- material. this bill together. My guess is that, dent, and act with a very strong voice $108 million of unrequested funding for the within an hour or so, we will over- to stem the rising tide of investor ap- Corps of Engineers to improve security at whelmingly pass this bill before us. prehension. Corps water projects. The chairman will be largely respon- $92 million, $82 million above the Presi- Passage of this bill will not and can- dent’s request for the FBI for counter ter- sible for the result. not of itself restore investor con- rorism and information technology enhance- I also commend my colleague from fidence. More must be done to win back ments. In total, FBI receives $175 million Wyoming, Senator ENZI, and others consumer faith, but this bill is a crit- when cyber security funding is included. who have worked very hard and have ical piece of the overall effort and, $50 million of unrequested funds for EPA to made it a bipartisan bill. Without his therefore, it is essentially important provide funds to local governments to con- leadership, I don’t think that would we adopt it. duct vulnerability assessments on our drink- have happened. We may have had a par- The part of the rationale of the origi- ing water systems. Examples of the remaining $273 million, tisan vote coming out of committee. nal securities law in the 1930s was to most of which was unrequested include: $12 That would not have bode well for the increase public trust in America’s fi- million for security at the Smithsonian; $17.7 handling of this matter on the floor. So nancial markets and reliability of dis- million for the National Park Service for in- I commend him and others for reaching closed corporate financial information. stallation of bollards at the Jefferson Memo- an accommodation that made this a Those laws over the past 70-plus years rial and an in-ground retaining wall at the strong, good bill. were a part of the modern economic Washington Monument (requested by the Mr. President, I want to take a few foundation of our Nation, and they President in FY 2003); $26 million for the US minutes toward the close of this debate Geological Survey for high resolution map- were designed to promote market effi- ping and imagery of the nation’s major cities to urge our colleagues to be supportive ciency and inspire investor confidence. for use in developing vulnerability assess- of this bill, and I hope Members of the The resulting market confidence in ments of infrastructure and for expanded other body will support what we have the statements of financial health of data storage capacity; $28.5 million to ex- done in the Senate. publicly traded companies has paved

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00044 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.026 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6773 the way for America’s rise as an eco- issue, which involved a lot of debate completed the process. We have a con- nomic superpower. and discussion of the last number of ference to go through yet. I could make a strong case that the days. I commend our colleague from Again, my compliments to Senator vote we are going to take today is for Michigan, Senator LEVIN, who has SARBANES. one of the most important bills im- made an extraordinary effort to find a What we are doing is important. This pacting the Nation’s financial markets resolution to this issue we all can sup- is extremely important legislation. I since the 1930s. I say that because this port. Obviously, this question inspires said earlier it may be more important legislation will fundamentally change more questions than answers in many what message it is we are sending; that the way publicly traded companies will ways, but I commend him for his we are not sitting in the bleachers, we do business and how the accounting thoughtfulness and energy that he has are not just standing by as these events profession performs its statutorily re- brought to this debate. unfold. All Members of this Chamber quired audit function. The issue of whether or not stock op- can take great pride that the Senate of Much has been said about what this tions should be expensed is not an issue the United States has responded with a legislation does not accomplish. Brief- that is going to go away. It has to be responsible bill we think is going to ly, I wish to focus my remarks on what addressed. I must admit, I am swayed make a difference. I yield the floor. it does do and repeat, we are not solv- by those who have a great deal of ex- Mr. SARBANES. What is the time ing every problem with this bill. There pertise in this area: Alan Greenspan, situation? are a lot of other issues that need to be Warren Buffett, Paul Volcker, all of The PRESIDING OFFICER. The Sen- addressed, but we have to begin the whom support the expensing of stock ator from Maryland controls almost 14 process, it seems to me, by getting the options. minutes, and the Senator from Texas accounting part of this equation right, I also recognize the danger when Con- controls just under 12 minutes. Mr. SARBANES. I yield 4 minutes to and we will not know ultimately gress begins the process of legislating the Senator from Missouri. accounting standards. whether we have done all we could, but The PRESIDING OFFICER. The Sen- My friend from Texas and I have been I think this is a major step in that di- ator from Missouri is recognized for 4 involved in the past when there have rection. minutes. The bill, we now know, creates a new been efforts by people who wanted to Mrs. CARNAHAN. Mr. President, my independent regulator for the account- have us vote on some of these matters. amendment requires that when cor- ing profession. The new body will act I recall 3 or 4 years ago the debate was porate insiders, such as CEOs, trade as a strong, independent, full-time over pooling and purchasing account- the stock of the companies they man- board with significant authority to ing standards. I was very sympathetic age, they must take reasonable steps regulate auditors of public companies. to the arguments made by those advo- to disclose those transactions to their The independent board will have clear cating pooling. Certainly, if I were a shareholders. Current law requires that authority for setting auditor standards member of FASB, I think I would have insiders file disclosure forms with the and important investigative standards. voted to allow that accounting stand- Securities and Exchange Commission. It strengthens audit reporting stand- ard to go forward, but the idea that the However, almost all of these forms are ards for the accounting profession and Senate might vote by 51 to 49 to pick filed on paper and average investors contains significant prohibitions for one accounting standard over another have no practical way of seeing these accountants performing nonaudit serv- is just ludicrous on its face. We do not disclosures. My amendment requires ices for audit clients, and it addresses want to set a precedent, in my view, of that these disclosure forms be filed the growing conflicts of interest that the Congress of the United States de- electronically and that the SEC make have been too pervasive throughout the ciding what accounting practices ought these disclosures available to the pub- accounting profession. to be. That is why we set up these lic over the Internet. It provides for the first time an inde- boards to do the job. This amendment also requires that pendent funding source for the Finan- The approach taken by having the corporations disclose insider trans- cial Standards Accounting Board, Accounting Standards Board, the SEC, actions on their own Web sites. Inves- which I think is also extremely impor- and others look at these matters and tors have a right to know if corporate tant and one of the major reforms in get back to us with their recommenda- officers are dumping their stock. How- this bill. tions is the appropriate and proper way ever, it is meaningless to require these There are additional dollars to pro- to go. Despite the temptation of others disclosures if investors have no prac- vide the SEC with more firepower, if to want to legislate these matters ex- tical way of ever seeing these disclo- you will, to have more cops on the plicitly on the floor, I remind my col- sures. Without this amendment, the street so we might avoid some of the leagues who have done that in the past, disclosure forms simply sit in a file problems that have occurred in the we inevitably regret doing it when we cabinet at the SEC in Washington. My past. set precedents such as those and are amendment ensures that investors It also improves corporate govern- only duplicated by other ideas that have access to this important informa- ance requirements and improves cor- temporarily may be very popular, may tion. porate disclosures. The bill grants ad- be politically attractive, but may be In the 3 years leading up to its bank- ditional authority and responsibility to terrible economics as well. ruptcy, as Enron’s top officers touted the audit committees of publicly trad- I applaud the effort to approach the the company’s stock, they sold more ed companies. stock option issue in the manner in than $1.1 billion worth of their own Those are very important steps. The which it has been addressed. I men- holdings. Ken Lay alone sold more provisions contained in the legislation tioned Senator ENZI. I mentioned my than $100 million worth of Enron stock were carefully considered. We had 10 colleague from Texas as well. He and I while telling others to buy it. Enron’s hearings, and by a vote of 17 to 4, the worked many years on a lot of matters vice president of human resources, committee—the Presiding Officer being affecting the financial services sector Cindy Olsen, was asked by employees if one—passed out this very fine legisla- of our economy. He does not have that they should invest 100 percent of their tion. many days left with us, and I am going retirement funds in Enron. She replied: Additionally, during floor consider- to miss him. I told him that privately, ‘‘Absolutely.’’ But within 3 months she ation of this bill, Senator LEAHY of and I tell him publicly that he is a val- personally unloaded $1 million worth of Vermont added new criminal penalties ued Member of this institution. Wheth- Enron stock. Had Enron employees for securities fraud. I commend him er we agree or disagree on matters he only known, they might have been and strongly endorse the provision that always brings a great deal of thought skeptical about this advice. won the overwhelming support of the to the debate. He has been a fine mem- Investors are entitled to know how Members. I hope it will add to our ef- ber of the Banking Committee, and I executives are acting with their own forts of restoring investor confidence. have enjoyed my service with him for shares of their company’s stock, and One of the last issues I would like to many years. I do not want to be too my amendment will ensure they will. address, because it has been talked complimentary. I will reserve any final I yield my remaining time back to about so much, is the stock options glowing accolades for when we have the Senator from Maryland.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00045 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.082 pfrm17 PsN: S15PT1 July 16, 2002 S6774 CONGRESSIONAL RECORD — SENATE July 15, 2002 The PRESIDING OFFICER. Who in the history of the United States, and reflected the views of as many Mem- yields time? restatements right now make every- bers as possible. I also thank the mem- Mr. GRAMM. Mr. President, I yield 8 body nervous. People ought to realize bers of the staff who worked diligently minutes to Senator ENZI, and might I that some restatements are caused by on the bill. say on my time, not his 8 minutes, that changes in rules, not by people doing From my own staff, Katherine I want to thank Senator ENZI for his things wrong. So investors should al- McGuire, Kristi Sansonetti, and Mi- contribution to this bill, for his work ways review restatements and deter- chael Thompson. From Senator from beginning to end. He has been a mine the actual cause. I certainly hope GRAMM’s staff, Wayne Abernathy, major contributor to the bill. He has it is never Congress, but I suspect it Linda Lord, Stacie Thomas, and proven that knowledge sometimes is a very well could be. Michele Jackson. And from Chairman nice thing to have. Another proposal that was going to SARBANES’ staff, Steve Harris, Steve Our standard in Washington for ob- be put before us was one telling FASB, Kroll, Dean Shahinian, Marty jectivity is that you came in off the this Financial Accounting Standards Gruenberg, and Lindsey Graham and turnip truck and you know absolutely Board, exactly what they were sup- Vince Meehan. All of these staffers nothing and therefore you are objec- posed to examine next and what they have spent many late nights and week- tive, but I would say that Senator ENZI were supposed to resolve in the next ends working to build this legislation. proves that it is nice every once in year. I have to say, FASB is working This legislation is badly needed. The awhile to have somebody who knows on some important things because they markets have been in a steady decline what he is talking about. I think in have been examining what Congress for several months now. While I do not many ways, large and small, the good has been debating and they know in believe it is Washington’s job to step in things in this bill he has had a very greater detail than we do what caused every time the market is in a decline, positive impact on and the bad things the massive restatements. I have to I do believe that when markets move in the bill he could not do anything say, I do not believe it was stock op- as a reaction to illegal or unethical about anyway—that was a joke, I tions. It was likely a number of other acts, then we have obviously not made would say to the Senator from Mary- things that need to be investigated. penalties severe enough to dissuade land. This Financial Accounting Standards this type of behavior. Congress had to In any case, I do want to congratu- Board is diligently looking at these act in this climate. late Senator ENZI for all the contribu- issues. They are looking at some high- However, I would also like to com- tions he has made. profile rules in the areas of accounting ment on a few things happening out- The PRESIDING OFFICER. The Sen- for intangibles and accounting for spe- side of the real debate—namely the at- ator from Wyoming is recognized for 8 cial purpose entities. We have talked a tacks on SEC Chairman Harvey Pitt. I minutes. lot about special purpose entities, and have to say that Chairman Pitt and I Mr. ENZI. I thank the Senator from our hearings showed that they may may not always agree, but I believe the Texas for his gracious comments. have been a cause for the Enron col- recent attacks on him to be unwar- It has been mentioned several times lapse. Also, they are looking at ac- ranted. Mr. Pitt has come under fire today that there is nervousness in the counting for guarantees and examining for having represented some of the ac- stock market. There has been since we a final rule on liabilities and equity. counting firms who have been criti- started debating this issue. I am very They are also studying whether to cre- cized in recent restatements. I believe convinced that some of that is because ate a rule on revenue recognition. Chairman Pitt’s work in the private people may read some of the amend- Those five things probably put one to sector is a great asset to investors. We ments that have been suggested and sleep, but they are important to have need individuals who are willing to recognize the legislative principle that, resolved to make sure we do not have work in government who know and un- if it is worth reacting to, it is worth problems with companies in the future. derstand the industries they regulate. I overreacting to. That ought to be We have to be careful now and in the do not want lifelong government bu- enough to scare anybody. days to follow that we ensure we use reaucrats monitoring these companies. We have had extensive debate. In all of FASB’s expertise, knowledge, and These restatements did not all of a fact, one reporter I talked to asked me staff to resolve high publicity problems sudden appear when Chairman Pitt was if we were going to pass the McCain of accounting. confirmed. In most cases, they begun bill. The reporter talked about the ac- In this bill, we have made the Finan- during the late 1990s when companies counting reform, and I had to say, no, cial Accounting Standards Board more became intent on not seeing the Inter- that is the Sarbanes bill we have been independent. We have provided them net bubble burst. I have to ask what working on. It is not stock options, in with independent funding so they no was going on at the SEC while these spite of the threat we had the other longer must beg for donations and per- companies were filling all of these false day. haps encounter a conflict of interest. financial statements? What I imagine We usually do bills the way we have Through this process, we should not in- happened was that the companies, who done this one—with a lot of coopera- sert ourselves and say we are going to are very familiar with who is at the tive talk. We then make arrangements tell them exactly what is important. Commission and where the resources to develop the best possible outcome. I would like to thank Senator SAR- are being devoted, thought they could The accounting reform bill before us is BANES and Senator GRAMM for the ex- take advantage of the situation be- designed in such a way that we set up traordinary work they have put into cause no one was paying attention. processes that people with account- the process. Last week was an ex- Look at what has happened since ability and responsibility and knowl- tremely difficult week. I thank them Chairman Pitt has taken office. He has edge have to oversee. This bill does not for the careful work and review they opened a record number of investiga- tell them exactly how to do the details have done on every single one of the tions of restatements filed by public of accounting. It gives a fair process amendments that has been submitted, companies. He has taken steps to break for accountants to be able to do the de- and the process they established to the relationship between research ana- tails of accounting. make sure this bill would not get out lysts and investment bankers. He has In past years, we have decided we of hand, that it would not be an over- supported legislation that will increase knew more than the people who had reaction, and that when we finish it to- penalties on corporate executives en- the expertise in the area of accounting night and we can reassure America it is gaged in fraudulent behavior. And, he and we have given them direction on still okay to invest in the stock mar- has indicated his support of this legis- how to do it. We almost made that mis- ket. lation, which by the way, I anticipate take again. For instance, the McCain We are fortunate on the Banking to be supported by the majority of the amendment was very simplistic. In one Committee to have these two people I Senate later today. paragraph it told people how to do ac- consider to be the finest public serv- The numbers are clear. In Chairman counting that may actually take about ants in Congress. They have worked Levitt’s last year as Chairman, 503 500 pages to explain. It would have long and hard to assure that the prod- total enforcement actions were filed. caused the most massive restatements uct that came out was bipartisan and Already this year, Chairman Pitt has

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00046 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.085 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6775 filed 415. Officer and Director Bars for sands other large companies. If we sub- FASB follows certain precepts in its 2000 were 38—this year so far 71. Sub- ject them to the will of the trial bar, it activities. One is to be objective in its poenaed enforcement proceedings in will only be a matter of time before we decision making. Another is to care- 2000 were 9—this year 18. The numbers lose the rest of the firms one by one. fully weigh the views of its constitu- go on and on. My point is that Chair- I know that, given what has hap- ents in developing concepts and stand- man Pitt seems to be left cleaning up pened recently with the restatements, ards. But its ultimate determination the mess his predecessor left in cor- it is easy to be critical of accountants must be the Board’s, based on research, porate America. and easy to legislate them. I agree we public input and careful deliberation. I offer my support for these actions do need legislation, but what also It also aspires to promulgate standards taken by Chairman Pitt. Instead of at- needs to be understood is that over- only when the expected benefits exceed tacking him, I am more concerned legislating could be drastic to the the perceived costs. about what was happening at the SEC economy. In the long run, if we over- Overall, FASB was created to serve that bred this climate where executives legislate, it could be detrimental for as an independent agency with an inde- felt compelled to engage in this uneth- the future of capital formation in this pendent agenda. However, FASB is cur- ical behavior. Why weren’t some of country. rently funded by companies and ac- these actions taken three or four years Once again, I thank the Chairman for counting firms. The long standing con- ago? Did the SEC Chairman not see the all of the work he and his staff have cern was that FASB did not act wholly potential conflicts that could arise out done with this legislation. I think it is independently, and succumbed to in- of research analysts getting compensa- a good bill, and I do intend to support dustry pressures in order to get the tion based on investment banking busi- it. I also think it will continue to im- funding it needed to operate. Back in ness? prove through the Conference process 1993 and 1994, when expensing of stock Therefore, I would say that I com- and when all is said and done, investors options was an issue, some critics say mend Chairman Pitt for the work he is will respond positively to passage of FASB succumbed to pressure by indus- doing. From what I understand, the ac- this legislation. try and Congress when it created a tions he is taking at the SEC have I wish to speak about the Financial dual method of either expensing stock struck fear throughout the corporate Accounting Standards Boards, known options at the time of grant, or placing community that they had better get as FASB, which has been referenced the information in a footnote as a form their act together. many times throughout the course of of public disclosure of possible stock This legislation before us now will discussion on the underlying account- dilution. The underlying accounting reform also go far in restoring faith in the ing bill, the Public Company Account- bill fixes this perceived problem of markets. It will provide assurances to ing Reform and Investor Protection independence and autonomy by pro- investors that we will not sit by and Act of 2002. viding FASB with funding from both watch executives shatter the retire- Some of the pending amendments issuers and the accounting firms. Be- ment dreams of workers while leaving have referenced FASB and directed or cause of this change, FASB will be themselves with millions of dollars. It mandated it to change how companies completely independent from the very will show the American people that we must expense stock options or to per- companies it will set standards for in will work to make financial state- form a study on how to expense stock the future. This is a good start. ments transparent and accurate to options. In addition, the McCain It is also important to understand make sure they know as much about amendment sets the accounting stand- that, historically, FASB has never the company’s financial state as pos- ard for expensing stock options, with- been directed by Congress through leg- sible. out allowing FASB to set rules on this islation to adopt one particular stand- The legislation builds an accounting form of expensing. The Levin amend- ard for accounting, including expense oversight board to oversee the account- ment mandates FASB conduct a one- accounting. It has also never been di- ants who prepare financial statements year study on expensing stock options, rected by Congress to perform a study. of public companies. This board will and then adopt a rule based on a nar- FASB’s role is not to perform studies have broad authority to enforce and row set of external parameters. The for Congress and they should not be discipline rules by which accountants Levin amendment implicates a desire bogged down performing them for po- must live. The board will have full ac- to have such expensing done. litical purposes. cess to accounting firms’ records and In order to understand some of the Following that precedent, the Senate policies to require uniformity through- problems with these types of amend- Banking Committee made certain out the industry when it comes to eth- ments, it is important to understand nothing in the bill directs FASB to ics and independence. Accountants exactly what FASB does. Since 1973, take any particular action. In other must know that someone is watching FASB has been the designated organi- words, there is no federal mandate to over them to require that their work is zation in the private sector for estab- FASB, nor should there be, if it is to in the best interest of investors. This lishing standard of financial account- remain an independent authority. In legislation will also provide for the ing and reporting. In short, those addition, why should Congress, a body SEC to have the resources they need to standards govern the preparation of all without expertise in accounting stand- enforce the law. financial reports. ards for publically traded companies, However, I also do not want this leg- The mission of FASB is ‘‘to establish set these standards? islation to provide a payday for the and improve standards of financial ac- I, and many other members, as well trial lawyers. The competitiveness of counting and reporting for the guid- as Federal Reserve Chairman, Alan the accounting industry is at stake and ance and education of the public, in- Greenspan, believe that Congress has we can ill afford to lose another firm cluding issuers, auditors and users of no business setting accounting stand- solely because we didn’t offer proper financial information.’’ ards. Instead, the Securities and Ex- protections in this legislation. I am in To accomplish this mission, FASB change Commission and FASB are the no way indicating that accounting acts to improve the usefulness of finan- entities with the expertise needed to firms should have new, special protec- cial reporting; keep standards current make these types of determinations. tions. The only thing I am asking is to reflect changes in the methods of Ordinarily, FASB establishes plans that accounting firms aren’t exposed to doing business and the economic envi- with milestones it works towards. Con- more liability after this bill is enacted ronment; consider any significant gress should not dictate what plans and than they were before. areas of deficiency in financial report- milestones it should work towards or I am not sure some Members truly ing; promote the international conver- address. FASB also never sets artificial understand the situation facing ac- gence of accounting standards together deadlines on when to reach a conclu- counting firms. We are down to the with improving the quality of financial sion. As an independent agency, it final four firms. These are the only reporting; and improve the common carefully and deliberately makes its firms that have the expertise and re- understanding of the nature and pur- determinations and sets rules, without sources to audit companies such as poses of information contained in fi- adhering to outside pressures or time- Microsoft, Coca Cola, and the thou- nancial reports. tables. Just as Congress should not set

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00047 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.039 pfrm17 PsN: S15PT1 July 16, 2002 S6776 CONGRESSIONAL RECORD — SENATE July 15, 2002 accounting standards for FASB to fol- The PRESIDING OFFICER. Who amendments. It does not make sense. low, it also should not set artificial yields time? That is not the way the Senate is sup- deadlines for FASB to adhere to either. Mr. SARBANES. Mr. President, I posed to work. Nevertheless, some members have yield 4 minutes to the junior Senator I ask unanimous consent to lay aside filed amendments asking FASB to not from North Dakota. the Edwards and Carnahan amend- only take a specific action, but in- Mr. DORGAN. Mr. President, in the ments so I may offer amendment 4214 structing it as to a specific timetable. final moments, I hope again to per- on bankruptcy disgorgement. One amendment actually sets an ac- suade my colleagues to accept by unan- Mr. GRAMM. I object. counting standard, thereby instructing imous consent my amendment dealing The PRESIDING OFFICER. The Sen- FASB to immediately change expens- with corporate bankruptcy. Let me ator from North Dakota. ing standards. Another mandates again say what this amendment is. Mr. DORGAN. How much time re- FASB complete an expensing study It says that during the 12 months mains? within a year. These amendment set preceding a bankruptcy, CEOs who The PRESIDING OFFICER. Forty seconds. unrealistic timetables and mandates. have received stock options, bonuses Mr. DORGAN. Mr. President, this is, It is important to remember that and other performance-based payments FASB already has its hands full with of course, the last chapter on amend- shall not be able to keep that kind of ments, and a pretty sad book. I know important projects to help improve fi- compensation. If they ride a company nancial standards and reporting. It is people will go up to the gallery—and I down to bankruptcy, they know the in- understand someone is at a press con- currently working towards promul- side details of that company and got gating high profile rules in the areas of ference from the other side—claiming incentive-based compensation, includ- credit for this bill. I want to know who accounting for intangibles; accounting ing stock options, they ought not ride for special purpose entities; accounting wants to run up to the press conference off in the sunset with a pocketful of and claim credit for preventing an for guarantees; and a final rule on li- gold while the employees and investors abilities and equity. FASB has also amendment that says you must dis- lose everything they have. That is not gorge ill-gotten gains, incentive-based added to its agenda a project to re- the right thing. A bankruptcy search and create a rule on revenue compensation, if you ran a company disgorgement proposal ought to be part into bankruptcy. I want somebody to recognition. of this bill. Everyone in this Chamber Let us not forget that the improper go to the press gallery and take credit knows it should be part of this bill. use of special purpose entities played a for blocking that kind of legislation. Former SEC Chairman Breeden, a Re- role in the downfall of Enron. Stock Tomorrow I want to read about it. Who publican, says it ought to be in this options had nothing to do with Enron’s takes credit? Someone ought to take bill. I quoted other CEOs who say it bankruptcy. credit for blocking an amendment that The projects FASB is concentrating should. Pass this bill without it and ought to be passed in the Senate by a on are important projects which will this bill is incomplete. 100 to zero vote. help clarify financial statements for My colleague said he thought maybe The PRESIDING OFFICER. Who investors. FASB itself needs to cue up the market, which has been so volatile yields time? Mr. GRAMM. Mr. President, I will and prioritize its projects based on recently, has been frightened by not get into a debate with the Senator. what is more important to financial ac- amendments that have been considered There is nothing ill-gotten in this counting and reporting. Congress by Congress. I don’t think so. I think amendment. This amendment does not should not dictate what those prior- the market has been volatile, up and belong in this bill. ities should be or the timetable it must down like a yo-yo, because we have story after story on the news in this We have a provision in this bill. If adhere to. you violate the law, then you have to If some of the amendments we are country about financial crooks. These are crooks who have cooked the books give back what you have earned from looking at are accepted, Congress will the company in terms of any kind of establish a bad precedent of setting up of their corporations, cheated inves- tors, pulled the rug out from under incentive in bonus. a timetable and prioritizing projects But to say that people who work for their employees, and ruined some good for FASB. Congress will be putting a company that goes bankrupt has to companies. They did it in broad day- stock option expensing—an accounting give back compensation is to guarantee light, under the nose of their account- standard which did not cause the col- that a company that is in trouble ing firms and law firms. lapse of Enron or the demise of other would never get anybody to go to work It seems to me those CEOs who made big companies—at the front of the cue. for them. They would never have an op- millions, in some cases over $100 mil- And another question we need to ask portunity to be saved. That amend- lion prior to bankruptcy, ought to give ourselves is whether FASB has the ment does not belong in this bill. It that money back. That money ought to manpower to perform the mandates makes no sense in the logic. and timetables Congress would be pro- go to help those who lost their live sav- Mr. DORGAN. Will the Senator viding through the McCain and Levin ings and those who lost their jobs. yield? amendments. Already, FASB is shift- We have in this bill a provision that Mr. GRAMM. I will not yield. ing its personnel to different projects says if there is a restatement of earn- If you did something wrong, making to try to timely promulgate needed ings, you have to give back some of you give back what you earned belongs rules. While the underlying accounting these incentive-based compensation in this bill. And it is in this bill. Not bill will help these staffing problems packages. However, the bill is silent on only belongs, it is here. by providing independent funding, in the issue of bankruptcy. What about But to simply say because somebody the short term, FASB cannot possibly top executives who ride their company worked for a company that goes broke, perform the mandates of some of the right into the ground and run off with that they have to give back compensa- amendments within the time frames $50 million in their pockets and leave tion, that sounds great in the environ- given. everyone else flat on their back? How ment we are in, but, look, I have a I hope I have given members some about asking those executives to dis- company, we are in deep trouble, and solid reasoning on why Congress should gorge themselves of their ill-gotten we try to go out and hire a top-notch not begin setting accounting stand- gains? How about telling them in this person to come in and save us, and we ards. Should we really be doing some- legislation that they must give that pay him a compensation to try to do it. thing we do not fully understand? money back? That is what my amend- To say we will take it back if he fails, There are already agencies to perform ment would do. as if that is an ill-gotten gain, I am this type of rulemaking, and they are I want to talk about the SEC, but I sorry, I don’t think that is good eco- the SEC and FASB. They are fully don’t have time at the moment. I will nomic policy. I don’t think it is smart. aware of the debate surrounding stock save that for another day. It has nothing to do with the provi- options. We don’t need to mandate This process has been a travesty of sions of this bill. FASB to make a new rule. I am certain the Senate, in my judgment, having Mr. DORGAN. Mr. President, perhaps if FASB deems it appropriate, it will be someone as a gatekeeper and pre- the Senator from Texas would like a looking at this issue in the future. venting us from bringing up germane explanation.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00048 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.043 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6777 Mr. SARBANES. I yield 1 minute. up with a better bill than either. I ‘‘(ii) who have been found to have been pri- Mr. DORGAN. I deeply appreciate the think America will survive under ei- mary violators of the Federal securities Senator from Maryland yielding. ther bill. Given the environment we are laws; ‘‘(B) a description of the Federal securities What the Senator from Texas misses in, that represents some achievement, is we are talking about incentive-based laws violations committed by aiders and and I am proud of it. abettors and by primary violators, includ- compensation. Should someone who I think we will come out of con- ing— gets incentives for running the cor- ference with a better bill than the ‘‘(i) the specific provisions of the Federal poration into bankruptcy be able to House bill and a better bill than the securities laws violated; keep that? I don’t think so for some- Senate bill. I think people will be ‘‘(ii) the specific sanctions and penalties body that gets a big bonus while he proud of what we did. imposed upon, such aiders and abetters and runs the company into bankruptcy, or If I were an investor today, and I had primary violators, including the amount of any monetary penalties assessed upon and for someone that gets big stock options a lot of money, I would invest in the while she runs the company into bank- collected from such persons; stock market today. ‘‘(iii) the occurrence of multiple violations ruptcy. The PRESIDING OFFICER. The time by the same person or persons either as an The Senator tried to win a debate we of the Senator has expired. The Sen- aider or abetter or as a primary violator; and were not having. He says we will take ator from Maryland has 4 minutes 45 ‘‘(iv) whether as to each such violator dis- compensation away from someone who seconds remaining. ciplinary sanctions have been imposed, in- is engaged in working for a corporation Mr. SARBANES. Mr. President, we cluding any censure, suspension, temporary bar, or permanent bar to practice before the that went into bankruptcy. No, this is have been trying to clear amendments. about incentive-based compensation Commission; and We have yesterday—not yesterday, but and profits. It is not about taking away ‘‘(C) the amount of disgorgement, restitu- on Friday we adopted three amend- their salary. It is about saying if you tion or any other fines or payments the Com- ments on the basis of a unanimous con- mission has (i) assessed upon and (ii) col- are paid on an incentive basis and you sent request. We have worked through lected from aiders and abetters and from pri- are running that corporation into two additional amendments. I am mary violators. bankruptcy, you ought not to be get- going to offer them now. ‘‘(2) A report based upon the study con- ting the bonus. If you did, you ought to ducted pursuant to subsection (c)(1) shall be One is an amendment by Senator give it back. You ought not get stock submitted to the Senate Committee on SHELBY for a study with respect to options; if you did, you ought to give it Banking, Housing, and Urban Affairs no aider and abettor violations of the Fed- back. later than six months after the date of en- This is simply about something my eral securities law. I ask unanimous actment of the ‘‘Public Company Accounting friend has missed. It is about incentive- consent that the pending amendment Reform and Investor Protection Act of 2002.’’. compensation and the fact that you be set aside; that the Shelby amend- ment, No. 4261, be called up and modi- Page 78 strike lines 15–24 and insert the fol- ought not walk out of a corporation lowing: you ran into bankruptcy with a pock- fied with a modification that I send to In supervising non-registered public ac- etful of gold while you left the employ- the desk; that the amendment as modi- counting firms and their associated persons, ees and the investors flat on their fied be agreed to; and then we then re- appropriate State regulatory authorities back. This is not an amendment that is turn to the regular order which, as I should make an independent determination hard to understand. understand it, would be the Edwards as of the proper standards applicable, particu- I regret very much it has been modified by the Carnahan amendment. larly taking into consideration the size and blocked. I regret especially we were not The PRESIDING OFFICER. Is there nature of the business of the accounting objection? Without objection, it is so firms they supervise and the size and nature allowed to vote on this amendment. of the business of the clients of those firms. That is the travesty, in my judgment. ordered. The standards applied by the Board under Mr. GRAMM. Mr. President, I think AMENDMENT NO. 4261, AS MODIFIED this Act should not be presumed to be appli- you could debate whether the amend- Mr. SARBANES. I send the amend- cable for purposes of this section for small ment is understood or not. I think I un- ment to the desk. and medium sized nonregistered public ac- derstand it perfectly. In fact, there are The PRESIDING OFFICER. The counting firms. people in this country who are turn- clerk will report. The PRESIDING OFFICER. Without around specialists, who are hired to try The bill clerk read as follows: objection, the amendment as modified to save companies. If somebody did The Senator from Maryland (Mr. is agreed to. something wrong, if they violated the SARBANES) for Mr. SHELBY, proposes an The amendment (No. 4261), as modi- law, then make them give back com- amendment numbered 4261, as modi- fied, was agreed to. pensation. You put them to death, if fied. Mr. SARBANES. Was the Ensign you want to put them to death. But to The amendment is as follow: amendment also on that amendment? simply say, if you hire somebody with (Purpose: To require the SEC to conduct a I urge the adoption of the amend- an incentive package to save the com- study and submit a report to the Congress ments. pany, and the company goes broke, on aider and abettor violations of the Fed- The PRESIDING OFFICER. The that you are going to take it back, eral securities laws) amendments have been agreed to. that is up to the bankruptcy court to On page 108 after line 15, insert the fol- Mr. SARBANES. Mr. President, I decide. lowing: move to reconsider the vote. So this ill-gotten gain business is ‘‘(c)(1) The Commission shall conduct a Mr. GRAMM. I move to lay that mo- good rhetoric, but it has absolutely study to determine based upon information tion on the table. nothing to do with this amendment. I for the period from January 1, 1998 to Decem- The motion to lay on the table was reserve the remainder of my time. ber 31, 2001— agreed to. The PRESIDING OFFICER. Who ‘‘(A) the number of ‘‘securities profes- Mr. SARBANES. Mr. President, in sionals,’’ which term shall mean public ac- the regular order we are back with the yields time? Just 29 seconds remain to countants, public accounting firms, invest- the Senator from Texas, and 51⁄2 min- ment bankers, investment advisers, brokers, Edwards and Carnahan amendments utes remain to the Senator from Mary- dealers, attorneys, and other securities pro- pending? land. fessionals practicing before the Commis- The PRESIDING OFFICER. That is Mr. SARBANES. Mr. President, what sion— correct. is the time situation? ‘‘(i) who have been found to have aided and Mr. SARBANES. I have a couple of The PRESIDING OFFICER. The Sen- abetted a violation of the Federal securities minutes? ator from Maryland has 5 minutes re- laws, including rules or regulations promul- The PRESIDING OFFICER. There re- maining, the Senator from Texas has 30 gated thereunder (hereinafter collectively mains 1 minute. referred to as ‘‘Federal securities laws’’), but seconds. Mr. SARBANES. Mr. President, I who have not been sanctioned, disciplined, or think the Senate is about to take a Mr. GRAMM. Mr. President, the Sen- otherwise penalized as a primary violator in ator from Maryland should have the any administrative action or civil pro- major step to contributing to the res- right to end the debate. ceeding, including in any settlement of such toration of investor confidence. I think we have two bills: One in the actions or proceedings (referred to herein- This legislation establishes a strong Senate, one in the House. We can come after as ‘‘aiders and abettors’’) and independent board to oversee auditors

VerDate Jun 13 2002 06:12 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00049 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.088 pfrm17 PsN: S15PT1 July 16, 2002 S6778 CONGRESSIONAL RECORD — SENATE July 15, 2002 of the public companies. The board can garet Simmons, Mat Young, Roger Hol- VOTE ON AMENDMENT NO. 4187, AS MODIFIED, AS set standards, investigate, and dis- lingsworth and Matt Pippin. AMENDED cipline accountants. It will be overseen I express my very deep appreciation. The PRESIDING OFFICER. The by the SEC, but it will have inde- The dedication these staff members question is on agreeing to amendment pendent funding and membership. I demonstrated over the last few months No. 4187, as modified, as amended. think this marks the end of weak self- was just extraordinary: Long nights, The yeas and nays have been ordered. regulation with respect to public com- weekends, day in and day out. I hope The clerk will call the roll. pany auditors. very much they will take a measure of The assistant legislative clerk called It addresses pervasive conflicts of in- satisfaction in the sense that they have the roll. terest by ensuring auditor independ- made a very important and significant Mr. NICKLES. I announce that the ence by restricting them from pro- contribution to better public policy in Senator from Idaho (Mr. CRAPO), the viding a defined list of consulting serv- this country. Senator from Idaho (Mr. CRAIG), and ices. Other consulting services on the I yield the floor. the Senator from North Carolina (Mr. part of the auditor can be permitted if HELMS) are necessarily absent. VOTE ON AMENDMENT NO. 4286 preapproved by the company’s audit The PRESIDING OFFICER. Are there company. The PRESIDING OFFICER. All time any other Senators in the Chamber de- This legislation strengthens cor- has expired. The question is on agree- siring to vote? porate responsibility. It establishes ing to amendment No. 4286. The yeas The result was announced—yeas 97, safeguards to protect investment/ana- and nays have been ordered. The clerk nays 0, as follows: lyst conflicts, and it gives the SEC ex- will call the roll. [Rollcall Vote No. 175 Leg.] panded staff resources so it has the re- Mr. NICKLES. I announce that the YEAS—97 Senator from Idaho (Mr. CRAIG), the sources to carry out its mandate of Akaka Edwards McConnell protecting investors in this critical Senator from Idaho (Mr. CRAPO), and Allard Ensign Mikulski time. the Senator from North Carolina (Mr. Allen Enzi Miller HELMS) are necessarily absent. Baucus Feingold Murkowski It is no exaggeration to say the crisis Bayh Feinstein The result was announced—yeas 97, Murray in our markets has put the plans and Bennett Fitzgerald Nelson (FL) hopes and dreams of millions of Ameri- nays 0, as follows: Biden Frist Nelson (NE) cans at risk. To restore market integ- Bingaman Graham Nickles [Rollcall Vote No. 174 Leg.] Bond Gramm Reed rity on which investor confidence de- Boxer Grassley YEAS—97 Reid pends, we should move expeditiously to Breaux Gregg Akaka Edwards McConnell Brownback Hagel Roberts move this legislation into law. Allard Ensign Mikulski Bunning Harkin Rockefeller I want to express my deep apprecia- Allen Enzi Miller Burns Hatch Santorum Baucus Feingold tion to my colleagues with whom we Murkowski Byrd Hollings Sarbanes Bayh Feinstein have worked for many weeks: To Sen- Murray Campbell Hutchinson Schumer Bennett Fitzgerald Nelson (FL) Cantwell Hutchison Sessions ator GRAMM, the ranking member of Biden Frist Nelson (NE) Carnahan Inhofe Shelby Bingaman Graham the committee with whom we interact Nickles Carper Inouye Smith (NH) Bond Gramm in an interesting and, on occasions, ex- Reed Chafee Jeffords Smith (OR) Boxer Grassley Reid Cleland Johnson Snowe citing fashion; to Senator ENZI, who Breaux Gregg Clinton Kennedy made a major contribution; to Sen- Brownback Hagel Roberts Specter Cochran Kerry Bunning Harkin Rockefeller Stabenow ators DODD and CORZINE on our side of Collins Kohl Burns Hatch Santorum Stevens the aisle who played an essential role Conrad Kyl Byrd Hollings Sarbanes Thomas Corzine Landrieu and introduced vital legislation on this Campbell Hutchinson Schumer Thompson Daschle Leahy Cantwell Hutchison Sessions Thurmond issue very early on; to Senator DURBIN Dayton Levin Carnahan Inhofe Shelby Torricelli who also introduced significant legisla- DeWine Lieberman Carper Inouye Smith (NH) Voinovich Dodd Lincoln tion on this subject, and to many other Chafee Jeffords Smith (OR) Domenici Lott Warner colleagues; and to Senator REID, who Cleland Johnson Snowe Dorgan Lugar Wellstone Clinton Kennedy has been extraordinarily helpful here Specter Durbin McCain Wyden on the floor of the U.S. Senate. Cochran Kerry Stabenow Collins Kohl Stevens NOT VOTING—3 Mr. REID. Mr. President, I ask unan- Conrad Kyl Thomas Craig Crapo Helms imous consent the 1 minute Senator Corzine Landrieu Thompson Daschle CARNAHAN has—she is not going to be Leahy Thurmond The amendment (No. 4187), as modi- Dayton Levin Torricelli using it—that it be given to the Sen- DeWine Lieberman fied, as amended, was agreed to. Voinovich ator from Maryland. Dodd Lincoln Mr. SARBANES. Madam President, I The PRESIDING OFFICER. The Sen- Domenici Lott Warner move to reconsider the vote. Dorgan Lugar Wellstone ator from Maryland has an additional Wyden Mr. DASCHLE. I move to lay that minute. Durbin McCain motion on the table. Mr. SARBANES. Mr. President, we NOT VOTING—3 The motion to lay on the table was don’t do this work by ourselves. We all Craig Crapo Helms agreed to. know that very well. We rely very The PRESIDING OFFICER. The The amendment (No. 4286) was agreed heavily on dedicated, absolutely dedi- question is on engrossment and third to. cated staff members. I am going to reading of the bill. take the closing time I have to simply Mr. DASCHLE. I move to reconsider The bill was ordered to be engrossed the vote. read their names into the RECORD: for a third reading and was read the Dean Shahinian, Steve Kroll, Lynsey Mr. GRAMM. I move to lay that mo- third time. Graham, Vincent Meehan, Sarah Kline, tion on the table. The PRESIDING OFFICER. The Sen- Judy Keenan, Jesse Jacobs, Aaron The motion to lay on the table was ator from Maryland is recognized. Kline, Marty Gruenberg and Steve Har- agreed to. Mr. SARBANES. Madam President, I ris of the Banking Committee staff; The PRESIDING OFFICER (Mrs. LIN- ask for the yeas and nays. Wayne Abernathy and Linda Lord of COLN). The majority leader. The PRESIDING OFFICER. Is there a Senator GRAMM’s staff on the com- Mr. DASCHLE. Madam President, sufficient second? mittee. There has also been the staff of under an earlier agreement, the next There is a sufficient second. the individual Members. four votes will all be 10-minute votes. I The bill having been read the third I particularly want to acknowledge urge Senators to stay in the well. We time, the question is, Shall it pass? Mike Thompson and Katherine are going to cut it off at 10 minutes. If The clerk will call the roll. McGuire of Senator ENZI’s staff, and you are not here in 10 minutes, you The legislative clerk called the roll. Alex Sternhell and Naomi Camper, Jon have lost the opportunity to vote. I Mr. NICKLES. I announce that the Berger, Jimmy Williams, Catherine urge Members to move forward, and we Senator from Idaho (Mr. CRAPO), the Cruz Wojtasik, Leslie Wooley, Mar- will take on the next vote. Senator from Idaho (Mr. CRAIG), and

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00050 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.090 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6779 the Senator from North Carolina (Mr. (b) TABLE OF CONTENTS.—The table of con- Sec. 803. Debts nondischargeable if incurred in HELMS) are necessarily absent. tents for this Act is as follows: violation of securities fraud laws. I further announce that if present Sec. 1. Short title; table of contents. Sec. 804. Statute of limitations for securities and voting the Senator from North Sec. 2. Definitions. fraud. Sec. 3. Commission rules and enforcement. Sec. 805. Review of Federal sentencing guide- Carolina (Mr. HELMS) would vote lines for obstruction of justice and TITLE I—PUBLIC COMPANY ACCOUNTING ‘‘yea’’. extensive criminal fraud. OVERSIGHT BOARD The result was announced—yeas 97, Sec. 806. Protection for employees of publicly nays 0, as follows: Sec. 101. Establishment; administrative provi- traded companies who provide [Rollcall Vote No. 176 Leg.] sions. evidence of fraud. YEAS—97 Sec. 102. Registration with the Board. Sec. 807. Criminal penalties for defrauding Sec. 103. Auditing, quality control, and inde- shareholders of publicly traded Akaka Edwards McConnell pendence standards and rules. companies. Allard Ensign Mikulski Sec. 104. Inspections of registered public ac- Allen Enzi TITLE IX—WHITE-COLLAR CRIME Miller counting firms. Baucus Feingold Murkowski PENALTY ENHANCEMENTS Bayh Feinstein Sec. 105. Investigations and disciplinary pro- Murray Sec. 901. Short title. Bennett Fitzgerald Nelson (FL) ceedings. Biden Frist Sec. 106. Foreign public accounting firms. Sec. 902. Criminal penalties for conspiracy to Nelson (NE) commit offense or to defraud the Bingaman Graham Nickles Sec. 107. Commission oversight of the Board. Bond Gramm United States. Reed Sec. 108. Accounting standards. Boxer Grassley Sec. 903. Criminal penalties for mail and wire Reid Sec. 109. Funding. Breaux Gregg fraud. Roberts TITLE II—AUDITOR INDEPENDENCE Brownback Hagel Sec. 904. Criminal penalties for violations of the Bunning Harkin Rockefeller Sec. 201. Services outside the scope of practice Santorum Employee Retirement Income Se- Burns Hatch of auditors. Byrd Hollings Sarbanes curity Act of 1974. Schumer Sec. 202. Preapproval requirements. Sec. 905. Amendment to sentencing guidelines Campbell Hutchinson Sec. 203. Audit partner rotation. Cantwell Hutchison Sessions relating to certain white-collar of- Carnahan Inhofe Shelby Sec. 204. Auditor reports to audit committees. fenses. Carper Inouye Smith (NH) Sec. 205. Conforming amendments. Sec. 906. Corporate responsibility for financial Chafee Jeffords Smith (OR) Sec. 206. Conflicts of interest. reports. Cleland Johnson Snowe Sec. 207. Study of mandatory rotation of reg- Sec. 907. Higher maximum penalties for mail Clinton Kennedy Specter istered public accounting firms. and wire fraud. Cochran Kerry Stabenow Sec. 208. Commission authority. Sec. 908. Tampering with a record or otherwise Collins Kohl Stevens Sec. 209. Considerations by appropriate State Conrad Kyl impeding an official proceeding. Thomas regulatory authorities. Sec. 909. Temporary freeze authority for the Se- Corzine Landrieu Thompson Daschle TITLE III—CORPORATE RESPONSIBILITY curities and Exchange Commis- Leahy Thurmond Dayton Levin Torricelli Sec. 301. Public company audit committees. sion. DeWine Lieberman Voinovich Sec. 302. Corporate responsibility for financial Sec. 910. Amendment to the Federal sentencing Dodd Lincoln Warner reports. guidelines. Domenici Lott Sec. 911. Authority of the Commission to pro- Dorgan Lugar Wellstone Sec. 303. Improper influence on conduct of au- Durbin McCain Wyden dits. hibit persons from serving as offi- Sec. 304. Forfeiture of certain bonuses and prof- cers or directors. NOT VOTING—3 its. TITLE X—CORPORATE TAX RETURNS Craig Crapo Helms Sec. 305. Officer and director bars and pen- Sec. 1001. Sense of the Senate regarding the The bill (S. 2673), as amended, was alties. signing of corporate tax returns passed. Sec. 306. Insider trades during pension fund by chief executive officers. blackout periods prohibited. Mr. SARBANES. Madam President, I SEC. 2. DEFINITIONS. move to reconsider the vote. TITLE IV—ENHANCED FINANCIAL (a) IN GENERAL.—In this Act, the following Mr. GRAMM. I move to lay that mo- DISCLOSURES definitions shall apply: tion on the table. Sec. 401. Disclosures in periodic reports. (1) APPROPRIATE STATE REGULATORY AUTHOR- The motion to lay on the table was Sec. 402. Enhanced conflict of interest provi- ITY.—The term ‘‘appropriate State regulatory agreed to. sions. authority’’ means the State agency or other au- The PRESIDING OFFICER. Under Sec. 403. Disclosures of transactions involving thority responsible for the licensure or other reg- the previous order, the Banking Com- management and principal stock- ulation of the practice of accounting in the holders. State or States having jurisdiction over a reg- mittee is discharged from further con- Sec. 404. Management assessment of internal istered public accounting firm or associated per- sideration of H.R. 3763, which the clerk controls. son thereof, with respect to the matter in ques- will report by title. Sec. 405. Exemption. tion. The legislative clerk read as follows: Sec. 406. Code of ethics for senior financial offi- (2) AUDIT.—The term ‘‘audit’’ means an exam- A bill (H.R. 3763) to protect investors by cers. ination of the financial statements of any issuer improving the accuracy and reliability of Sec. 407. Disclosure of audit committee finan- by an independent public accounting firm in ac- corporate disclosures made pursuant to the cial expert. cordance with the rules of the Board or the securities laws, and for other purposes. TITLE V—ANALYST CONFLICTS OF Commission (or, for the period preceding the The PRESIDING OFFICER. Under INTEREST adoption of applicable rules of the Board under section 103, in accordance with then-applicable the previous order, all after the enact- Sec. 501. Treatment of securities analysts by generally accepted auditing and related stand- registered securities associations. ing clause will be stricken and the text ards for such purposes), for the purpose of ex- of S. 2673, as passed, is inserted in lieu TITLE VI—COMMISSION RESOURCES AND pressing an opinion on such statements. thereof. AUTHORITY (3) AUDIT COMMITTEE.—The term ‘‘audit com- The question is on the engrossment Sec. 601. Authorization of appropriations. mittee’’ means— of the amendment and third reading of Sec. 602. Appearance and practice before the (A) a committee (or equivalent body) estab- the bill. Commission. lished by and amongst the board of directors of The amendment was ordered to be Sec. 603. Federal court authority to impose an issuer for the purpose of overseeing the ac- engrossed and the bill to be read a penny stock bars. counting and financial reporting processes of third time. Sec. 604. Qualifications of associated persons of the issuer and audits of the financial statements brokers and dealers. The bill was read the third time. of the issuer; and TITLE VII—STUDIES AND REPORTS (B) if no such committee exists with respect to The PRESIDING OFFICER. The bill an issuer, the entire board of directors of the Sec. 701. GAO study and report regarding con- having been read the third time, the issuer. solidation of public accounting question is, Shall the bill pass? (4) AUDIT REPORT.—The term ‘‘audit report’’ firms. The bill (H.R. 3763), as amended, was means a document or other record— Sec. 702. Commission study and report regard- passed, as follows: (A) prepared following an audit performed for ing credit rating agencies. Strike out all after the enacting clause and purposes of compliance by an issuer with the re- insert: TITLE VIII—CORPORATE AND CRIMINAL quirements of the securities laws; and SECTION 1. SHORT TITLE; TABLE OF CONTENTS. FRAUD ACCOUNTABILITY (B) in which a public accounting firm either— (a) SHORT TITLE.—This Act may be cited as Sec. 801. Short title. (i) sets forth the opinion of that firm regard- the ‘‘Public Company Accounting Reform and Sec. 802. Criminal penalties for altering docu- ing a financial statement, report, or other docu- Investor Protection Act of 2002’’. ments. ment; or

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(ii) asserts that no such opinion can be ex- (12) REGISTERED PUBLIC ACCOUNTING FIRM.— (1) the authority of the Commission to regu- pressed. The term ‘‘registered public accounting firm’’ late the accounting profession, accounting (5) BOARD.—The term ‘‘Board’’ means the means a public accounting firm registered with firms, or persons associated with such firms for Public Company Accounting Oversight Board the Board in accordance with this Act. purposes of enforcement of the securities laws; established under section 101. (13) RULES OF THE BOARD.—The term ‘‘rules of (2) the authority of the Commission to set (6) COMMISSION.—The term ‘‘Commission’’ the Board’’ means the bylaws and rules of the standards for accounting or auditing practices means the Securities and Exchange Commission. Board (as submitted to, and approved, modified, or auditor independence, derived from other (7) ISSUER.—The term ‘‘issuer’’ means an or amended by the Commission, in accordance provisions of the securities laws or the rules or issuer (as defined in section 3 of the Securities with section 107), and those stated policies, regulations thereunder, for purposes of the Exchange Act of 1934 (15 U.S.C. 78c)), the secu- practices, and interpretations of the Board that preparation and issuance of any audit report, or rities of which are registered under section 12 of the Commission, by rule, may deem to be rules of otherwise under applicable law; or that Act (15 U.S.C. 78l), or that is required to the Board, as necessary or appropriate in the (3) the ability of the Commission to take, on file reports pursuant to section 15(d) of that Act public interest or for the protection of investors. the initiative of the Commission, legal, adminis- (15 U.S.C. 78o(d)), or that will be required to file (14) SECURITY.—The term ‘‘security’’ has the trative, or disciplinary action against any reg- such reports at the end of a fiscal year of the same meaning as in section 3(a) of the Securities istered public accounting firm or any associated issuer in which a registration statement filed by Exchange Act of 1934 (15 U.S.C. 78c(a)). person thereof. such issuer has become effective pursuant to the (15) SECURITIES LAWS.—The term ‘‘securities TITLE I—PUBLIC COMPANY ACCOUNTING Securities Act of 1933 (15 U.S.C. 77a et. seq.), laws’’ means the provisions of law referred to in OVERSIGHT BOARD unless its securities are registered under section section 3(a)(47) of the Securities Exchange Act 12 of the Securities Exchange Act of 1934 (15 SEC. 101. ESTABLISHMENT; ADMINISTRATIVE of 1934 (15 U.S.C. 78c(a)(47)), as amended by PROVISIONS. U.S.C. 78c) on or before the end of such fiscal this Act, and includes the rules, regulations, year. (a) ESTABLISHMENT OF BOARD.—There is es- and orders issued by the Commission there- tablished the Public Company Accounting Over- (8) NON-AUDIT SERVICES.—The term ‘‘non- under. audit services’’ means any professional services sight Board, to oversee the audit of public com- (16) STATE.—The term ‘‘State’’ means any provided to an issuer by a registered public ac- panies that are subject to the securities laws, State of the United States, the District of Co- and related matters, in order to protect the in- counting firm, other than those provided to an lumbia, Puerto Rico, the Virgin Islands, or any issuer in connection with an audit or a review terests of investors and further the public inter- other territory or possession of the United est in the preparation of informative, accurate, of the financial statements of an issuer. States. (9) PERSON ASSOCIATED WITH A PUBLIC AC- and independent audit reports for companies (b) CONFORMING AMENDMENT.—Section COUNTING FIRM.— the securities of which are sold to, and held by 3(a)(47) of the Securities Exchange Act of 1934 (A) IN GENERAL.—The terms ‘‘person associ- and for, public investors. The Board shall be a ated with a public accounting firm’’ (or with a (15 U.S.C. 78c(a)(47)) is amended by inserting body corporate, operate as a nonprofit corpora- ‘‘registered public accounting firm’’) and ‘‘asso- ‘‘the Public Company Accounting Reform and tion, and have succession until dissolved by an ciated person of a public accounting firm’’ (or of Investor Protection Act of 2002,’’ before ‘‘the Act of Congress. Public’’. a ‘‘registered public accounting firm’’) mean (b) STATUS.—The Board shall not be an agen- any individual proprietor, partner, shareholder, SEC. 3. COMMISSION RULES AND ENFORCEMENT. cy or establishment of the United States Govern- principal, accountant, or other professional em- (a) REGULATORY ACTION.—The Commission ment, and, except as otherwise provided in this ployee of a public accounting firm, or any other shall promulgate such rules and regulations, as Act, shall be subject to, and have all the powers independent contractor or entity that, in con- may be necessary or appropriate in the public conferred upon a nonprofit corporation by, the nection with the preparation or issuance of any interest or for the protection of investors, and in District of Columbia Nonprofit Corporation Act. audit report— furtherance of this Act. No member or person employed by, or agent for, (i) shares in the profits of, or receives com- (b) ENFORCEMENT.— the Board shall be deemed to be an officer or pensation in any other form from, that firm; or (1) IN GENERAL.—A violation by any person of employee of or agent for the Federal Govern- (ii) participates as agent or otherwise on be- this Act, any rule or regulation of the Commis- ment by reason of such service. half of such accounting firm in any activity of sion issued under this Act, or any rule of the (c) DUTIES OF THE BOARD.—The Board shall, that firm. Board shall be treated for all purposes in the subject to action by the Commission under sec- (B) EXEMPTION AUTHORITY.—The Board may, same manner as a violation of the Securities Ex- tion 107, and once a determination is made by by rule, exempt persons engaged only in ministe- change Act of 1934 (15 U.S.C. 78a et seq.) or the the Commission under subsection (d) of this sec- rial tasks from the definition in subparagraph rules and regulations issued thereunder, con- tion— (A), to the extent that the Board determines sistent with the provisions of this Act, and any (1) register public accounting firms that pre- that any such exemption is consistent with the such person shall be subject to the same pen- pare audit reports for issuers, in accordance purposes of this Act, the public interest, or the alties, and to the same extent, as for a violation with section 102; protection of investors. of that Act or such rules or regulations. (2) establish or adopt, or both, by rule, audit- (10) PROFESSIONAL STANDARDS.—The term (2) INVESTIGATIONS, INJUNCTIONS, AND PROS- ing, quality control, ethics, independence, and ‘‘professional standards’’ means— ECUTION OF OFFENSES.—Section 21 of the Securi- other standards relating to the preparation of (A) accounting principles that are— ties Exchange Act of 1934 (15 U.S.C. 78u) is audit reports for issuers, in accordance with sec- (i) established by the standard setting body amended tion 103; described in section 19(b) of the Securities Act of (A) in subsection (a)(1), by inserting ‘‘the (3) conduct inspections of registered public ac- 1933, as amended by this Act, or prescribed by rules of the Public Company Accounting Over- counting firms, in accordance with section 104 the Commission under section 19(a) of that Act sight Board, of which such person is a reg- and the rules of the Board; (15 U.S.C. 17a(s)) or section 13(b) of the Securi- istered public accounting firm or a person asso- (4) conduct investigations and disciplinary ties Exchange Act of 1934 (15 U.S.C. 78a(m)); ciated with such a firm,’’ after ‘‘is a partici- proceedings concerning, and impose appropriate and pant,’’; sanctions where justified upon, registered public (ii) relevant to audit reports for particular (B) in subsection (d)(1), by inserting ‘‘the accounting firms and associated persons of such issuers, or dealt with in the quality control sys- rules of the Public Company Accounting Over- firms, in accordance with section 105; tem of a particular registered public accounting sight Board, of which such person is a reg- (5) perform such other duties or functions as firm; and istered public accounting firm or a person asso- (B) auditing standards, standards for attesta- the Board determines are necessary or appro- ciated with such a firm,’’ after ‘‘is a partici- tion engagements, quality control policies and priate to promote high professional standards pant,’’; procedures, ethical and competency standards, among, and improve the quality of audit serv- (C) in subsection (e), by inserting ‘‘the rules of and independence standards (including rules ices offered by, registered public accounting the Public Company Accounting Oversight implementing title II) that the Board or the firms and associated persons thereof, or other- Board, of which such person is a registered pub- Commission determines— wise to carry out this Act, in order to protect in- (i) relate to the preparation or issuance of lic accounting firm or a person associated with vestors, or to further the public interest; audit reports for issuers; and such a firm,’’ after ‘‘is a participant,’’; and (6) enforce compliance with this Act, the rules (ii) are established or adopted by the Board (D) in subsection (f), by inserting ‘‘or the Pub- of the Board, professional standards, and the under section 103(a), or are promulgated as lic Company Accounting Oversight Board’’ after securities laws relating to the preparation and rules of the Commission. ‘‘self-regulatory organization’’ each place that issuance of audit reports and the obligations (11) PUBLIC ACCOUNTING FIRM.—The term term appears. and liabilities of accountants with respect there- ‘‘public accounting firm’’ means— (3) CEASE-AND-DESIST PROCEEDINGS.—Section to, by registered public accounting firms and as- (A) a proprietorship, partnership, incor- 21C(c)(2) of the Securities Exchange Act of 1934 sociated persons thereof; and porated association, corporation, limited liabil- (15 U.S.C. 78u–3(c)(2)) is amended by inserting (7) set the budget and manage the operations ity company, limited liability partnership, or ‘‘registered public accounting firm (as defined in of the Board and the staff of the Board. other legal entity that is engaged in the practice section 2 of the Public Company Accounting Re- (d) COMMISSION DETERMINATION.—The mem- of public accounting or preparing or issuing form and Investor Protection Act of 2002),’’ after bers of the Board shall take such action (includ- audit reports; and ‘‘government securities dealer,’’. ing hiring of staff, proposal of rules, and adop- (B) to the extent so designated by the rules of (c) EFFECT ON COMMISSION AUTHORITY.— tion of initial and transitional auditing and the Board, any associated person of any entity Nothing in this Act or the rules of the Board other professional standards) as may be nec- described in subparagraph (A). shall be construed to impair or limit— essary or appropriate to enable the Commission

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00052 Fmt 4624 Sfmt 6333 E:\CR\FM\A15JY6.046 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6781 to determine, not later than 270 days after the (3) to lease, purchase, accept gifts or dona- (A) the names of all issuers for which the firm date of enactment of this Act, that the Board is tions of or otherwise acquire, improve, use, sell, prepared or issued audit reports during the im- so organized and has the capacity to carry out exchange, or convey, all of or an interest in any mediately preceding calendar year, and for the requirements of this title, and to enforce property, wherever situated; which the firm expects to prepare or issue audit compliance with this title by registered public (4) to appoint such employees, accountants, reports during the current calendar year; accounting firms and associated persons thereof. attorneys, and other agents as may be necessary (B) the annual fees received by the firm from (e) BOARD MEMBERSHIP.— or appropriate, and to determine their qualifica- each such issuer for audit services, other ac- (1) COMPOSITION.—The Board shall have 5 tions, define their duties, and fix their salaries counting services, and non-audit services, re- members, appointed from among prominent indi- or other compensation (at a level that is com- spectively; viduals of integrity and reputation who have a parable to private sector self-regulatory, ac- (C) such other current financial information demonstrated commitment to the interests of in- counting, technical, supervisory, or other staff for the most recently completed fiscal year of the vestors and the public, and an understanding of or management positions); firm as the Board may reasonably request; the responsibilities for and nature of the finan- (5) to allocate, assess, and collect accounting (D) a statement of the quality control policies cial disclosures required of issuers under the se- support fees established pursuant to section 109, of the firm for its accounting and auditing prac- curities laws and the obligations of accountants for the Board, and other fees and charges im- tices; with respect to the preparation and issuance of posed under this title; and (E) a list of all accountants associated with audit reports with respect to such disclosures. (6) to enter into contracts, execute instru- the firm who participate in or contribute to the (2) LIMITATION.—Two members, and only 2 ments, incur liabilities, and do any and all other preparation of audit reports, stating the license members, of the Board shall be or have been cer- acts and things necessary, appropriate, or inci- or certification number of each such person, as tified public accountants pursuant to the laws dental to the conduct of its operations and the well as the State license numbers of the firm of 1 or more States, provided that, if 1 of those exercise of its obligations, rights, and powers im- itself; 2 members is the chairperson, he or she may not posed or granted by this title. (F) information relating to criminal, civil, or have been a practicing certified public account- (g) RULES OF THE BOARD.—The rules of the administrative actions or disciplinary pro- ant for at least 5 years prior to his or her ap- Board shall, subject to the approval of the Com- ceedings pending against the firm or any associ- pointment to the Board. mission— ated person of the firm in connection with any (3) FULL-TIME INDEPENDENT SERVICE.—Each (1) provide for the operation and administra- audit report; member of the Board shall serve on a full-time tion of the Board, the exercise of its authority, (G) copies of any periodic or annual disclo- basis, and may not, concurrent with service on and the performance of its responsibilities under sure filed by an issuer with the Commission dur- the Board, be employed by any other person or this Act; ing the immediately preceding calendar year engage in any other professional or business ac- (2) permit, as the Board determines necessary which discloses accounting disagreements be- tivity. No member of the Board may share in or appropriate, delegation by the Board of any tween such issuer and the firm in connection any of the profits of, or receive payments from, of its functions to an individual member or em- with an audit report furnished or prepared by a public accounting firm (or any other person, ployee of the Board, or to a division of the the firm for such issuer; and as determined by rule of the Commission), other Board, including functions with respect to hear- (H) such other information as the rules of the than fixed continuing payments, subject to such ing, determining, ordering, certifying, reporting, Board or the Commission shall specify as nec- conditions as the Commission may impose, or otherwise acting as to any matter, except essary or appropriate in the public interest or under standard arrangements for the retirement that— for the protection of investors. of members of public accounting firms. (A) the Board shall retain a discretionary (3) CONSENTS.—Each application for registra- (4) APPOINTMENT OF BOARD MEMBERS.— right to review any action pursuant to any such tion under this subsection shall include— (A) INITIAL BOARD.—Not later than 90 days delegated function, upon its own motion; (A) a consent executed by the public account- after the date of enactment of this Act, the Com- (B) a person shall be entitled to a review by ing firm to cooperation in and compliance with mission, after consultation with the Chairman the Board with respect to any matter so dele- any request for testimony or the production of of the Board of Governors of the Federal Re- gated, and the decision of the Board upon such documents made by the Board in the further- serve System and the Secretary of the Treasury, review shall be deemed to be the action of the ance of its authority and responsibilities under shall appoint the chairperson and other initial Board for all purposes (including appeal or re- this title (and an agreement to secure and en- members of the Board, and shall designate a view thereof); and force similar consents from each of the associ- term of service for each. (C) if the right to exercise a review described ated persons of the public accounting firm as a (B) VACANCIES.—A vacancy on the Board in subparagraph (A) is declined, or if no such condition of their continued employment by or shall not affect the powers of the Board, but review is sought within the time stated in the other association with such firm); and shall be filled in the same manner as provided rules of the Board, then the action taken by the (B) a statement that such firm understands for appointments under this section. holder of such delegation shall for all purposes, and agrees that cooperation and compliance, as (5) TERM OF SERVICE.— including appeal or review thereof, be deemed to described in the consent required by subpara- (A) IN GENERAL.—The term of service of each be the action of the Board; graph (A), and the securing and enforcement of Board member shall be 5 years, and until a suc- (3) establish ethics rules and standards of con- such consents from its associated persons, in ac- cessor is appointed, except that— duct for Board members and staff, including a cordance with the rules of the Board, shall be a (i) the terms of office of the initial Board bar on practice before the Board (and the Com- condition to the continuing effectiveness of the members (other than the chairperson) shall ex- mission, with respect to Board-related matters) registration of the firm with the Board. pire in annual increments, 1 on each of the first of 1 year for former members of the Board, and (c) ACTION ON APPLICATIONS.— 4 anniversaries of the initial date of appoint- appropriate periods (not to exceed 1 year) for (1) TIMING.—The Board shall approve a com- ment; and former staff of the Board; and pleted application for registration not later than (ii) any Board member appointed to fill a va- (4) provide as otherwise required by this Act. 45 days after the date of receipt of the applica- cancy occurring before the expiration of the (h) ANNUAL REPORT TO THE COMMISSION.— tion, in accordance with the rules of the Board, term for which the predecessor was appointed The Board shall submit an annual report (in- unless the Board, prior to such date, issues a shall be appointed only for the remainder of cluding its audited financial statements) to the written notice of disapproval to, or requests that term. Commission, and the Commission shall transmit more information from, the prospective reg- (B) TERM LIMITATION.—No person may serve a copy of that report to the Committee on Bank- istrant. as a member of the Board, or as chairperson of ing, Housing, and Urban Affairs of the Senate, (2) TREATMENT.—A written notice of dis- the Board, for more than 2 terms, whether or and the Committee on Financial Services of the approval of a completed application under para- not such terms of service are consecutive. House of Representatives, not later than 30 days graph (1) for registration shall be treated as a (6) REMOVAL FROM OFFICE.—A member of the after the date of receipt of that report by the disciplinary sanction for purposes of sections Board may be removed by the Commission from Commission. 105(d) and 107(c). office, in accordance with section 107(d)(3), for SEC. 102. REGISTRATION WITH THE BOARD. (d) PERIODIC REPORTS.—Each registered pub- good cause shown before the expiration of the (a) MANDATORY REGISTRATION.—Beginning lic accounting firm shall submit an annual re- term of that member. 180 days after the date of the determination of port to the Board, and may be required to report (f) POWERS OF THE BOARD.—In addition to the Commission under section 101(d), it shall be more frequently, as necessary to update the in- any authority granted to the Board otherwise in unlawful for any person that is not a registered formation contained in its application for reg- this Act, the Board shall have the power, sub- public accounting firm to prepare or issue, or to istration under this section, and to provide to ject to section 107— participate in the preparation or issuance of, the Board such additional information as the (1) to sue and be sued, complain and defend, any audit report with respect to any issuer. Board or the Commission may specify, in ac- in its corporate name and through its own coun- (b) APPLICATIONS FOR REGISTRATION.— cordance with subsection (b)(2). sel, with the approval of the Commission, in any (1) FORM OF APPLICATION.—A public account- (e) PUBLIC AVAILABILITY.—Registration appli- Federal, State, or other court; ing firm shall use such form as the Board may cations and annual reports required by this sub- (2) to conduct its operations and maintain of- prescribe, by rule, to apply for registration section, or such portions of such applications or fices, and to exercise all other rights and powers under this section. reports as may be designated under rules of the authorized by this Act, in any State, without re- (2) CONTENTS OF APPLICATIONS.—Each public Board, shall be made available for public in- gard to any qualification, licensing, or other accounting firm shall submit, as part of its ap- spection, subject to rules of the Board or the provision of law in effect in such State (or a po- plication for registration, in such detail as the Commission, and to applicable laws relating to litical subdivision thereof); Board shall specify— the confidentiality of proprietary, personal, or

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other information contained in such applica- (A) IN GENERAL.—In carrying out this sub- (b) INSPECTION FREQUENCY.— tions or reports, provided that, in all events, the section, the Board— (1) IN GENERAL.—Subject to paragraph (2), in- Board shall protect from public disclosure infor- (i) may adopt as its rules, subject to the terms spections required by this section shall be con- mation reasonably identified by the subject ac- of section 107, any portion of any statement of ducted— counting firm as proprietary information. auditing standards or other professional stand- (A) annually with respect to each registered (f) REGISTRATION AND ANNUAL FEES.—The ards that the Board determines satisfy the re- public accounting firm that regularly provides Board shall assess and collect a registration fee quirements of paragraph (1), and that were pro- audit reports for more than 100 issuers; and and an annual fee from each registered public posed by 1 or more professional groups of ac- (B) not less frequently than once every 3 years accounting firm, in amounts that are sufficient countants that shall be designated or recognized with respect to each registered public account- to recover the costs of processing and reviewing by the Board, by rule, for such purpose, pursu- ing firm that regularly provides audit reports for applications and annual reports. ant to this paragraph or 1 or more advisory 100 or fewer issuers. SEC. 103. AUDITING, QUALITY CONTROL, AND groups convened pursuant to paragraph (4); (2) ADJUSTMENTS TO SCHEDULES.—The Board INDEPENDENCE STANDARDS AND and may, by rule, adjust the inspection schedules set RULES. (ii) notwithstanding clause (i), shall retain under paragraph (1) if the Board finds that dif- (a) AUDITING, QUALITY CONTROL, AND ETHICS full authority to modify, supplement, revise, or ferent inspection schedules are consistent with STANDARDS.— subsequently amend, modify, or repeal, in whole the purposes of this Act, the public interest, and ‘‘(1) IN GENERAL.—The Board shall, by rule, or in part, any portion of any statement de- the protection of investors. establish, including, to the extent it determines scribed in clause (i). (c) PROCEDURES.—The Board shall, in each appropriate, through adoption of standards pro- (B) INITIAL AND TRANSITIONAL STANDARDS.— inspection under this section, and in accordance posed by 1 or more professional groups of ac- The Board shall adopt standards described in with its rules for such inspections— countants designated pursuant to paragraph subparagraph (A)(i) as initial or transitional (1) identify any act or practice or omission to (3)(A) or advisory groups convened pursuant to standards, to the extent the Board determines act by the registered public accounting firm, or paragraph (4), and amend or otherwise modify necessary, prior to a determination of the Com- by any associated person thereof, revealed by or alter, such auditing and related attestation mission under section 101(d), and such stand- such inspection that may be in violation of this standards, such quality control standards, and ards shall be separately approved by the Com- Act, the rules of the Board, the rules of the such ethics standards to be used by registered mission at the time of that determination, with- Commission, the firm’s own quality control poli- public accounting firms in the preparation and out regard to the procedures required by section cies, or professional standards; issuance of audit reports, as required by this Act 107 that otherwise would apply to the approval (2) report any such act, practice, or omission, or the rules of the Commission, or as may be of rules of the Board. if appropriate, to the Commission and each ap- necessary or appropriate in the public interest (4) ADVISORY GROUPS.—The Board shall con- propriate State regulatory authority; and or for the protection of investors. vene, or authorize its staff to convene, such ex- (3) begin a formal investigation or take appro- (2) RULE REQUIREMENTS.—In carrying out pert advisory groups as may be appropriate, priate disciplinary action, if any, with respect paragraph (1), the Board— which may include practicing accountants and to any such violation, in accordance with this (A) shall include in the auditing standards other experts, as well as representatives of other Act and the rules of the Board. that it adopts, requirements that each registered interested groups, subject to such rules as the (d) CONDUCT OF INSPECTIONS.—In conducting public accounting firm shall— Board may prescribe to prevent conflicts of in- an inspection of a registered public accounting (i) prepare, and maintain for a period of not terest, to make recommendations concerning the firm under this section, the Board shall— less than 7 years, audit work papers, and other content (including proposed drafts) of auditing, (1) inspect and review selected audit and re- information related to any audit report, in suffi- quality control, ethics, independence, or other view engagements of the firm (which may in- cient detail to support the conclusions reached standards required to be established under this clude audit engagements that are the subject of in such report; section. ongoing litigation or other controversy between (ii) provide a concurring or second partner re- (b) INDEPENDENCE STANDARDS AND RULES.— the firm and 1 or more third parties), performed view and approval of such audit report (and The Board shall establish such rules as may be at various offices and by various associated per- other related information), and concurring ap- necessary or appropriate in the public interest sons of the firm, as selected by the Board; proval in its issuance, by a qualified person (as or for the protection of investors, to implement, (2) evaluate the sufficiency of the quality con- prescribed by the Board) associated with the or as authorized under, title II of this Act. trol system of the firm, and the manner of the public accounting firm, other than the person in (c) COOPERATION WITH DESIGNATED PROFES- documentation and communication of that sys- charge of the audit, or by an independent re- SIONAL GROUPS OF ACCOUNTANTS AND ADVISORY tem by the firm; and viewer (as prescribed by the Board); and GROUPS.— (3) perform such other testing of the audit, su- (iii) describe the scope of the auditor’s testing (1) IN GENERAL.—The Board shall cooperate pervisory, and quality control procedures of the of the system of internal accounting controls of on an ongoing basis with professional groups of firm as are necessary or appropriate in light of the issuer required by section 13(b)(2) of the Se- accountants designated under subsection the purpose of the inspection and the respon- curities Exchange Act of 1934 (15 U.S.C. (a)(3)(A) and advisory groups convened under sibilities of the Board. 78m(b)(2)), and present (in such report or in a subsection (a)(4) in the examination of the need (e) RECORD RETENTION.—The rules of the separate report)— for changes in any standards subject to its au- Board may require the retention by registered (I) the findings of the auditor from such test- thority under subsection (a), recommend issues public accounting firms for inspection purposes ing; for inclusion on the agendas of such designated of records whose retention is not otherwise re- (II) an evaluation of whether such system of professional groups of accountants or advisory quired by section 103 or the rules issued there- internal accounting controls— groups, and take such other steps as it deems under. (aa) complies with the requirements of that appropriate to increase the effectiveness of the (f) PROCEDURES FOR REVIEW.—The rules of section 13(b)(2); and standard setting process. the Board shall provide a procedure for the re- (bb) provides reasonable assurance that re- (2) BOARD RESPONSES.—The Board shall re- view of and response to a draft inspection report ceipts and expenditures of the issuer comply spond in a timely fashion to requests from des- by the registered public accounting firm under with applicable law, and are being made in ac- ignated professional groups of accountants and inspection. The Board shall take such action cordance with proper authorizations of the advisory groups referred to in paragraph (1) for with respect to such response as it considers ap- management and directors of the issuer; and any changes in standards over which the Board propriate (including revising the draft report or (III) a description of significant defects in has authority. continuing or supplementing its inspection ac- such internal controls, and of any material non- (d) EVALUATION OF STANDARD SETTING PROC- tivities before issuing a final report), but the compliance, of which the auditor should know ESS.—The Board shall include in the annual re- text of any such response, appropriately re- on the basis of such testing; and port required by section 101(h) the results of its dacted to protect information reasonably identi- (B) shall include, in the quality control stand- standard setting responsibilities during the pe- fied by the accounting firm as confidential, ards that it adopts with respect to the issuance riod to which the report relates, including a dis- shall be attached to and made part of the in- of audit reports, requirements for every reg- cussion of the work of the Board with any des- spection report. istered public accounting firm relating to— ignated professional groups of accountants and (g) REPORT.—A written report of the findings (i) monitoring of professional ethics and inde- advisory groups described in paragraphs (3)(A) of the Board for each inspection under this sec- pendence from issuers on behalf of which the and (4) of subsection (a), and its pending issues tion, subject to subsection (h), shall be— firm issues audit reports; agenda for future standard setting projects. (1) transmitted, in appropriate detail, to the (ii) consultation within such firm on account- SEC. 104. INSPECTIONS OF REGISTERED PUBLIC Commission and each appropriate State regu- ing and auditing questions; ACCOUNTING FIRMS. latory authority, accompanied by any letter or (iii) supervision of audit work; (a) IN GENERAL.—The Board shall conduct a comments by the Board or the inspector, and (iv) hiring, professional development, and ad- continuing program of inspections to assess the any letter of response from the registered public vancement of personnel; degree of compliance of each registered public accounting firm; and (v) the acceptance and continuation of en- accounting firm and associated persons of that (2) made available in appropriate detail to the gagements; firm with this Act, the rules of the Board, the public (subject to section 105(b)(5)(A), and to the (vi) internal inspection; and rules of the Commission, or professional stand- protection of such confidential and proprietary (vii) such other requirements as the Board ards, in connection with its performance of au- information as the Board may determine to be may prescribe, subject to subsection (a)(1). dits, issuance of audit reports, and related mat- appropriate, or as may be required by law), ex- (3) AUTHORITY TO ADOPT OTHER STANDARDS.— ters involving issuers. cept that no portions of the inspection report

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00054 Fmt 4624 Sfmt 6333 E:\CR\FM\A15JY6.046 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6783 that deal with criticisms of or potential defects ent of a registered public accounting firm, that (A) bring specific charges with respect to the in the quality control systems of the firm under the Board considers relevant or material to an firm or associated person; inspection shall be made public if those criti- investigation under this section. (B) notify such firm or associated person of, cisms or defects are addressed by the firm, to the (3) NONCOOPERATION WITH INVESTIGATIONS.— and provide to the firm or associated person an satisfaction of the Board, not later than 12 (A) IN GENERAL.—If a registered public ac- opportunity to defend against, such charges; months after the date of the inspection report. counting firm or any associated person thereof and (h) INTERIM COMMISSION REVIEW.— refuses to testify, produce documents, or other- (C) keep a record of the proceedings. (1) REVIEWABLE MATTERS.—A registered public wise cooperate with the Board in connection (2) PUBLIC HEARINGS.—Hearings under this accounting firm may seek review by the Commis- with an investigation under this section, the section shall not be public, unless otherwise or- sion, pursuant to such rules as the Commission Board may— dered by the Board for good cause shown, with shall promulgate, if the firm— (i) suspend or bar such person from being as- the consent of the parties to such hearing. (A) has provided the Board with a response, sociated with a registered public accounting (3) SUPPORTING STATEMENT.—A determination pursuant to rules issued by the Board under firm, or require the registered public accounting by the Board to impose a sanction under this subsection (f), to the substance of particular firm to end such association; subsection shall be supported by a statement set- items in a draft inspection report, and disagrees (ii) suspend or revoke the registration of the ting forth— with the assessments contained in any final re- public accounting firm; and (A) each act or practice in which the reg- port prepared by the Board following such re- (iii) invoke such other lesser sanctions as the istered public accounting firm, or associated sponse; or Board considers appropriate, and as specified by person, has engaged (or omitted to engage), or (B) disagrees with the determination of the rule of the Board. that forms a basis for all or a part of such sanc- Board that criticisms or defects identified in an (B) PROCEDURE.—Any action taken by the tion; inspection report have not been addressed to the Board under this paragraph shall be subject to (B) the specific provision of this Act, the secu- satisfaction of the Board within 12 months of the terms of section 107(c). rities laws, the rules of the Board, or profes- (4) REFERRAL.—The Board may refer an in- the date of the inspection report, for purposes of sional standards which the Board determines vestigation under this section— subsection (g)(2). (A) to the Commission; has been violated; and REATMENT OF REVIEW.—Any decision of (2) T (B) to any other Federal functional regulator (C) the sanction imposed, including a jus- the Commission with respect to a review under (as defined in section 509 of the Gramm-Leach- tification for that sanction. paragraph (1) shall not be reviewable under sec- Bliley Act (15 U.S.C. 6809)), in the case of an in- (4) SANCTIONS.—If the Board finds, based on tion 25 of the Securities Exchange Act of 1934 vestigation that concerns an audit report for an all of the facts and circumstances, that a reg- (15 U.S.C. 78y), or deemed to be ‘‘final agency institution that is subject to the jurisdiction of istered public accounting firm or associated per- action’’ for purposes of section 704 of title 5, such regulator; and son thereof has engaged in any act or practice, United States Code. (C) at the direction of the Commission, to— or omitted to act, in violation of this Act, the (3) TIMING.—Review under paragraph (1) may (i) the Attorney General of the United States; rules of the Board, the provisions of the securi- be sought during the 30-day period following the (ii) the attorney general of 1 or more States; ties laws relating to the preparation and date of the event giving rise to the review under and issuance of audit reports and the obligations subparagraph (A) or (B) of paragraph (1). (iii) the appropriate State regulatory author- and liabilities of accountants with respect there- SEC. 105. INVESTIGATIONS AND DISCIPLINARY ity. to, including the rules of the Commission issued PROCEEDINGS. (5) USE OF DOCUMENTS.— under this Act, or professional standards, the (a) IN GENERAL.—The Board shall establish, (A) CONFIDENTIALITY.—Except as provided in Board may impose such disciplinary or remedial by rule, subject to the requirements of this sec- subparagraph (B), all documents and informa- sanctions as it determines appropriate, subject tion, fair procedures for the investigation and tion prepared or received by or specifically for to applicable limitations under paragraph (5), disciplining of registered public accounting the Board, and deliberations of the Board and including— firms and associated persons of such firms. its employees and agents, in connection with an (A) temporary suspension or permanent rev- (b) INVESTIGATIONS.— inspection under section 104 or with an inves- ocation of registration under this title; (1) AUTHORITY.—In accordance with the rules tigation under this section, shall be confidential (B) temporary or permanent suspension or bar of the Board, the Board may conduct an inves- and privileged as an evidentiary matter (and of a person from further association with any tigation of any act or practice, or omission to shall not be subject to civil discovery or other registered public accounting firm; act, by a registered public accounting firm, any legal process) in any proceeding in any Federal (C) temporary or permanent limitation on the associated person of such firm, or both, that or State court or administrative agency, and activities, functions, or operations of such firm may violate any provision of this Act, the rules shall be exempt from disclosure, in the hands of or person (other than in connection with re- of the Board, the provisions of the securities an agency or establishment of the Federal Gov- quired additional professional education or laws relating to the preparation and issuance of ernment, under the Freedom of Information Act training); audit reports and the obligations and liabilities (5 U.S.C. 552a), or otherwise, unless and until (D) a civil money penalty for each such viola- of accountants with respect thereto, including presented in connection with a public pro- tion, in an amount equal to— the rules of the Commission issued under this ceeding or released in accordance with sub- (i) not more than $100,000 for a natural person Act, or professional standards, regardless of section (c). or $2,000,000 for any other person; and how the act, practice, or omission is brought to (B) AVAILABILITY TO GOVERNMENT AGEN- (ii) in any case to which paragraph (5) ap- the attention of the Board. CIES.—All information referred to in subpara- plies, not more than $750,000 for a natural per- (2) TESTIMONY AND DOCUMENT PRODUCTION.— graph (A) may, in the discretion of the Board, son or $15,000,000 for any other person; In addition to such other actions as the Board when determined by the Board to be necessary (E) censure; determines to be necessary or appropriate, the to accomplish the purposes of this Act or to pro- (F) required additional professional education rules of the Board may— tect investors, and without the loss of its status or training; or (A) require the testimony of the firm or of any as confidential and privileged in the hands of (G) any other appropriate sanction provided person associated with a registered public ac- the Board, be made available to the Commission, for in the rules of the Board. counting firm, with respect to any matter that the Attorney General of the United States, to (5) INTENTIONAL OR OTHER KNOWING CON- the Board considers relevant or material to an the appropriate Federal functional regulator (as DUCT.—The sanctions and penalties described in investigation; defined in section 509 of the Gramm-Leach-Bli- subparagraphs (A) through (C) and (D)(ii) of (B) require the production of audit work pa- ley Act (15 U.S.C. 6809)), other than the Com- paragraph (4) shall only apply to— pers and any other document or information in mission, with respect to an audit report for an (A) intentional or knowing conduct, including the possession of a registered public accounting institution subject to the jurisdiction of such reckless conduct, that results in violation of the firm or any associated person thereof, wherever regulator, to State attorneys general in connec- applicable statutory, regulatory, or professional domiciled, that the Board considers relevant or tion with any criminal investigation, and to any standard; or material to the investigation, and may inspect appropriate State regulatory authority, which (B) repeated instances of negligent conduct, the books and records of such firm or associated shall maintain such information as confidential each resulting in a violation of the applicable person to verify the accuracy of any documents and privileged. statutory, regulatory, or professional standard. or information supplied; (6) IMMUNITY.—Any employee of the Board (6) FAILURE TO SUPERVISE.— (C) request the testimony of, and production engaged in carrying out an investigation under (A) IN GENERAL.—The Board may impose of any document in the possession of, any other this Act shall be immune from any civil liability sanctions under this section on a registered ac- person, including any client of a registered pub- arising out of such investigation in the same counting firm or upon the supervisory personnel lic accounting firm that the Board considers rel- manner and to the same extent as an employee of such firm, if the Board finds that— evant or material to an investigation under this of the Federal Government in similar cir- (i) the firm has failed reasonably to supervise section, with appropriate notice, subject to the cumstances. an associated person, either as required by the needs of the investigation, as permitted under (c) DISCIPLINARY PROCEDURES.— rules of the Board relating to auditing or qual- the rules of the Board; and (1) NOTIFICATION; RECORDKEEPING.—The rules ity control standards, or otherwise, with a view (D) provide for procedures to seek issuance by of the Board shall provide that in any pro- to preventing violations of this Act, the rules of the Commission, in a manner established by the ceeding by the Board to determine whether a the Board, the provisions of the securities laws Commission, of a subpoena to require the testi- registered public accounting firm, or an associ- relating to the preparation and issuance of mony of, and production of any document in ated person thereof, should be disciplined, the audit reports and the obligations and liabilities the possession of, any person, including any cli- Board shall— of accountants with respect thereto, including

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00055 Fmt 4624 Sfmt 6333 E:\CR\FM\A15JY6.046 pfrm17 PsN: S15PT1 July 16, 2002 S6784 CONGRESSIONAL RECORD — SENATE July 15, 2002 the rules of the Commission under this Act, or to this Act and the rules of the Board and the this Act and the securities laws, or is necessary professional standards; and Commission issued under this Act, in the same or appropriate in the public interest or for the (ii) such associated person commits a violation manner and to the same extent as a public ac- protection of investors. of this Act, or any of such rules, laws, or stand- counting firm that is organized and operates (4) PROPOSED RULE PROCEDURES.—The provi- ards. under the laws of the United States or any sions of paragraphs (1) through (3) of section (B) RULE OF CONSTRUCTION.—No associated State, except that registration pursuant to sec- 19(b) of the Securities Exchange Act of 1934 (15 person of a registered public accounting firm tion 102 shall not by itself provide a basis for U.S.C. 78s(b)) shall govern the proposed rules of shall be deemed to have failed reasonably to su- subjecting such a foreign public accounting firm the Board, as fully as if the Board were a ‘‘reg- pervise any other person for purposes of sub- to the jurisdiction of the Federal or State courts, istered securities association’’ for purposes of paragraph (A), if— other than with respect to controversies between that section 19(b), except that, for purposes of (i) there have been established in and for that such firms and the Board. this paragraph— firm procedures, and a system for applying such (2) BOARD AUTHORITY.—The Board may, by (A) the phrase ‘‘consistent with the require- procedures, that comply with applicable rules of rule, determine that a foreign public accounting ments of this title and the rules and regulations the Board and that would reasonably be ex- firm (or a class of such firms) that does not issue thereunder applicable to such organization’’ in pected to prevent and detect any such violation audit reports nonetheless plays such a substan- section 19(b)(2) of that Act shall be deemed to by such associated person; and tial role in the preparation and furnishing of read ‘‘consistent with the requirements of title I (ii) such person has reasonably discharged the such reports for particular issuers, that it is nec- of the Public Company Accounting Reform and duties and obligations incumbent upon that per- essary or appropriate, in light of the purposes of Investor Protection Act of 2002, and the rules son by reason of such procedures and system, this Act and in the public interest or for the pro- and regulations issued thereunder applicable to and had no reasonable cause to believe that tection of investors, that such firm (or class of such organization, or as necessary or appro- such procedures and system were not being com- firms) should be treated as a public accounting priate in the public interest or for the protection plied with. firm (or firms) for purposes of registration of investors’’; and (7) EFFECT OF SUSPENSION.— under, and oversight by the Board in accord- (B) the phrase ‘‘otherwise in furtherance of (A) ASSOCIATION WITH A PUBLIC ACCOUNTING ance with, this title. the purposes of this title’’ in section 19(b)(3)(C) FIRM.—It shall be unlawful for any person that (b) PRODUCTION OF AUDIT WORKPAPERS.— of that Act shall be deemed to read ‘‘otherwise is suspended or barred from being associated (1) CONSENT BY FOREIGN FIRMS.—If a foreign in furtherance of the purposes of title I of the with a registered public accounting firm under public accounting firm issues an opinion or oth- Public Company Accounting Reform and Inves- this subsection willfully to become or remain as- erwise performs material services upon which a tor Protection Act of 2002’’. sociated with any registered public accounting registered public accounting firm relies in (5) COMMISSION AUTHORITY TO AMEND RULES firm, or for any registered public accounting issuing all or part of any audit report or any OF THE BOARD.—The provisions of section 19(c) firm that knew, or, in the exercise of reasonable opinion contained in an audit report, that for- of the Securities Exchange Act of 1934 (15 U.S.C. care should have known, of the suspension or eign public accounting firm shall be deemed to 78s(c)) shall govern the abrogation, deletion, or bar, to permit such an association, without the have consented— addition to portions of the rules of the Board by consent of the Board or the Commission. (A) to produce its audit workpapers for the the Commission as fully as if the Board were a (B) ASSOCIATION WITH AN ISSUER.—It shall be Board or the Commission in connection with ‘‘registered securities association’’ for purposes unlawful for any person that is suspended or any investigation by either body with respect to of that section 19(c), except that the phrase ‘‘to barred from being associated with an issuer that audit report; and conform its rules to the requirements of this title under this subsection willfully to become or re- (B) to be subject to the jurisdiction of the and the rules and regulations thereunder appli- main associated with any issuer in an account- courts of the United States for purposes of en- cable to such organization, or otherwise in fur- ancy or a financial management capacity, and forcement of any request for production of such therance of the purposes of this title’’ in section for any issuer that knew, or in the exercise of workpapers. 19(c) of that Act shall, for purposes of this para- (2) CONSENT BY DOMESTIC FIRMS.—A registered reasonable care should have known, of such graph, be deemed to read ‘‘to assure the fair ad- public accounting firm that relies upon the suspension or bar, to permit such an associa- ministration of the Public Company Accounting opinion of a foreign public accounting firm, as tion, without the consent of the Board or the Oversight Board, conform the rules promulgated described in paragraph (1), shall be deemed— Commission. by that Board to the requirements of title I of (A) to have consented to supplying the audit (d) REPORTING OF SANCTIONS.— the Public Company Accounting Reform and In- workpapers of that foreign public accounting (1) RECIPIENTS.—If the Board imposes a dis- vestor Protection Act of 2002, or otherwise fur- firm in response to a request for production by ciplinary sanction, in accordance with this sec- ther the purposes of that Act, the securities tion, the Board shall report the sanction to— the Board or the Commission; and (B) to have secured the agreement of that for- laws, and the rules and regulations thereunder (A) the Commission; eign public accounting firm to such production, applicable to that Board’’. (B) any appropriate State regulatory author- as a condition of its reliance on the opinion of (c) COMMISSION REVIEW OF DISCIPLINARY AC- ity or any foreign accountancy licensing board that foreign public accounting firm. TION TAKEN BY THE BOARD.— with which such firm or person is licensed or (c) EXEMPTION AUTHORITY.—The Commission, (1) NOTICE OF SANCTION.—The Board shall certified; and and the Board, subject to the approval of the promptly file notice with the Commission of any (C) the public (once any stay on the imposi- Commission, may, by rule, regulation, or order, final sanction on any registered public account- tion of such sanction has been lifted). and as the Commission (or Board) determines ing firm or on any associated person thereof, in (2) CONTENTS.—The information reported necessary or appropriate in the public interest such form and containing such information as under paragraph (1) shall include— or for the protection of investors, either uncon- the Commission, by rule, may prescribe. (A) the name of the sanctioned person; ditionally or upon specified terms and condi- (2) REVIEW OF SANCTIONS.—The provisions of (B) a description of the sanction and the basis tions exempt any foreign public accounting firm, sections 19(d)(2) and 19(e)(1) of the Securities for its imposition; and or any class of such firms, from any provision of Exchange Act of 1934 (15 U.S.C. 78s (d)(2) and (C) such other information as the Board this Act or the rules of the Board or the Com- (e)(1)) shall govern the review by the Commis- deems appropriate. mission issued under this Act. sion of final disciplinary sanctions imposed by (e) STAY OF SANCTIONS.— (d) DEFINITION.—In this section, the term the Board (including sanctions imposed under (1) IN GENERAL.—Application to the Commis- ‘‘foreign public accounting firm’’ means a public section 105(b)(3) of this Act for noncooperation sion for review, or the institution by the Com- accounting firm that is organized and operates in an investigation of the Board), as fully as if mission of review, of any disciplinary action of under the laws of a foreign government or polit- the Board were a self-regulatory organization the Board shall operate as a stay of any such ical subdivision thereof. and the Commission were the appropriate regu- disciplinary action, unless and until the Com- latory agency for such organization for pur- mission orders (summarily or after notice and SEC. 107. COMMISSION OVERSIGHT OF THE BOARD. poses of those sections 19(d)(2) and 19(e)(1), ex- opportunity for hearing on the question of a (a) GENERAL OVERSIGHT RESPONSIBILITY.— cept that, for purposes of this paragraph— stay, which hearing may consist solely of the The Commission shall have oversight and en- (A) section 105(e) of this Act (rather than that submission of affidavits or presentation of oral forcement authority over the Board, as provided section 19(d)(2)) shall govern the extent to arguments) that no such stay shall continue to in this Act. which application for, or institution by the operate. (b) RULES OF THE BOARD.— Commission on its own motion of, review of any (2) EXPEDITED PROCEDURES.—The Commission (1) DEFINITION.—In this section, the term disciplinary action of the Board operates as a shall establish for appropriate cases an expe- ‘‘proposed rule’’ means any proposed rule of the stay of such action; dited procedure for consideration and deter- Board, and any modification of any such rule. (B) references in that section 19(e)(1) to mination of the question of the duration of a (2) PRIOR APPROVAL REQUIRED.—No rule of ‘‘members’’ of such an organization shall be stay pending review of any disciplinary action the Board shall become effective without prior deemed to be references to registered public ac- of the Board under this subsection. approval of the Commission in accordance with counting firms; SEC. 106. FOREIGN PUBLIC ACCOUNTING FIRMS. this section, other than as provided in section (C) the phrase ‘‘consistent with the purposes (a) APPLICABILITY TO CERTAIN FOREIGN 103(a)(3)(B) with respect to initial or transi- of this title’’ in that section 19(e)(1) shall be FIRMS.— tional standards. deemed to read ‘‘consistent with the purposes of (1) IN GENERAL.—Any foreign public account- (3) APPROVAL CRITERIA.—The Commission this title and title I of the Public Company Ac- ing firm that prepares or furnishes an audit re- shall approve a proposed rule, if it finds that counting Reform and Investor Protection Act of port with respect to any issuer, shall be subject the rule is consistent with the requirements of 2002’’;

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00056 Fmt 4624 Sfmt 6333 E:\CR\FM\A15JY6.046 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6785 (D) references to rules of the Municipal Secu- body) serving in the public interest, the majority ment of the fiscal year to which the budget per- rities Rulemaking Board in that section 19(e)(1) of whom are not, concurrent with their service tains. The budget of the Board shall be subject shall not apply; and on such board, and have not been during the 2- to approval by the Commission. (E) the reference to section 19(e)(2) of the Se- year period preceding such service, associated (c) SOURCES AND USES OF FUNDS.— curities Exchange Act of 1934 shall refer instead persons of any registered public accounting (1) RECOVERABLE BUDGET EXPENSES.—The to section 107(c)(3) of this Act. firm; budget of the Board (reduced by any registra- (3) COMMISSION MODIFICATION AUTHORITY.— ‘‘(iii) is funded as provided in section 109 of tion or annual fees received under section 102(e) The Commission may enhance, modify, cancel, the Public Company Accounting Reform and In- for the year preceding the year for which the reduce, or require the remission of a sanction vestor Protection Act of 2002; budget is being computed), and all of the budget imposed by the Board upon a registered public ‘‘(iv) has adopted procedures to ensure prompt of the standard setting body referred to in sub- accounting firm or associated person thereof, if consideration, by majority vote of its members, section (a), for each fiscal year of each of those the Commission, having due regard for the pub- of changes to accounting principles necessary to 2 entities, shall be payable from annual ac- lic interest and the protection of investors, reflect emerging accounting issues and changing counting support fees, in accordance with sub- finds, after a proceeding in accordance with this business practices; sections (d) and (e). subsection, that the sanction— ‘‘(v) considers, in adopting accounting prin- (2) FUNDS GENERATED FROM THE COLLECTION (A) is not necessary or appropriate in further- ciples, the need to keep standards current in OF MONETARY PENALTIES.—Subject to the avail- ance of this Act or the securities laws; or order to reflect changes in the business environ- ability in advance in an appropriations Act, (B) is excessive, oppressive, inadequate, or ment, the extent to which international conver- and notwithstanding subsection (h), all funds otherwise not appropriate to the finding or the gence on high quality accounting standards is collected by the Board as a result of the assess- basis on which the sanction was imposed. necessary or appropriate in the public interest ment of monetary penalties shall be used to (d) CENSURE OF THE BOARD; OTHER SANC- and for the protection of investors; and fund a merit scholarship program for under- TIONS.— ‘‘(B) that the Commission determines has the graduate and graduate students enrolled in ac- (1) RESCISSION OF BOARD AUTHORITY.—The capacity to assist the Commission in fulfilling credited accounting degree programs, which Commission, by rule, consistent with the public the requirements of subsection (a) and section program is to be administered by the Board or interest, the protection of investors, and the 13(b) of the Securities Exchange Act of 1934, be- by an entity or agent identified by the Board. (d) ANNUAL ACCOUNTING SUPPORT FEE FOR other purposes of this Act and the securities cause, at a minimum, the standard setting body THE BOARD.— laws, may relieve the Board of any responsi- is capable of improving the accuracy and effec- (1) ESTABLISHMENT OF FEE.—The Board shall bility to enforce compliance with any provision tiveness of financial reporting and the protec- establish, with the approval of the Commission, of this Act, the securities laws, the rules of the tion of investors under the securities laws. a reasonable annual accounting support fee (or Board, or professional standards. ‘‘(2) ANNUAL REPORT.—A standard setting a formula for the computation thereof), as may (2) CENSURE OF THE BOARD; LIMITATIONS.— body described in paragraph (1) shall submit an be necessary or appropriate to establish and The Commission may, by order, as it determines annual report to the Commission and the public, necessary or appropriate in the public interest, maintain the Board. containing audited financial statements of that (2) ASSESSMENTS.—The rules of the Board for the protection of investors, or otherwise in standard setting body.’’. furtherance of the purposes of this Act or the se- under paragraph (1) shall provide for the equi- (b) COMMISSION AUTHORITY.—The Commission table allocation, assessment, and collection by curities laws, censure or impose limitations upon shall promulgate such rules and regulations to the activities, functions, and operations of the the Board (or an agent appointed by the Board) carry out section 19(b) of the Securities Act of of the fee established under paragraph (1), Board, if the Commission finds, on the record, 1933, as added by this section, as it deems nec- after notice and opportunity for a hearing, that among issuers, in accordance with subsection essary or appropriate in the public interest or (f), allowing for differentiation among classes of the Board— for the protection of investors. (A) has violated or is unable to comply with issuers, as appropriate. (c) NO EFFECT ON COMMISSION POWERS.— any provision of this Act, the rules of the (e) ANNUAL ACCOUNTING SUPPORT FEE FOR Nothing in this Act, including this section and STANDARD SETTING BODY.—The annual ac- Board, or the securities laws; or the amendment made by this section, shall be (B) without reasonable justification or excuse, counting support fee for the standard setting construed to impair or limit the authority of the has failed to enforce compliance with any such body referred to in subsection (a)— Commission to establish accounting principles or provision or rule, or any professional standard (1) shall be allocated in accordance with sub- standards for purposes of enforcement of the se- by a registered public accounting firm or an as- section (f), and assessed and collected against curities laws. sociated person thereof. each issuer, on behalf of the standard setting (d) STUDY AND REPORT ON ADOPTING PRIN- (3) CENSURE OF BOARD MEMBERS; REMOVAL body, by 1 or more appropriate designated col- CIPLES-BASED ACCOUNTING.— FROM OFFICE.—The Commission may, as nec- lection agents, as may be necessary or appro- (1) STUDY.— essary or appropriate in the public interest, for priate to pay for the budget and provide for the (A) IN GENERAL.—The Commission shall con- the protection of investors, or otherwise in fur- expenses of that standard setting body, and to duct a study on the adoption by the United therance of the purposes of this Act or the secu- provide for an independent, stable source of States financial reporting system of a principles- rities laws, remove from office or censure any funding for such body, subject to review by the based accounting system. member of the Board, if the Commission finds, Commission; and (B) STUDY TOPICS.—The study required by (2) may differentiate among different classes on the record, after notice and opportunity for subparagraph (A) shall include an examination of issuers. a hearing, that such member— of— (f) ALLOCATION OF ACCOUNTING SUPPORT FEES (A) has willfully violated any provision of this (i) the extent to which principles-based ac- AMONG ISSUERS.—Any amount due from issuers Act, the rules of the Board, or the securities counting and financial reporting exists in the (or a particular class of issuers) under this sec- laws; tion to fund the budget of the Board or the (B) has willfully abused the authority of that United States; standard setting body referred to in subsection member; or (ii) the length of time required for change (C) without reasonable justification or excuse, from a rules-based to a principles-based finan- (a) shall be allocated among and payable by has failed to enforce compliance with any such cial reporting system; each issuer (or each issuer in a particular class, provision or rule, or any professional standard (iii) the feasibility of and proposed methods by as applicable) in an amount equal to the total of by any registered public accounting firm or any which a principles-based system may be imple- such amount, multiplied by a fraction— (1) the numerator of which is the average associated person thereof. mented; and (iv) a thorough economic analysis of the im- monthly equity market capitalization of the SEC. 108. ACCOUNTING STANDARDS. plementation of a principles-based system. issuer for the 12-month period immediately pre- (a) AMENDMENT TO SECURITIES ACT OF 1933.— (2) REPORT.—Not later than 1 year after the ceding the beginning of the fiscal year to which Section 19 of the Securities Act of 1933 (15 U.S.C. date of enactment of this Act, the Commission such budget relates; and 77s) is amended— shall submit a report on the results of the study (2) the denominator of which is the average (1) by redesignating subsections (b) and (c) as required by paragraph (1) to the Committee on monthly equity market capitalization of all such subsections (c) and (d), respectively; and Banking, Housing, and Urban Affairs of the issuers for such 12-month period. (2) by inserting after subsection (a) the fol- (g) CONFORMING AMENDMENTS.—Section lowing: Senate and the Committee on Financial Services of the House of Representatives. 13(b)(2) of the Securities Exchange Act of 1934 ‘‘(b) RECOGNITION OF ACCOUNTING STAND- (15 U.S.C. 78m(b)(2)) is amended— ARDS.— SEC. 109. FUNDING. (1) in subparagraph (A), by striking ‘‘and’’ at ‘‘(1) IN GENERAL.—In carrying out its author- (a) IN GENERAL.—The Board, and the stand- the end; ity under subsection (a) and under section 13(b) ard setting body designated pursuant to section (2) in subparagraph (B), by striking the period of the Securities Exchange Act of 1934, the Com- 19(b) of the Securities Act of 1933, as amended at the end and inserting the following: ‘‘; and mission may recognize, as ‘generally accepted’ by section 108, shall be funded as provided in ‘‘(C) notwithstanding any other provision of for purposes of the securities laws, any account- this section. law, pay the allocable share of such issuer of a ing principles established by a standard setting (b) ANNUAL BUDGETS.—The Board and the reasonable annual accounting support fee or body— standard setting body referred to in subsection fees, determined in accordance with section 109 ‘‘(A) that— (a) shall each establish a budget for each fiscal of the Public Company Accounting Reform and ‘‘(i) is organized as a private entity; year, which shall be reviewed and approved ac- Investor Protection Act of 2002.’’. ‘‘(ii) has, for administrative and operational cording to their respective internal procedures (h) RULE OF CONSTRUCTION.—Nothing in this purposes, a board of trustees (or equivalent not less than 1 month prior to the commence- section shall be construed to render either the

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Board, the standard setting body referred to in not more than 5 percent of the total amount of ‘‘(59) REGISTERED PUBLIC ACCOUNTING FIRM.— subsection (a), or both, subject to procedures in revenues paid by the issuer to its auditor; The term ‘registered public accounting firm’ has Congress to authorize or appropriate public ‘‘(ii) such services were not recognized by the the same meaning as in section 3 of the Public funds, or to prevent such organization from uti- issuer at the time of the engagement to be non- Company Accounting Reform and Investor Pro- lizing additional sources of revenue for its ac- audit services; and tection Act of 2002.’’. tivities, such as earnings from publication sales, ‘‘(iii) such services are promptly brought to (b) AUDITOR REQUIREMENTS.—Section 10A of provided that each additional source of revenue the attention of the audit committee of the the Securities Exchange Act of 1934 (15 U.S.C. shall not jeopardize, in the judgment of the issuer and approved by the audit committee 78j–1) is amended— Commission, the actual and perceived independ- prior to the completion of the audit, by 1 or (1) by striking ‘‘an independent public ac- ence of such organization. more members of the audit committee who are countant’’ each place that term appears and in- members of the board of directors to whom au- TITLE II—AUDITOR INDEPENDENCE serting ‘‘a registered public accounting firm’’; thority to grant such approvals has been dele- (2) by striking ‘‘the independent public ac- SEC. 201. SERVICES OUTSIDE THE SCOPE OF gated by the audit committee. countant’’ each place that term appears and in- PRACTICE OF AUDITORS. ‘‘(2) DISCLOSURE TO INVESTORS.—Approval by serting ‘‘the registered public accounting firm’’; (a) PROHIBITED ACTIVITIES.—Section 10A of an audit committee of an issuer under this sub- (3) in subsection (c), by striking ‘‘No inde- the Securities Exchange Act of 1934 (15 U.S.C. section of a non-audit service to be performed by pendent public accountant’’ and inserting ‘‘No 78j–1) is amended by adding at the end the fol- the auditor of the issuer shall be disclosed to in- registered public accounting firm’’; and lowing: vestors in periodic reports required by section (4) in subsection (b)— ‘‘(g) PROHIBITED ACTIVITIES.—It shall be un- 13(a). (A) by striking ‘‘the accountant’’ each place lawful for a registered public accounting firm ‘‘(3) DELEGATION AUTHORITY.—The audit com- that term appears and inserting ‘‘the firm’’; (and any associated person of that firm, to the mittee of an issuer may delegate to 1 or more (B) by striking ‘‘such accountant’’ each place extent determined appropriate by the Commis- designated members of the audit committee who that term appears and inserting ‘‘such firm’’; sion) that performs for any issuer any audit re- are independent directors of the board of direc- and quired by this title or the rules of the Commis- tors, the authority to grant preapprovals re- (C) in paragraph (4), by striking ‘‘the ac- sion under this title or, beginning 180 days after quired by this subsection. The decisions of any countant’s report’’ and inserting ‘‘the report of the date of commencement of the operations of member to whom authority is delegated under the firm’’. the Public Company Accounting Oversight this paragraph to preapprove an activity under (c) OTHER REFERENCES.—The Securities Ex- Board established under section 101 of the Pub- this subsection shall be presented to the full change Act of 1934 (15 U.S.C. 78a et seq.) is lic Company Accounting Reform and Investor audit committee at each of its scheduled meet- amended— Protection Act of 2002 (in this section referred to ings. (1) in section 12(b)(1) (15 U.S.C. 78l(b)(1)), by as the ‘Board’), the rules of the Board, to pro- ‘‘(4) APPROVAL OF AUDIT SERVICES FOR OTHER striking ‘‘independent public accountants’’ each vide to that issuer, contemporaneously with the PURPOSES.—In carrying out its duties under place that term appears and inserting ‘‘a reg- audit, any non-audit service, including— subsection (m)(2), if the audit committee of an istered public accounting firm’’; and ‘‘(1) bookkeeping or other services related to issuer approves an audit service within the (2) in subsections (e) and (i) of section 17 (15 the accounting records or financial statements scope of the engagement of the auditor, such U.S.C. 78q), by striking ‘‘an independent public of the audit client; audit service shall be deemed to have been accountant’’ each place that term appears and ‘‘(2) financial information systems design and preapproved for purposes of this subsection.’’. inserting ‘‘a registered public accounting firm’’. implementation; SEC. 203. AUDIT PARTNER ROTATION. (d) CONFORMING AMENDMENT.—Section 10A(f) ‘‘(3) appraisal or valuation services, fairness Section 10A of the Securities Exchange Act of of the Securities Exchange Act of 1934 (15 U.S.C. opinions, or contribution-in-kind reports; 1934 (15 U.S.C. 78j–1), as amended by this Act, 78k(f)) is amended— ‘‘(4) actuarial services; is amended by adding at the end the following: (1) by striking ‘‘DEFINITION’’ and inserting ‘‘(5) internal audit outsourcing services; ‘‘(j) AUDIT PARTNER ROTATION.—It shall be ‘‘(6) management functions or human re- ‘‘DEFINITIONS’’; and unlawful for a registered public accounting firm (2) by adding at the end the following: ‘‘As sources; to provide audit services to an issuer if the lead ‘‘(7) broker or dealer, investment adviser, or used in this section, the term ‘issuer’ means an audit partner (having primary responsibility for issuer (as defined in section 3), the securities of investment banking services; the audit) or the audit partner responsible for ‘‘(8) legal services and expert services unre- which are registered under section 12, or that is reviewing the audit that is assigned to perform required to file reports pursuant to section 15(d), lated to the audit; and those audit services has performed audit services ‘‘(9) any other service that the Board deter- or that will be required to file such reports at for that issuer in each of the 5 previous fiscal the end of a fiscal year of the issuer in which mines, by regulation, is impermissible. years of that issuer.’’. ‘‘(h) PREAPPROVAL REQUIRED FOR NON-AUDIT a registration statement filed by such issuer has SEC. 204. AUDITOR REPORTS TO AUDIT COMMIT- SERVICES.—A registered public accounting firm become effective pursuant to the Securities Act TEES. of 1933 (15 U.S.C. 77a et. seq.), unless its securi- may engage in any non-audit service, including Section 10A of the Securities Exchange Act of tax services, that is not described in any of ties are registered under section 12 of this title 1934 (15 U.S.C. 78j–1), as amended by this Act, on or before the end of such fiscal year.’’. paragraphs (1) through (9) of subsection (g) for is amended by adding at the end the following: SEC. 206. CONFLICTS OF INTEREST. an audit client, only if the activity is approved ‘‘(k) REPORTS TO AUDIT COMMITTEES.—Each in advance by the audit committee of the issuer, registered public accounting firm that performs Section 10A of the Securities Exchange Act of in accordance with subsection (i).’’. for any issuer any audit required by this title 1934 (15 U.S.C. 78j–1), as amended by this Act, (b) EXEMPTION AUTHORITY.—The Board may, shall timely report to the audit committee of the is amended by adding at the end the following: on a case by case basis, exempt any person, issuer— ‘‘(l) CONFLICTS OF INTEREST.—It shall be un- issuer, public accounting firm, or transaction ‘‘(1) all critical accounting policies and prac- lawful for a registered public accounting firm to from the prohibition on the provision of services tices to be used; perform for an issuer any audit service required under section 10A(g) of the Securities Exchange ‘‘(2) all alternative treatments of financial in- by this title, if a chief executive officer, con- Act of 1934 (as added by this section), to the ex- formation within generally accepted accounting troller, chief financial officer, chief accounting tent that such exemption is necessary or appro- principles that have been discussed with man- officer or any person serving in an equivalent priate in the public interest and is consistent agement officials of the issuer, ramifications of position for the issuer was employed by that reg- with the protection of investors, and subject to the use of such alternative disclosures and istered independent public accounting firm and review by the Commission in the same manner treatments, and the treatment preferred by the participated in any capacity in the audit of that as for rules of the Board under section 107. registered public accounting firm; and issuer during the 1-year period preceding the SEC. 202. PREAPPROVAL REQUIREMENTS. ‘‘(3) other material written communications date of the initiation of the audit.’’. Section 10A of the Securities Exchange Act of between the registered public accounting firm SEC. 207. STUDY OF MANDATORY ROTATION OF 1934 (15 U.S.C. 78j–1), as amended by this Act, and the management of the issuer, such as any REGISTERED PUBLIC ACCOUNTING is amended by adding at the end the following: management letter or schedule of unadjusted FIRMS. ‘‘(i) PREAPPROVAL REQUIREMENTS.— differences.’’. (a) STUDY AND REVIEW REQUIRED.—The ‘‘(1) IN GENERAL.— SEC. 205. CONFORMING AMENDMENTS. Comptroller General of the United States shall ‘‘(A) AUDIT COMMITTEE ACTION.—All auditing (a) DEFINITIONS.—Section 3(a) of the Securi- conduct a study and review of the potential ef- services (which may entail providing comfort ties Exchange Act of 1934 (15 U.S.C. 78c(a)) is fects of requiring the mandatory rotation of reg- letters in connection with securities amended by adding at the end the following: istered public accounting firms. underwritings) and non-audit services, other ‘‘(58) AUDIT COMMITTEE.—The term ‘audit (b) REPORT REQUIRED.—Not later than 1 year than as provided in subparagraph (B), provided committee’ means— after the date of enactment of this Act, the to an issuer by the auditor of the issuer shall be ‘‘(A) a committee (or equivalent body) estab- Comptroller General shall submit a report to the preapproved by the audit committee of the lished by and amongst the board of directors of Committee on Banking, Housing, and Urban Af- issuer. an issuer for the purpose of overseeing the ac- fairs of the Senate and the Committee on Finan- ‘‘(B) DE MINIMUS EXCEPTION.—The counting and financial reporting processes of cial Services of the House of Representatives on preapproval requirement under subparagraph the issuer and audits of the financial statements the results of the study and review required by (A) is waived with respect to the provision of of the issuer; and this section. non-audit services for an issuer, if— ‘‘(B) if no such committee exists with respect (c) DEFINITION.—For purposes of this section, ‘‘(i) the aggregate amount of all such non- to an issuer, the entire board of directors of the the term ‘‘mandatory rotation’’ refers to the im- audit services provided to the issuer constitutes issuer. position of a limit on the period of years in

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which a particular registered public accounting ‘‘(C) EXEMPTION AUTHORITY.—The Commis- SEC. 304. FORFEITURE OF CERTAIN BONUSES firm may be the auditor of record for a par- sion may exempt from the requirements of sub- AND PROFITS. ticular issuer. paragraph (B) a particular relationship with re- (a) ADDITIONAL COMPENSATION PRIOR TO SEC. 208. COMMISSION AUTHORITY. spect to audit committee members, as the Com- NONCOMPLIANCE WITH COMMISSION FINANCIAL (a) COMMISSION REGULATIONS.—Not later mission determines appropriate in light of the REPORTING REQUIREMENTS.—If an issuer is re- than 180 days after the date of enactment of this circumstances. quired to prepare an accounting restatement Act, the Commission shall issue final regulations ‘‘(4) COMPLAINTS.—Each audit committee due to the material noncompliance of the issuer, to carry out each of subsections (g) through (l) shall establish procedures for— as a result of misconduct, with any financial re- of section 10A of the Securities Exchange Act of ‘‘(A) the receipt, retention, and treatment of porting requirement under the securities laws, 1934, as added by this title. complaints received by the issuer regarding ac- the chief executive officer and chief financial (b) AUDITOR INDEPENDENCE.—It shall be un- counting, internal accounting controls, or au- officer of the issuer shall reimburse the issuer lawful for any registered public accounting firm diting matters; and for— (or an associated person thereof, as applicable) ‘‘(B) the confidential, anonymous submission (1) any bonus or other incentive-based or eq- to prepare or issue any audit report with respect by employees of the issuer of concerns regarding uity-based compensation received by that person to any issuer, if the firm or associated person questionable accounting or auditing matters. from the issuer during the 12-month period fol- engages in any activity with respect to that ‘‘(5) AUTHORITY TO ENGAGE ADVISERS.—Each lowing the first public issuance or filing with issuer prohibited by any of subsections (g) audit committee shall have the authority to en- the Commission (whichever first occurs) of the through (l) of section 10A of the Securities Ex- gage independent counsel and other advisers, as financial document embodying such financial change Act of 1934, as added by this title, or any it determines necessary to carry out its duties. reporting requirement; and rule or regulation of the Commission or of the ‘‘(6) FUNDING.—Each issuer shall provide for (2) any profits realized from the sale of securi- Board issued thereunder. appropriate funding, as determined by the audit ties of the issuer during that 12-month period. committee, in its capacity as a committee of the (b) COMMISSION EXEMPTION AUTHORITY.—The SEC. 209. CONSIDERATIONS BY APPROPRIATE board of directors, for payment of compensa- Commission may exempt any person from the STATE REGULATORY AUTHORITIES. In supervising nonregistered public account- tion— application of subsection (a), as it deems nec- ‘‘(A) to the registered public accounting firm ing firms and their associated persons, appro- essary and appropriate. employed by the issuer for the purpose of ren- priate State regulatory authorities should make SEC. 305. OFFICER AND DIRECTOR BARS AND dering or issuing an audit report; and an independent determination of the proper PENALTIES. ‘‘(B) to any advisers employed by the audit standards applicable, particularly taking into (a) UNFITNESS STANDARD.— committee under paragraph (5).’’. consideration the size and nature of the busi- (1) SECURITIES EXCHANGE ACT OF 1934.—Section ness of the accounting firms they supervise and SEC. 302. CORPORATE RESPONSIBILITY FOR FI- 21(d)(2) of the Securities Exchange Act of 1934 NANCIAL REPORTS. the size and nature of the business of the clients (15 U.S.C. 78u(d)(2)) is amended by striking (a) CERTIFICATION OF PERIODIC REPORTS.— of those firms. The standards applied by the ‘‘substantial unfitness’’ and inserting Each periodic report containing financial state- Board under this Act should not be presumed to ‘‘unfitness’’. ments filed by an issuer with the Commission (2) SECURITIES ACT OF 1933.—Section 20(e) of be applicable for purposes of this section for pursuant to section 13(a) or 15(d) of the Securi- the Securities Act of 1933 (15 U.S.C. 77t(e)) is small and medium sized nonregistered public ac- ties Exchange Act of 1934, shall be accompanied amended by striking ‘‘substantial unfitness’’ counting firms. by a written statement by the chief executive of- and insert ‘‘unfitness’’. TITLE III—CORPORATE RESPONSIBILITY ficer and chief financial officer (or the equiva- (b) EQUITABLE RELIEF.—Section 21(d) of the SEC. 301. PUBLIC COMPANY AUDIT COMMITTEES. lent thereof) of the issuer. Securities Exchange Act of 1934 (15 U.S.C. Section 10A of the Securities Exchange Act of (b) CONTENT.—The statement required by sub- 78u(d)) is amended— 1934 (15 U.S.C. 78f) is amended by adding at the section (a) shall certify the appropriateness of (1) by redesignating paragraphs (2) through end the following: the financial statements and disclosures con- (4) as paragraphs (3) through (5), respectively; ‘‘(m) STANDARDS RELATING TO AUDIT COMMIT- tained in the periodic report, and that those fi- and TEES.— nancial statements and disclosures fairly (2) by inserting after paragraph (1) the fol- ‘‘(1) COMMISSION RULES.— present, in all material respects, the operations lowing: ‘‘(A) IN GENERAL.—Effective not later than 270 and financial condition of the issuer. ‘‘(2) EQUITABLE RELIEF.—In any action or days after the date of enactment of this sub- (c) FOREIGN REINCORPORATIONS HAVE NO EF- proceeding brought or instituted by the Commis- section, the Commission shall, by rule, direct the FECT.—Nothing in this section 302 shall be inter- sion under any provision of the securities laws, national securities exchanges and national se- preted or applied in any way to allow any issuer the Commission may seek, and any Federal curities associations to prohibit the listing of to lessen the legal force of the statement re- court may grant, any equitable relief that may any security of an issuer that is not in compli- quired under this section 302, by an issuer hav- be appropriate or necessary for the benefit of in- ance with the requirements of any portion of ing reincorporated or having engaged in any vestors.’’. paragraphs (2) through (6). other transaction that resulted in the transfer of SEC. 306. INSIDER TRADES DURING PENSION ‘‘(B) OPPORTUNITY TO CURE DEFECTS.—The the corporate domicile or offices of the issuer FUND BLACKOUT PERIODS PROHIB- rules of the Commission under subparagraph (A) from inside the United States to outside of the ITED. shall provide for appropriate procedures for an United States. (a) PROHIBITION.—It shall be unlawful for issuer to have an opportunity to cure any de- SEC. 303. IMPROPER INFLUENCE ON CONDUCT OF any director or executive officer of an issuer of fects that would be the basis for a prohibition AUDITS. any equity security (other than an exempted se- under subparagraph (A), before the imposition (a) RULES TO PROHIBIT.—It shall be unlawful, curity), directly or indirectly, to purchase, sell, of such prohibition. in contravention of such rules or regulations as or otherwise acquire or transfer any equity se- ‘‘(2) RESPONSIBILITIES RELATING TO REG- the Commission shall prescribe as necessary and curity of the issuer (other than an exempted se- ISTERED PUBLIC ACCOUNTING FIRMS.—The audit appropriate in the public interest or for the pro- curity), during any blackout period with respect committee of each issuer, in its capacity as a tection of investors, for any officer or director of to such equity security, in accordance with any committee of the board of directors, shall be di- an issuer, or any other person acting under the exception provided by rule of the Commission rectly responsible for the appointment, com- direction thereof, to take any action to fraudu- pursuant to subsection (d). pensation, and oversight of the work of any reg- lently influence, coerce, manipulate, or mislead (b) EFFECTIVENESS.— istered public accounting firm employed by that any independent public or certified accountant (1) NOTICE REQUIREMENTS.—Except as pro- issuer (including resolution of disagreements be- engaged in the performance of an audit of the vided in paragraph (2), no blackout period may tween management and the auditor regarding financial statements of that issuer for the pur- take effect earlier than 30 days after the date on financial reporting) for the purpose of preparing pose of rendering such financial statements ma- which written notice of such blackout period is or issuing an audit report or related work, and terially misleading. provided by the plan administrator to the par- each such registered public accounting firm (b) ENFORCEMENT.—In any civil proceeding, ticipants or beneficiaries. shall report directly to the audit committee. the Commission shall have exclusive authority (2) EXCEPTION.—The 30-day notice require- ‘‘(3) INDEPENDENCE.— to enforce this section and any rule or regula- ment in paragraph (1) shall not apply, and no- ‘‘(A) IN GENERAL.—Each member of the audit tion issued under this section. tice under paragraph (1) shall be furnished as committee of the issuer shall be a member of the (c) NO PREEMPTION OF OTHER LAW.—The pro- soon as is reasonably possible, in any case in board of directors of the issuer, and shall other- visions of subsection (a) shall be in addition to, which— wise be independent. and shall not supersede or preempt, any other (A) a deferral of the blackout period would ‘‘(B) CRITERIA.—In order to be considered to provision of law or any rule or regulation issued violate the requirements of subparagraph (A) or be independent for purposes of this paragraph, thereunder. (B) of section 404(a)(1) of the Employment Re- a member of an audit committee of an issuer (d) DEADLINE FOR RULEMAKING.—The Com- tirement Income Security Act of 1974, and a fi- may not, other than in his or her capacity as a mission shall— duciary of the plan so reasonably determines in member of the audit committee, the board of di- (1) propose the rules or regulations required writing; or rectors, or any other board committee— by this section, not later than 90 days after the (B) the inability to provide the 30-day notice ‘‘(i) accept any consulting, advisory, or other date of enactment of this Act; and is due to events that were unforeseeable, or cir- compensatory fee from the issuer; or (2) issue final rules or regulations required by cumstances beyond the reasonable control of the ‘‘(ii) be an affiliated person of the issuer or this section, not later than 270 days after that plan administrator, and a fiduciary of the plan any subsidiary thereof. date of enactment. so reasonably determines in writing.

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(3) WRITTEN NOTICE.—The notice required to rangements, obligations (including contingent credit, in the form of a personal loan to or for be provided under paragraph (1) shall be in obligations), and other relationships of the any director or executive officer (or equivalent writing, except that such notice may be in elec- issuer with unconsolidated entities or other per- thereof) of that issuer. tronic form to the extent that such form is rea- sons, that may have a material current or future ‘‘(2) LIMITATION.—Paragraph (1) does not pre- sonably accessible to the recipient. effect on financial condition, changes in finan- clude any home improvement and manufactured (c) REMEDY.— cial condition, results of operations, liquidity, home loans (as that term is defined in section 5 (1) IN GENERAL.—Any profit realized by a di- capital expenditures, capital resources, or sig- of the Home Owners Loan Act), consumer credit rector or executive officer referred to in sub- nificant components of revenues or expenses.’’. (as defined in section 103 of the Truth in Lend- section (a) from any purchase, sale, or other ac- (b) COMMISSION RULES ON PRO FORMA FIG- ing Act), or any extension of credit under an quisition or transfer in violation of this section URES.—Not later than 180 days after the date of open end credit plan (as defined in section 103 shall inure to and be recoverable by the issuer, enactment of this Act, the Commission shall of the Truth in Lending Act (15 U.S.C. 1602)), irrespective of any intention on the part of such issue final rules providing that pro forma finan- that is— director or executive officer in entering into the cial information included in any periodic or ‘‘(A) made in the ordinary course of the con- transaction. other report filed with the Commission pursuant sumer credit business of such issuer; (2) ACTIONS TO RECOVER PROFITS.—An action to the securities laws, or in any public disclo- ‘‘(B) of a type that is generally made avail- to recover profits in accordance with this section sure or press or other release, shall be presented able by such issuer to the public; and ‘‘(C) made by such issuer on market terms, or may be instituted at law or in equity in any in a manner that— terms that are no more favorable than those of- court of competent jurisdiction by the issuer, or (1) does not contain an untrue statement of a fered by the issuer to the general public for such by the owner of any security of the issuer in the material fact or omit to state a material fact loans.’’. name and in behalf of the issuer if the issuer necessary in order to make the pro forma finan- fails or refuses to bring such action within 60 cial information, in light of the circumstances SEC. 403. DISCLOSURES OF TRANSACTIONS IN- VOLVING MANAGEMENT AND PRIN- days after the date of request, or fails diligently under which it is presented, not misleading; and CIPAL STOCKHOLDERS. to prosecute the action thereafter, except that (2) reconciles it with the financial condition Section 16(a) of the Securities Exchange Act of no such suit shall be brought more than 2 years and results of operations of the issuer under 1934 (15 U.S.C. 78p(a)) is amended— after the date on which such profit was realized. generally accepted accounting principles. (1) by striking ‘‘security, shall file,’’ and in- (d) RULEMAKING AUTHORIZED.—The Commis- (c) STUDY AND REPORT ON SPECIAL PURPOSE serting the following: sion may issue rules to clarify the application of ENTITIES.— ‘‘(1) shall file’’; and this subsection, to ensure adequate notice to all (1) STUDY REQUIRED.—The Commission shall, (2) by striking ‘‘beneficial owner, and’’ and persons affected by this subsection, and to pre- not later than 1 year after the effective date of all that follows through the end of the sub- vent evasion thereof. adoption of off-balance sheet disclosure rules re- section and inserting the following: ‘‘beneficial (e) DEFINITIONS.—For purposes of this sec- quired by section 13(j) of the Securities Ex- owner; and tion— change Act of 1934, as added by this section, ‘‘(2) if there has been a change in such owner- (1) the term ‘‘blackout period’’, with respect to complete a study of filings by issuers and their ship, or if such person shall have purchased or the equity securities of any issuer— disclosures to determine— sold a security-based swap agreement (as de- (A) means any period during which the ability (A) the extent of off-balance sheet trans- fined in section 206B of the Gramm-Leach-Bliley of not fewer than 50 percent of the participants actions, including assets, liabilities, leases, Act) involving such equity security, shall file or beneficiaries under all applicable individual losses, and the use of special purpose entities; with the Commission (and if such security is account plans maintained by the issuer to pur- and registered on a national securities exchange, chase, sell, or otherwise acquire or transfer an (B) whether generally accepted accounting shall also file with the exchange), a statement interest in any equity of such issuer held in rules result in financial statements of issuers re- before the end of the second business day fol- such an individual account plan, is suspended flecting the economics of such off-balance sheet lowing the day on which the subject transaction by the issuer or a fiduciary of the plan; and transactions to investors in a transparent fash- has been executed, or at such other time as the (B) does not include— ion. Commission shall establish, by rule, in any case (i) a period in which the employees of an (2) REPORT AND RECOMMENDATIONS.—Not later in which the Commission determines that such issuer may not allocate their interests in the in- than 6 months after the date of completion of 2-day period is not feasible, indicating owner- dividual account plan due to an express invest- the study required by paragraph (1), the Com- ship by that person at the date of filing, any ment restriction— mission shall submit a report to the President, such changes in such ownership, and such pur- (I) incorporated into the individual account the Committee on Banking, Housing, and Urban chases and sales of the security-based swap plan; and Affairs of the Senate, and the Committee on Fi- agreements as have occurred since the most re- (II) timely disclosed to employees before join- nancial Services of the House of Representa- cent such filing under this paragraph.’’. ing the individual account plan or as a subse- tives, setting forth— SEC. 404. MANAGEMENT ASSESSMENT OF INTER- quent amendment to the plan; or (A) the amount or an estimate of the amount NAL CONTROLS. (ii) any suspension described in subparagraph of off-balance sheet transactions, including as- (a) RULES REQUIRED.—The Commission shall (A) that is imposed solely in connection with sets, liabilities, leases, and losses of, and the use prescribe rules requiring each annual report re- persons becoming participants or beneficiaries, of special purpose entities by, issuers filing peri- quired by section 13 of the Securities Exchange or ceasing to be participants or beneficiaries, in odic reports pursuant to section 13 or 15 of the Act of 1934 (15 U.S.C. 78m) to contain an inter- an applicable individual account plan by reason Securities Exchange Act of 1934; nal control report, which shall— of a corporate merger, acquisition, divestiture, (B) the extent to which special purpose enti- (1) state the responsibility of management for or similar transaction; and ties are used to facilitate off-balance sheet establishing and maintaining an adequate inter- (2) the term ‘‘individual account plan’’ has transactions; nal control structure and procedures for finan- the same meaning as in section 3(34) of the Em- (C) whether generally accepted accounting cial reporting; and ployee Retirement Income Security Act of 1974 principles or the rules of the Commission result (2) contain an assessment, as of the end of the (29 U.S.C. 1002(34)). in financial statements of issuers reflecting the most recent fiscal year of the issuer, of the effec- economics of such transactions to investors in a tiveness of the internal control structure and TITLE IV—ENHANCED FINANCIAL transparent fashion; procedures of the issuer for financial reporting. DISCLOSURES (D) whether generally accepted accounting (b) INTERNAL CONTROL EVALUATION AND RE- SEC. 401. DISCLOSURES IN PERIODIC REPORTS. principles specifically result in the consolidation PORTING.—With respect to the internal control (a) DISCLOSURES REQUIRED.—Section 13 of the of special purpose entities sponsored by an assessment required by subsection (a), each reg- Securities Exchange Act of 1934 (15 U.S.C. 78m) issuer in cases in which the issuer has the ma- istered public accounting firm that prepares or is amended by adding at the end the following: jority of the risks and rewards of the special issues the audit report for the issuer shall attest ‘‘(i) ACCURACY OF FINANCIAL REPORTS.—Each purpose entity; and to, and report on, the assessment made by the financial report that is required to be prepared (E) any recommendations of the Commission management of the issuer. An attestation made in accordance with generally accepted account- for improving the transparency and quality of under this subsection shall be made in accord- ing principles under this title and filed with the reporting off-balance sheet transactions in the ance with standards for attestation engagements Commission shall reflect all material correcting financial statements and disclosures required to issued or adopted by the Board. Any such attes- adjustments that have been identified by a reg- be filed by an issuer with the Commission. tation shall not be the subject of a separate en- istered public accounting firm in accordance SEC. 402. ENHANCED CONFLICT OF INTEREST gagement. with generally accepted accounting principles PROVISIONS. SEC. 405. EXEMPTION. and the rules and regulations of the Commis- (a) PROHIBITION ON PERSONAL LOANS TO EX- Nothing in section 401, 402, or 404, the amend- sion. ECUTIVES.—Section 13 of the Securities Ex- ments made by those sections, or the rules of the ‘‘(j) OFF-BALANCE SHEET TRANSACTIONS.—Not change Act of 1934 (15 U.S.C. 78m), as amended Commission under those sections shall apply to later than 180 days after the date of enactment by this Act, is amended by adding at the end the any investment company registered under sec- of the Public Company Accounting Reform and following: tion 8 of the Investment Company Act of 1940 Investor Protection Act of 2002, the Commission ‘‘(k) PROHIBITION ON PERSONAL LOANS TO EX- (15 U.S.C. 80a–8). shall issue final rules providing that each an- ECUTIVES.— SEC. 406. CODE OF ETHICS FOR SENIOR FINAN- nual and quarterly financial report required to ‘‘(1) IN GENERAL.—It shall be unlawful for CIAL OFFICERS. be filed with the Commission shall disclose all any issuer, directly or indirectly, to extend or (a) CODE OF ETHICS DISCLOSURE.—The Com- material off-balance sheet transactions, ar- maintain credit, or arrange for the extension of mission shall issue rules to require each issuer,

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together with periodic reports required pursuant ‘‘(n) RULES REGARDING SECURITIES ANA- public information regarding specific potential to sections 13(a) and 15(d) of the Securities Ex- LYSTS.— future investment banking transactions of such change Act of 1934, to disclose whether or not, ‘‘(1) ANALYST PROTECTIONS.—The Commission, issuer, as is appropriate in the public interest and if not, the reason therefor, such issuer has or upon the authorization and direction of the and consistent with the protection of investors; adopted a code of ethics for senior financial of- Commission, a registered securities association ‘‘(C) whether an issuer, the securities of ficers, applicable to its principal financial offi- or national securities exchange, shall have which are recommended in the appearance or cer, comptroller or principal accounting officer, adopted, not later than 1 year after the date of research report, currently is, or during the 1- or persons performing similar functions. enactment of this subsection, rules reasonably year period preceding the date of the appear- (b) CHANGES IN CODES OF ETHICS.—The Com- designed to address conflicts of interest that can ance or date of distribution of the report has mission shall revise its regulations concerning arise when research analysts recommend equity been, a client of the registered broker or dealer, matters requiring prompt disclosure on Form 8– securities in research reports and public appear- and if so, stating the types of services provided K (or any successor thereto) to require the im- ances, in order to improve the objectivity of re- to the issuer; mediate disclosure, by means of the filing of search and provide investors with more useful ‘‘(D) whether the securities analyst received such form, dissemination by the Internet or by and reliable information, including rules de- compensation with respect to a research report, other electronic means, by any issuer of any signed— based upon (among any other factors) the in- change in or waiver of the code of ethics of the ‘‘(A) to foster greater public confidence in se- vestment banking revenues (either generally or issuer. curities research, and to protect the objectivity specifically earned from the issuer being ana- (c) DEFINITION.—In this section, the term and independence of securities analysts, by— lyzed) of the registered broker or dealer; and ‘‘(i) restricting the prepublication clearance or ‘‘code of ethics’’ means such standards as are ‘‘(E) such other disclosures of conflicts of in- approval of research reports by persons em- reasonably necessary to promote— terest that are material to investors, research ployed by the broker or dealer who are engaged (1) honest and ethical conduct, including the analysts, or the broker or dealer as the Commis- in investment banking activities, or persons not ethical handling of actual or apparent conflicts sion, or such association or exchange, deter- directly responsible for investment research, of interest between personal and professional re- mines appropriate. lationships; other than legal or compliance staff; ‘‘(3) DEFINITIONS.—In this subsection— (2) full, fair, accurate, timely, and under- ‘‘(ii) limiting the supervision and compen- ‘‘(A) the term ‘securities analyst’ means any standable disclosure in the periodic reports re- satory evaluation of securities analysts to offi- associated person of a registered broker or deal- quired to be filed by the issuer; and cials employed by the broker or dealer who are er that is principally responsible for, and any (3) compliance with applicable governmental not engaged in investment banking activities; associated person who reports directly or indi- rules and regulations. and rectly to a securities analyst in connection with, (d) DEADLINE FOR RULEMAKING.—The Com- ‘‘(iii) requiring that a broker or dealer and the preparation of the substance of a research mission shall— persons employed by a broker or dealer who are report, whether or not any such person has the (1) propose rules to implement this section, not involved with investment banking activities may job title of ‘securities analyst’; and later than 90 days after the date of enactment of not, directly or indirectly, retaliate against or this Act; and threaten to retaliate against any securities ana- ‘‘(B) the term ‘research report’ means a writ- (2) issue final rules to implement this section, lyst employed by that broker or dealer or its af- ten or electronic communication that includes not later than 180 days after that date of enact- filiates as a result of an adverse, negative, or an analysis of equity securities of individual ment. otherwise unfavorable research report that may companies or industries, and that provides in- adversely affect the present or prospective in- formation reasonably sufficient upon which to SEC. 407. DISCLOSURE OF AUDIT COMMITTEE FI- base an investment decision.’’. NANCIAL EXPERT. vestment banking relationship of the broker or (b) ENFORCEMENT.—Section 21B(a) of the Se- (a) RULES DEFINING ‘‘FINANCIAL EXPERT’’.— dealer with the issuer that is the subject of the The Commission shall issue rules, as necessary research report, except that such rules may not curities Exchange Act of 1934 (15 U.S.C. 78u– or appropriate in the public interest and con- limit the authority of a broker or dealer to dis- 2(a)) is amended by inserting ‘‘15A(n),’’ before sistent with the protection of investors, to re- cipline a securities analyst for causes other than ‘‘15B’’. quire each issuer, together with periodic reports such research report in accordance with the (c) COMMISSION AUTHORITY.—The Commission required pursuant to sections 13(a) and 15(d) of policies and procedures of the firm; may promulgate and amend its regulations, or the Securities Exchange Act of 1934, to disclose ‘‘(B) to define periods during which brokers or direct a registered securities association or na- whether or not, and if not, the reasons therefor, dealers who have participated, or are to partici- tional securities exchange to promulgate and the audit committee of that issuer is comprised pate, in a public offering of securities as under- amend its rules, to carry out section 15A(n) of of at least 1 member who is a financial expert, writers or dealers should not publish or other- the Securities Exchange Act of 1934, as added by as such term is defined by the Commission. wise distribute research reports relating to such this section, as is necessary for the protection of securities or to the issuer of such securities; (b) CONSIDERATIONS.—In defining the term investors and in the public interest. ‘‘(C) to establish structural and institutional ‘‘financial expert’’ for purposes of subsection safeguards within registered brokers or dealers TITLE VI—COMMISSION RESOURCES AND (a), the Commission shall consider whether a to assure that securities analysts are separated AUTHORITY person has, through education and experience by appropriate informational partitions within SEC. 601. AUTHORIZATION OF APPROPRIATIONS. as a public accountant or auditor or a principal the firm from the review, pressure, or oversight financial officer, comptroller, or principal ac- Section 35 of the Securities Exchange Act of of those whose involvement in investment bank- counting officer of an issuer, or from a position 1934 (15 U.S.C. 78kk) is amended to read as fol- ing activities might potentially bias their judg- involving the performance of similar functions— lows: ment or supervision; and (1) an understanding of generally accepted ‘‘SEC. 35. AUTHORIZATION OF APPROPRIATIONS. ‘‘(D) to address such other issues as the Com- accounting principles and financial statements; mission, or such association or exchange, deter- ‘‘In addition to any other funds authorized to (2) experience in— mines appropriate. be appropriated to the Commission, there are (A) the preparation or auditing of financial ‘‘(2) DISCLOSURE.—The Commission, or upon authorized to be appropriated to carry out the statements of generally comparable issuers; and the authorization and direction of the Commis- functions, powers, and duties of the Commis- (B) the application of such principles in con- sion, a registered securities association or na- sion, $776,000,000 for fiscal year 2003, of which— nection with the accounting for estimates, ac- tional securities exchange, shall have adopted, ‘‘(1) $102,700,000 shall be available to fund ad- cruals, and reserves; not later than 1 year after the date of enactment ditional compensation, including salaries and (3) experience with internal accounting con- of this subsection, rules reasonably designed to benefits, as authorized in the Investor and Cap- trols; and require each securities analyst to disclose in ital Markets Fee Relief Act (Public Law 107–123; (4) an understanding of audit committee func- public appearances, and each registered broker 115 Stat. 2390 et seq.); tions. or dealer to disclose in each research report, as ‘‘(2) $108,400,000 shall be available for infor- (c) DEADLINE FOR RULEMAKING.—The Com- applicable, conflicts of interest that are known mation technology, security enhancements, and mission shall— or should have been known by the securities an- recovery and mitigation activities in light of the (1) propose rules to implement this section, not alyst or the broker or dealer, to exist at the time terrorist attacks of September 11, 2001; and later than 90 days after the date of enactment of of the appearance or the date of distribution of ‘‘(3) $98,000,000 shall be available to add not this Act; and the report, including— fewer than an additional 200 qualified profes- (2) issue final rules to implement this section, ‘‘(A) the extent to which the securities analyst sionals to provide enhanced oversight of audi- not later than 180 days after that date of enact- has debt or equity investments in the issuer that tors and audit services required by the Federal ment. is the subject of the appearance or research re- securities laws, and to improve Commission in- TITLE V—ANALYST CONFLICTS OF port; vestigative and disciplinary efforts with respect INTEREST ‘‘(B) whether any compensation has been re- to such auditors and services, as well as for ad- SEC. 501. TREATMENT OF SECURITIES ANALYSTS ceived by the registered broker or dealer, or any ditional professional support staff necessary to BY REGISTERED SECURITIES ASSO- affiliate thereof, including the securities ana- strengthen the programs of the Commission in- CIATIONS. lyst, from the issuer that is the subject of the volving Full Disclosure and Prevention and (a) RULES REGARDING SECURITIES ANALYSTS.— appearance or research report, subject to such Suppression of Fraud, risk management, indus- Section 15A of the Securities Exchange Act of exemptions as the Commission may determine try technology review, compliance, inspections, 1934 (15 U.S.C. 78o–3) is amended by adding at appropriate and necessary to prevent disclosure examinations, market regulation, and invest- the end the following: by virtue of this subparagraph of material non- ment management.’’.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00061 Fmt 4624 Sfmt 6333 E:\CR\FM\A15JY6.047 pfrm17 PsN: S15PT1 July 16, 2002 S6790 CONGRESSIONAL RECORD — SENATE July 15, 2002 SEC. 602. APPEARANCE AND PRACTICE BEFORE and Urban Affairs no later than 6 months after rule or regulation, define such term to include THE COMMISSION. the date of enactment of the ‘Public Company other activities, and may, by rule, regulation, or (a) IN GENERAL.—The Securities Exchange Act Accounting Reform and Investor Protection Act order, exempt any person or class of persons, in of 1934 (15 U.S.C. 78a et seq.) is amended by in- of 2002’. whole or in part, conditionally or uncondition- serting after section 4B the following: ‘‘(d) RULES OF PROFESSIONAL RESPONSIBILITY ally, from inclusion in such term. ‘‘SEC. 4C. APPEARANCE AND PRACTICE BEFORE FOR ATTORNEYS.—Not later than 180 days after (b) SECURITIES ACT OF 1933.—Section 20 of the THE COMMISSION. the date of enactment of this section, the Com- Securities Act of 1933 (15 U.S.C. 77t) is amended ‘‘(a) AUTHORITY TO CENSURE.—The Commis- mission shall establish rules, in the public inter- by adding at the end the following: sion may censure any person, or deny, tempo- est and for the protection of investors, setting ‘‘(g) AUTHORITY OF A COURT TO PROHIBIT rarily or permanently, to any person the privi- forth minimum standards of professional con- PERSONS FROM PARTICIPATING IN AN OFFERING lege of appearing or practicing before the Com- duct for attorneys appearing and practicing be- OF PENNY STOCK.— mission in any way, if that person is found by fore the Commission in any way in the represen- ‘‘(1) IN GENERAL.—In any proceeding under the Commission, after notice and opportunity tation of public companies, including a rule re- subsection (a) against any person participating for hearing in the matter— quiring an attorney to report evidence of a ma- in, or, at the time of the alleged misconduct, ‘‘(1) not to possess the requisite qualifications terial violation of securities law or breach of fi- who was participating in, an offering of penny to represent others; duciary duty or similar violation by the com- stock, the court may prohibit that person from ‘‘(2) to be lacking in character or integrity, or pany or any agent thereof to the chief legal participating in an offering of penny stock, con- to have engaged in unethical or improper pro- counsel or the chief executive officer of the com- ditionally or unconditionally, and permanently fessional conduct; or pany (or the equivalent thereof) and, if the or for such period of time as the court shall de- ‘‘(3) to have willfully violated, or willfully counsel or officer does not appropriately re- termine. aided and abetted the violation of, any provi- spond to the evidence (adopting, as necessary, ‘‘(2) DEFINITION.—For purposes of this sub- sion of the securities laws or the rules and regu- appropriate remedial measures or sanctions with section, the term ‘person participating in an of- fering of penny stock’ includes any person en- lations issued thereunder. respect to the violation), requiring the attorney gaging in activities with a broker, dealer, or ‘‘(b) DEFINITION.—With respect to any reg- to report the evidence to the audit committee of issuer for purposes of issuing, trading, or induc- istered public accounting firm, for purposes of the board of directors or to another committee of ing or attempting to induce the purchase or sale this section, the term ‘improper professional the board of directors comprised solely of direc- of, any penny stock. The Commission may, by conduct’ means— tors not employed directly or indirectly by the rule or regulation, define such term to include ‘‘(1) intentional or knowing conduct, includ- company, or to the board of directors.’’. other activities, and may, by rule, regulation, or ing reckless conduct, that results in a violation (b) ELECTRONIC FILING.—Notwithstanding the of applicable professional standards; and provisions of section 403 of this Act, section order, exempt any person or class of persons, in ‘‘(2) negligent conduct in the form of— 16(a)(2) of the Securities and Exchange Act of whole or in part, conditionally or uncondition- ‘‘(A) a single instance of highly unreasonable 1934, as added by section 403, is amended to read ally, from inclusion in such term.’’. conduct that results in a violation of applicable as follows: SEC. 604. QUALIFICATIONS OF ASSOCIATED PER- professional standards in circumstances in ‘‘(2) if there has been a change in such owner- SONS OF BROKERS AND DEALERS. which the registered public accounting firm ship, or if such person shall have purchased or (a) BROKERS AND DEALERS.—Section 15(b)(4) knows, or should know, that heightened scru- sold a security-based swap agreement (as de- of the Securities Exchange Act of 1934 (15 U.S.C. tiny is warranted; or fined in section 206B of the Gramm-Leach-Bliley 78o) is amended— (1) by striking subparagraph (F) and inserting ‘‘(B) repeated instances of unreasonable con- Act) involving such equity security, shall file the following: duct, each resulting in a violation of applicable electronically with the Commission (and if such ‘‘(F) is subject to any order of the Commission professional standards, that indicate a lack of security is registered on a national securities ex- barring or suspending the right of the person to competence to practice before the Commission. change, shall also file with the exchange), a be associated with a broker or dealer;’’; and ‘‘(c) STUDY AND REPORT.—(1) The Commission statement before the end of the second business (2) in subparagraph (G), by striking the period shall conduct a study to determine based upon day following the day on which the subject at the end and inserting the following: ‘‘; or information for the period from January 1, 1998 transaction has been executed, or at such other ‘‘(H) is subject to any final order of a State se- to December 31, 2001— times as the Commission shall establish, by rule, curities commission (or any agency or officer ‘‘(A) the number of ‘securities professionals’, in any case in which the Commission determines performing like functions), State authority that which term shall mean public accountants, pub- that such 2 day period is not feasible, and the supervises or examines banks, savings associa- lic accounting firms, investment bankers, invest- Commission shall provide that statement on a tions, or credit unions, State insurance commis- ment advisers, brokers, dealers, attorneys, and publicly accessible Internet site not later than sion (or any agency or office performing like other securities professionals practicing before the end of the business day following that fil- functions), an appropriate Federal banking the Commission— ing, and the issuer (if the issuer maintains a agency (as defined in section 3 of the Federal ‘‘(i) who have been found to have aided and corporate website) shall provide that statement Deposit Insurance Act (12 U.S.C. 1813(q))), or abetted a violation of the Federal securities on that corporate website not later than the end the National Credit Union Administration, laws, including rules or regulations promulgated of the business day following that filing (the re- that— thereunder (hereinafter collectively referred to quirements of this paragraph with respect to ‘‘(i) bars such person from association with an as ‘Federal securities laws’), but who have not electronic filing and providing the statement on entity regulated by such commission, authority, been sanctioned, disciplined, or otherwise penal- a corporate website shall take effect 1 year after agency, or officer, or from engaging in the busi- ized as a primary violator in any administrative the date of enactment of this paragraph), indi- ness of securities, insurance, banking, savings action or civil proceeding, including in any set- cating ownership by that person at the date of association activities, or credit union activities; tlement of such actions or proceedings (referred filing, any such changes in such ownership, and or to hereinafter as ‘aiders and abettors’); and such purchases and sales of the security-based ‘‘(ii) constitutes a final order based on viola- ‘‘(ii) who have been found to have been pri- swap agreements as have occurred since the tions of any laws or regulations that prohibit mary violators of the Federal securities laws; most recent such filing under this paragraph.’’. fraudulent, manipulative, or deceptive con- ‘‘(B) a description of the Federal securities SEC. 603. FEDERAL COURT AUTHORITY TO IM- duct.’’. laws violations committed by aiders and abettors POSE PENNY STOCK BARS. (b) INVESTMENT ADVISERS.—Section 203(e) of and by primary violators, including— (a) SECURITIES EXCHANGE ACT OF 1934.—Sec- the Investment Advisers Act of 1940 (15 U.S.C. ‘‘(i) the specific provisions of the Federal se- tion 21(d) of the Securities Exchange Act of 1934 80b–3(e)) is amended by striking paragraphs (7) curities laws violated; (15 U.S.C. 78u(d)), as amended by this Act, is and (8) and inserting the following: ‘‘(ii) the specific sanctions and penalties im- amended by adding at the end the following: ‘‘(7) is subject to any order of the Commission posed upon, such aiders and abettors and pri- ‘‘(7) AUTHORITY OF A COURT TO PROHIBIT PER- barring or suspending the right of the person to mary violators, including the amount of any SONS FROM PARTICIPATING IN AN OFFERING OF be associated with an investment adviser; or monetary penalties assessed upon and collected PENNY STOCK.— ‘‘(8) is subject to any final order of a State se- from such persons; ‘‘(A) IN GENERAL.—In any proceeding under curities commission (or any agency or officer ‘‘(iii) the occurrence of multiple violations by paragraph (1) against any person participating performing like functions), State authority that the same person or persons either as an aider or in, or, at the time of the alleged misconduct who supervises or examines banks, savings associa- abettor or as a primary violator; and was participating in, an offering of penny stock, tions, or credit unions, State insurance commis- ‘‘(iv) whether as to each such violator discipli- the court may prohibit that person from partici- sion (or any agency or office performing like nary sanctions have been imposed, including pating in an offering of penny stock, condi- functions), an appropriate Federal banking any censure, suspension, temporary bar, or per- tionally or unconditionally, and permanently or agency (as defined in section 3 of the Federal manent bar to practice before the Commission; for such period of time as the court shall deter- Deposit Insurance Act (12 U.S.C. 1813(q))), or and mine. the National Credit Union Administration, ‘‘(C) the amount of disgorgement, restitution ‘‘(B) DEFINITION.—For purposes of this para- that— or any other fines or payments the Commission graph, the term ‘person participating in an of- ‘‘(A) bars such person from association with has (i) assessed upon and (ii) collected from, fering of penny stock’ includes any person en- an entity regulated by such commission, author- aiders and abettors and from primary violators. gaging in activities with a broker, dealer, or ity, agency, or officer, or from engaging in the ‘‘(2) A report based upon the study conducted issuer for purposes of issuing, trading, or induc- business of securities, insurance, banking, sav- pursuant to subsection (c)(1) shall be submitted ing or attempting to induce the purchase or sale ings association activities, or credit union ac- to the Senate Committee on Banking, Housing, of, any penny stock. The Commission may, by tivities; or

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00062 Fmt 4624 Sfmt 6333 E:\CR\FM\A15JY6.048 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6791 ‘‘(B) constitutes a final order based on viola- rating agencies in the operation of the securities or obligation, imposed by Federal or State law tions of any laws or regulations that prohibit market. or regulation, to maintain, or refrain from de- fraudulent, manipulative, or deceptive con- (2) AREAS OF CONSIDERATION.—The study re- stroying, any document.’’. duct.’’. quired by this subsection shall examine— (b) CLERICAL AMENDMENT.—The table of sec- (c) CONFORMING AMENDMENTS.— (A) the role of credit rating agencies in the tions at the beginning of chapter 73 of title 18, (1) SECURITIES EXCHANGE ACT OF 1934.—The evaluation of issuers of securities; United States Code, is amended by adding at the Securities Exchange Act of 1934 (15 U.S.C. 78a et (B) the importance of that role to investors end the following new items: seq.) is amended— and the functioning of the securities markets; ‘‘1519. Destruction, alteration, or falsification of (A) in section 3(a)(39)(F) (15 U.S.C. (C) any impediments to the accurate appraisal records in Federal investigations 78c(a)(39)(F)), by inserting ‘‘, or is subject to an by credit rating agencies of the financial re- and bankruptcy. order or finding,’’ before ‘‘enumerated’’; sources and risks of issuers of securities; ‘‘1520. Destruction of corporate audit records.’’. (B) in each of sections 15(b)(6)(A)(i) (15 U.S.C. (D) any barriers to entry into the business of SEC. 803. DEBTS NONDISCHARGEABLE IF IN- 78o(b)(6)(A)(i)), paragraphs (2) and (4) of sec- acting as a credit rating agency, and any meas- CURRED IN VIOLATION OF SECURI- tion 15B(c) (15 U.S.C. 78o–4(c)), and subpara- ures needed to remove such barriers; TIES FRAUD LAWS. graphs (A) and (C) of section 15C(c)(1) (15 (E) any measures which may be required to Section 523(a) of title 11, United States Code, U.S.C. 78o–5(c)(1)) by striking ‘‘or omission’’ improve the dissemination of information con- is amended— each place that term appears, and inserting ‘‘, cerning such resources and risks when credit (1) in paragraph (17), by striking ‘‘or’’ after or is subject to an order or finding,’’; and rating agencies announce credit ratings; and the semicolon; (C) in each of paragraphs (3)(A) and (4)(C) of (F) any conflicts of interest in the operation (2) in paragraph (18), by striking the period at section 17A(c) (15 U.S.C. 78q–1(c)), by inserting of credit rating agencies and measures to pre- the end and inserting ‘‘; or’’; and ‘‘, or is subject to an order or finding,’’ before vent such conflicts or ameliorate the con- (3) by adding at the end, the following: ‘‘enumerated’’ each place that term appears. sequences of such conflicts. ‘‘(19) that— (2) INVESTMENT ADVISERS ACT OF 1940.—Sec- (b) REPORT REQUIRED.—The Commission shall ‘‘(A) arises under a claim relating to— tion 203(f) of the Investment Advisers Act of 1940 submit a report on the study required by sub- ‘‘(i) the violation of any of the Federal securi- (15 U.S.C. 80b–3(f)) is amended, by inserting ‘‘or section (a) to the President, the Committee on ties laws (as that term is defined in section (3)’’ after ‘‘paragraph (2)’’. Financial Services of the House of Representa- 3(a)(47) of the Securities Exchange Act of 1934 TITLE VII—STUDIES AND REPORTS tives, and the Committee on Banking, Housing, (15 U.S.C. 78c(a)(47)), any State securities laws, and Urban Affairs of the Senate not later than or any regulations or orders issued under such SEC. 701. GAO STUDY AND REPORT REGARDING 180 days after the date of enactment of this Act. Federal or State securities laws; or CONSOLIDATION OF PUBLIC AC- COUNTING FIRMS. TITLE VIII—CORPORATE AND CRIMINAL ‘‘(ii) common law fraud, deceit, or manipula- tion in connection with the purchase or sale of (a) STUDY REQUIRED.—The Comptroller Gen- FRAUD ACCOUNTABILITY any security; and eral of the United States shall conduct a SEC. 801. SHORT TITLE. ‘‘(B) results, in relation to any claim described study— This title may be cited as the ‘‘Corporate and in subparagraph (A), from— (1) to identify— Criminal Fraud Accountability Act of 2002’’. ‘‘(i) any judgment, order, consent order, or de- (A) the factors that have led to the consolida- SEC. 802. CRIMINAL PENALTIES FOR ALTERING cree entered in any Federal or State judicial or tion of public accounting firms since 1989 and DOCUMENTS. administrative proceeding; the consequent reduction in the number of firms (a) IN GENERAL.—Chapter 73 of title 18, ‘‘(ii) any settlement agreement entered into by capable of providing audit services to large na- United States Code, is amended by adding at the the debtor; or tional and multi-national business organiza- end the following: ‘‘(iii) any court or administrative order for tions that are subject to the securities laws; ‘‘§ 1519. Destruction, alteration, or falsifica- any damages, fine, penalty, citation, (B) the present and future impact of the con- tion of records in Federal investigations restitutionary payment, disgorgement payment, dition described in subparagraph (A) on capital and bankruptcy attorney fee, cost, or other payment owed by the formation and securities markets, both domestic debtor.’’. and international; and ‘‘Whoever knowingly alters, destroys, muti- (C) solutions to any problems identified under lates, conceals, covers up, falsifies, or makes a SEC. 804. STATUTE OF LIMITATIONS FOR SECURI- TIES FRAUD. subparagraph (B), including ways to increase false entry in any record, document, or tangible (a) IN GENERAL.—Section 1658 of title 28, competition and the number of firms capable of object with the intent to impede, obstruct, or in- fluence the investigation or proper administra- United States Code, is amended— providing audit services to large national and (1) by inserting ‘‘(a)’’ before ‘‘Except’’; and multinational business organizations that are tion of any matter within the jurisdiction of any department or agency of the United States or (2) by adding at the end the following: subject to the securities laws; ‘‘(b) Notwithstanding subsection (a), a private (2) of the problems, if any, faced by business any case filed under title 11, or in relation to or contemplation of any such matter or case, shall right of action that involves a claim of fraud, organizations that have resulted from limited deceit, manipulation, or contrivance in con- competition among public accounting firms, in- be fined under this title, imprisoned not more than 10 years, or both. travention of a regulatory requirement con- cluding— cerning the securities laws, as defined in section ‘‘§ 1520. Destruction of corporate audit records (A) higher costs; 3(a)(47) of the Securities Exchange Act of 1934 (B) lower quality of services; ‘‘(a)(1) Any accountant who conducts an (15 U.S.C. 78c(a)(47)), may be brought not later (C) impairment of auditor independence; or audit of an issuer of securities to which section than the earlier of— (D) lack of choice; and 10A(a) of the Securities Exchange Act of 1934 (15 ‘‘(1) two years after the discovery of the facts (3) whether and to what extent Federal or U.S.C. 78j–1(a)) applies, shall maintain all audit constituting the violation; or State regulations impede competition among or review workpapers for a period of 5 years ‘‘(2) five years after such violation.’’. public accounting firms. from the end of the fiscal period in which the (b) EFFECTIVE DATE.—The limitations period (b) CONSULTATION.—In planning and con- audit or review was concluded. provided by section 1658(b) of title 28, United ducting the study under this section, the Comp- ‘‘(2) The Securities and Exchange Commission States Code, as added by this section, shall troller General shall consult with— shall promulgate, within 180 days, after ade- apply to all proceedings addressed by this sec- (1) the Commission; quate notice and an opportunity for comment, tion that are commenced on or after the date of (2) the regulatory agencies that perform func- such rules and regulations, as are reasonably enactment of this Act. tions similar to the Commission within the other necessary, relating to the retention of relevant (c) NO CREATION OF ACTIONS.—Nothing in this member countries of the Group of Seven Indus- records such as workpapers, documents that section shall create a new, private right of ac- trialized Nations; form the basis of an audit or review, memo- tion. (3) the Department of Justice; and randa, correspondence, communications, other SEC. 805. REVIEW OF FEDERAL SENTENCING (4) any other public or private sector organi- documents, and records (including electronic GUIDELINES FOR OBSTRUCTION OF zation that the Comptroller General considers records) which are created, sent, or received in JUSTICE AND EXTENSIVE CRIMINAL appropriate. connection with an audit or review and contain FRAUD. (c) REPORT REQUIRED.—Not later than 1 year conclusions, opinions, analyses, or financial Pursuant to section 994 of title 28, United after the date of enactment of this Act, the data relating to such an audit or review, which States Code, and in accordance with this sec- Comptroller General shall submit a report on the is conducted by any accountant who conducts tion, the United States Sentencing Commission results of the study required by this section to an audit of an issuer of securities to which sec- shall review and amend, as appropriate, the the Committee on Banking, Housing, and Urban tion 10A(a) of the Securities Exchange Act of Federal Sentencing Guidelines and related pol- Affairs of the Senate and the Committee on Fi- 1934 (15 U.S.C. 78j–1(a)) applies. icy statements to ensure that— nancial Services of the House of Representa- ‘‘(b) Whoever knowingly and willfully violates (1) the base offense level and existing en- tives. subsection (a)(1), or any rule or regulation pro- hancements contained in United States Sen- SEC. 702. COMMISSION STUDY AND REPORT RE- mulgated by the Securities and Exchange Com- tencing Guideline 2J1.2 relating to obstruction of GARDING CREDIT RATING AGEN- mission under subsection (a)(2), shall be fined justice are sufficient to deter and punish that CIES. under this title, imprisoned not more than 5 activity; (a) STUDY REQUIRED.— years, or both. (2) the enhancements and specific offense (1) IN GENERAL.—The Commission shall con- ‘‘(c) Nothing in this section shall be deemed to characteristics relating to obstruction of justice duct a study of the role and function of credit diminish or relieve any person of any other duty are adequate in cases where—

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00063 Fmt 4624 Sfmt 6333 E:\CR\FM\A15JY6.048 pfrm17 PsN: S15PT1 July 16, 2002 S6792 CONGRESSIONAL RECORD — SENATE July 15, 2002 (A) documents and other physical evidence ‘‘(B) if the Secretary has not issued a final de- TITLE IX—WHITE-COLLAR CRIME PENALTY are actually destroyed, altered, or fabricated; cision within 180 days of the filing of the com- ENHANCEMENTS (B) the destruction, alteration, or fabrication plaint and there is no showing that such delay SEC. 901. SHORT TITLE. of evidence involves— is due to the bad faith of the claimant, bringing This title may be cited as the ‘‘White-Collar (i) a large amount of evidence, a large number an action at law or equity for de novo review in Crime Penalty Enhancement Act of 2002’’. of participants, or is otherwise extensive; the appropriate district court of the United (ii) the selection of evidence that is particu- SEC. 902. CRIMINAL PENALTIES FOR CONSPIRACY States, which shall have jurisdiction over such TO COMMIT OFFENSE OR TO DE- larly probative or essential to the investigation; an action without regard to the amount in con- FRAUD THE UNITED STATES. or troversy. Section 371 of title 18, United States Code, is (iii) more than minimal planning; or ‘‘(2) PROCEDURE.— amended by striking ‘‘If two or more’’ and all (C) the offense involved abuse of a special ‘‘(A) IN GENERAL.—An action under para- that follows through ‘‘If, however,’’ and insert- skill or a position of trust; graph (1)(A) shall be governed under the rules ing the following: (3) the guideline offense levels and enhance- and procedures set forth in section 42121(b) of ‘‘(a) IN GENERAL.—If 2 or more persons— ments for violations of section 1519 or 1520 of title 49, United States Code. ‘‘(1) conspire to commit any offense against title 18, United States Code, as added by this ‘‘(B) EXCEPTION.—Notification made under the United States, in any manner or for any title, are sufficient to deter and punish that ac- section 42121(b)(1) of title 49, United States purpose, and 1 or more of such persons do any tivity; Code, shall be made to the person named in the act to effect the object of the conspiracy, each (4) the guideline offense levels and enhance- complaint and to the employer. person shall be fined or imprisoned, or both, as ments under United States Sentencing Guideline ‘‘(C) BURDENS OF PROOF.—An action brought set forth in the specific substantive offense 2B1.1 (as in effect on the date of enactment of under paragraph (1)(B) shall be governed by the which was the object of the conspiracy; or this Act) are sufficient for a fraud offense when legal burdens of proof set forth in section ‘‘(2) conspire to defraud the United States, or the number of victims adversely involved is sig- 42121(b) of title 49, United States Code. any agency thereof in any manner or for any nificantly greater than 50; ‘‘(D) STATUTE OF LIMITATIONS.—An action purpose, and 1 or more of such persons do any (5) a specific offense characteristic enhancing under paragraph (1) shall be commenced not act to effect the object of the conspiracy, each sentencing is provided under United States Sen- later than 90 days after the date on which the person shall be fined under this title, or impris- tencing Guideline 2B1.1 (as in effect on the date violation occurs. oned not more than 10 years, or both. of enactment of this Act) for a fraud offense ‘‘(c) REMEDIES.— ‘‘(b) MISDEMEANOR OFFENSE.—If, however,’’. that endangers the solvency or financial secu- ‘‘(1) IN GENERAL.—An employee prevailing in rity of a substantial number of victims; and SEC. 903. CRIMINAL PENALTIES FOR MAIL AND any action under subsection (b)(1) shall be enti- WIRE FRAUD. (6) the guidelines that apply to organizations tled to all relief necessary to make the employee (a) MAIL FRAUD.—Section 1341 of title 18, in United States Sentencing Guidelines, chapter whole. United States Code, is amended by striking ‘‘five 8, are sufficient to deter and punish organiza- ‘‘(2) COMPENSATORY DAMAGES.—Relief for any years’’ and inserting ‘‘10 years’’. tional criminal misconduct. action under paragraph (1) shall include— (b) WIRE FRAUD.—Section 1343 of title 18, SEC. 806. PROTECTION FOR EMPLOYEES OF PUB- ‘‘(A) reinstatement with the same seniority United States Code, is amended by striking ‘‘five LICLY TRADED COMPANIES WHO status that the employee would have had, but years’’ and inserting ‘‘10 years’’. PROVIDE EVIDENCE OF FRAUD. for the discrimination; SEC. 904. CRIMINAL PENALTIES FOR VIOLATIONS (a) IN GENERAL.—Chapter 73 of title 18, ‘‘(B) the amount of back pay, with interest; United States Code, is amended by inserting OF THE EMPLOYEE RETIREMENT IN- and COME SECURITY ACT OF 1974. after section 1514 the following: ‘‘(C) compensation for any special damages Section 501 of the Employee Retirement In- ‘‘§ 1514A. Civil action to protect against retal- sustained as a result of the discrimination, in- come Security Act of 1974 (29 U.S.C. 1131) is iation in fraud cases cluding litigation costs, expert witness fees, and amended— ‘‘(a) WHISTLEBLOWER PROTECTION FOR EM- reasonable attorney fees. (1) by striking ‘‘$5,000’’ and inserting PLOYEES OF PUBLICLY TRADED COMPANIES.—No ‘‘(d) RIGHTS RETAINED BY EMPLOYEE.—Noth- ‘‘$100,000’’; company with a class of securities registered ing in this section shall be deemed to diminish (1) by striking ‘‘one year’’ and inserting ‘‘10 under section 12 of the Securities Exchange Act the rights, privileges, or remedies of any em- years’’; and of 1934 (15 U.S.C. 78l), or that is required to file ployee under any Federal or State law, or under (3) by striking ‘‘$100,000’’ and inserting reports under section 15(d) of the Securities Ex- any collective bargaining agreement.’’. ‘‘$500,000’’. change Act of 1934 (15 U.S.C. 78o(d)), or any of- (b) CLERICAL AMENDMENT.—The table of sec- SEC. 905. AMENDMENT TO SENTENCING GUIDE- ficer, employee, contractor, subcontractor, or tions at the beginning of chapter 73 of title 18, LINES RELATING TO CERTAIN agent of such company, may discharge, demote, United States Code, is amended by inserting WHITE-COLLAR OFFENSES. suspend, threaten, harass, or in any other man- after the item relating to section 1514 the fol- (a) DIRECTIVE TO THE UNITED STATES SEN- ner discriminate against an employee in the lowing new item: TENCING COMMISSION.—Pursuant to its author- terms and conditions of employment because of ‘‘1514A. Civil action to protect against retalia- ity under section 994(p) of title 18, United States any lawful act done by the employee— tion in fraud cases.’’. Code, and in accordance with this section, the ‘‘(1) to provide information, cause information SEC. 807. CRIMINAL PENALTIES FOR DEFRAUD- United States Sentencing Commission shall re- to be provided, or otherwise assist in an inves- ING SHAREHOLDERS OF PUBLICLY view and, as appropriate, amend the Federal tigation regarding any conduct which the em- TRADED COMPANIES. Sentencing Guidelines and related policy state- ployee reasonably believes constitutes a viola- (a) IN GENERAL.—Chapter 63 of title 18, ments to implement the provisions of this title. tion of section 1341, 1343, 1344, or 1348, any rule United States Code, is amended by adding at the (b) REQUIREMENTS.—In carrying out this sec- or regulation of the Securities and Exchange end the following: tion, the Sentencing Commission shall— (1) ensure that the sentencing guidelines and Commission, or any provision of Federal law re- ‘‘§ 1348. Securities fraud lating to fraud against shareholders, when the policy statements reflect the serious nature of information or assistance is provided to or the ‘‘Whoever knowingly executes, or attempts to the offenses and the penalties set forth in this investigation is conducted by— execute, a scheme or artifice— title, the growing incidence of serious fraud of- ‘‘(A) a Federal regulatory or law enforcement ‘‘(1) to defraud any person in connection with fenses which are identified above, and the need agency; any security of an issuer with a class of securi- to modify the sentencing guidelines and policy ‘‘(B) any Member of Congress or any com- ties registered under section 12 of the Securities statements to deter, prevent, and punish such mittee of Congress; or Exchange Act of 1934 (15 U.S.C. 78l) or that is offenses; ‘‘(C) a person with supervisory authority over required to file reports under section 15(d) of the (2) consider the extent to which the guidelines the employee (or such other person working for Securities Exchange Act of 1934 (15 U.S.C. and policy statements adequately address— the employer who has the authority to inves- 78o(d)); or (A) whether the guideline offense levels and tigate, discover, or terminate misconduct); or ‘‘(2) to obtain, by means of false or fraudulent enhancements for violations of the sections ‘‘(2) to file, cause to be filed, testify, partici- pretenses, representations, or promises, any amended by this title are sufficient to deter and pate in, or otherwise assist in a proceeding filed money or property in connection with the pur- punish such offenses, and specifically, are ade- or about to be filed (with any knowledge of the chase or sale of any security of an issuer with quate in view of the statutory increases in pen- employer) relating to an alleged violation of sec- a class of securities registered under section 12 alties contained in this title; and tion 1341, 1343, 1344, or 1348, any rule or regula- of the Securities Exchange Act of 1934 (15 U.S.C. (B) whether a specific offense characteristic tion of the Securities and Exchange Commission, 78l) or that is required to file reports under sec- should be added in United States Sentencing or any provision of Federal law relating to tion 15(d) of the Securities Exchange Act of 1934 Guideline section 2B1.1 in order to provide for fraud against shareholders. (15 U.S.C. 78o(d)); stronger penalties for fraud when the crime is ‘‘(b) ENFORCEMENT ACTION.— shall be fined under this title, or imprisoned not committed by a corporate officer or director; ‘‘(1) IN GENERAL.—A person who alleges dis- more than 10 years, or both.’’. (3) assure reasonable consistency with other charge or other discrimination by any person in (b) CLERICAL AMENDMENT.—The table of sec- relevant directives and sentencing guidelines; violation of subsection (a) may seek relief under tions at the beginning of chapter 63 of title 18, (4) account for any additional aggravating or subsection (c), by— United States Code, is amended by adding at the mitigating circumstances that might justify ex- ‘‘(A) filing a complaint with the Secretary of end the following new item: ceptions to the generally applicable sentencing Labor; or ‘‘1348. Securities fraud.’’. ranges;

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00064 Fmt 4624 Sfmt 6333 E:\CR\FM\A15JY6.048 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6793 (5) make any necessary conforming changes to issuer will make extraordinary payments in section 21(a) of the Sentencing Reform Act of the sentencing guidelines; and (whether compensation or otherwise) to any of 1987, as though the authority under that Act (6) assure that the guidelines adequately meet the foregoing persons, the Commission may peti- had not expired. the purposes of sentencing as set forth in section tion a Federal district court for a temporary SEC. 911. AUTHORITY OF THE COMMISSION TO 3553(a)(2) of title 18, United States Code. order requiring the issuer to escrow, subject to PROHIBIT PERSONS FROM SERVING SEC. 906. CORPORATE RESPONSIBILITY FOR FI- court supervision, those payments in an inter- AS OFFICERS OR DIRECTORS. NANCIAL REPORTS. est-bearing account for 45 days. Such an order (a) In section 21C of the Securities Exchange (a) IN GENERAL.—Chapter 63 of title 18, shall be entered, if the court finds that the Act of 1934, add at the end a new subsection as United States Code, is amended by adding at the issuer is likely to make such extraordinary pay- follows: end the following: ments, only after notice and opportunity for a ‘‘(f) AUTHORITY OF THE COMMISSION TO PRO- HIBIT PERSONS FROM SERVING AS OFFICERS OR ‘‘§ 1348. Failure of corporate officers to certify hearing, unless the court determines that notice DIRECTORS.—In any cease-and-desist proceeding financial reports and hearing prior to entry of the order would be impracticable or contrary to the public interest. under subsection (a), the Commission may issue ‘‘(a) CERTIFICATION OF PERIODIC FINANCIAL A temporary order shall become effective imme- an order to prohibit, conditionally or uncondi- REPORTS.—Each periodic report containing fi- diately and shall be served upon the parties sub- tionally, and permanently or for such period of nancial statements filed by an issuer with the time as it shall determine, any person who has Securities Exchange Commission pursuant to ject to it and, unless set aside, limited or sus- pended by court of competent jurisdiction, shall violated section 10(b) of this title or the rules or section 13(a) or 15(d) of the Securities Exchange regulations thereunder from acting as an officer Act of 1934 (15 U.S.C. 78m(a) or 78o(d)) shall be remain effective and enforceable for 45 days. The period of the order may be extended by the or director of any issuer that has a class of se- accompanied by a written statement by the curities registered pursuant to section 12 of this chairman of the board, chief executive officer, court upon good cause shown for not longer than 45 days, provided that the combined period title or that is required to file reports pursuant and chief financial officer (or equivalent there- to section 15(d) of this title if the person’s con- of) of the issuer. of the order not exceed 90 days. ‘‘(B) If the individual affected by such order duct demonstrates unfitness to serve as an offi- ‘‘(b) CONTENT.—The statement required under is charged with violations of the Federal securi- cer or director of any such issuer.’’. subsection (a) shall certify the appropriateness ties laws by the expiration of the 45 days (or the (b) In section 8A of the Securities Act of 1933 of the financial statements and disclosures con- expiration of any extended period), the escrow add at the end a new subsection as follows: tained in the periodic report or financial report, would continue, subject to court approval, until ‘‘(f) AUTHORITY OF THE COMMISSION TO PRO- and that those financial statements and disclo- the conclusion of any legal proceedings. The HIBIT PERSONS FROM SERVING AS OFFICERS OR sures fairly present, in all material respects, the issuer and the affected director, officer, partner, DIRECTORS.—In any cease-and-desist proceeding operations and financial condition of the issuer. controlling person, agent or employee would under subsection (a), the Commission may issue ‘‘(c) CRIMINAL PENALTIES.—Notwithstanding an order to prohibit, conditionally or uncondi- any other provision of law— have the right to petition the court for review of the order. If the individual affected by such tionally, and permanently or for such period of ‘‘(1) any person who recklessly and knowingly time as it shall determine, any person who has violates any provision of this section shall upon order is not charged, the escrow will terminate at the expiration of the 45 days (or the expira- violated section 17(a)(1) of this title from acting conviction be fined not more than $500,000, or as an officer or director of any issuer that has imprisoned not more than 5 years, or both; or tion of any extended period), and the payments (with accrued interest) returned to the issuer.’’. a class of securities registered pursuant to sec- ‘‘(2) any person who willfully violates any tion 12 of the Securities Exchange Act of 1934 or provision of this section shall upon conviction (b) TECHNICAL AMENDMENT.—Section 21C(c)(2) of the Securities Exchange Act of 1934 (15 U.S.C. that is required to file reports pursuant to sec- be fined not more than $1,000,000, or imprisoned tion 15(d) of that Act if the person’s conduct not more than 10 years, or both.’’. 78u–3(c)(2)) is amended by striking ‘‘This’’ and inserting ‘‘Paragraph (1) of this’’. demonstrates unfitness to serve as an officer or (b) TECHNICAL AND CONFORMING AMEND- director of any such issuer.’’. MENT.—The section analysis for chapter 63 of SEC. 910. AMENDMENT TO THE FEDERAL SEN- TITLE X—CORPORATE TAX RETURNS title 18, United States Code, is amended by add- TENCING GUIDELINES. ing at the end the following: (a) REQUEST FOR IMMEDIATE CONSIDERATION SEC. 1001. SENSE OF THE SENATE REGARDING BY THE UNITED STATES SENTENCING COMMIS- THE SIGNING OF CORPORATE TAX ‘‘1348. Failure of corporate officers to certify fi- SION.—Pursuant to its authority under section RETURNS BY CHIEF EXECUTIVE OF- nancial reports.’’. 994(p) of title 28, United States Code, and in ac- FICERS. SEC. 907. HIGHER MAXIMUM PENALTIES FOR cordance with this section, the United States It is the sense of the Senate that the Federal MAIL AND WIRE FRAUD. Sentencing Commission is requested to— income tax return of a corporation should be (a) MAIL FRAUD.—Section 1341 of title 18, (1) promptly review the sentencing guidelines signed by the chief executive officer of such cor- United States Code, is amended by striking applicable to securities and accounting fraud poration. ‘‘five’’ and inserting ‘‘ten’’. and related offenses; The PRESIDING OFFICER. The Sen- (b) WIRE FRAUD.—Section 1343 of title 18, (2) expeditiously consider promulgation of ate insists on its amendment and re- United States Code, is amended by striking new sentencing guidelines or amendments to ex- quests a conference with the House. ‘‘five’’ and inserting ‘‘ten’’. isting sentencing guidelines to provide an en- f SEC. 908. TAMPERING WITH A RECORD OR OTHER- hancement for officers or directors of publicly WISE IMPEDING AN OFFICIAL PRO- traded corporations who commit fraud and re- EXECUTIVE SESSION CEEDING. lated offenses; and Section 1512 of title 18, United States Code, is (3) submit to Congress an explanation of ac- amended— tions taken by the Commission pursuant to NOMINATION OF LAVENSKI R. (1) by re-designating subsections (c), (d), (e), paragraph (2) and any additional policy rec- SMITH OF ARKANSAS, TO BE (f), (g), (h), and (i) as subsections (d), (e), (f), ommendations the Commission may have for UNITED STATES CIRCUIT JUDGE (g), (h), (i) and (j); combating offenses described in paragraph (1). FOR THE EIGHTH CIRCUIT (2) by inserting after subsection (b) the fol- (b) OTHER.—In carrying out this section, the lowing new subsection: Sentencing Commission is requested to— The PRESIDING OFFICER. The Sen- ‘‘(c) Whoever corruptly— (1) ensure that the sentencing guidelines and ate will proceed to executive session. ‘‘(1) alters, destroys, mutilates, or conceals a policy statements reflect the serious nature of CLOTURE MOTION record, document, or other object, or attempts to securities, pension, and accounting fraud and do so, with the intent to impair the object’s in- The PRESIDING OFFICER. Under the need for aggressive and appropriate law en- the previous order, the clerk will re- tegrity or availability for use in an official pro- forcement action to prevent such offenses; ceeding; or (2) assure reasonable consistency with other port the motion to invoke cloture. ‘‘(2) otherwise obstructs, influences, or im- relevant directives and with other guidelines; CLOTURE MOTION pedes any official proceeding, or attempts to do (3) account for any aggravating or mitigating We, the undersigned Senators, in ac- so; circumstances that might justify exceptions, in- cordance with the provisions of rule shall be fined under this title or imprisoned not cluding circumstances for which the sentencing XXII of the Standing Rules of the Sen- more than 10 years, or both.’’. guidelines currently provide sentencing en- ate, hereby move to bring to a close SEC. 909. TEMPORARY FREEZE AUTHORITY FOR hancements; THE SECURITIES AND EXCHANGE (4) make any necessary conforming changes to the debate on Executive Calendar No. COMMISSION. the sentencing guidelines; and 903, the nomination of Lavenski R. (a) IN GENERAL.—The Securities Exchange Act (5) assure that the guidelines adequately meet Smith, of Arkansas, to be United of 1934 is amended by inserting after section the purposes of sentencing as set forth in section States Circuit Judge for the Eighth 21C(c)(2) (15 U.S.C. 78u–3(c)(2)) the following: 3553(a)(2) of title 18, United States Code. Circuit: ‘‘(3) TEMPORARY FREEZE.—(A) Whenever, dur- (c) EMERGENCY AUTHORITY AND DEADLINE FOR ZELL MILLER, FRITZ HOLLINGS, KENT ing the course of a lawful investigation involv- COMMISSION ACTION.—The Commission is re- CONRAD, BYRON L. DORGAN, HARRY ing possible violations of the Federal securities quested to promulgate the guidelines or amend- laws by an issuer of publicly traded securities or ments provided for under this section as soon as REID, JEFF BINGAMAN, DEBBIE any of its directors, officers, partners, control- practicable, and in any event not later than the STABENOW, JACK REED, BARBARA ling persons, agents, or employees, it shall ap- 120 days after the date of the enactment of this BOXER, PATRICK LEAHY, BARBARA MI- pear to the Commission that it is likely that the Act, in accordance with the procedures set forth KULSKI, BLANCHE R. LINCOLN, BOB

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00065 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.048 pfrm17 PsN: S15PT1 July 16, 2002 S6794 CONGRESSIONAL RECORD — SENATE July 15, 2002 GRAHAM, JEAN CARNAHAN, JAY ROCKE- port the effort made by the Senator court nominees. In stark contrast, 7 of FELLER, CHARLES SCHUMER. from Arizona, Mr. MCCAIN, to advance President Bush’s first 11 nominations The PRESIDING OFFICER. The ma- the long overdue appointment of a are still pending without a hearing for jority leader. commissioner to the expired position over 1 whole year. Mr. DASCHLE. Madam President, I on the Federal Elections Commission, History also shows that Presidents understand that no one is asking for a and in doing so I opposed the cloture can expect almost all of their first 100 rollcall vote on confirmation if we can motion to bring debate on the Smith nominees to be confirmed swiftly. reach the cloture vote. So if we reach nomination to a close. As we have seen, Presidents Reagan, Bush and Clinton cloture, this will be the last vote of the the FEC commissioners have a direct got 97, 95 and 97, respectively, of their evening. impact on Federal election laws, even first 100 judicial nominations con- The PRESIDING OFFICER. Under to the extent of obstructing the will of firmed. But the Senate has confirmed the unanimous consent, the mandatory Congress. Given the recent behavior of only 57 of President Bush’s first 100 quorum call under the rule is waived. the FEC, it is reasonable for us to take nominees. The question is, Is it the sense of the every appropriate step to facilitate the Some try to blame Republicans for Senate that debate on Executive Cal- filing of the expired position. the current vacancy crisis. That is endar No. 903, the nomination of Mr. HATCH. Mr. President, I rise bunk. In fact, the number of judicial Lavenski R. Smith of Arkansas to be today in support of Justice Lavenski vacancies decreased by 3 during the 6 United States Circuit Judge for the Smith to the Eighth Circuit Court of years of Republican leadership. There Eighth Circuit, shall be brought to a Appeals. Before I speak directly about were 70 vacancies when I became chair- close? him and his nomination, however, I man of the Judiciary Committee in The yeas and nays are required under would like to take just a moment to January 1995, and there were 67 at the the rule. explain where the Senate stands on its close of the 106th Congress in December The clerk will call the roll. job of considering and confirming 2000. Mr. NICKLES. I announce that the President Bush’s judicial nominees Senator from Idaho (Mr. CRAIG), the during this Congress. Now I know that some try to justify Senator from Idaho (Mr. CRAPO), and The Senate has not confirmed a sin- the current wholesale delay as payback the Senator from North Carolina (Mr. gle judge since May 13, exactly 9 weeks for the past. That is just a sleight of HELMS) are necessarily absent. ago today. This is nothing short of ir- hand. Look at the facts: During Presi- The PRESIDING OFFICER (Mr. DAY- responsible considering the vacancy dent Clinton’s 8 years in office, the TON). Are there any other Senators in rates and backlogs around the country. Senate confirmed 377 judges—essen- the Chamber desiring to vote? There were 31 vacancies in the Fed- tially the same, 5 fewer as for Reagan, The yeas and nays resulted—yeas 94, eral courts of appeals when President 382. This is an unassailable record of nays 3, as follows: Bush sent us his first 11 circuit nomi- non-partisan fairness, especially when [Rollcall Vote No. 177] nees on May 9, 2001, and there are 31 you consider that President Reagan had 6 years of a Senate controlled by YEAS—94 today. We are barely keeping pace with the rate of attrition. his own party, while President Clinton Akaka Edwards McConnell had only 2. Furthermore, almost 50 per- Allard Ensign Mikulski The Sixth Circuit is half-staffed with Allen Enzi Miller 8 of its 16 seats vacant. The DC. Circuit cent of all Federal judges currently Baucus Feinstein Murkowski is two-thirds staffed, with 4 of its 12 serving are Clinton judges. Bayh Fitzgerald Murray seats sitting vacant. Meanwhile, seven Bennett Frist Finally, some suggest that the Re- Nelson (FL) of President Bush’s first 11 nominees Biden Graham Nelson (NE) publicans left an undue number of Bingaman Gramm Nickles have not even been scheduled for hear- nominees pending in committee with- Bond Grassley Reed ings—despite having been pending for Boxer Gregg out hearings at the end of the Clinton Reid Breaux Hagel 432 days as of today. A total of 23 cir- administration. Well, we left 41, which Brownback Harkin Roberts cuit court nominations now sit pending is 13 less that the Democrats left with- Bunning Hatch Rockefeller for those 31 vacancies. But we have Santorum out hearings in 1992 at the end of the Burns Hollings confirmed only 3 circuit judges this Byrd Hutchinson Sarbanes Bush administration. Campbell Hutchison Schumer year, and only 9 since President Bush Mr. President, the President’s nomi- Sessions Cantwell Inhofe took office. nees deserve better; President Bush de- Carnahan Inouye Shelby It is bad enough that the Judiciary serves better; and most importantly, Carper Jeffords Smith (NH) Committee has been slow to even begin Chafee Johnson Smith (OR) the American people—the people who the process of consideration by sched- Cleland Kennedy Snowe own this Government and who rely on Clinton Kerry uling hearings. It is even worse that Specter the judicial branch for their rights and Cochran Kohl Stabenow the Democrat leadership can’t do what Collins Kyl freedoms—deserve much better. Stevens is necessary to move the 17 judges that Conrad Landrieu Thomas Now, Mr. President, I would like to Corzine Leahy Thompson are still pending for a floor vote. Of Daschle turn to the matter directly at hand, Levin Thurmond course, I applaud the leadership for DeWine Lieberman Torricelli bringing Lavenski Smith to a vote, but the confirmation of Lavenski Smith to Dodd Lincoln Voinovich the Eighth Circuit Court of Appeals. Domenici Lott I think everyone has to admit that 1 Dorgan Lugar Warner out of 17 is, at most, a low start. Many Justice Smith is a highly qualified ju- Wyden Durbin McCain of my colleagues have noted with dis- rist who has distinguished himself NAYS—3 pleasure the Judiciary Committee’s through his service to the poor, his service in the public sector, and his Dayton Feingold Wellstone wholesale slow-walking of President Bush’s nominees, but now I must bring service on the State bench. His experi- NOT VOTING—3 some attention to the Senate leader- ence includes working for legal serv- Craig Crapo Helms ship’s role as well. It is high time for ices, running his own law firm, serving The PRESIDING OFFICER (Mr. DAY- them to demonstrate their leadership, with distinction on the Arkansas Su- TON). On this vote, the yeas are 94, the and their control of the floor, by set- preme Court, and holding his current nays are 3. Three-fifths of the Senators ting votes on the rest of the 16 judicial position on the Arkansas Public Serv- duly chosen and affirmed having voted nominees who are awaiting a final ice Commission. in the affirmative, the motion is vote. Justice Smith began his legal career agreed to. Mr. President, let me put the current at Ozark Legal Services in Fayette- Mr. FEINGOLD. Mr. President, I will situation into context. Historically, a ville, AR, specializing in consumer de- support the nomination of Lavenski R. President can count on seeing all of his fense and the representation of juve- Smith, of Arkansas, to be a U.S. Cir- first 11 circuit court nominees con- niles as a guardian ad litem. He worked cuit Judge. I did so as a member of the firmed. Presidents Reagan, Bush, and with those who are traditionally under- Judiciary Committee, and I will do so Clinton all enjoyed a 100 percent con- represented: low-income individuals, again on the floor. But I will also sup- firmation rate on their first 11 circuit families, and children. After 4 years, he

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00066 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.094 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6795 opened his own law firm in the Arkan- The following is what the Arkansas majority, a record outpacing any Re- sas town of Springdale, where he han- Times had to say about Mr. SMITH’s publican total in any 10-month period dled all sorts of cases, including busi- qualifications: in which they held the majority. ness law, real estate, domestic rela- Lavenski Smith of Little Rock is not the We have also addressed long-standing tions, worker’s compensation, public best-qualified Arkansan President Bush vacancies on circuit courts caused by benefits, and estates. Notably, his firm could have chosen for the U.S. 8th Circuit Republican obstruction of President was the first minority-owned firm in Court of Appeals, nor even close. Marginally Clinton’s judicial nominees. We held the history of the town. acceptable, if that, Smith was nominated by the first hearing for a Fifth Circuit Bush, on the recommendation of Senator TIM nominee in 7 years, the first hearings Justice Smith’s excellence as a law- HUTCHINSON, because Smith is racially, ideo- yer and his commitment to public serv- logically and politically correct—a black for Sixth Circuit nominees in almost 5 ice did not go unnoticed: in 1999 Gov- conservative Republican, avidly anti-abor- years, the first hearing for a Tenth Cir- ernor Huckabee appointed Justice tion and anti-Clinton, whose nomination cuit nominee in 6 years, and the first Smith to the Arkansas Supreme Court. will, it is hoped, aid HUTCHINSON’s re-election hearings for Fourth Circuit nominees During his tenure on the bench, Justice effort. Not much there to suggest a distin- in 3 years. Smith wrote opinions on a range of guished judicial career. Still, there are worse We have reformed the process for legal issues, including criminal, tort, things than mediocrity, and Bush has nomi- considering judicial nominees. nated them, too. worker’s compensation, insurance, con- For example, we have ended the prac- tract, civil procedure, oil and gas, tax, It is difficult to vote in favor of a tice of anonymous holds that plagued probate and attorney discipline mat- nominee to a lifetime appointment on the period of Republican control, when ters. a Federal appellate court with this any Republican Senator could hold any kind of record, but he is supported by Currently, Justice Smith serves on nominee from his home State, his own both of his home-State Senators. Sen- the Arkansas Public Service Commis- circuit or any part of the country for ator BLANCHE LINCOLN worked hard to sion, which is responsible for regu- any reason, or no reason, without any be sure that Mr. Smith was included in lating the State’s electric, gas, and accountability. We have returned to a hearing earlier this year and she sup- telecommunications industries. In this the Democratic tradition of holding ports his nomination. Based on Senator position, Justice Smith has become an regular hearings, every few weeks, LINCOLN’s confidence in this nominee’s expert in understanding and inter- rather than going for months without a ability to do the job and based on the preting a wide variety of complex Fed- single hearing. nominee’s assurances that he will not eral regulations, including the Federal With a positive vote on the nomina- seek to impose his personal views in Power Act and the Federal Tele- tion of Lavenski Smith, the Senate his legal decisions, I have reluctantly communications Act of 1996. will have confirmed its 10th Court of decided to vote in favor of this nomina- Appeals nominee of President Bush Chief Justice Arnold of the Arkansas tion. since the reorganization of the Senate Supreme Court, Justice Smith’s former Smith seems like an honorable per- Judiciary Committee a year ago, on colleague, praises his intelligence and son, and despite his political views and July 10, 2001. During their recent 61⁄2 the quality of his service on the court, political activism, I am hopeful that he years of majority control, Republicans saying, ‘‘I think he’ll make a great will be a person of his word: that he averaged seven Court of Appeals con- Federal judge.’’ Justice Smith has will follow the law and not seek out op- firmations a year. wide, bipartisan support in his home portunities to overturn precedent or The Democratic-led Judiciary Com- State, but I think the Arkansas Demo- decide cases in accord with his private mittee has had a record-breaking first crat-Gazette summed it up well: It said beliefs rather than his obligations as a year fairly and promptly considering that Justice Smith possesses ‘‘integ- judge. President Bush’s nominees, which I de- rity, intelligence, and compassion.’’ I This is one of 17 nominations that tailed last Friday. For example, in 1 agree, and I urge my colleagues to join have been reported by the Judiciary year, we have held hearings for 78 of me in supporting this qualified can- Committee to the Senate but were the President’s nominees. didate for the Eighth Circuit. I think stalled for the last 2 months. In addi- That is more hearings for this Presi- that each of us can be proud about vot- tion, nearly two dozen Executive dent’s district and circuit court nomi- ing for the first African-American Ar- Branch nominees reported by the Judi- nees than in 20 of the past 22 years. kansan to serve on a circuit court of ciary Committee are also awaiting ac- Under Democratic leadership, the appeals. tion. Senate confirmed more circuit and dis- Thank you, Mr. President. I yield the The delay in final Senate action on trict court judges, 57, than were con- floor. these nominees has been due to the firmed during all 12 months in each of Mr. LEAHY. Mr. President, failure of the administration to fulfill 2000, 1999, 1997, 1996, and 1995, 5 of the ‘‘Lavenski Smith is a young Arkansas its responsibility to work with the Sen- prior 6 years of Republican control of political appointee, who has had a total ate in the naming of members of bipar- the Senate. The Judiciary Committee of 7 years experience practicing law, tisan boards and commissions. Last has since last July voted on 15 circuit has had minimal Federal experience, week I congratulated the majority court nominees. In our first year, we minimal appellate experience, and no leader for overcoming this impediment held more hearings for more of Presi- experience at all arguing in front of the and for his patience and determination dent Bush’s circuit court nominees Federal Court of Appeals for the in achieving some movement on these than in the first year of any of the past Eighth Circuit to which he has been matters. three Presidents. nominated. He is nominated to the I understand that he hopes to be able More of President Bush’s nominees judgeship held by Judge Richard Ar- to resume voting on judicial nomina- have also been given committee votes nold, one of the most distinguished tions once cloture is achieved on the than in the first year of any of the past judges ever to serve on the 8th Circuit. Smith nomination today. three Presidents. Mr. Smith served a brief term on the Democrats are taking extraordinary Unfortunately, one-sixth of President Arkansas Supreme Court, after being efforts to overcome impediments to ac- Clinton’s judicial nominees—more than appointed by the Governor and before tion on nominations. Had the adminis- 50—never got a committee hearing and running for election to a lower State tration not caused this delay, and had committee vote from the Republican court judicial vacancy and losing. He Republican Senators not placed majority, which perpetuated long- also spent several years as the volun- ‘‘holds’’ over the last several months, I standing vacancies into this year. If teer executive director of the Arkansas am confident that the Senate would the Republicans had not left more than chapter of the Rutherford Institute, an have confirmed more than 70 judicial 50 of President Clinton’s nominees organization devoted to, among other nominees by now. without a hearing or a vote, the cur- things, doing away with a woman’s We were able to overcome the other rent number of vacancies might be constitutional right to choose, and sup- obstacles created by the administra- closer to 40 than 90. porting efforts against Governor, and tion and proceed to confirm 57 judicial In addition, large numbers of vacan- then President, Bill Clinton.’’ nominees in our first 10 months in the cies continue to exist on many Courts

VerDate Jun 13 2002 06:12 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00067 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.051 pfrm17 PsN: S15PT1 July 16, 2002 S6796 CONGRESSIONAL RECORD — SENATE July 15, 2002 of Appeals, in large measure because bell were given committee hearings Mr. HUTCHINSON. Mr. President, I the recent Republican majority was and votes and were confirmed later rise to speak about Judge Lavenski not willing to hold hearings or vote on that year, while Ms. Campbell’s nomi- Smith who has been confirmed this more than half—56 percent—of Presi- nation languished. evening for the eighth circuit court of dent Clinton’s Courts of Appeals nomi- She seems to have been the victim of appeals. This is a great evening for him nees in 1999 and 2000 and was not will- the Republican practice of anonymous, and his family. He is going to be a ing to confirm a single judge to the indefinite holds. In January of 2001, great jurist. I congratulate Judge Courts of Appeals during the entire President Clinton re-nominated Ms. Smith tonight. 1996 session. Campbell, but President Bush failed to I thank President Bush for making From the time the Republicans took seize the opportunity for bipartisan- an excellent choice, a choice that I over majority control of the Senate in ship, and withdrew her nomination think Arkansas can feel good about, 1995 until the reorganization of the shortly thereafter. the Eighth Circuit can feel good about, Committee last July, circuit vacancies At the time of her nomination Ms. and, indeed, the country can feel good increased from 16 to 33, more than dou- Campbell was nearing the end of a dis- about. Judge Smith is an excellent bling. tinguished term at the U.S. Depart- choice. He is the first African Amer- Democrats have broken with that re- ment of Justice, where she served as ican to represent the State of Arkansas cent history of inaction. During our Director of the Violence Against in the Eighth Circuit Court of Appeals. first year in control of the Judiciary Women Office, a position to which she He will do so with great distinction. Committee, we held 16 hearings for cir- was appointed by President Clinton in I will speak, very briefly, about his cuit court nominees. That is almost 1995. career. But the hallmark of Judge the same number of circuit court nomi- In that capacity, she oversaw a $1.6 Smith’s entire career has been one of nees, 17, who were never given a Com- billion program to provide funding to service. It has been a storybook tale. mittee vote by Republicans in 2000. States to strengthen their efforts in He is a native of Hope, AR. He earned Democrats are working hard to re- the areas of domestic violence and sex- both his bachelor’s degree and his law duce judicial vacancies and we have ual abuse. She also directed the Fed- degree from the University of Arkansas moved quickly on these nominees, as eral Government’s efforts to imple- in Fayetteville. He worked his way well as many, many others. I have ment the new criminal statutes created through college. Following law school, noted that we could have been even by the 1994 Violence Against Women he clerked for 3 years, and then he more productive with a little coopera- Act. Ms. Campbell oversaw the Justice served the poorest citizens of Arkansas tion from the White House, but that Department’s efforts to combine tough as the staff attorney for Ozark Legal has not been forthcoming. new Federal criminal laws with assist- Services, representing abused and ne- Moreover, of the current vacancies, ance to states and localities to fight glected children. more than half do not have a nominee. against violence against women. After working with Ozark Legal We are almost out of district court Bonnie Campbell had, before coming Services, he opened the first minority- nominees ready to be included at hear- to Washington, served as the Attorney owned firm in Springdale, AR, handling ings, because the President has been so General of Iowa, the first woman ever primarily civil cases. He then taught slow to nominate district court nomi- elected to that position. During her business law at John Brown University nees and insists on delaying the ABA tenure in office, she was instrumental and took several positions in public peer review process until after the in pushing the State legislature to service, including Regulatory Liaison nominations are made. strengthen Iowa’s domestic abuse stat- for Governor Huckabee. Currently Today’s vote on the nomination of ute, and in 1992 she authored one of the Judge Smith serves as the commis- Lavenski Smith to the United States Nation’s first anti-stalking laws. In sioner of the Arkansas Public Service Court of Appeals for the Eighth Circuit 1997 Bonnie Campbell was named by Commission. is the third Eighth Circuit nominee the Time magazine as one of the 25 most In 1999, he was appointed to the Ar- committee has considered in the past influential people in America. kansas supreme court and served on year. This is in sharp contrast to the Ms. Campbell’s record of distin- the Arkansas supreme court with dis- treatment of Eighth Circuit nominee guished public service and her experi- tinction for 2 years. As a supreme Bonnie Campbell by Republicans. ence in private practice combined to court justice, he presided over hun- Ms. Campbell is now a partner at the make an excellent nominee to the dreds of cases and authored several distinguished Washington law firm of Court of Appeals for the Eighth Cir- dozen majority opinions. He was highly Arent Fox Kintner Plotkin & Kahn, cuit, a fact with which both of her Sen- praised by all his colleagues in the Ar- where she acts as an adviser, nego- ators obviously agreed. Yet once af- kansas supreme court. tiator, advocate, and litigator, rep- forded a hearing, Bonnie Campbell was In June of 2001, the American Bar As- resenting employers in personnel, labor left to linger in an indefensible limbo. sociation reviewed Justice Smith’s relations, employment discrimination, She was not granted a committee vote, qualifications and made a ‘‘unanimous benefits, and other employment-re- but neither was she confronted with qualified’’ determination. lated matters. A graduate of Drake any objections to her nomination to Beyond all of his obvious legal quali- University and Drake’s law school, Ms. the Eighth Circuit proceeding. fications, I want to point out that he Campbell has an outstanding record of Contrasting the treatment of the has had a long history of community public service. nominations of Bonnie Campbell and service. Whether it was as a board She was nominated by President Lavenski Smith to the Eighth Circuit member of the Northwest Arkansas Clinton early in 2000 to serve on the evidences the difference in how the Re- Christian Justice Center, a nonprofit U.S. Court of Appeals for the Eighth publican majority and the current organization dedicated to providing Circuit. Democratic majority have handled ju- mediation and conciliation services, She was supported by both of her dicial nominations and highlights the working with the Partners for Family Senators, Democrat TOM HARKIN and fairness that has been restored to the Training, a group that recruits and Republican CHUCK GRASSLEY, given a confirmation process. trains foster parents, or whether it was ‘‘Qualified’’ rating by the ABA, and af- f raising funds for the School of Hope, a forded a hearing before the Judiciary school for handicapped children in Committee a few months later, in May LEGISLATIVE SESSION Hope, AR, at every stage of his life of 2000. However, despite a non- The PRESIDING OFFICER. The Sen- there has been this hallmark of service. controversial hearing, Ms. Campbell ate will return to legislative session. This outstanding record of service is was never scheduled for a committee The question is, Will the Senate ad- the most outwardly visible sign of vote. No explanation for this failure to vise and consent to the nomination of something the people in Arkansas give her a vote was ever given, and her Lavenski R. Smith, of Arkansas, to be know well; that he is a good and honor- nomination was eventually returned at United States Circuit Judge for the able man who will serve his country the end of the 106th Congress. Other in- Eighth Circuit? well. We can all be proud of the vote dividuals nominated after Ms. Camp- The nomination was confirmed. that occurred this evening.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00068 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.096 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6797 It is a storybook tale, but it is a sto- ticing attorney, as my colleague men- along with the Banking Committee, rybook tale that has not yet had the tioned, with great service through the makes this a historic moment for the last chapters written. There are going legal services to the indigent, a State Senate, a historic moment for cor- to be a lot of wonderful chapters in the supreme court judge, a professor, and, porate governance, and a real recogni- years ahead as he, as a young man, has most recently, a member of the Arkan- tion that at long last we are going to a long time to serve on the Federal sas Public Service Commission. be rebuilding the confidence and trust bench. This would be an impressive list of we need in our free enterprise system. It will be a wonderful culmination to accomplishments for anyone, but at We made a contribution in that re- what has already been a great story the age of 43, Judge Smith’s record is a gard today. I am very hopeful we can and a great career. I stand with Arkan- good indication that he has many years get this work done very soon. sas this evening in pride. of productive service in his future. It would be my hope, given the Presi- I thank Senator BLANCHE LINCOLN for Since President Bush announced the dent’s support for the Sarbanes bill, her cooperation, for her support, and appointment of Judge Smith last year, and Speaker HASTERT’s support, as he all that she has done over the last year I have heard from dozens of Arkansans indicated just last week, that the to make tonight’s vote possible. from across the political spectrum who House consider taking up the Sarbanes With that, Mr. President, I yield the support his nomination. In fact, my bill and passing it free-standing so we floor. support for Judge Smith’s nomination could send it directly to the President The PRESIDING OFFICER. The Sen- is based in large part on the enthusi- in time to afford the President the op- ator from Arkansas. astic endorsement he has received from portunity to sign it very quickly. That Mrs. LINCOLN. Mr. President, I those who know him the best: his col- would be the quickest way, and given thank my colleague from Arkansas for leagues and friends who have firsthand the broad bipartisan support this legis- those kind words. I rise to express my gratitude to all knowledge of his professional and per- lation now enjoys, and given Speaker of my colleagues tonight for their sup- sonal attributes, those who have HASTERT’s support for the legislation, I port of the cloture motion before the worked with him in the legal field who would think this would be a tremen- Senate this evening of the nomination have sent their recommendations to dous opportunity to demonstrate in a of Judge Lavinski Smith of Arkansas me. bipartisan way how quickly we can re- Those who have indicated strong sup- to fill a vacancy on the Eighth Circuit spond as we did today. But more than port for Judge Smith in Arkansas in- Court of Appeals. how quickly, how effectively we can re- I am certainly pleased that the ma- clude Arkansas supreme court chief spond to the needs of our Nation when jority leader has taken a step which justice ‘‘Dub’’ Arnold and Arkansas it comes to restoring that confidence. demonstrates a commitment of the NAACP president Dale Charles. In ad- f dition, I believe it is important to note Democratic leadership in the Senate to GREATER ACCESS TO AFFORD- move the nomination process forward that Judge Smith received a unani- mous ‘‘qualified’’ rating for this posi- ABLE PHARMACEUTICALS ACT and to fulfill our obligation under the OF 2001—Motion To Proceed Constitution. tion by the ABA Standing Committee As one of those who signed the clo- on the Federal Judiciary. Mr. DASCHLE. Having disposed of ture motion to bring forward Judge Even though Judge Smith and I may the banking legislation, it is now our Smith’s nomination, I am proud of my not agree on every issue, that is not intent to turn to the whole issue of colleagues for joining in with an excel- the test I apply to determine an indi- prescription drugs. We will deal with lent vote in supporting this fine Arkan- vidual’s fitness for the Federal judici- both cost containment as well as Medi- san to the bench. ary. I evaluate judicial nominees based care benefits. The bill passed out of the I want to say a special thanks to the on skill, experience, and ability to un- Labor Committee, S. 812, Calendar No. chairman of the Judiciary Committee derstand and apply established prece- 491, will be the vehicle for our debate. for his hard work over the last year to dent, not on any one particular point It is my intention now to ask unani- reduce the number of judicial vacan- of view a nominee may hold. Fun- mous consent the Senate proceed to cies which will ensure our Federal damentally, I am interested in know- the consideration of Calendar No. 491, courts can operate efficiently. He has ing that a nominee can fulfill his re- S. 812, to provide greater access to af- tirelessly worked in the Judiciary sponsibility under the Constitution in fordable pharmaceuticals at 10:30 a.m., Committee to be fair and to be expedi- a court of law. Tuesday, July 16. tious. I am satisfied that Judge Smith has Mr. GREGG. This bill was reported There has certainly been a good deal met that standard, and I, therefore, out of the committee on which I am of heated debate surrounding the pace thank my colleagues for supporting his ranking member. At the time it was re- of judicial confirmations in recent nomination and the cloture motion to ported out, which was last Thursday— months. However, I can say from per- move that forward. so it has been a very quick turnaround sonal experience that the chairman has The PRESIDING OFFICER. The ma- and no report has been filed on the been highly responsive to my inquiries jority leader. bill—there was an understanding with- regarding this nomination. I am grate- PASSAGE OF S. 2673 in the committee that there would be ful for his efforts and those of the com- Mr. DASCHLE. I thank all of my col- two issues resolved before it came to mittee staff in trying to move the proc- leagues for the tremendous work done the floor. One involved bioequivalency ess forward expeditiously and fairly. in the past week. I especially com- and the other involved the 45-day rule. I also thank my colleague, Senator pliment the distinguished Senator from There are other issues with the bill. HUTCHINSON from Arkansas, for his Maryland, the chairman of the Bank- There are other issues which may re- work in this arena. ing Committee, for the extraordinary quire further work, but those two For the benefit of my colleagues who leadership he has shown in getting us issues need to be resolved before this are not familiar with Judge Smith, I to this point. I am sure there were few bill comes to the floor. As I believe was am pleased to offer a few words of in- who have ever guessed this could have the understanding when the bill was troduction. passed so overwhelmingly as it did to- passed out of committee, it would be As my colleague from Arkansas men- night. passed with those being resolved before tioned, Lavinski Smith is a lifelong That is the accounting legislation. I it got to the floor. resident of Hope, Arkansas, as many am very grateful to all who had a sig- I understand it is being moved to the people from Arkansas have been recog- nificant role to play. I thank the staff floor quickly to be the vehicle address- nized being from Hope. After grad- of the Banking Committee and so ing the other issues involved in drug uating from high school, Judge Smith many of my colleagues. I also acknowl- coverage. moved north to Fayetteville, where he edge the fine work done by Senator The bill itself has some very strong received both his BA and JD from the LEAHY on the enforcement aspects of points in it; I have drafted a fair University of Arkansas in Fayetteville. this legislation. amount of it so I recognize that. But at Since that time, Judge Smith has en- The combination of the contribution this time I have to object to the mo- joyed an impressive career as a prac- made by the Judiciary Committee, tion to proceed.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00069 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.098 pfrm17 PsN: S15PT1 July 16, 2002 S6798 CONGRESSIONAL RECORD — SENATE July 15, 2002 The PRESIDING OFFICER. Objec- The PRESIDING OFFICER. The ma- Act as in effect on the day before the tion has been heard. jority leader. day of enactment of this Act. Mr. KENNEDY. Will the Senator Mr. DASCHLE. Mr. President, obvi- Effectively, we are restating the cur- yield? ously, I am disappointed. I looked at rent law. Mr. DASCHLE. I am happy to yield. the vote. I think it was 16 to 5—similar I will also have printed in the The PRESIDING OFFICER. The Sen- in magnitude, on a bipartisan basis, to RECORD the language which was ques- ator from Massachusetts. the Sarbanes bill that passed out of the tioned earlier—I think an explanation Mr. KENNEDY. Mr. President, in re- Banking Committee. We ended up with and how it conforms with what we had gard to the language to which the Sen- a unanimous vote on the floor. agreed to in terms of the exchange. ator has referred on the question of the I hope we can get the same kind of If it is necessary, we will be glad to bioequivalence, a whole new section unanimity ultimately on this legisla- work with our friends and colleagues was added, subsection (C) of section 7, tion. But a 16-to-5 vote would seem to on the other side during the remainder dealing with bioequivalency. It was me to indicate very strong bipartisan of the evening and certainly tomorrow sent out to the good Senator on Thurs- support for this legislation as well. to try to find out, if this language is day evening. Senators are welcome to offer amend- not satisfactory, what language would We had indicated if we did not hear ments. We oftentimes negotiate issues be satisfactory. back from the Senator or his staff, we on the floor and accommodate Sen- We did have areas of differences, but would assume that language reflected ators’ concerns, both in the managers’ not with regard to these two particular what was discussed in the course of the amendment as well as in individual provisions. There was an agreement on markup. We had similar kinds of clari- votes. So we will certainly have that it. It was just trying to find the appro- fications with regard to certain proce- opportunity once again. priate language which would reflect dures and filings. I have no doubt if there is an interest the opinion of the committee. We be- As far as we are concerned, at least in resolving these outstanding ques- lieved we had done so, and we are glad on our side, these particular provisions tions, we ought to be able to do so. But to work with our colleagues on the have been dealt with in the legislation we do need to move on. That was my other side. If that is not the case, we and we are prepared to move ahead hope, that we could lay the bill down are glad to make those adjustments with the consideration. and begin the debate and have these and changes so we can begin the debate This is extraordinarily important discussions. on this extremely important piece of legislation. It relates to not only the CLOTURE MOTION legislation. quality of prescription drugs but acces- Mr. DASCHLE. Mr. President, I have We recognized when this was intro- sibility and affordability of prescrip- no choice, of course, but to move to duced—and I give great respect to my tion drugs. We are seeing today the sig- proceed to Calendar No. 491. I send a friends and colleagues, Senator SCHU- nificant abuses of the Hatch-Waxman cloture motion to the desk. MER and Senator MCCAIN, for devel- legislation. If we were able to just go The PRESIDING OFFICER. The clo- oping the basic legislation which was back to the full intent of Hatch-Wax- ture motion having been presented the core of the debate we had in our man, conforming with that, this legis- under rule XXII, the Chair directs the committee—it was modified to try to lation would not be necessary. But it is clerk to read the motion. respond to some of those who had some necessary. The legislative clerk read as follows: concerns. We had Senator EDWARDS The best estimate is it would save and Senator COLLINS in a bipartisan CLOTURE MOTION consumers $71 billion over the period of way develop an approach which had We, the undersigned Senators, in accord- strong bipartisan support. We had good 10 years. It is very important. We ance with the provisions of rule XXII of the ought to be about it. I hope we can get Standing Rules of the Senate, do hereby discussion and debate in our committee to the legislation and start debating it. move to bring to a close the debate on the on this matter and a strong committee We had a strong bipartisan vote in motion to proceed to Calendar No. 491, S. 812, outcome. the committee, and we are ready to go the Greater Access to Affordable Pharma- This is a very important piece of leg- and consider amendments. If there is ceuticals Act of 2001: islation. It is one which deals, not so further clarification that is necessary, Senators Harry Reid, Jon Corzine, Byron much with the availability and the we are glad to consider it, but I regret L. Dorgan, Ron Wyden, Maria Cant- accessability of drugs but as to the very much we are going to have to well, Paul Sarbanes, Debbie Stabenow, question of whether they are going to Dick Durbin, Thomas Carper, Tom delay legislation which is as important Daschle, Jack Reed, Daniel K. Akaka, be reasonably affordable alternatives as this to our seniors as well as to Kent Conrad, Zell Miller, Charles Schu- to brand name drugs and whether we other Americans who believe they need mer, Ernest Hollings, and Hillary Clin- are going to follow the agreement that to be able to get fairness in the consid- ton. was made at the time of the Hatch- eration of generic drugs. The PRESIDING OFFICER. The ma- Waxman legislation, which was en- The PRESIDING OFFICER. The ma- jority leader. acted, which really was based upon the jority leader. Mr. DASCHLE. Mr. President, I ask idea that we would have new break- Mr. GREGG. Will the Senator yield unanimous consent that Senators Lin- through drugs rather than rehashing of for a question? coln and Hutchinson have the oppor- older drugs. Mr. DASCHLE. I think I retain the tunity to speak for up to 8 minutes What we have seen is in recent times floor. I will be happy to yield to the each with respect to the Smith nomi- those who have the patents are using Senator from New Hampshire. nation, to appear at the appropriate the Hatch-Waxman legislation in ways Mr. GREGG. Yes. That is why I was place in the RECORD. that work to the significant disadvan- asking. The PRESIDING OFFICER. Without tage of the consumers in this country. The question is this—rhetorical in objection, it is so ordered. It is to change those abuses that this nature. Unfortunately, in order to Mr. DASCHLE. I yield the floor. legislation has been developed. It is reach an agreement, you have to have The PRESIDING OFFICER. The Sen- very important. We will continue to both sides agree. Senator FRIST, who is ator from Massachusetts. work with our colleagues to try to concerned about the bioequivalency, Mr. KENNEDY. Mr. President, I will clarify any of the language that needs has not agreed to the language. I have include in this part of the RECORD the to be clarified. We look forward to the not agreed to the 45-day language. I am sections relating to the bioequivalence. debate at the earliest possible time. sure it could be worked out, and It is on page 53. The effect of the sec- I thank the majority leader for giv- worked out rather promptly, so we tion is: ing the attention and priority that he would not have to go through the exer- This section shall not be construed to has to this legislation. I think for most cise of delaying this bill, and I would alter the authority of the Secretary of of us, as we travel around to our con- be happy to do that. But until we have Health and Human Services to regulate stituencies, we find the availability, worked out that issue, I have to re- biological products under the Food, the accessibility, and the cost of pre- serve my rights and object to the pro- Drug, and Cosmetics Act. Any such au- scription drugs are on the minds of just ceeding. thority shall be exercised under that about every family in this country.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00070 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.101 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6799 You don’t have to be sick, although trees—the forest being the great need So I can’t stand here and listen to my that is certainly something that every to do something and the trees being colleague being characterized as ob- person who is ill understands very well. the details that we should be debating structing the progress of this legisla- But it is the total family. So much of on the floor in open debate. tion when in fact they want to honor the challenge and the burden of health I will just say to my colleague that I the agreement that was made at the care costs goes to all the members of am as disappointed as he is—maybe not time that bipartisan vote took place. the family. quite as disappointed; nobody works I ask the chairman if that is his As we are particularly in the period harder than he does on bringing these recollection of the vote that occurred. of what I consider to be the life-science issues to the floor, but almost as much. Mr. KENNEDY. No. The Senator has century where we have enormous op- Is this something that is brand new? not understood correctly. I will stand portunities for major breakthroughs Where do these objections come from? by the record. There was never a condi- and extraordinary kinds of positive im- These are issues that we have discussed tioning of reporting this out for an pact on the lives of people in this coun- and agreed on. It is my understanding agreement. I have been either chair- try, we must make sure these prescrip- that the Senator from New Hampshire man or ranking member for some pe- tion drugs and the generics are going simply didn’t have the votes when he riod of time. I know those words are to be available and accessible. The decided not to bring forward his stated. But there was never a condi- faster that we have a chance to engage amendments when the committee tioning of reporting out based upon in this debate and pass this legislation, marked up. getting agreement. I would not have the better the health of the American Is that a correct or an unfair charac- accepted that. This is too important. people is going to be. terization? There was not a difference. I note on the floor the prime sponsor, Mr. KENNEDY. The reason the Sen- You will find that the language we ator objects is in behalf of the Senator the Senator from New York, Mr. SCHU- have included with regard to biologics from Tennessee who wanted clarifica- MER. He has probably heard that there basically is a restatement of what Sen- tion in terms of the ability of the FDA was objection to taking up this legisla- ator FRIST said. If it isn’t, I am glad to to regulate biological products. We tion because of certain language clari- make that kind of adjustment. What have included a new section on page 52. fications. We reviewed and put in the we did say—as we say in virtually the This section shall not be construed to RECORD clarifications which, quite passage of all legislation—is that we alter the authority of the Secretary to frankly, conform to the issues that will authorize technical corrections to regulate biological products under the were raised. They are not areas of dif- be made by the staff. FDA act. So we added that just for ference but areas of clarification. We If you have an agreement in prin- clarification. ciple, you do not have a difference. We sent those to our colleagues last Thurs- It is difficult for me to understand have an agreement in principle. day night indicating that we under- why that doesn’t work. If this language isn’t carried for- stand they would be satisfactory unless Mr. HUTCHINSON. Will the Senator we heard back. We did not hear back yield? ward—and it is language which I be- until just minutes ago. Mr. KENNEDY. I will in just a mo- lieve should be—give us the language, We want to work with our colleagues. ment. and we will work on it tonight. But I We certainly invite the Senator who Then there was another question think to delay something that is as im- has been such a driving force on this with regard to the timing and proce- portant as this is not justified. This issue. We hope that overnight and cer- dures to be able to bring civil action. subject matter is too important to tainly in the early morning we could We added on page 35 a new section for families in my State, as I am sure it is have a clarification which would re- the Senator from New Hampshire. in Arkansas. That is why I am sur- move the reasons for not proceeding; As I mentioned earlier, we don’t have prised the Senator from Arkansas is that at some time tomorrow we could a difference. We would be glad to work standing with the Senator from New begin the debate in full and move through the evening, if we had the op- Hampshire and urging delay of this leg- ahead to considering this legislation. portunity to proceed to this on tomor- islation, because it is of such impor- Mr. SCHUMER. Will my colleague row. tance. I welcome the fact that he sup- yield for a question? If this language isn’t clear—we are ported it, but we want to get on with Mr. KENNEDY. Yes. not facing a difference on it. What I am this legislation. And I think the sooner Mr. SCHUMER. I thank my colleague troubled by is the fact that there is ob- we can get on it, the better. from Massachusetts who has been such jection to moving to the legislation If the Senator wants to work with us a great leader on this issue. I guess, as and moving to it in a timely way when and be the agent for the other Senators I understand it, our friend from New it is legislation which is of such impor- and work through the evening, we Hampshire has objected to moving for- tance and relevance to every family in would welcome his intervention in ward. this country. doing that because we want to get on We have spent a very long time talk- I see my friend from Michigan on the it. ing about this issue—of course the floor, but I will yield to the Senator I would be glad to yield to the Sen- issue of availability of drugs, and of from Arkansas. ator from Michigan. Then I would be course the issue of the cost of drugs Mr. HUTCHINSON. I ask the Senator glad to yield the floor and let the Sen- but even the specifics of the generic from Massachusetts. I pose the ques- ator speak. drugs. tion because as a member of the com- Ms. STABENOW. I thank you the We had extensive hearings on this mittee and someone who was very glad Senator. bill 10 weeks ago or 8 weeks ago. There to join in a positive way the bipartisan First, I commend our chairman, Sen- has been a great deal of discussion. vote for the legislation, it was my clear ator KENNEDY, for his work in bringing This is not a last minute something understanding as we came to that deci- this important bill to the floor. I also that someone wrote on the back of an sive vote that a point was reached in commend Senator SCHUMER for his envelope and said here, take it. There working out the two outstanding issues leadership. has been tremendous discussion on this which Senator GREGG mentioned in his I say to my friend from Massachu- issue. There are differences of opinion. objection. There is no desire on any- setts, it is my understanding the lead- That is fair. That is legitimate. That is body’s part to slow this legislation er, because of the importance of the why we have a Senate. down. But it was with the under- issue of not only lowering drug prices But to prevent the bill from moving standing that there would be that for everyone but providing Medicare forward when the cost of drugs goes agreement. coverage for prescription drugs, has ac- through the roof, when the people are While it seems the issues are rel- tually allocated up to 2 weeks on this clamoring for us to bring down those atively minor and that it can be done subject. I would assume we would have costs, and when there is a proposal that in a very expeditious way, the fact is ample opportunity to work out any passed in a very bipartisan way in Sen- that Senator FRIST and Senator GREGG issues and problems that colleagues ator KENNEDY’s committee, it just have not yet signed off on that lan- would have on the other side of the strikes me as missing the forest for the guage. aisle.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00071 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.103 pfrm17 PsN: S15PT1 July 16, 2002 S6800 CONGRESSIONAL RECORD — SENATE July 15, 2002 But the clock is ticking on the 2 tion based on that provision. I do not our seniors in dealing with the phe- weeks. The sooner we can get to the quite understand it because there was nomenal cost and concerns they have bill, the sooner we can begin to move some discussion early on in the bill in being able to provide for themselves through a number of different amend- that the Senator from Arizona and I in- the prescription drugs they actually ments to be able to get this bill in good troduced about whether bioequivalence need for the quality of life we all know shape, to be able to deal with a number was the same. We intended it to be the they deserve. of issues, such as those that deal with same, but we were silent. Adding this We all have parents and grand- increasing competition and providing provision just clarified it. parents, we have neighbors and loved Medicare coverage, and so on. So there is no new change here, none. ones who are suffering from the unbe- This is so critical that our leader To not move forward on the bill on lievable dealings of the increase in cost has, in fact, allocated 2 weeks. So I am that basis, when there seems to be a of prescription drugs. For us in Arkan- very surprised that our colleague from complete meeting of the minds of what sas, where we don’t have many tools at New Hampshire would stop even the be- to do, does not make sense. all; we have lost all of the ginning of the debate when he knows The second point is this, and both my Medicare+Choice plans that served Ar- that it is not a 1-day debate. We are colleague from Massachusetts and my kansas. The last two or three left in talking about having 2 weeks and as able colleague from Michigan, who has December, none of which provided a many hours as it takes in that time to been such a leader on this bill, have prescription drug package, which be able to work out all of the kinks and made it clear: The people are waiting. means our seniors in Arkansas are ba- to be able to get it right. Every day, every minute, someone—a sically subsidizing other seniors across I know, coming from Michigan today, senior citizen, a family with a child this country in their tax dollars. Other working and being in Battle Creek at a who is ill—approaches the prescription seniors in other areas, where a senior center and in Kalamazoo at a drugstore counter with trepidation Medicare+Choice plan fits can actually senior center, that they are watching wondering what that bill will be. get a prescription drug package be- us very closely. We have had a lot of They want the best drugs for them- cause our seniors are subsidizing that. talk, and if talk bought medicine, peo- selves and their loved ones. Yet they So our seniors in Arkansas are paying ple would have a lot of medicine. are afraid they cannot afford it. They top dollar, more than you or I or any- It is time to act. I commend the are afraid it means not paying the body else who has insurance or who has chairman of the committee for acting. rent. They are afraid it will mean not a program like Medicare+Choice or I am looking forward to working with buying gasoline for their car. something else, a Medigap program him. Here we have a solution. I would not that is helping to pay for that, are pay- Mr. KENNEDY. Mr. President, I will say it is the most breathtaking solu- ing more than anybody else for pre- yield the floor in just a moment. I tion. I would like to see prescription scription drugs. want to be very clear on the RECORD; drugs added to Medicare. We are going That is unheard of. Sixty percent of that is, that the language was provided to have a big fight about that. But it is our seniors in Arkansas tend to need both to Senator FRIST and Senator a solution that makes a real difference, more prescription drugs because, unfor- GREGG on Thursday afternoon at that reduces prices on a large number tunately, their availability to health around 4:15. The first I have heard of drugs, that has some consensus, that care is less. The other thing is their there was objection to it was 5 minutes does not get into the free market availability to prescription drugs out before the majority leader’s request. I versus price control argument that has in rural areas is a lot more difficult. did not hear any objection to it Friday. plagued us as we have tried to come to These are people who need assistance. There was not any objection to it Sat- some kind of agreement. They don’t need, as Senator STABENOW urday. There had been no objection to So we have a proposal. We are ready mentioned, a lot more discussion, a lot it today, Monday. to debate it. The majority leader, real- more talk, and a lot more promises. It seems to me that if there are ob- izing its importance, has given us plen- What they need is action. jections to it, we ought to be able to ty of time. And the first thing we hear Unfortunately, what happened to- clarify the language and move forward is objection to moving forward. night was a roadblock that would pre- it. If people have objections to this leg- Again, as Senator KENNEDY has said, vent the kind of action we need in mov- islation, let’s hear it. Let’s debate it. I am willing, as a sponsor of the bill, to ing forward. We have 2 weeks to debate I pay special tribute to Senator be amenable. The more, the merrier. I and talk about the initiatives here for SCHUMER and Senator MCCAIN. Seniors do not want a partisan victory. I want the generics bill and some of the other have been paying too high a price for to get something passed. We have spent proposals for prescription drugs but to too long. This is going to make a dif- a long time trying to work this out, move this debate forward. That is what ference. We have delayed too long in and it is complicated. We know that. seniors are waiting on; they are wait- addressing this issue. But when I hear the first thing done is ing on a solution. But more impor- So I indicate that we are prepared to objection to proceeding—as opposed to tantly, they are waiting on us to begin work on the language over the evening somebody calling up the chairman or the debate. Unfortunately, that is what or tomorrow. But we believe we ought myself and saying, what did you really was stopped tonight. to get about the business of dealing mean by this? Shouldn’t we dot the i’s, I hope we can all come together and with this legislation. cross the t’s, and put together an work out whatever differences they The PRESIDING OFFICER. The Sen- amendment?—I get a little worried. may have found from the committee, a ator from New York. So I hope this is not an indication of bill that passed out in a bipartisan Mr. SCHUMER. Mr. President, I will anything in the future. I hope this is an way, but work those details out, hope- be brief. indication that we can try to come to- fully tonight, so maybe we can bring First, a specific point. One of the ob- gether, despite some of our differing forward, without having to go through jections was on the language for what views, to work on how to reduce the the unusual procedural cloture motion we call bioequivalence. In other words, costs of these wonderful drugs that are to bring something up, that we can what makes the drug the same drug? I so expensive and together bring up a begin the debate in earnest and begin am not a member of the committee, good bill. to honestly look at the ways we can but I sat there as Chairman KENNEDY With that, Mr. President, I yield the help the seniors of the Nation. presided. As I recall, there was a con- floor. I yield the floor and suggest the ab- sensus on that issue, which was, let us Mrs. LINCOLN. Mr. President, I rise sence of a quorum. codify what the FDA does now. to applaud the majority leader for his The PRESIDING OFFICER. The That is what the language was sup- attempt to bring forward this possible clerk will call the roll. posed to do. There was not supposed to solution to help our elderly address the The legislative clerk proceeded to be a change. There was not supposed to enormous problem that seniors face in call the roll. be a wrinkle. There was not supposed drug costs and in getting prescription Mr. BROWNBACK. Mr. President, I to be anything different. And now, all drug care, to use that bill and that tool ask unanimous consent that the order of a sudden, we are hearing an objec- of generics and others to try to assist for the quorum call be rescinded.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00072 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.106 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6801 The PRESIDING OFFICER. Without It was not until the showing of a dra- NGOs who are in the best position to objection, it is so ordered. matic video of five members of the know report that food aid from South f Han-mee family being forcibly removed Korea, the U.S., and Japan, simply are from the Japanese consulate in Beijing not reaching the dying people. As I ACCOUNTING REFORM that the world began to pay attention. mentioned in a previous statement, I Mr. BROWNBACK. Mr. President, I Since then, several other asylum bids believe it is absolutely necessary to wish to address the body on an issue of have drawn the attention of main- condition stringent monitoring of the some significant importance to the stream media, including the horrifying delivery of food aid by NGOs in an ef- country. First, good business was done story of baby-killings in North Korean fort to determine that they are being by the Senate today dealing with the prison camps reported in the New York distributed appropriately. Much of this accounting situation, the financial Times and based on the testimony of aid is apparently being diverted to feed trust crisis that we have going on in Ms. Soon Ok Lee, who, as I indicated the million-plus North Korean army our country with some of the heads of before, testified at our hearing. and to reward the elites and the inner corporations. I think we have taken a In June 2002, ABC Nightime broad- circle around Kim Jong-il in positive step on dealing with that prob- cast a three-part documentary of the Pyongyang. For this reason, many lem. North Korean refugee in China by Ms. well-respected NGOs, including Doctors f Kim Jung-eun whose schedule did not Without Borders have withdrawn from NORTH KOREA permit her to testify before our com- North Korea. mittee. I was told by ABC News staff More troubling is that these NGO’s Mr. BROWNBACK. I want to address that thousands of Americans have re- have confirmed reports of more than a the body quickly and briefly but impor- sponded to the broadcast with e-mails dozen prison camps in North Korea, tantly on what is happening in North in disbelief and in rage against the where the prisoners are starved, forced Korea and to North Korean refugees North Korean regime. I understand to work at hard labor, and tortured to coming out of that country. Prior to the July 4th recess, my col- that the three programs drew high re- death. Aside from the troubling refugee leagues, Senator KENNEDY and Senator sponse from viewers. It is estimated that between 2 to 3 issue, we cannot forget that North ALLEN, and I brought to light the plight of North Korean refugees in a million people died of starvation and Korea is a threat to regional and global hearing before the Immigration Sub- persecution in North Korea from 1995 security. North Korea continues its committee. The hearing capped a through 1998 and that up to up to procurement of materials and compo- month of activity that involved the 300,000 North Korean refugees in China nents for its ballistic missile programs passage of resolution on North Korean are living a precarious and dangerous from foreign sources, especially refugees in both the House and the life, hiding by day, begging by night, in through North Korean firms based in Seante. Both resolutions strongly an effort to avoid being captured and China. In addition, North Korea has be- urged the Chinese government not to repatriated back to North Korea by come a ‘‘secondary supplier’’ of missile repatriate North Korean refugees back Chinese and North Korean agents bra- technology and expertise to several to North Korea. The House version zenly operating inside China countries in the Middle East, South passed by 406 to 0 and our resolution Of the 300,000 refugees, only 518 refu- Asia and North Africa. The CIA’s 2001 passed by unanimous consent on June gees successfully defected to South report assesses that North Korea is ca- 19, 2002. Korea this year through June 2002, pable of producing and delivering via At our hearing, we heard some very many of them by taking refuge at for- missile warheads or other munitions a moving testimony from Ms. Lee Soon- eign missions in Beijing and in variety of chemical agents and possibly Ok, a North Korean defector who suf- Shenyang, China. some biological. fered more than five years in a prison These actions by the Chinese are sim- Furthermore, North Korea refuses to camp. We also heard from Ms. Helie ply unacceptable, not only to basic carry out its obligations under the Nu- Lee, a Korean American writer whose principles and tenets of international clear Nonproliferation Treaty, NPT memoir, In the Absence of the Sun, human rights, but also by the fact that and the 1994 Agreed Framework. Initial movingly highlighted a largely hidden China is a signatory of the Inter- IAEA, International Atomic Energy and painful secret shared by hundreds national Refugees Convention. Hun- Agency, inspections and intelligence of thousands of Korean Americans and dreds of South Korean, Japanese and reports in the early 1990s triggered con- millions of Koreans—more than 50 western NGO’s are working inside cerns regarding a clandestine nuclear years of separation among family China to help the refugees, risking weapons program. U.S. and foreign in- members and loved ones since the out- their lives and capture by the Chinese telligence have concluded that the break of the Korean War. Few other police. A German doctor who also testi- DPRK government of North Korea country and its people has suffered as fied before our committee worked in probably has sufficient plutonium for 1 much. North Korea for a year and a half but to 5 nuclear weapons. Despite its obli- In addition, Mr. President, I urged was evicted by the North Korean re- gations under the NPT and the Agreed Secretary Powell in both a formal con- gime for disclosing the tragedies of the Framework, North Korea continues to sultation and by correspondence on the NK people. People like him and others refuse inspections. need of our Department of State to on the ground in China and Korea have So while it would be reason enough allow the processing of North Korean been some of the most vocal and active to continue our pressure on North refugees together with the Chinese gov- in their effort to make the whole world Korea and China for the humanitarian ernment and the Beijing office of the aware of the conditions in North Korea violations alone, there are also the United Nations High Commissioner on and China. Many NGO’s have taken pressing security threats that the cur- Refugees. care of refugee families full-time with rent North Korean government poses The plight of North Korean refugees, their own money. to U.S. interests which must be dealt of course, is merely a symptom of a far I’ve met with many of these people, with. While refugee and nuclear weap- more pressing issue—how to deal with all of whom are now effectively shut ons issues will necessitate very dif- one of the most repressive and totali- down from operating in China. And ferent responses—the thing they share tarian states in the world, the isolated what they tell me over and over is that in common is the alarms they raise country of North Korea ruled by one they simply cannot not ignore what about ignoring the North Korean prob- man, Kim Jong-il. they saw. All of them said to me that lem in all its complexity. Although news regarding the efforts they could not look away and ignore While I am mindful of the diplomatic of many in the NGO community and the refugees, many of whom were too sensitivities regarding the need to countless others working in North East scared to even beg for help. reach out to the North Korean regime, China have been slowly filtering into These NGO’s from South Korea, there comes a time when we have to the West, the true nature of the North Japan, the U.S., France, and Germany, confront the truth and tell the truth. Korean regime is largely hidden and in- first reported the tragedy of the North Moreover, reconciliation efforts have accessible. Koreans to the outside world. These yet to yield any results. There was

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00073 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.107 pfrm17 PsN: S15PT1 July 16, 2002 S6802 CONGRESSIONAL RECORD — SENATE July 15, 2002 much hope after the historic meeting Beijing and Shenyang, China. They Mr. President, I draw this to the at- between President Kim Dae Jung and have rushed embassies in those com- tention of my colleagues because we Jong-il in June 2000, that such a ges- munities, gotten inside, asked for po- need to allow refugees to pass and ture would bring about some meaning- litical asylum, it has been granted, and come into the United States as well. ful change. they passed to South Korea, generally We will be bringing this issue up again As the naval skirmish last month through a third country—many times in front of this body. I hope we will put and the continuing problems with the through the Philippines. I say only 518 pressure on China, which doesn’t have North Korean refugees show, the North this year. If you look at the history a good human rights record, so that Korean issue has simply worsened. It’s since the Korean conflict has ended— they can act to save people’s lives—if time for the North Korean regime to now 50 years ago—there have been only they will only allow these people to immediately allow international moni- several thousand who have defected pass through. toring of food aid into the country and from North Korea into South Korea. Mr. President, I yield the floor. to work with the international NGO Generally, each year, it has been a The PRESIDING OFFICER. The Sen- community to alleviate the suffering of trickle—maybe in the teens. ator from Oregon is recognized. its people. That may at least stem the The North Korean regime has been f tide of refugees crossing over into able to keep people in a dogmatic sys- PRESCRIPTION DRUG COVERAGE China and being prey to human traf- tem, saying this regime is the best in FOR SENIORS fickers and other difficulties faced by the world and saying they are being fed refugees. But more fundamentally, the by the President and the leadership. Mr. WYDEN. Mr. President, I am North regime itself must begin to Now that trickle is beginning to really very hopeful the Senate will be able to change itself and join the rest of the move. They believe it may be up to a get on the issue of prescription drug world in giving hope and freedom to its thousand; there may be a thousand or coverage very soon. This is an urgent people. more defecting this year alone, which issue for seniors and the people of this The U.S. can not afford to give into is a massive number considering the country. I want to spend a few minutes the slow-walking of reforms in North history. tonight talking about why this is so Korea. For our own security, for the Mr. President, the issue I want to important and what I think the real stability of the region and for the sake bring to light is the role of China and challenge is to the Senate in the next of basic human rights—North Korea the importance of China in allowing couple of weeks. must remain a top policy focus for U.S. these people to live. If China will allow Mr. President, for the last quarter of foreign policy. We must keep clear and these people to pass through, or if the 20th century, the standard Govern- constant pressure on NK and neigh- China will allow the U.N. Commission, ment line on prescription drugs for boring countries to bring new leader- or the High Commission on Refugees to older people was a little bit like the ship into being. This is a daunting establish a processing center to deter- marquee of the big, old-fashioned thea- task, but one that we can not afford to mine if these are people who need to be ters you would see downtown. The mar- shirk. allowed to pass into third countries, quee sign was all lit up and it always We have significant refugee flight thousands if not millions of people will read: ‘‘Coming soon.’’ But, for seniors, taking place out of North Korea. We not have to live in North Korea. If that ‘‘soon’’ just never seems to arrive. have had hearings in the Senate Immi- China does not, you are going to see Years ago, when I was director of the gration Committee on this particular thousands, possibly millions more, die Oregon Gray Panthers—I had the honor topic. We have a humanitarian crisis, of starvation, persecution, and other to be co-director for about 7 years be- probably the largest in the world, that causes. fore I was elected to the House—I got is taking place. We estimate that there China has a choice. They will choose many of the questions then that all of are between 2 to 3 million people who what the status is going to be, whether us in the Senate get now. Seniors have died of starvation and persecution these people will live or die. They need asked then, just as they do now at our in North Korea from 1995 to 1998, in a 3- to be confronted directly and asked to town meetings, if anybody in Wash- year time period—2 to 3 million people. let these people live, to let them pass ington is ever going to provide some Nobody knows for sure because outside through. Let them pass through to real help in paying for prescription observers are not allowed. Mongolia, to South Korea, to other medicines. This Nation is the most repressive, places; but don’t send them back. If I am very pleased that Senator closed regime in the world today. The they don’t want to have them stay in DASCHLE has made this a priority issue world community is feeding those who China, allow some place for them to go for the Senate. He has made it very are left in North Korea. The United through, such as a refugee center. But, clear to me that he is willing to work States and a number of other donating China, make the choice. It is your re- with anybody in the Senate to finally countries are feeding about half of the sponsibility and their blood that will get this job done and to get it done population in North Korea. Much of the be on your call as to what you deter- right. food aid we are giving North Korea is mine you are going to do in this par- I think we know what this issue is all not getting out to where it is needed. It ticular situation. about for seniors, and that is the cost is still held by the leadership in that North Korea is a country that is dif- of medicine and coverage for medicine. country. ficult for us or anybody else in the In effect, cost and coverage really go We estimate that some 300,000 North world to influence. China is the only hand in hand because if you are able to Korean refugees are living in China country in the world that has some in- get seniors coverage, but you have not today in a precarious and dangerous fluence on North Korea. So it is going held down the cost, then you are not lifestyle. They are hiding by day and to be their choice as to whether these getting a whole lot for the Govern- begging by night, trying to keep from people will live or die. ment’s money. Of course, if you take being caught and sent back into North North Korea needs to change its re- steps to control costs, but many sen- Korea, which is what China does. If gime. I don’t need to remind Members iors still don’t have the ability to meet they catch people from North Korea, of the Senate of the other problems we even those costs, we will continue to they treat them as economic migrants have with North Korea. They are a sup- have more and more older people fall and ship them back into starvation, plier of weapons. North Korea has be- between the cracks. refugee camps, persecution, and prob- come a secondary supplier of missile So it is important that the Senate ably death. technology and expertise to several addresses both of these issues and ad- Of the 300,000 refugees in China, only countries in the Middle East, South dresses them right. I want to talk for a 518 refugees have successfully defected, Asia, and North Africa. The CIA’s 2001 few minutes about what I think some gotten out of China and into South report assesses that North Korea is ca- of the key components are first of hold- Korea or into another third country— pable of producing and delivering via ing costs down. First, I think it is im- that is this year, through June of 2002. missile warheads, or other munitions, a portant that it be done with bargaining Many of them have done it by taking variety of chemical agents and possibly power in the private sector. In dis- refugee status at foreign missions in some biological agents as well. cussing this—and we will do this over

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00074 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.056 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6803 the next couple of weeks—I want to de- ing breakthrough products that are so sure that seniors have bargaining scribe what I was involved in back in important. power in the private sector. the 1970s when I was co-director of the What I have tried to contribute to The model that will be used in the Oregon Gray Panthers. the Senate on prescription drugs has legislation Senator GRAHAM and Sen- I remember one rainy night standing been an effort to come up with solu- ator MILLER have drafted incorporated with a swarm of seniors around a labor tions that are going to work in the real much of what I and Senator SNOWE union pharmacy that was barely bigger world for Americans trying to navigate have been concerned about, and that is than a pill box. We were kicking off a our health care system. In the past two to make sure that bargaining power is program that night where seniors, sessions of the Congress, Senator structured in the private sector so that through labor unions and others in the SNOWE and I have introduced bipar- costs are not shifted to millions of community, had been able to bargain tisan legislation. Tonight for just a few other Americans. There is no Senator with pharmaceutical concerns, and sen- minutes, I want to express my appre- who wants, in the effort to come up iors were able to get their drugs at ciation to Senator DASCHLE and others with a prescription drug proposal for cost, plus a small monthly fee. It in the leadership because the bill they seniors, to end up shifting costs on to worked for the company, it worked for will try to offer when we get to the their children and their grandchildren. the seniors. question of Medicare coverage for sen- That is why private sector bargaining The community pulled together, and iors has been a genuine effort to ad- power, something about which I and in this little pharmacy, which I have dress each of the concerns Senator Senator SNOWE have felt strongly, and said was really no bigger than a pill SNOWE and I have focused on in our leg- Senator DASCHLE has graciously box, we saw that you could set up bar- islation. worked with us on, is included in what gaining power right in the private sec- When we get to that question, we are the Senate is going to have a chance to tor. I think tonight, how many more sure to have Members say this country vote for. older people in this country need the cannot afford such coverage. They are Those are some of the key questions. benefits of bargaining power today? So going to say that the costs have al- I will wrap up by way of saying that as I am very hopeful that on this question ready accelerated today; that we are we move into this discussion over the of cost containment we focus on bar- having a demographic tsunami coming next couple of weeks, we have one prin- gaining power. in just a few years, with millions of cipal challenge as we try to pass a com- Senator DASCHLE made it clear that more older people in 2009, 2010, and 2011 prehensive bill and then have it go to it is a priority to him. He will work retiring, and they are going to say the discussions with our colleagues in the with all our colleagues to make sure country cannot afford for the Congress House, and that is to make it clear to that is in a final bill and that we re- to cover prescription drugs for older the country that this is a real effort to member that across this country, and people. that what happened in Eugene, OR, I want to make it clear that, in my help, and not just an exercise in elec- more than 25 years ago has been dupli- opinion, the Congress cannot afford not tion-year rhetoric. The seniors who cated elsewhere, and that what hap- to cover senior citizens, and I want to have come to us at our meetings have pened there is all about making sure give a short example of why this is so watched this Congress and other Con- people could have bargaining power in urgently needed. gresses debate this topic and come the private sector so that senior citi- Not long ago, a physician in Hills- back to it sporadically from time to zens can afford their medicine. boro, OR, in the metropolitan area sur- time. They want to know: Is this on The underlying legislation that is rounding Portland, wrote to me that he the level? Is this a real effort now to do going to give all Americans—not just put a senior citizen in a hospital for a the job right? I believe it is. I believe seniors, but all Americans—quicker ac- 6-week course of antibiotics because it the commitment is there now and that cess to generic drugs is another step was the only way the patient could af- this is not just an election-year exer- toward private sector cost contain- ford the treatment. cise. ment. I commend my colleagues—Sen- Of course, when the senior goes into There are key principles. We have an ator SCHUMER, Senator MCCAIN, and the hospital, Medicare Part A, which opportunity to address the questions of others—who have worked so hard on covers institutional services, picks up cost and coverage in a way that can this legislation. the bill, no questions asked. The check win the support of colleagues on both After I had the honor of serving as gets written by the program to cover sides of the aisle. The question of pri- codirector of the Gray Panthers, I the costs in the hospital. Of course, vate sector bargaining power, ensuring served on the Health Subcommittee in that same condition could have been that the program is voluntary so that the House of Representatives, and we treated under Medicare Part B, the any senior who is comfortable with had a chance to work on what I outpatient portion of Medicare. Our as- their existing coverage can continue it thought was historic legislation. It was sessment is that to spend 6 weeks in an if they choose to do otherwise—these drafted by our distinguished colleague, Oregon hospital probably cost the are principles that are going to be in the senior Senator from Utah, ORRIN Medicare Program $40,000, $50,000, the Graham-Miller proposal that can HATCH, and Congressman WAXMAN. It $60,000, to pick up those huge costs for win the support of colleagues on both struck a good balance between holding an individual who had to be hospital- sides of the aisle. down costs for seniors by making it ized to get the benefit, whereas it prob- These are principles that can bring easier to get access to generic medi- ably would have cost a few hundred the Senate together. Let us make sure cine, while at the same time promoting dollars to have treated that person on that at the end of this 2-week period, innovation and research in the break- an outpatient basis under Part B of the when we have had the opportunity to through products that are so important Medicare Program. help seniors and help all Americans to seniors in this country. When we hear in this Chamber and with respect to the cost of medicine, I believed the Congress got it right in elsewhere that America cannot afford we do not let this opportunity slip that Hatch-Waxman legislation and to cover prescription drugs for seniors, away once again. that the legislation we will be consid- I am going to do my best to remind Mr. President, I yield the floor, and I ering over the next couple of weeks is people about what I heard from that suggest the absence of a quorum. going to continue that kind of balance. physician in Hillsboro, OR, and it has The PRESIDING OFFICER. The We may try to refine it, and I am cer- been repeated all over this country, be- clerk will call the roll. tainly open to that, but I think it will cause I think it is clear we cannot af- continue that crucial balance that was ford not to have this important pro- The assistant legislative clerk pro- put together in the historic Hatch- gram. ceeded to call the roll. Waxman legislation of helping to con- We know what needs to be done in Mr. REID. Mr. President, I ask unan- tain the costs for seniors and others the next few weeks. We ought to pro- imous consent that the order for the through access to generic medicine, mote easier access to generics. It is one quorum call be rescinded. while at the same time promoting the of the key parts of the equation of The PRESIDING OFFICER. Without new cures, the new research, the excit- doing this right. We ought to make objection, it is so ordered.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00075 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.110 pfrm17 PsN: S15PT1 July 16, 2002 S6804 CONGRESSIONAL RECORD — SENATE July 15, 2002 MORNING BUSINESS more than he has asked for, to strive Ryan A. Anderson. The title of the Mr. REID. Mr. President, I ask unan- always to try to make the future of poem is ‘‘University of Dreams.’’ imous consent that the Senate now this country a favorite and favorable I know my colleagues will be as im- proceed to a period for morning busi- place for generations of Americans yet pressed with his beautiful words as I ness, with Senators allowed to speak unborn. was. His talent and extraordinary abil- therein for a period not to exceed 10 He shunned tributes, but he was ity as a poet of any age is an inspira- minutes each. proud of the Presidential Medal of tion to us all. The PRESIDING OFFICER. Without Freedom bestowed on him by President I ask unanimous consent that ‘‘Uni- objection, it is so ordered. Clinton. If he had not just bought Uni- versity of Dreams’’ be printed in the versal Studios, he would have accepted RECORD. f the Cabinet post offered to him by There being no objection, the mate- IN MEMORY OF LEW WASSERMAN President Johnson. He is truly one of rial was ordered to be printed in the those unique human beings whose like RECORD, as follows: Mr. DASCHLE. Mr. President, this is is seldom found, which is why his loss not a happy day for America. On this UNIVERSITY OF DREAMS is so profound to this Nation. I miss (By Ryan A. Anderson) day occurs a memorial service for Lew him. I thank him for being my friend. Wasserman, who died in his 89th year. One seed can bear a stunning bloom And I wish his family Godspeed during One spice can blend some revitalizing per- He is one of the two giants of the these difficult times. American free enterprise system who fume I yield the floor. One individual can devise an entire scheme for over 60 years helped shape and build Mrs. CLINTON. Mr. President, on One coach can pilot a basketball team one of America’s greatest export trade June 3, our Nation lost one of its finest One gift can heal a hurting soul prizes and an extraordinary engine of citizens. Lew Wasserman, long time One smile can let another’s day unroll economic and creative growth: The president and chairman of MCA and One picture can explain an entire stance American film industry. He was a pio- friend of Presidents, died at the age of One song can exchange for your last dance neer of great intellect and innovation. 89. One god can create massive seas He could see what others could not, for Lew came from humble roots, but One god can produce ceaseless trees he had the gift of vision, both rare and never forgot those less fortunate than One god can establish geographical extremes valuable. One god, our God, can establish a he. An entertainment industry vision- University of Dreams He was more than that. He was a pa- ary and modern day mogul, Lew triot in a shining sense of that word. Wasserman, along with his wonderful f He cared about his country and all who wife, Edie, used their position and re- live in it. He believed in the American LOCAL LAW ENFORCEMENT ACT sources to support hospitals and cul- OF 2001 free market system. He was appalled at tural institutions; to provide scholar- Mr. SMITH of Oregon. Mr. President, the behavior of those executives who ships to young people; to fund research I rise today to speak about hate crimes knowingly soiled the honor and integ- to prevent blindness; and to support legislation I introduced with Senator rity of that system. political candidates in whose leader- KENNEDY in March of last year. The He and his wife, Edie, believed in ship they believed. In a rough and tum- Local Law Enforcement Act of 2001 young people and lavished millions of ble industry, he believed in fairness would add new categories to current dollars in scholarships on them at a and thoughtful mediation, and he cared hate crimes legislation sending a sig- dozen universities on a continuing passionately about our political system nal that violence of any kind is unac- basis. His heart and his purse went and democratic ideals. ceptable in our society. without hesitation to the Motion Pic- Lew Wasserman was a mentor and I would like to describe a terrible ture Home and Hospital, giving it mil- role model to an entire industry and a crime that occurred June 10, 2000, in lions of dollars so that those in the great friend to Presidents of both par- Albuquerque, NM. A man in a minivan movie industry, hard-working crafts- ties, including my husband. I was hon- yelling obscenities ran down partici- men, artisans, and creators, when they ored that he was my friend; but, even pants in a gay pride parade. One victim became old and sick, could be cared more than that, I was grateful for his was hit twice in the knees and thrown for. many contributions to America. off the hood. The perpetrator tried to More millions were conferred anony- On September 29, 1995, my husband swerve into the crowd three times be- mously. Lew never sought the spot- awarded Lew Wasserman the Presi- fore police finally pulled him out of the light because fame was not his goal nor dential Medal of Freedom. In his re- vehicle and arrested him. publicity his guide. He had an old-fash- marks, the President said of Lew: ioned view about loyalty. He never I believe that government’s first duty turned his back on a friend nor did he I have met a lot of philanthropists and suc- is to defend its citizens, to defend them cessful people in my life. I don’t know that ever break his word once given to an I ever met anybody that more consistently against the harms that come out of individual, to a cause, to his country. every day looked for another opportunity to hate. The Local Law Enforcement En- Those who worked with him revered do something for somebody else, to give hancement Act of 2001 is now a symbol him because he never considered him- somebody else the chance to enjoy the suc- that can become substance. I believe self their leader but, rather, one who cess that he had in life. I thank you, Lew that by passing this legislation and served his employees and their com- Wasserman. changing current law, we can change pany. f hearts and minds as well. There are many in this Congress Mr. SARBANES. Mr. President, I rise today who can bear personal witness to UNIVERSITY OF DREAMS to note the release on July 15, 2002 of his commitment to be of service to the Mr. DASCHLE. Mr. President, I re- the first annual report of the U.S.- Nation. He was the personal friend of cently attended the ribbon-cutting of China Security Review Commission. Presidents from John Kennedy, Lyndon an exciting new store in Bristol, SD. It Shortly after the enactment in the Johnson, to Bill Clinton. I daresay if was a joyous occasion. The entire town year 2000 of legislation giving China God granted him the time, he would turned out and it looked as good as I’ve Permanent Normal Trade Relations, have known and served George W. ever seen it look in more than a quar- PNTR, the Congress, thanks to the Bush. To me, personally, he was invari- ter-century. leadership of Senator ROBERT C. BYRD, ably kind, thoughtful, responsive to The ‘‘South Dakota Made Store’’ will passed legislation creating the U.S.- my requests for counsel and his wise sell foods, crafts, and art from all over China Security Review Commission. judgment. He never asked me for a our beautiful State. It is an exciting According to the law that established thing. He was, to my mind, the exem- addition to Bristol and northeastern the Commission, its purpose is to plar of the man who wants to give back South Dakota. ‘‘monitor, investigate and report to the more than he gained, to give back to The program included a recitation of Congress on the national security im- his neighborhoods, his industry, to the an inspirational poem by its author. He plications of the bilateral trade and young whose hopes are slender, to offer is a very young man whose name is economic relationship between the

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00076 Fmt 4624 Sfmt 0634 E:\CR\FM\G15JY6.112 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6805 United Stats and the People’s Republic I think this first Report of the Com- ides. President Bush has proposed a of China’’. The legislation which cre- mission makes a very valuable con- plan, the Clear Skies Initiative, that ated the Commission charges it to sub- tribution to our policy deliberations on contains the most dramatic reductions mit an annual report to the Congress China. It will be very helpful to the in these harmful emissions ever pro- with recommendations for action, if Congress as we examine how to respond posed by an administration. The plan any. to the challenges to our country posed would reduce power plant emissions by The bi-partisan Commission is com- by China’s strengthening economic, 70 percent by the year 2018. I will con- posed of twelve commissioners, three military, and political profiles. We can tinue to closely study the Clear Skies of whom were appointed by each of the best craft sensible policies if we better Initiative and its potential impact on Congressional leaders in both the understand the perceptions that Chi- our mountains and across our state. House and Senate. To prepare itself to nese leaders have of us and what their Second, we must reduce emissions in issue its first Report the Commission long-term goals are. Judging the Com- the most efficient and effective manner held nine open hearings and took testi- mission’s Report will help us do both. possible. Our quality of life and future mony from 115 witnesses on 35 separate I salute Senator BYRD for his wisdom economic development depends on how panels. It also contracted for new re- in calling for the creation of the Com- we pursue these reductions. Ten- search on China from a variety of mission and thank all of its Commis- nessee’s families, businesses and com- sources including extensive translation sioners for the important contributions munities depend on affordable and reli- and analysis of articles on economic, that their first Report makes to our able energy. A thoughtful and respon- political, and trade issues that are ap- knowledge of the U.S.-China economic sible approach to address the park’s air pearing in influential Chinese publica- and political relationship. I commend quality issue requires us to closely ex- tions. Members of the Commission also the Report to my fellow Senators. amine any proposal and to ensure it is traveled to China, Taiwan, Japan, and f based on sound science. Tennesseans the headquarters of the World Trade and all Americans deserve no less from CLEARING THE AIR IN THE Organization, WTO, in Geneva. During their elected officials. its deliberations the Commission devel- SMOKIES It is also important to remember oped a broad bi-partisan agreement on Mr. FRIST. Mr. President, the Great that air quality is a comprehensive the issues it was charged by Congress Smoky Mountains National Park is problem that requires a comprehensive to study, and it adopted its first report truly the crown jewel of our national response. Roughly, one-half of the by a vote of 11–1. park system. With towering moun- problems in the Smokies are caused by Among its key findings are that the tains, clear streams, and a diversity of power plants, one third by cars and United States, by acting as China’s wildlife, Tennessee is fortunate to have trucks, and the rest from various other largest export market and a key inves- such a tremendous treasure in our own sources. As we review solutions, we tor in the Chinese economy, has been a backyard. During the Senate’s July must address every source of emis- major contributor to China’s rise as an break, I returned to the Smokies, to sions. For example, I want to commend economic power. It further notes that once again hike Mt. LeConte, this year local officials for Pigeon Forge’s recent our trade relationship with China is with my oldest son, Harrison. Our hike Clean Air Week which promoted reduc- not only our largest trade deficit in ab- up the Alum Cave trail was ing emissions through the use of low solute terms, but is the most unbal- exhilirating, and we spent the night at emissions public transportation. Park anced trading relationship maintained LeConte Lodge, watching the sunset, officials are looking at alternatives to by the United States. and enjoying the hearty meals and transportation problems in the park, The Report further notes that while good fellowship of fellow hikers. which will not only clean up the air, U.S. imports from China constitute My trip to the Smokies this month but enhance the overall visitor’s expe- over 40 percent of China’s exports, U.S. had another purpose, too. This year, I rience. Continued discussion by all, exports to China represent only two invited EPA Administrator Christie local, State and federal officials along percent of our total exports. It finds Whitman to join me in order for her to with concerned citizens, will ensure the that the U.S. trade deficit with China see first-hand the air quality problem most innovative, common-sense solu- is not only in low-skilled labor inten- that plagues our beautiful park. Over tions and ensure we do what’s right for sive items, but also in a majority of the coming months, Congress and the Smokies. items found on the Commerce Depart- President Bush’s Administration will Tennesseans are blessed with an ment’s list of advanced technology analyze and pursue policies to improve abundance of natural resources, and products. It further finds that there is our nation’s air quality. As this process the Great Smoky Mountains National plausible evidence that our burgeoning moves forward, I wanted to make sure Park is world-renowned. However, we trade deficit with China will worsen re- that the President’s top official respon- must be mindful that if we are to con- gardless of China’s entry into the WTO. sible for protecting our environment tinue to enjoy the Smokies, all of us The Report also discusses the fast in- heard directly from park officials and have a responsibility to be good stew- creasing trade and investment linkages saw for herself the unique challenge ards of the park. I am committed to between China and Taiwan which the facing the Smokies. fight for what is best for the Smokies, Commission notes ‘‘could ameliorate As the first EPA Administrator to and I am encouraged by Administrator tensions between the two’’, but which ever visit the park, Administrator Whitman’s recent visit. The Smokies are also increasing ‘‘U.S. dependence Whitman demonstrated her personal are a unique American experience that on the items made in China for our commitment to address the pollution must be preserved for generations to computer electronics and other high problem. We hiked to the park’s high- come, so that fathers and sons, just technology products’’. est point, Clingman’s Dome, where Ad- like Harrison and I, can know the joys The Report makes a number of rec- ministrator Whitman looked out on a of spending time together on a hike in ommendations to better the chances vista where natural visibility should be the woods. for building a better long-term mutu- about 77 miles, but on the hot July day f ally beneficial economic and political we visited, was reduced to only 15 relationship with China. Among these miles. Air entering the southern Appa- CRIMINAL PENALTIES RELATING are: 1. That we put in place new pro- lachians is trapped by geography and TO TERRORIST ATTACKS grams to build a much wider expertise weather patterns, capturing pollution Mr. LEAHY. Mr. President, due to about China both in our society and and harmful emissions in the park, and time constraints, the Congressional among policymakers, and 2. that we no where is that point made more clear Budget Office, CBO, estimate was not take new measures to keep our indus- than at Clingman’s Dome. included in the report to accompany S. trial, scientific, and technological base Any plan to clean up the air in the 2621, an act to provide a definition of from eroding as a result of our eco- Great Smoky Mountains National Park vehicle for purposes of criminal pen- nomic relations with a China whose must contain two essential elements. alties relating to terrorist attacks and government has adopted policies to ex- First, we must reduce harmful emis- other acts of violence against mass pand its own base even at our expense. sions of sulfur dioxide and nitrogen ox- transportation systems. The report is

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00077 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.063 pfrm17 PsN: S15PT1 July 16, 2002 S6806 CONGRESSIONAL RECORD — SENATE July 15, 2002 now available and, therefore, I ask Forty years, two children, Nancy and Wolverines. After a stellar overall per- unanimous consent that the attached Doug, and ten grandchildren later, my formance throughout the year, the CBO estimate be printed in the dear friend Kirke Nelson retired from Wolverines were selected by a com- RECORD. active medical practice on July 1, 2002, mittee to play in the NCAA Champion- There being no objection, the mate- leaving behind a legacy that has en- ships. At the championship, they rial was ordered to be printed in the riched the very fabric of the commu- scored their highest finish in both Wes- RECORD, as follows: nity to which he and his family mean ley records and in Pennsylvania Ath- U.S. CONGRESS, so much. letic Conference history. The team CONGRESSIONAL BUDGET OFFICE, For 40 years, Dr. Van Kirke Nelson dominated the Conference and won the Washington, DC, June 27, 2002. delivered the town’s babies. Lots of ba- Pennsylvania Athletic Conference Hon. PATRICK J. LEAHY, bies. So many, in fact, that it is not Tournament. Chairman, Committee on the Judiciary, U.S. unusual for him to look at a list of Throughout the season, Chris Noll Senate, Washington, DC. set Wesley College records. He finished DEAR MR. CHAIRMAN: The Congressional Flathead High graduates and deter- Budget Office has prepared the enclosed cost mine that he has delivered a majority first in the Glen Health Ship Builders, estimate for S. 2621, an act to provide a defi- of them. the Wesley College Invitational, the nition of vehicle for purposes of criminal Think of it this way. At 10 babies a King’s College National Invitational penalties relating to terrorist attacks and month, 12 months a year, for 41 years, tournaments and the District II Cham- other acts of violence against mass transpor- Kirke delivered roughly 4,920 babies in pionships. The Dover sophomore was tation systems. his career. To put that in perspective, named Pennsylvania Athletic Con- If you wish further details on this esti- ference Player of the Week for four mate, we will be pleased to provide them. those 4,920 new Montanans are a larger group than the entire population of 22 consecutive weeks in addition to a The CBO staff contact is Mark Grabowicz. Ping All-American. He closed the sea- of Montana’s 56 counties. Sincerely, son as the 2002 NCAA National Golf BARRY B. ANDERSON, But the quality of Kirke’s career can- Champion. [FOR DAN L. CRIPPEN, DIRECTOR.] not be measured in numbers. Every day For the past decade Wolverine Coach Enclosure. he changed lives and made the Flat- Congressional Budget Office cost esti- Rick McCall has worked tirelessly to head Valley and Montana a better successfully build and strengthen the mate—S. 2621—an act to provide a definition place to live. Partners, co-workers, pa- of vehicle for purposes of criminal penalties men’s golf program. McCall was named relating to terrorist attacks and other acts tients and their families all know what All-Middle Atlantic Region Coach of of violence against mass transportation sys- I mean. There are more stories than the Year this season, as well as the tems. one can possibly tell, and you can be Pennsylvania Athletic Conference As passed by the Senate on June 25, 2002. assured that although he is retired, Coach of the Year. In 1989 he won the The USA PATRIOT Act of 2001 (Public Law there will be many, many more stories 107–56) established a new federal offense for Delaware State Golf Association An- yet to come. nual Golf Award. Later he was given acts of violence against mass transportation Because you see, Kirke Nelson will systems. S. 2621 would clarify the definition the Pat Knight Award for his lifetime of the term ‘‘vehicle’’ as used in that act. never retire from making a difference contribution to junior golf and two CBO estimates that implementing S. 2621 in the world around him. The phone Philadelphia P.G.A. Junior Golf would result in no significant costs to the may not ring in the middle of the night Awards. He is dedicated to the game. federal government. The legislation could af- anymore, but knowing Kirke as I do, The success of Wesley’s golf team is fect direct spending and receipts through that just means he’ll just be better indicative of the depth of the commu- greater collections of criminal fines, so pay- rested for the challenges that lay nity’s support, and the caliber of stu- as-you-go procedures would apply. However, ahead. dents, faculty, and staff at the College. CBO estimates that any effects on direct I know no better Montanans than I commend those associated with Wes- spending or receipts would be significant be- Kirke and Helen Nelson. I wish for cause of the small number of cases likely to ley College athletics for their commit- be affected. them in this retirement an enriched ment to preparing athletes for success S. 2621 contains on intergovernmental or life with each other and their wonder- both on and off the court. private-sector mandates as defined in the ful family. There are not thanks Today, I congratulate Coach Rick Unfunded Mandates Reform Act and would enough for this kind of career that McCall, Chris Noll and all of the fine impose no costs on state, local, or tribal gov- Kirke has shared with us, but that’s athletes on the golf team. Athletics ernments. what makes America so great. Ours is play a vital role in the development The CBO staff contact for this estimate is a country where dreams come true. and integrity of students. Wesley Col- Mark Grabowicz. This estimate was approved Where promises are our bond. And lege athletes prove that the school’s by Robert A. Sunshine, Assistant Director emphasis on the ‘‘carry-over value of for Budget Analysis. where ordinary careers become ex- traordinary because of the people who athletics’’ is warranted. I am proud of f live them. their achievements as student-ath- ADDITIONAL STATEMENTS Kirke Nelson’s career has been truly letes.∑ extraordinary. And on behalf of a f grateful community, State and nation, RETIREMENT OF DR. VAN KIRKE MESSAGES FROM THE PRESIDENT it is my honor to rise today to say NELSON Messages from the President of the thank you.∑ ∑ United States were communicated to Mr. BAUCUS. Mr. President, I rise f today to recognize an outstanding the Senate by Mr. Thomas, one of his Montanan whose distinguished career IN RECOGNITION OF WESLEY COL- secretaries. has literally changed the course of two LEGE ATHLETICS, COACH RICK f McCALL AND CHRIS NOLL, 2002 generations of families in the Flathead EXECUTIVE MESSAGES REFERRED Valley. In the 1950’s a college student NCAA NATIONAL GOLF CHAM- PIONS As in executive session the PRE- from Southern California came to Mon- SIDING OFFICER laid before the Sen- ∑ tana to be a camp counselor on Flat- Mr. CARPER. Mr. President, I rise ate messages from the President of the head Lake. As many do, he fell in love today to congratulate Wesley College’s United States submitting treaties and with the area and pledged to return Chris Noll, the 2002 NCAA National sundry nominations which were re- after completing medical school to Golf Champion. His victory dem- ferred to the appropriate committees. begin his practice in Kalispell, MT. onstrates the success that comes from (The nominations received today are True to his word, Dr. Van Kirke Nel- hard work, perseverance, experience of printed at the end of the Senate pro- son, his wife Helen and their children a remarkable team, a dedicated coach, ceedings.) Greg, Julie and Kathy packed all their and the support of an outstanding col- f belongings in a beer truck and moved lege. to Kalispell where Kirke became the The championship competition held MESSAGE FROM THE HOUSE town’s first medical specialist, opening in Nebraska last month ended a dra- At 5:30 p.m., a message from the his practice as an OB-GYN in 1962. matic, record-breaking season for the House of Representatives, delivered by

VerDate Jun 13 2002 06:12 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00078 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.062 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6807 Mr. Hays, one of its reading clerks, an- ceived on July 9, 2002; to the Committee on (Rev. Rul. 2001–64) received on July 9, 2002 ; nounced that the House has passed the Environment and Public Works. to the Committee on Finance. following bill, in which it request the EC–7864. A communication from the Prin- EC–7875. A communication from the Chief, cipal Deputy Associate Administrator of the Regulations Unit, Internal Revenue Service, concurrence of the Senate: Environmental Protection Agency, transmit- Department of the Treasury, transmitting, H.R. 4687. An act to provide for the estab- ting, pursuant to law, the report of a rule en- pursuant to law, the report of a rule entitled lishment of investigative teams to assess titled ‘‘Designation of Areas for Air Quality ‘‘Section 832 Discount Factor for 2001’’ (Rev. building performance and emergency re- Planning Purposes; Deletion of Total Sus- Proc. 2001–61) received on July 9, 2002; to the sponse and evacuation procedures in the pended Particulate Designations in Michi- Committee on Finance. wake of any building failure that has re- gan’’ (FRL7242–8) received on July 9, 2002; to EC–7876. A communication from the Chief, sulted in substantial loss of life or that posed the Committee on Environment and Public Regulations Unit, Internal Revenue Service, significant potential of substantial loss of Works. Department of the Treasury, transmitting, life. EC–7865. A communication from the Prin- pursuant to law, the report of a rule entitled cipal Deputy Associate Administrator of the ‘‘2002 CPI Adjustment for Certain Loans f Environmental Protection Agency, transmit- Under Section 1274A’’ (Rev. Rul. 2001–64) re- MEASURES PLACED ON THE ting, pursuant to law, the report of a rule en- ceived on July 9, 2002; to the Committee on CALENDAR titled ‘‘Designation of Areas for Air Quality Finance. Planning Purposes; Deletion of Total Sus- EC–7877. A communication from the Chief, The following bills were read the sec- pension Particulate Designations in Min- Regulations Unit, Internal Revenue Service, ond time, and placed on the calendar: nesota’’ (FRL7242–6) received on July 9, 2002; Department of the Treasury, transmitting, H.R. 4635. An act to amend title 49, United to the Committee on Environment and Pub- pursuant to law, the report of a rule entitled States Code, to establish a program for Fed- lic Works. ‘‘Coordinated Issue: Replacement of Under- EC–7866. A communication from the Prin- eral flight deck officers, and for other pur- ground Storage Tanks at Retail Gasoline cipal Deputy Associate Administrator of the poses. Stations’’ (UILN 263.23–00) received on July Environmental Protection Agency, transmit- H.R. 4954. An act to amend title XVIII of 10, 2002; to the Committee on Finance. ting, pursuant to law, the report of a rule en- EC–7878. A communication from the Chief the Social Security Act to provide for a vol- titled ‘‘National Emission Standards for Haz- of the Regulations Branch, U.S. Customs untary program for prescription drug cov- ardous Air Pollutants for olyvinyl Chloride Service, Department of the Treasury, trans- erage under the Medicare Program, to mod- and Copolymers Production’’ (FRL7243–9) re- mitting, pursuant to law, the report of a rule ernize and reform payments and the regu- ceived on July 9, 2002; to the Committee on entitled ‘‘Elimination of the Tariff-Rate latory structure of the Medicare Program, Environment and Public Works. Quotas on Imported Lamb Meat’’ (RIN1515– and for other purposes. EC–7867. A communication from the Prin- AD09) received on July 11, 2002; to the Com- H.R. 5017. An act to amend the Temporary cipal Deputy Associate Administrator of the mittee on Finance. Emergency Wildfire Suppression Act to fa- Environmental Protection Agency, transmit- EC–7879. A communication from the Direc- cilitate the ability of the Secretary of the ting, pursuant to law, the report of a rule en- tor, Employment Service, Office of Per- Interior and the Secretary of Agriculture to titled ‘‘National Emission Standards for Haz- sonnel Management, transmitting, pursuant enter into reciprocal agreements with for- ardous Air Pollutants: Surface Coating of to law, the report of a rule entitled ‘‘Reduc- eign countries for the sharing of personnel to Large Appliances’’ (FRL7244–1) received on tion in Force Retreat Rights’’ (RIN3206– fight wildfires. July 9, 2002; to the Committee on Environ- AJ14) received on June 26, 2002; to the Com- f ment and Public Works. mittee on Governmental Affairs. EC–7868. A communication from the Chief, EC–7880. A communication from the Dep- MEASURES READ THE FIRST TIME Regulations Unit, Internal Revenue Service, uty Archivist of the United States, National Department of the Treasury, transmitting, Archives and Records Administration, trans- The following bill was read the first pursuant to law, the report of a rule entitled mitting, pursuant to law, the report of a rule time: ‘‘1259 Short Sale’’ (Rev. Rul. 2002–44, 2002–28) entitled ‘‘Debt Collection’’ (RIN3095–AA77) S. 2. A bill to amend title XVIII of the So- received on June 24, 2002; to the Committee received on July 9, 2002; to the Committee on cial Security Act to provide for a medicare on Finance. Governmental Affairs. voluntary prescription drug delivery pro- EC–7869. A communication from the Chief, EC–7881. A communication from the Dep- gram under the medicare program, to mod- Regulations Unit, Internal Revenue Service, uty Archivist of the United States, National ernize the medicare program, and for other Department of the Treasury, transmitting, Archives and Records Administration, trans- purposes. pursuant to law, the report of a rule entitled mitting, pursuant to law, the report of a rule ‘‘Tax Avoidance Using Inflated Basis’’ (No- entitled ‘‘Nixon Presidential Materials; Re- f tice 2002–21) received on June 26, 2002; to the production’’ (RIN3095–AB07) received on July EXECUTIVE AND OTHER Committee on Finance. 9, 2002; to the Committee on Governmental COMMUNICATIONS EC–7870. A communication from the Chief, Affairs. Regulations Unit, Internal Revenue Service, EC–7882. A communication from the Sec- The following communications were Department of the Treasury, transmitting, retary of Education, transmitting, pursuant laid before the Senate, together with pursuant to law, the report of a rule entitled to law, the report of the Office of the Inspec- accompanying papers, reports, and doc- ‘‘Update of Mortality Tables for 417(e)’’ (Rev. tor General for the period from October 1, uments, which were referred as indi- Rul. 2001–67) received on July 9, 2002; to the 2001 to March 31, 2002; to the Committee on Committee on Finance. Governmental Affairs. cated: EC–7871. A communication from the Chief, EC–7883. A communication from the Ad- EC–7861. A communication from the Prin- Regulations Unit, Internal Revenue Service, ministrator, General Service Administra- cipal Deputy Associate Administrator of the Department of the Treasury, transmitting, tion, transmitting, pursuant to law, the re- Environmental Protection Agency, transmit- pursuant to law, the report of a rule entitled port of the Office of the Inspector General ting, pursuant to law, the report of a rule en- ‘‘EGTTRA Changes in User Fees’’ (Notice for the period from October 1, 2001 through titled ‘‘Approval and Promulgation of Imple- 2002–1) received on July 9, 2002; to the Com- March 31, 2002 together with a report pro- mentation Plans Georgia: Approval of Revi- mittee on Finance. viding management’s perspective on the im- sions to State Implementation Plan’’ EC–7872. A communication from the Chief, plementation status of audit recommenda- (FRL7244–5) received on July 9, 2002; to the Regulations Unit, Internal Revenue Service, tions; to the Committee on Governmental Committee on Environment and Public Department of the Treasury, transmitting, Affairs. Works. pursuant to law, the report of a rule entitled EC–7884. A communication from the Chair- EC–7862. A communication from the Prin- ‘‘Questions and Answers Regarding Dividend man of the Council of the District of Colum- cipal Deputy Associate Administrator of the Elections Under Section 404(k)’’ (Notice 2002– bia, transmitting, pursuant to law, a report Environmental Protection Agency, transmit- 2) received on July 9, 2002; to the Committee on D.C. Act 14–388, ‘‘College Savings Pro- ting, pursuant to law, the report of a rule en- on Finance. gram Temporary Act of 2002’’; to the Com- titled ‘‘Approval and Promulgation of Imple- EC–7873. A communication from the Chief, mittee on Governmental Affairs. mentation Plans Georgia: Approval of Revi- Regulations Unit, Internal Revenue Service, EC–7885. A communication from the Chair- sions to State Implementation Plan’’ Department of the Treasury, transmitting, man of the Council of the District of Colum- (FRL7244–7) received on July 9, 2002; to the pursuant to law, the report of a rule entitled bia, transmitting, pursuant to law, a report Committee on Environment and Public ‘‘Section 846 Discount Factors for 2001’’ (Rev. on D.C. Act 14–389, ‘‘Mental Health Commit- Works. Proc. 2001–60) received on July 9, 2002; to the ment Clarification Temporary Act of 2002’’; EC–7863. A communication from the Prin- Committee on Finance. to the Committee on Governmental Affairs. cipal Deputy Associate Administrator of the EC–7874. A communication from the Chief, EC–7886. A communication from the Chair- Environmental Protection Agency, transmit- Regulations Unit, Internal Revenue Service, man of the Council of the District of Colum- ting, pursuant to law, the report of a rule en- Department of the Treasury, transmitting, bia, transmitting, pursuant to law, a report titled ‘‘Approval and Promulgation of Imple- pursuant to law, the report of a rule entitled on D.C. Act 14–387, ‘‘Excepted and Executive mentation Plans; Indiana’’ (FRL7235–2) re- ‘‘CPI Adjustment for Section 7872(g) for 2002’’ Service Domicile Requirement Amendment

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00079 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.057 pfrm17 PsN: S15PT1 July 16, 2002 S6808 CONGRESSIONAL RECORD — SENATE July 15, 2002 Act of 2002’’; to the Committee on Govern- 3, 2002; to the Committee on Agriculture, Nu- purchase price limitation under mort- mental Affairs. trition, and Forestry. gage subsidy bond rules based on me- EC–7887. A communication from the Chair- dian family income, and for other pur- man of the Council of the District of Colum- f poses. bia, transmitting, pursuant to law, a report REPORTS OF COMMITTEES on D.C. Act 14–385, ‘‘Washington Convention S. 701 Center Authority Oversight and Manage- The following reports of committees At the request of Mr. BAUCUS, the ment Continuity Amendment Act of 2002’’; to were submitted: name of the Senator from New York the Committee on Governmental Affairs. By Mr. BIDEN, from the Committee on (Mrs. CLINTON) was added as a cospon- EC–7888. A communication from the Chair- Foreign Relations: sor of S. 701, a bill to amend the Inter- man of the Council of the District of Colum- Report to accompany S. 2487, A bill to pro- bia, transmitting, pursuant to law, a report nal Revenue Code of 1986 to provide vide for global pathogen surveillance and re- special rules for the charitable deduc- on D.C. Act 14–384, ‘‘Capitol Hill North Ex- sponse. (Rept. No. 107–210). pansion and Expansion of Business Improve- tion for conservation contributions of ment Districts Amendment Act of 2002’’; to f land by eligible farmers and ranchers, the Committee on Governmental Affairs. INTRODUCTION OF BILLS AND and for other purposes. EC–7889. A communication from the Chair- S. 913 man of the Council of the District of Colum- JOINT RESOLUTIONS bia, transmitting, pursuant to law, a report The following bills and joint resolu- At the request of Ms. SNOWE, the on D.C. Act 14–399, ‘‘Human Rights Amend- tions were introduced, read the first names of the Senator from Hawaii (Mr. ment Act of 2002’’; to the Committee on Gov- and second times by unanimous con- INOUYE) and the Senator from Idaho ernmental Affairs. sent, and referred as indicated: (Mr. CRAIG) were added as cosponsors of EC–7890. A communication from the Chair- S. 913, a bill to amend title XVIII of the man of the Council of the District of Colum- By Mr. GRASSLEY (for himself, Ms. Social Security Act to provide for cov- SNOWE, Mr. JEFFORDS, Mr. BREAUX, bia, transmitting, pursuant to law, a report erage under the medicare program of on D.C. Act 14–398, ‘‘RLA Revitalization Cor- Mr. HATCH, Ms. COLLINS, Ms. poration Amendment Act of 2002’’; to the LANDRIEU, Mr. HUTCHINSON, and Mr. all oral anticancer drugs. Committee on Governmental Affairs. DOMENICI): S. 917 EC–7891. A communication from the Chair- S. 2. A bill to amend title XVIII of the So- At the request of Ms. COLLINS, the man of the Council of the District of Colum- cial Security Act to provide for a medicare name of the Senator from Alaska (Mr. voluntary prescription drug delivery pro- bia, transmitting, pursuant to law, a report STEVENS) was added as a cosponsor of gram under the medicare program, to mod- on D.C. Act 14–403, ‘‘Fiscal Year Budget Sup- S. 917, a bill to amend the Internal port Act of 2002’’; to the Committee on Gov- ernize the medicare program, and for other ernmental Affairs. purposes; read the first time. Revenue Code of 1986 to exclude from EC–7892. A communication from the Prin- By Mr. DAYTON (for himself and Mr. gross income amounts received on ac- cipal Deputy Associate Administrator of the WELLSTONE): count of claims based on certain un- Environmental Protection Agency, transmit- S. 2728. A bill to provide emergency agri- lawful discrimination and to allow in- ting, pursuant to law, the report of a rule en- cultural disaster assistance; to the Com- come averaging for backpay and titled ‘‘Mesotrione; Pesticide Tolerances for mittee on Agriculture, Nutrition, and For- frontpay awards received on account of Emergency Exemptions’’ (FRL7184–2) re- estry. such claims, and for other purposes. ceived on July 9, 2002; to the Committee on By Mr. GRASSLEY (for himself, Ms. Agriculture, Nutrition, and Forestry. SNOWE, Mr. JEFFORDS, Mr. BREAUX, S. 1042 EC–7893. A communication from the Prin- Mr. HATCH, Ms. COLLINS, Ms. At the request of Mr. INOUYE, the cipal Deputy Associate Administrator of the LANDRIEU, Mr. HUTCHINSON, and Mr. name of the Senator from Nevada (Mr. Environmental Protection Agency, transmit- DOMENICI): REID) was added as a cosponsor of S. ting, pursuant to law, the report of a rule en- S. 2729. A bill to amend title XVIII of the 1042, a bill to amend title 38, United titled ‘‘Halosulfuron; Pesticide Tolerances Social Security Act to provide for a medi- States Code, to improve benefits for for Emergency Exemptions’’ (FRL7283–2) re- care voluntary prescription drug delivery ceived on July 9, 2002; to the Committee on program under the medicare program, to Filipino veterans of World War II, and Agriculture, Nutrition, and Forestry. modernize the medicare program, and for for other purposes. EC–7894. A communication from the Prin- other purposes; to the Committee on Fi- S. 1394 cipal Deputy Associate Administrator of the nance. At the request of Mr. ENSIGN, the Environmental Protection Agency, transmit- name of the Senator from New Jersey ting, pursuant to law, the report of a rule en- f (Mr. CORZINE) was added as a cosponsor titled ‘‘Extension of Tolerances for Emer- ADDITIONAL COSPONSORS gency Exemptions Multiple Chemicals’’ of S. 1394, a bill to amend title XVIII of (FRL7183–6) received on July 9, 2002; to the S. 490 the Social Security Act to repeal the Committee on Agriculture, Nutrition, and At the request of Mr. EDWARDS, the medicare outpatient rehabilitation Forestry. name of the Senator from Georgia (Mr. therapy caps. EC–7895. A communication from the Ad- CLELAND) was added as a cosponsor of S. 1581 ministrator, Agricultural Marketing Serv- S. 490, a bill to provide grants to law ice, Fruit and Vegetable Programs, Depart- At the request of Mr. MURKOWSKI, the ment of Agriculture, transmitting, pursuant enforcement agencies that ensure that name of the Senator from Georgia (Mr. to law, the report of a rule entitled ‘‘Hazel- law enforcement officers employed by MILLER) was added as a cosponsor of S. nuts Grown in Oregon and Washington; Es- such agencies are afforded due process 1581, a bill to amend the Internal Rev- tablishment of Interim Final and Final Free when involved in a case that may lead enue Code of 1986 to allow a business and Restricted Percentages for the 2001–2002 to dismissal, demotion, suspension, or deduction for the purchase and instal- Marketing Year’’ (Doc. No. FV02–982–1 FIR transfer. lation of qualifying security enhance- EC–7896. A communication from the Ad- S. 554 ment property. ministrator, Research and Promotion Branch, Agricultural Marketing Service, De- At the request of Mrs. MURRAY, the S. 1678 partment of Agriculture, transmitting, pur- name of the Senator from New Mexico At the request of Mr. MCCAIN, the suant to law, the report of a rule entitled (Mr. BINGAMAN) was added as a cospon- name of the Senator from South Da- ‘‘Rules of Practice and Procedure Governing sor of S. 554, a bill to amend title XVIII kota (Mr. JOHNSON) was added as a co- Proceedings Under Research, Promotion, and of the Social Security Act to expand sponsor of S. 1678, a bill to amend the Education Programs’’ (Doc. No. FV–02–709) medicare coverage of certain self-in- Internal Revenue Code of 1986 to pro- received on July 9, 2002; to the Committee on Agriculture, Nutrition, and Forestry. jected biologicals. vide that a member of the uniformed EC–7897. A communication from the Under S. 677 services or the Foreign Service shall be Secretary for Food, Nutrition, and Consumer At the request of Mr. HATCH, the treated as using a principal residence Services, Food and Nutrition Service, De- name of the Senator from California while away from home on qualified of- partment of Agriculture, transmitting, pur- (Mrs. BOXER) was added as a cosponsor ficial extended duty in determining the suant to law, the report of a rule entitled of S. 677, a bill to amend the Internal exclusion of gain from the sale of such ‘‘Food Stamp Program: Work Provisions of residence. the Personal Responsibility and Work Oppor- Revenue Code of 1986 to repeal the re- tunity Reconciliation Act of 1996 and Food quired use of certain principal repay- S. 1686 Stamp Provisions of the Balanced Budget ments on mortgage subsidy bond fi- At the request of Mr. KENNEDY, the Act of 1997’’ (RIN0584–AC45) received on July nancing to redeem bonds, to modify the name of the Senator from Rhode Island

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00080 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.059 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6809 (Mr. REED) was added as a cosponsor of S. 2559 Massachusetts (Mr. KERRY) were added S. 1686, a bill to amend title XVIII of At the request of Mr. EDWARDS, the as cosponsors of S. 2714, a bill to extend the Social Security Act to provide for name of the Senator from Louisiana and expand the Temporary Extended patient protection by limiting the (Ms. LANDRIEU) was added as a cospon- Unemployment Compensation Act of number of mandatory overtime hours a sor of S. 2559, a bill to expand research 2002. nurse may be required to work in cer- for women in trauma. S. 2715 tain providers of services to which pay- S. 2611 At the request of Mrs. CLINTON, the ments are made under the medicare At the request of Mr. REED, the name names of the Senator from New Jersey program. of the Senator from Oregon (Mr. SMITH) (Mr. CORZINE) and the Senator from S. 1868 was added as a cosponsor of S. 2611, a Massachusetts (Mr. KERRY) were added At the request of Mr. BIDEN, the bill to reauthorize the Museum and Li- as cosponsors of S. 2715, a bill to pro- name of the Senator from New Jersey brary Services Act, and for other pur- vide an additional extension of the pe- (Mr. CORZINE) was added as a cosponsor poses. riod of availability of unemployment of S. 1868, a bill to establish a national S. 2613 assistance under the Robert T. Stafford center on volunteer and provider At the request of Mr. LIEBERMAN, the Disaster Relief an Emergency Assist- screening to reduce sexual and other names of the Senator from Ohio (Mr. ance Act in the case of victims of the abuse of children, the elderly, and indi- DEWINE) and the Senator from Ten- terrorist attacks of September 11, 2001. viduals with disabilities. nessee (Mr. FRIST) were added as co- S. RES. 242 S. 2204 sponsors of S. 2613, a bill to amend sec- At the request of Mr. THURMOND, the At the request of Mr. EDWARDS, the tion 507 of the Omnibus Parks and Pub- names of the Senator from Rhode Is- name of the Senator from Louisiana lic Lands Management Act of 1996 to land (Mr. REED), the Senator from Kan- (Ms. LANDRIEU) was added as a cospon- authorize additional appropriations for sas (Mr. BROWNBACK), the Senator from sor of S. 2204, to amend the Public historically black colleges and univer- North Carolina (Mr. HELMS), the Sen- Health Service Act to improve treat- sities, to decrease the cost-sharing re- ator from Illinois (Mr. FITZGERALD) and ment for the mental health and sub- quirement relating to the additional the Senator from Nevada (Mr. REID) stance abuse needs of women with his- appropriations, and for other purposes. were added as cosponsors of S. Res. 242, tories of trauma, including domestic S. 2626 a resolution designating August 16, and sexual violence. At the request of Mr. KENNEDY, the 2002, as ‘‘National Airborne Day’’. S. 2219 name of the Senator from Washington S. CON. RES. 11 At the request of Mr. EDWARDS, the (Mrs. MURRAY) was added as a cospon- names of the Senator from Massachu- At the request of Mrs. FEINSTEIN, the sor of S. 2626, a bill to protect the pub- name of the Senator from Minnesota setts (Mr. KERRY) and the Senator from lic health by providing the Food and Louisiana (Ms. LANDRIEU) were added (Mr. DAYTON) was added as a cosponsor Drug Administration with certain au- of S. Con. Res. 11, a concurrent resolu- as cosponsors of S. 2219, a bill to pro- thority to regulate tobacco products. vide for compassionate payments with tion expressing the sense of Congress S. 2647 regard to individuals who contracted to fully use the powers of the Federal At the request of Ms. SNOWE, the the human immunodeficiency virus due Government to enhance the science name of the Senator from Wisconsin to provision of a contaminated blood base required to more fully develop the (Mr. FEINGOLD) was added as a cospon- transfusion, and for other purposes. field of health promotion and disease sor of S. 2647, a bill to require that ac- S. 2425 prevention, and to explore how strate- tivities carried out by the United At the request of Mr. BAYH, the name gies can be developed to integrate life- States in Afghanistan relating to gov- of the Senator from South Dakota (Mr. style improvement programs into na- ernance, reconstruction and develop- JOHNSON) was added as a cosponsor of tional policy, our health care system, ment, and refugee relief and assistance S. 2425, a bill to prohibit United States schools, workplaces, families and com- will support the basic human rights of assistance and commercial arms ex- munities. women and women’s participation and ports to countries and entities sup- S. CON. RES. 107 leadership in these areas. porting international terrorism. At the request of Mr. CRAIG, the S. 2663 S. 2480 name of the Senator from Oregon (Mr. At the request of Mr. MCCAIN, the At the request of Mr. LEAHY, the SMITH) was added as a cosponsor of S. names of the Senator from California name of the Senator from Nebraska Con. Res. 107, a concurrent resolution (Mr. HAGEL) was added as a cosponsor (Mrs. FEINSTEIN) and the Senator from expressing the sense of Congress that of S. 2663, a bill to permit the designa- North Dakota (Mr. DORGAN) were added Federal land management agencies as cosponsors of S. 2480, a bill to amend tion of Israeli-Turkish qualifying in- should fully support the Western Gov- title 18, United States Code, to exempt dustrial zones. ernors Association ‘‘Collaborative 10- qualified current and former law en- S. 2671 year Strategy for Reducing Wildland forcement officers from state laws pro- At the request of Mr. EDWARDS, the Fire Risks to Communities and the En- hibiting the carrying of concealed name of the Senator from Vermont vironment’’, as signed August 2001, to handguns. (Mr. JEFFORDS) was added as a cospon- reduce the overabundance of forest S. 2528 sor of S. 2671, a bill to amend the Child fuels that place national resources at At the request of Mr. DOMENICI, the Care and Development Block Grant Act high risk of catastrophic wildfire, and name of the Senator from Kansas (Mr. of 1990 to provide for child care quality prepare a National prescribed Fire ROBERTS) was added as a cosponsor of improvements for children with dis- Strategy that minimizes risks of es- S. 2528, a bill to establish a National abilities or other special needs, and for cape. Drought Council within the Federal other purposes. S. CON. RES. 122 Emergency Management Agency, to S. 2672 At the request of Ms. SNOWE, the improve national drought prepared- At the request of Mr. BINGAMAN, the names of the Senator from South Da- ness, mitigation, and response efforts, name of the Senator from Oregon (Mr. kota (Mr. JOHNSON) and the Senator and for other purposes. SMITH) was added as a cosponsor of S. from New Jersey (Mr. CORZINE) were S. 2533 2672, a bill to provide opportunities for added as cosponsors of S. Con. Res. 122, At the request of Mrs. FEINSTEIN, the collaborative restoration projects on a concurrent resolution expressing the name of the Senator from Missouri National Forest System and other pub- sense of Congress that security, rec- (Mrs. CARNAHAN) was added as a co- lic domain lands, and for other pur- onciliation, and prosperity for all Cyp- sponsor of S. 2533, a bill to amend title poses. riots can be best achieved within the II of the Social Security Act to provide S. 2714 context of membership in the European for miscellaneous enhancements in So- At the request of Mrs. CLINTON, the Union which will provide significant cial Security benefits, and for other names of the Senator from New Jersey rights and obligations for all Cypriots, purposes. (Mr. CORZINE) and the Senator from and for other purposes.

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00081 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.060 pfrm17 PsN: S15PT1 July 16, 2002 S6810 CONGRESSIONAL RECORD — SENATE July 15, 2002 AMENDMENT NO. 4235 companies, to increase corporate re- PRIVILEGES OF THE FLOOR At the request of Mr. ALLEN, the sponsibility and the usefulness of cor- Mr. KENNEDY. Mr. President, I ask name of the Senator from Nevada (Mr. porate financial disclosure, to protect unanimous consent that Deborah ENSIGN) was added as a cosponsor of the objectivity and independence of se- Forbes of the Labor Committee be amendment No. 4235 intended to be pro- curities analysts, to improve Securities given access of the floor during delib- posed to S. 2673, an original bill to im- and Exchange Commission resources eration of this legislation. prove quality and transparency in fi- and oversight, and for other purposes. The PRESIDING OFFICER. Without nancial reporting and independent au- f objection, it is so ordered. dits and accounting services for public Mr. ENZI. Mr. President, I ask unani- NOTICES OF HEARINGS/MEETINGS companies, to create a Public Company mous consent that privilege of the Accounting Oversight Board, to en- floor be granted to Joe Laird during hance the standard setting process for PERMANENT SUBCOMMITTEE ON INVESTIGATIONS the remainder of the debate and the accounting practices, to strengthen the Mr. LEVIN. Mr. President, I would votes on this bill we are considering. independence of firms that audit public like to announce for the information of The PRESIDING OFFICER. Without companies, to increase corporate re- the Senate and the public that the Per- objection, it is so ordered. sponsibility and the usefulness of cor- manent Subcommittee on Investiga- porate financial disclosure, to protect f tions of the Committee on Government the objectivity and independence of se- Affairs will hold hearings entitled ‘‘The REMOVAL OF INJUNCTION OF SE- curities analysts, to improve Securities Role of the Financial Institutions In CRECY—TREATY DOCUMENTS and Exchange Commission resources Enron’s Collapse.’’ These hearings are NOS. 107–12 and 107–13 and oversight, and for other purposes. a continuation of Subcommittee hear- Mr. REID. Mr. President, as in execu- AMENDMENT NO. 4240 ings on the collapse of Enron Corp., fo- tive session, I ask unanimous consent At the request of Mr. ALLEN, the cusing on the role of major financial that the injunction of secrecy be re- name of the Senator from Nevada (Mr. institutions and how they contributed moved from the following treaties ENSIGN) was added as a cosponsor of to Enron’s use of complex transactions transmitted to the Senate today by the amendment No. 4240 intended to be pro- to make the company look better fi- President of the United States: posed to S. 2673, an original bill to im- nancially than it actually was. Treaty with Sweden on Mutual Legal prove quality and transparency in fi- The hearing will take place on Tues- Assistance in Criminal Matters, Treaty nancial reporting and independent au- day, July 23, and Tuesday, July 30, 2002, Document No. 107–12; dits and accounting services for public at 9:30 a.m. each day, in room 342 of the Treaty with Belize on Mutual Legal companies, to create a Public Company Dirksen Senate Office Building. For Assistance in Criminal Matters, Treaty Accounting Oversight Board, to en- further information, please contact Document No. 107–13. hance the standard setting process for Elise J. Bean of the Subcommittee I further ask unanimous consent that accounting practices, to strengthen the staff at 224–9505. the treaties be considered as having independence of firms that audit public COMMITTEE ON ENERGY AND NATURAL been read the first time; that they be companies, to increase corporate re- RESOURCES referred, with accompanying papers, to sponsibility and the usefulness of cor- Mr. BINGAMAN. Mr. President, I the Committee on Foreign Relations porate financial disclosure, to protect would like to announce for the infor- and ordered to be printed; and that the the objectivity and independence of se- mation of the Senate and the public President’s messages be printed in the curities analysts, to improve Securities that a hearing has been scheduled be- RECORD. and Exchange Commission resources fore the Subcommittee on National The PRESIDING OFFICER. Without and oversight, and for other purposes. Parks of the Committee on Energy and objection, it is so ordered. AMENDMENT NO. 4241 Natural Resources. The messages of the President are as At the request of Mr. ALLEN, the The hearing will take place on Tues- follows: name of the Senator from Nevada (Mr. day, July 23, 2002, at 2:30 p.m. in room To the Senate of the United States: ENSIGN) was added as a cosponsor of 366 of the Dirksen Senate Office Build- With a view to receiving the advice amendment No. 4241 intended to be pro- ing in Washington, D.C. and consent of the Senate to ratifica- posed to S. 2673, an original bill to im- The purpose of the hearing is to re- tion, I transmit herewith the Treaty prove quality and transparency in fi- ceive testimony on the following bills: Between the Government of the United nancial reporting and independent au- S. 2494, to revise the boundary of the States of America and the Government dits and accounting services for public Petrified Forest National Park in the of the Kingdom of Sweden on Mutual companies, to create a Public Company State of Arizona, and for other pur- Legal Assistance in Criminal Matters, Accounting Oversight Board, to en- poses; S. 2598, to enhance the criminal signed at Stockholm on December 17, hance the standard setting process for penalties for illegal trafficking of ar- 2001. I transmit also, for the informa- accounting practices, to strengthen the chaeological resources, and for other tion of the Senate, the report of the independence of firms that audit public purposes; S. 2727, to provide for the Department of State with respect to companies, to increase corporate re- protection of paleontological resources the Treaty. sponsibility and the usefulness of cor- on Federal lands, and for other pur- The Treaty is one of a series of mod- porate financial disclosure, to protect poses; and H.R. 3954, to designate cer- ern mutual legal assistance treaties the objectivity and independence of se- tain waterways in the Caribbean Na- being negotiated by the United States curities analysts, to improve Securities tional Forest in the Commonwealth of in order to counter criminal activities and Exchange Commission resources Puerto Rico as components of the Na- more effectively. The Treaty should be and oversight, and for other purposes. tional Wild and Scenic Rivers System, an effective tool to assist in the pros- AMENDMENT NO. 4283 and for other purposes. ecution of a wide variety of crimes, in- At the request of Mr. LEVIN, the Because of the limited time available cluding terrorism, drug trafficking, name of the Senator from Florida (Mr. for the hearing, witnesses may testify and fraud and other white-collar of- GRAHAM) was added as a cosponsor of by invitation only. However, those fenses. The Treaty is self-executing. amendment No. 4283 intended to be pro- wishing to submit written testimony The Treaty provides for a broad posed to S. 2673, an original bill to im- for the hearing record should send two range of cooperation in criminal mat- prove quality and transparency in fi- copies of their testimony to the Com- ters. Mutual assistance available under nancial reporting and independent au- mittee on Energy and Natural Re- the Treaty includes: locating or identi- dits and accounting services for public sources, United States Senate, 312 fying persons or items; serving docu- companies, to create a Public Company Dirksen Senate Office Building, Wash- ments; taking the testimony or state- Accounting Oversight Board, to en- ington, DC 20510. ments of persons; transferring persons hance the standard setting process for For further information, please con- in custody for testimony or other pur- accounting practices, to strengthen the tact David Brooks of the Committee poses; providing documents, records, independence of firms that audit public staff at (202) 224–9863. and items; executing requests for

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00082 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.060 pfrm17 PsN: S15PT1 July 16, 2002 July 15, 2002 CONGRESSIONAL RECORD — SENATE S6811 searches and seizures; assisting in pro- Mr. REID. I ask for its second read- same time, it limits that protection by ceedings related to immobilization and ing and then would object to my own allowing generic competition. It allows forfeiture of assets and restitution; ini- request. generic drug manufacturers to take a tiating criminal proceedings in the Re- The PRESIDING OFFICER. The ob- patented drug, produce it, and sell it at quested State; and any other form of jection having been heard, the bill will a much lower price, a competitive assistance consistent with the purposes receive its second reading on the next price, driving down the price of the of this Treaty and not prohibited by legislative day. drug for consumers. Since 1984 the scales, it appears, have the laws of the State from whom the f assistance is requested. tilted too much in favor of the name- I recommend that the Senate give MEASURE RETURNED TO THE brand producer of the drug, the patent early and favorable consideration to CALENDAR—S. 2673 holder of the drug, and too much the Treaty and give its advice and con- The PRESIDING OFFICER. Under against the generic manufacturers. sent to ratification. the previous order, passage of S. 2673 is There have been some problems on THE WHITE HOUSE, July 15, 2002. vitiated. The bill is returned to the cal- both sides of this issue. Loopholes of the Hatch-Waxman Act are being ex- To the Senate of the United States: endar. ploited, giving one side an advantage With a view to receiving the advice f over the other. In fact, one of the and consent of the Senate to ratifica- ORDERS FOR TUESDAY, JULY 16, things that has occurred is some ge- tion, I transmit herewith the Treaty 2002 neric companies have challenged pat- Between the Government of the United ents and have gotten the right to States of America and the Government Mr. REID. Mr. President, I appreciate produce patented drugs, because they of Belize on Mutual Legal Assistance in the Senator from Alabama allowing us have challenged it using the procedures Criminal Matters, signed at Belize on to do the closing before his remarks. of the act. Then they enter into an September 19, 2000, and a related ex- I ask unanimous consent that when agreement with the original patent change of notes signed at Belize on the Senate completes its business holder to not produce the generic September 18 and 22, 2000. I transmit today, it stand in adjournment until drug—thereby agreeing to not compete also, for the information of the Senate, 9:30 a.m., Tuesday, July 16; that fol- with the name-brand manufacturer. the report of the Department of State lowing the prayer and the pledge, the This is a loophole that needs to be with respect to the Treaty. morning hour be deemed expired, the Journal of proceedings be approved to eliminated. The Treaty is one of a series of mod- I believe S.812 will help recover the date, the time for the two leaders be ern mutual legal assistance treaties delicate balance that was originally in- reserved for their use later in the day, being negotiated by the United States tended by the Hatch-Waxman Act. I be- and there be a period for morning busi- in order to counter criminal activities lieve it will help contain the rising ness until 10:30 a.m., with Senators per- more effectively. The Treaty should be costs of prescription drugs. I believe it mitted to speak for up to 10 minutes an effective tool to assist in the pros- will also encourage production of drugs each; with the first half under the con- ecution of a wide variety of crimes, in- the way we intended, but at the same trol of the Republican leader or his des- cluding drug trafficking, money laun- time will eliminate unfair patent ex- ignee and the second half of the time dering, and terrorism offenses. The tensions. I believe that by reporting under the control of the majority lead- Treaty is self-executing. this bill out of committee, we are mov- er or his designee; that at 10:30, the The Treaty provides for a broad ing in the right direction. I salute Sen- range of cooperation in criminal mat- Senate resume consideration of the ators EDWARDS, COLLINS, SCHUMER, and ters. Mutual assistance available under motion to proceed to S. 812 regarding affordable pharmaceuticals; further, MCCAIN who have worked to produce the providing documents, records, and this legislation. I think it is going to articles of evidence; locating or identi- that the Senate recess from 12:30 to 2:15 p.m. for the weekly party conferences. be something we can all support. fying persons; serving documents; I know we will be beginning to talk The PRESIDING OFFICER. Without transferring persons in custody for tes- about prescription drugs in general objection, it is so ordered. timony or other purposes; executing re- later this week, and I think it is time quests for searches and seizures; assist- f to do so. This Congress voted—I ing in proceedings related to immo- ORDER FOR ADJOURNMENT voted—for a budget last year that set bilization and forfeiture of assets, res- aside $300 billion for a prescription titution to the victims of crime and Mr. REID. Mr. President, if there is drug benefit. However, we were not collection of fines; and any other form no further business to come before the able to pass a prescription drug benefit of assistance not prohibited by the Senate, I ask unanimous consent that last year, and it remains to be seen laws of the State from whom the as- the Senate stand in adjournment fol- whether we will be successful this year. sistance is requested. lowing the remarks of the Senator There are a lot of different views I recommend that the Senate give from Alabama, Mr. SESSIONS, under the about how prescription drugs should be early and favorable consideration to previous order. handled. Over the Fourth of July week- the Treaty, and give its advice and con- The PRESIDING OFFICER (Mr. DUR- end, I visited two assisted care living sent to ratification. BIN). Without objection, it is so or- facilities in Alabama: Chateau THE WHITE HOUSE, July 15, 2002. dered. Vestavia near Birmingham and West- f f minster in Mobile, Alabama. I talked with seniors who have high drug bills PRESCRIPTION DRUGS MEASURE READ THE FIRST and listened to what they had to say. I TIME—S. 2 Mr. SESSIONS. Mr. President, I wanted to have their input as the Sen- thank the Senator from Nevada for his Mr. REID. Mr. President, I under- ate moved toward considering a pre- courtesies, as always. stand that S. 2, the 21st Century Medi- scription drug proposal. They told me Mr. President, I serve on the Health, care Act, is at the desk. I ask for its that they are most concerned about Education, Labor and Pensions Com- first reading. high drug prices. I spoke with seniors mittee and am pleased that we re- The PRESIDING OFFICER. The that are struggling to pay for their ported out a bill to improve generic clerk will read the bill by title. drugs. drug competition in America and to ad- My mother is in her eighties. She has The assistant legislative clerk read dress the high cost of prescription a $300-a-month drug bill. She is in rel- as follows: drugs. The Hatch-Waxman Act, which atively good health, although she has A bill (S. 2) to amend title XVIII of the So- passed in 1984, is considered to be a re- arthritis and high blood pressure. Her cial Security Act to provide for a medicare voluntary prescription drug delivery pro- markable piece of legislation. It strives sister’s drug bill is even higher than gram under the medicare program, to mod- to provide patent protection to compa- that each month. They are both in an ernize the medicare program, and for other nies that invests hundreds of millions assisted living center. They are getting purposes. of dollars to develop new drugs. At the by, but it is not easy. For people who

VerDate Jun 13 2002 04:53 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00083 Fmt 4624 Sfmt 0634 E:\CR\FM\A15JY6.064 pfrm17 PsN: S15PT1 July 16, 2002 S6812 CONGRESSIONAL RECORD — SENATE July 15, 2002 rely on their Social Security as their year. There is, through President ADJOURNMENT UNTIL 9:30 A.M. sole income, they are not able to get by Bush’s plan, an idea of using group pur- TOMORROW with those drug prices. chasing power to reduce the cost The PRESIDING OFFICER. Under a We know we have a problem. The the- through a prescription drug discount previous order, the Senate stands in ory is this: If this federal government, card. A number of my pharmacist adjournment until 9:30 a.m., Tuesday, through Medicare, will pay for the re- friends are concerned that could hurt July 16, 2002. moval of a kidney, or will pay for the them. That was not the intent. They Thereupon, the Senate, at 8:12 p.m., amputation of a leg, is it not irrational have challenged this card. But a card adjourned until Tuesday, July 16, 2002, that we would not pay to fund drugs plan should not harm our pharmacists. at 9:30 a.m. that would keep people from having to We ought to be able to drive down the have a kidney removed or keep people cost of prescription drugs by up to 20, f from having to have an amputation be- 30, or 40 percent. That would be a tre- cause they are diabetic? mendous savings. It would be good if NOMINATIONS We are at a point where drugs are we could do that today—and not wait such a central part of health care in any longer. It would be a monumental Executive nominations received by America, that we cannot leave them step forward. the Senate July 15, 2002: out of Medicare. We want our seniors to have choice NATIONAL COUNCIL ON DISABILITY The seniors I visited with in Alabama and to not have to give up their cur- GLENN BERNARD ANDERSON, OF ARKANSAS, TO BE A want us here in the Senate to address MEMBER OF THE NATIONAL COUNCIL ON DISABILITY rent coverage plans. We do not want FOR A TERM EXPIRING SEPTEMBER 17, 2002, VICE the high cost of drugs. They believe them to have to enter into some sort of YERKER ANDERSSON, TERM EXPIRED. they are higher than they need to be— GLENN BERNARD ANDERSON, OF ARKANSAS, TO BE A mandatory plan that costs them more MEMBER OF THE NATIONAL COUNCIL ON DISABILITY and I agree. They would like to see less and provides less benefits. FOR A TERM EXPIRING SEPTEMBER 17, 2005. (REAPPOINT- paperwork in the process, less bureauc- Beneficiaries should have informa- MENT) MILTON APONTE, OF FLORIDA, TO BE A MEMBER OF racy, and less fraud. They would also tion and the choice to choose between THE NATIONAL COUNCIL ON DISABILITY FOR A TERM EX- like to see that they can go to their whether they want generic drugs or PIRING SEPTEMBER 17, 2003, VICE AUDREY L. MCCRIMON, TERM EXPIRED. local pharmacy and buy the drugs name-brand drugs. That is a choice BARBARA GILLCRIST, OF NEW MEXICO, TO BE A MEM- there and talk to a pharmacist about that many can make. We need to make BER OF THE NATIONAL COUNCIL ON DISABILITY FOR A TERM EXPIRING SEPTEMBER 17, 2002, VICE LILLIAM RAN- them if they choose. They would like sure that option is available to them. GEL POLLO, TERM EXPIRED. to be able to buy through direct mail We did vote for a budget last year BARBARA GILLCRIST, OF NEW MEXICO, TO BE A MEM- BER OF THE NATIONAL COUNCIL ON DISABILITY FOR A and mail order if they choose. Those that provides for $300 billion for pre- TERM EXPIRING SEPTEMBER 17, 2005. (REAPPOINTMENT) are things we will have to wrestle with. scription drugs. We have allowed our GRAHAM HILL, OF VIRGINIA, TO BE A MEMBER OF THE NATIONAL COUNCIL ON DISABILITY FOR A TERM EXPIR- I intend to be talking with more sen- spending here to get out of control. Our ING SEPTEMBER 17, 2002, VICE HUGHEY WALKER, TERM iors as time goes by so we can listen to discretionary spending last year hit EXPIRED. GRAHAM HILL, OF VIRGINIA, TO BE A MEMBER OF THE their concerns and desires and see what about a 7 percent increase. This year, NATIONAL COUNCIL ON DISABILITY FOR A TERM EXPIR- we can do to pass a responsible bill. likewise, with defense and ING SEPTEMBER 17, 2005. (REAPPOINTMENT) JOEL KAHN, OF OHIO, TO BE A MEMBER OF THE NA- We are not doing anything to help supplementals, it could be greater than TIONAL COUNCIL ON DISABILITY FOR A TERM EXPIRING Medicare beneficiaries pay for drugs that. If we get our spending under con- SEPTEMBER 17, 2004, VICE DAVE NOLAN BROWN, TERM EXPIRED. today. We should not fail to act at all trol and contain excessive spending, we PATRICIA POUND, OF TEXAS, TO BE A MEMBER OF THE and do nothing simply because we can’t ought to be able to fund a plan that NATIONAL COUNCIL ON DISABILITY FOR A TERM EXPIR- ING SEPTEMBER 17, 2005. (REAPPOINTMENT) do everything we would like to do would meet the needs of thousands of MARCO A. RODRIGUEZ, OF CALIFORNIA, TO BE A MEM- today. seniors who are in a crisis situation BER OF THE NATIONAL COUNCIL ON DISABILITY FOR A TERM EXPIRING SEPTEMBER 17, 2002, VICE EDWARD We need to have some relief now. We today. CORREIA. have people this day who are having to Politics should be put on the back MARCO A. RODRIGUEZ, OF CALIFORNIA, TO BE A MEM- BER OF THE NATIONAL COUNCIL ON DISABILITY FOR A choose between food and rent and burner. It is time to ask ourselves how TERM EXPIRING SEPTEMBER 17, 2005. (REAPPOINTMENT) drugs. They often are not able to buy we can accomplish passing a piece of DAVID WENZEL, OF PENNSYLVANIA, TO BE A MEMBER OF THE NATIONAL COUNCIL ON DISABILITY FOR A TERM the drugs they need to keep themselves legislation that we all can support, EXPIRING SEPTEMBER 17, 2004, VICE BONNIE O’DAY, TERM healthy, and that leads to complica- that the American people would like to EXPIRED. LINDA WETTERS, OF OHIO, TO BE A MEMBER OF THE tions and even greater health care see passed, and that we can afford. We NATIONAL COUNCIL ON DISABILITY FOR A TERM EXPIR- costs. can do this, if we watch our cost and do ING SEPTEMBER 17, 2003, VICE GERALD S. SEGAL. We need to quit putting this off. If we not let it get out of control. If we are cannot afford the Cadillac, we need a smart and work at it and do it in a way f Ford. We need to do something to move that is bipartisan as this generic bill forward. Seniors need help now. we passed out of the HELP Committee CONFIRMATION People who need drugs, seniors who last week, we can make good progress Executive nomination confirmed by need drugs, all Medicare beneficiaries for America. I look forward to the de- the Senate July 15, 2002: who need them and simply cannot af- bate and hope we can achieve that be- THE JUDICIARY ford them need help. We can do that fore the recess. LAVENSKI R. SMITH, OF ARKANSAS, TO BE UNITED through the budget we passed last I yield the floor. STATES CIRCUIT JUDGE FOR THE EIGHTH CIRCUIT.

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PAYING TRIBUTE TO JEAN- Douglas Morrisson was first elected to the shelter, along with the indelible imprint she left JACQUES CARQUILLAT Board of Directors of the Hayward Area on so many lives, will stand forever as the leg- Recreation and Park District in November of acy left by this amazing woman. HON. MAURICE D. HINCHEY 1962. Since then, he has been re-elected to Georgia Travis dedicated her personal and OF NEW YORK nine consecutive four-year terms. This year, professional life to helping others. Born in his 40th year of service, he is serving as vice- 1908 in Kansas City, Missouri, Georgia was IN THE HOUSE OF REPRESENTATIVES president of the District. brought up in a family with a keen awareness Monday, July 15, 2002 The Hayward Area Recreation and Park of social injustice and inequity. She was Mr. HINCHEY. Mr. Speaker, I am pleased to District has seen unprecedented growth during taught to lend a helping hand to those in congratulate my constituent and dear friend, Douglas Morrisson’s tenure. The District need, a notion that would dictate the course of Jean-Jacques Carquillat, on the occasion of boasts beautiful parks and fine recreation fa- her long life. After becoming one of the first his attainment of United States citizenship. Mr. cilities, including community parks, swim cen- students to earn a master’s degree from the Carquillat is a valued and well-respected ters, linear parks, playgrounds, community University of Chicago School of Social Service member of our community, and I am proud to centers, athletic fields, and senior centers. Ad- Administration, she began working in the rel- welcome him as a full citizen to the 26th Con- ditionally, the park district has gone beyond atively new field of medical social work, help- gressional District of New York State. traditional park features to include special in- ing stress patients in Chicago and disabled I became acquainted with Jean-Jacques, as terest facilities for theater, art, nature study, children in Seattle. By the late 1930s. Ms. well as his family, through his businesses in camping and golf. Travis was traveling the country as a consult- the Uptown Historic District in Kingston, NY. In A graduate of San Jose University and a ant for the new Washington, DC, based Crip- 1994, Jean-Jacques established Le Carnard former high school teacher, Douglas Morrisson pled Children Service Department and the Enchaine, a Zagat-rated, fine dining res- is currently an independent business owner. In U.S. Transient Bureau. In 1953, Georgia was taurant. He also started a dance club and spe- the past he has served in the leadership of awarded a Fulbright Scholarship which sent cial events catering business in 2000. The many park and recreation organizations, nota- her to Sydney, Australia, to teach. Shortly success of these businesses led to his more bly as President of the California Association after returning to the States, she settled into recent opening of Luke’s Place, a gourmet of Parks and Recreation Commissioners and what would eventually become her permanent restaurant, in the Town of Shandaken, named Board Members and President and Vice-Presi- home: the Bay Area of California. after his young son. dent of the Commissioners and Board Mem- The State of California may never fully real- I have witnessed the hard work, strong bers Branch of the National Park and Recre- ize the full extent of Ms. Travis’ contributions, character and integrity that Jean-Jacques has ation Association. He is the recipient of the but I would like to take moment to share some brought to the projects he has undertaken. His 1993 California Association of Recreation and of the many highlights. By 1962, just a few businesses have had positive impacts on our Park Districts Outstanding Board member years after arriving in the Bay Area, she was local area, including creating jobs in the City award and the 1993 California Special Dis- name California Social Worker of the year. A of Kingston and enhancing the city’s efforts to tricts Association Outstanding Board Member year later she became a professor of Social promote tourism in the historic district. Jean- Award. Services at San Diego State University, teach- Jacques has been an active member of the In the community, Douglas Morrisson has ing graduate level courses until her retirement Uptown Kingston Business Association and re- been active as a board member of the Castro in 1970. But Georgia’s idea of ‘‘retirement’’ ceived its Excellence Award for 1999. In addi- Valley Fire District, and a member of the Hay- was as unconventional as it was prolific. tion, he has been a consistent and strong sup- ward Rotary Club. He has served as chair- Ms. Travis lived in retirement with the same porter of various local nonprofit community or- person and vice-chairperson of the Alameda spirit and ideals of her childhood and profes- ganizations. County Local Agency Formation Commission sional life; she could sense injustice and suf- Mr. Speaker, it is my pleasure to join Jean- (LAFCO) and as President and board member fering, create solutions, and see the process Jacques Carquillat’s colleagues, friends and of the Hayward Sun Gallery. In 1999 he re- through to the end. After the passing of her family in extending my congratulations on his ceived the city of Hayward’s Mayor’s Award. mother in 1971. Georgia found solace and bal- naturalization. His personal and professional I am honored to join the colleagues of ance in the Quaker faith, and became a mem- enthusiasm has made him a valuable asset to Douglas Morrisson in commending him for his ber of the Quaker Society of Friends. our community, and I am confident that he will 40 years of service to the city of Hayward. Strengthened by her new faith, Georgia fo- continue to serve in the most admirable way Douglas Morrisson’s dedicated work with the cused her efforts on the plight of the homeless both his community and our great nation. Park District has provided every member of community, a pursuit that would lead her to f the Hayward community spectacular state-or- some of the biggest accomplishments of her the-art park facilities to enjoy. life. She started out with fundamentals like HONORING THE NAMING OF THE f providing meals at the Family Center in DOUGLAS MORRISSON THEATER Agnews Hospital and distributing clothing at IN RECOGNITION OF DOUGLAS F. MEMORIALIZING MS. GEORGIA the Family Shelter in East San Jose. Then, MORRISSON’S 40 YEARS AS A BALL TRAVIS with the help of the American Association of BOARD MEMBER OF THE HAY University Women, Georgia organized a com- WARD AREA RECREATION AND HON. MICHAEL M. HONDA mittee that develops and provides the home- PARK DISTRICT OF CALIFORNIA less, especially women and children, with im- IN THE HOUSE OF REPRESENTATIVES proved services and outreach. She convinced Stanford University to conduct a major study HON. FORTNEY PETE STARK Monday, July 15, 2002 OF CALIFORNIA on homeless children, and helped initiate edu- IN THE HOUSE OF REPRESENTATIVES Mr. HONDA. Mr. Speaker, I rise today to cational programs for the children as well. Mr. ask my colleagues to join me in honoring the Speaker, the list of her successes, of the tan- Monday, July 15, 2002 life and work of Ms. Georgia Travis, whose gible changes she made for thousands of peo- Mr. STARK. Mr. Speaker, on July 28, 2002, amazing life came to a peaceful end on March ple, is far too long to describe here. But I the Hayward Area Recreation and Park Dis- 12, 2002, after 94 wonderful years. Ms. Travis would like to make note of perhaps her great- trict will rename their theater in honor of Board committed her extraordinary life to the better- est accomplishment of all: the establishment Member Douglas F. Morrisson. In his 40 years ment of others, through social work, teaching, of the Georgia Travis Center. of service, Douglas Morrisson has honorably writing, and countless other endeavors, culmi- In 1992, the nonprofit San Jose shelter served the park and recreation field on the nating in the creation of the Georgia Travis agency InnVision honored the wishes of Ms. local, regional, state, and national levels. Center for homeless women and children. This Travis by opening a new shelter for homeless

∑ This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor.

VerDate 112000 05:00 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00001 Fmt 0626 Sfmt 9920 E:\CR\FM\A15JY8.000 pfrm15 PsN: E15PT1 E1254 CONGRESSIONAL RECORD — Extensions of Remarks July 15, 2002 women and children, to be named after the Man now, through law, denies the truth and women and children across the globe by help- woman who perhaps had done more for their calls it ‘‘separation.’’ ing them escape brutal religious and political cause than anyone else in the city’s history. At No longer does man see a need for God when persecution—I commend him for his efforts. I the Center, volunteers help women and chil- he’s in full control, am confident that the Mohawk Valley Re- For the only truth self-evident is in the lat- dren get back on their feet by providing meals, est poll. source Center for Refugees will continue to medical care, childhood-development courses, maintain its excellent reputation, level of pro- But with man as his own master we fail to and classes on computers and career plan- count the cost, fessionalism, and success that Mr. Sessler ning. The Center provides them not only with Our precious freedoms vanish and our liberty worked so diligently to instill within it. new hope for the future, but a sense of a se- is lost. f curity and value that may have been taken Children are told they can’t pray and they away from them when their homes were lost. teach them evolution, VFW VOICE OF DEMOCRACY Ever humble, Ms. Travis was embarrased by When will they learn the fear of God is the CONTEST the attention of having her name immortalized, only true solution. but the Georgia Travis Center will forever be Our schools have become the battleground HON. MAURICE D. HINCHEY a working tribute to Georgia’s insatiable desire while all across the land, OF NEW YORK to empower, enlighten, and improve the lives Christians shrug their shoulders afraid to IN THE HOUSE OF REPRESENTATIVES of those in need of help. take a stand. Monday, July 15, 2002 Mr. Speaker, I rise today to mourn the loss And from the grave their voices cry the vic- tory has been won Mr. HINCHEY. Mr. Speaker, I am pleased to of a friend and a role model. I had many op- Just glorify the Father as did His only Son. congratulate my constituent Allegra Guarino, portunities to work with Ms. Travis, and what When your work on earth is done, and you’ve New York’s recent winner of the Veterans of amazed me most about her was the ability traveled where we’ve trod, Foreign Wars’ Voice of Democracy Scholar- she had to instill in others the same passion You’ll leave the land we left to you, One Na- ship Contest. This very talented young writer and resolve that she herself had in everything tion Under God from Marlboro, New York has written an essay she set out to accomplish. The Bay Area entitled ‘‘Reaching Out to America’s Future’’ should feel fortunate to be chosen as the ben- f that bears reading and reflection by all of us. eficiary of her great works, and I personally I am very proud to represent her in Congress, feel fortunate to represent a district so deeply RECOGNIZING RICHARD P. and I’m sure that her family and friends are touched by her. SESSLER very proud of her accomplishment. I am cer- f tain that she has a very bright future and will PLEDGE OF ALLEGIANCE HON. SHERWOOD L. BOEHLERT go on to do great things for her community OF NEW YORK and our nation. We need more young people HON. CLIFF STEARNS IN THE HOUSE OF REPRESENTATIVES like her. OF FLORIDA Monday, July 15, 2002 REACHING OUT TO AMERICA’S FUTURE IN THE HOUSE OF REPRESENTATIVES Mr. BOEHLERT. Mr. Speaker, I rise today (By Allegra Guarino) Monday, July 15, 2002 to recognize Richard ‘‘Dick’’ Sessler for his 12 When I hear the phrase . . . ‘‘reaching out to America’s future’’ . . . I think of an out- Mr. STEARNS. Mr. Speaker, I rise today to years of dedicated service to the Mohawk Val- reach trip that I took this summer to Harlan remind Americans why the Pledge of Alle- ley Resource Center for Refugees. On June County, Kentucky. Harlan County is one of— giance is so important in light of the 9th Circuit 28th, 2002, Mr. Sessler retired from his post if not the poorest counties in America. The Appeals Court decision. I’d like to submit Chief as Executive Director for the Refugee Center. people here don’t have running water, some Justice of the Alabama Supreme Court Roy S. During his tenure, he was instrumental in the of them don’t have electricity, and what is even more shocking is that some of them Moore’s July 1998 statement titled ‘‘Our Amer- successful resettlement of close to 10,000 ref- ugees from Bosnia, Russia, Vietnam, Burma, don’t have a sewage system. They live in ican Birthright.’’ At that time, Justice Moore hills of the Appalachian Mountains in condi- was a Circuit Court Judge. and Sudan to the Utica, NY area. Mr. Sessler tions that many people wouldn’t dream exist is a visionary and a truly remarkable leader. OUR AMERICAN BIRTHRIGHT in our great country. One of the volunteers Under his leadership the Mohawk Valley Re- (By Roy S. Moore) on the trip found a beautiful stone on the source Center for Refugees expanded signifi- ground and gave it to a little girl that he One nation under God was their cry and dec- cantly, initiated innovative services and formed met. He told her that it was a dream stone, laration, many meaningful partnerships with a large and that if she held onto it when she was Upon the law of nature’s God they built a dreaming of the future, it would hold inside mighty nation. number of community organizations. Mr. Sessler’s work with the center dates of it all of her hopes and her dreams. The six- For unlike mankind before them who had year-old girl looked up at him with ques- walked this earthen sod, back to 1990 when he was first hired as Asso- tioning eyes and said, ‘‘But I don’t know how These men would never question the sov- ciate Director and later promoted to Executive to hope and dream.’’ How do you teach a ereignty of God. Director in 1993. During that time the Center child to dream? Most people don’t have to be That all men were ‘‘created’’ was a truth has grown tremendously. The Refugee Center taught. Because they are lucky enough to ‘‘self-evident,’’ now offers three well staffed and well devel- live in part of our country where the reach of To secure the rights God gave us was the role oped programs that have been made more ef- their dreams has no limitations. of government, Another child I met in Kentucky is named fective: a health program, an education pro- Bailey. She is a four-year-old that loves to And if any form of government became de- gram, and an excellent job placement pro- structive of this end, play on the swing set, so on the third day of It was their right, their duty, a new one to gram. In addition, Mr. Sessler was involved in the trip I decided to teach her how to but- begin. the establishment of an on-site clinic, night- terfly swing. I sat down on the swing and placed her on my lap so that she was facing So with firm reliance on Divine Providence time English classes (ESL), a dental program, me. I kicked off from the rocky soil and we for protection, a community relations program and citizenship began swinging. I told her to be sure and They pledged their sacred honor and sought classes. watch the shadow that we were casting on His wise direction. Upon his retirement, Mr. Sessler plans to the ground. I watched her eyes light up as They lifted an appeal to God for all the world continue to offer his services to the refugee she saw the butterfly shaped shadow on the to see, community. His plans include consulting and ground. As we pulled away from each other And declared their independence forever to serving as an active member of the Lutheran and then back towards each other the shad- be free. Immigration Service (LIRS). I am confident ow was an image of a butterfly flapping its I’m glad they’re not here with us to see the that he will continue to offer his knowledge wings. I told her that she might not be able mess we’re in, and experience and serve as a tremendous to fly like the butterfly but she could do lots How we’ve given up our righteousness for a of great things in her life. She thought about life of indulgent sin. asset to the LIRS. Mr. Sessler’s commitment to the Refugee the butterfly and what I had said and then For when abortion isn’t murder and sodomy she looked at me with these big blue eyes is deemed a right, Center should serve as an inspiration to all. and said you can be the wings. I know that Then evil is now called good and darkness is Mr. Sessler was and will remain to be well re- she didn’t mean it as deeply as I took it. She now called light. spected and well liked by all that have the was probably only referring to the shadow While truth and law were founded on the God pleasure to work with him. He has touched that we were making on the ground. But to of all Creation, and reshaped the lives of many war-torn men, me it meant something more.

VerDate 112000 05:00 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00002 Fmt 0626 Sfmt 0634 E:\CR\FM\A15JY8.002 pfrm15 PsN: E15PT1 July 15, 2002 CONGRESSIONAL RECORD — Extensions of Remarks E1255 Today our country is at war and once ica. Not since 1994 have we seen such a visi- highlighted in an in depth story published last again many brave people have gone off to ble and strong nationwide movement for uni- year. This is particularly true if you are African fight in defense of freedom. They are truly versal health care. American or Hispanic. Might I remind you that the wings of the butterfly. Just as I picked Two years ago, in an attempt to create mo- the first question a nurse or hospital intake ad- up Bailey and placed her safely on my lap the troops fighting now, and the troops that mentum and a unified strategy to achieve uni- ministrator asks the patient is not, ‘‘May I help have fought for us in the past picked up versal health care in Congress, I founded, you,’’ but rather, ‘‘Do you have health insur- America, and started to fly. In order to start along with Members of the Congressional ance?’’ Health care in America for the most us swinging I had to push hard off the rocky Black Caucus, the Progressive Caucus, the part is a business, and therefore, health care ground. The American soldiers don’t have an Hispanic Caucus, and the Asian Pacific Amer- providers and physicians that are making easy task ahead of them. We are just now, ican Caucus, the ‘‘Congressional Universal money do not have an incentive to provide just kicking off of the rocky ground. But I Health Care Task Force,’’ which now has 44 charity care. have no doubt that we will fly. A butterfly Members. For over two years we have spon- The Kaiser Family Foundation recently re- has two wings. Each equally important. The ported that the majority of the uninsured do soldiers will no doubt put 110% into flying sored briefings on Capital Hill, attended town our country to the freedom of the open skies. meetings on universal health care in cities not receive comprehensive charity care in hos- But we the American people must put equal- across the country, and learned from health pital emergency rooms or community clinics. ly as much effort into flying the country care experts about different ways to achieve Because there is no such thing as ‘‘universal higher. All of us as a team must reach out to universal health care. charity care’’ in this country, we need uni- America’s future. Without knowing us people Mr. Speaker, I introduced House Concurrent versal health care and we need it now. Most have laid down their lives so that we would Resolution 99 with several of my colleagues uninsured patients with serious illnesses need be able to enjoy the freedoms that are now from the ‘‘Congressional Universal Health long term health care treatment, prescription being threatened. America too has a dream drugs, or medical equipment. Currently, mil- stone. Only it comes in a different form. It is Care Task Force,’’ in order to build the mo- tri-colored in red, white, and blue. Red for mentum for passage of universal health care lions of uninsured chronically ill patients must the blood shed yesterday, White for the pure legislation by 2004. suffer the indignities of spending days and freedoms we enjoy today and Blue for the We currently have 86 co-sponsors for this weeks searching for charity care. They often endless clear skies of tomorrow. bill. There are over 325 national, state, and borrow money from relatives or friends just to Our flag is our dream stone holding inside local organizations who support it as well. purchase prescription drugs or to see a doc- of it the very hopes and dreams of our Na- House Concurrent Resolution 99 does not tor. This is wrong and we all know it. tion. We held tightly to it as it was proudly specify how to pay for universal health care, For the past two years, the ‘‘Congressional carried through World War One, World War nor does it spell out how a health care for all Universal Health Care Task Force’’ has spon- Two, Desert Storm, Vietnam and Korea. sored several briefings with my colleagues While we were enjoying a time of great pros- system would be administered. Instead, the perity we tucked our stone away in our resolution explicitly states what universal from the Congressional Black Caucus, Pro- pocket. On September 11th we pulled it out health care should be—affordable, com- gressive Caucus, Hispanic Caucuses, and the of our pockets when firefighters proudly prehensive, and accessible for all Americans. Asian Pacific American Caucus on the unin- raised it high at ground zero, athletes dis- America is on the road to universal health sured crisis in America. We have heard story played it on their jerseys, and average Amer- care. How can we as members of Congress after story of untold suffering by uninsured or icans flew it from their cars and homes. My justify the fact that we have one of the best under-insured Americans. We have also heard generation knows how to dream. Will the health insurance plans available, yet we allow from numerous physicians who saw patients generation after us be able to say the same? after their illness were full blown, many of We must reach out and place the knowledge 40 million Americans to have no health insur- of the past into the hands of the future. ance coverage at all? Mr. Speaker, we cannot them who died, because they delayed treat- When we empower the future generations defend something that is clearly indefensible. ment only because they were uninsured. I with knowledge our country is sure to In the world’s wealthiest country, my col- urge Members of Congress to read ‘‘As Sick thrive. It is estimated that over one million leagues somehow can sleep at night knowing As it Gets,’’ by Rudolph Mueller, M.D., a men and women have died in service to our that right now in America, there are millions of ground breaking book about the shocking re- great country. Let us, America’s present, patients, many of the children and families, ality of America’s healthcare system. The book take pride in our history and reach out to that are having serious heart problems, lung documents case after case of Dr. Mueller’s the future by passing along our knowledge problems, headaches, dental problems, mental patients who tragically became chronically ill, and our great American dream stone. Be- cause without a doubt America’s future is illness, or other maladies, but are delaying or died, as a result of delaying health care whatever America dreams it to be. treatment, not because they do not care about only because they were uninsured. their health, but because the system does not The Task Force has heard from numerous f care about them. Americans whose credit was ruined for life, PERSONAL EXPLANATION We now know empirically, based on the re- and went into bankruptcy due to thousands of cent Institute of Medicine’s 2002 report on the dollars of unpaid medical bills. There are ap- HON. BOB RILEY uninsured, that 18,000 Americans die each proximately 200,000 bankruptcies in America year because they were uninsured. If we truly each year due to unpaid medical bills. Individ- OF ALABAMA care about the health and well being of work- uals and families should not have to experi- IN THE HOUSE OF REPRESENTATIVES ing families, and those with serious illnesses ence the pain and humiliation of declaring Monday, July 15, 2002 who are too sick to work, we would ensure bankruptcy just because they got sick. I heard Mr. RILEY. Mr. Speaker, I was unavoidably that all Americans would have peace of mind, testimony last year from two Washington D.C. detained for Rollcall No. 295, on H.R. 4687, as they do in Europe and Canada, to acces- residents, a husband and wife with cancer, the National Construction Safety Team Act. sible, affordable, high quality, and comprehen- both high school teachers, who declared bank- Had I been present, I would have voted ‘‘yea.’’ sive health care for all guaranteed by law. ruptcy due to the high costs of chemotherapy. f In Michigan, thousands of uninsured HIV/ They were both insured at the time, but had AIDS patients can not afford the necessary to rely on their credit cards to cover the costs THE UNINSURED cocktail of life sustaining drugs due to budget of treatment, due to inadequate private health cut backs of government subsidized HIV/AIDS insurance coverage. Their daughter, who has HON. JOHN CONYERS, JR. prescription drug programs. Can we continue Hepatitis C, called dozens of doctors but was OF MICHIGAN to allow the uninsured chronically ill, those denied access because she was uninsured. IN THE HOUSE OF REPRESENTATIVES who have serious physical or mental health She is having a difficult time returning to work, problems to go without needed health care for because she needs long term therapy and Monday, July 15, 2002 long periods of time, jeopardizing their lives, treatment in order to be productive again. This Mr. CONYERS. Mr. Speaker, last week, on and needlessly suffering due to having un- is a national disgrace. July 11, 2002, several of my colleagues, Ms. treated illnesses? For Congress to ignore Mr. Speaker, I do not believe, unlike many BALDWIN, Ms. LEE, Mr. MCDERMOTT, and Ms. these health care injustices and continue to of my colleagues, that universal health care CARSON, declared that it was time for this ‘‘wish our health crisis away’’ is both immoral means the federal government provides Congress to place universal health care at the and cold hearted. vouchers so Americans can purchase costly top of the nation’s political agenda. This dec- Plain and simple, if you do not have health and inferior or private health insurance, that in laration, I believe, was a defining moment for insurance, you will receive ‘‘second class most cases, will not adequately cover one’s the universal health care movement in Amer- medicine,’’ as Consumer Reports magazine health care needs, especially if an individual

VerDate 112000 05:00 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00003 Fmt 0626 Sfmt 9920 E:\CR\FM\K15JY8.002 pfrm15 PsN: E15PT1 E1256 CONGRESSIONAL RECORD — Extensions of Remarks July 15, 2002 or family has a chronic illness. Universal Ambani, the founder of The Reliance Group, Even seasoned NIST employees admitted health care is not a system where health deci- India’s largest and most profitable company. they were covering new ground as no one sions are made by HMO bureaucrats instead Dhirubhai Ambani began his illustrious busi- could ever imagine such an event as 9/11 of physicians. Furthermore, it is not a system ness career as a small trader of fabrics in happening. where the patient receives some kind of health rural Gujurat. Over the next half decade, he In the immediate aftermath of September insurance coverage through an HMO or a pri- transformed his small business into a diverse 11th, NIST had to try to do its job amidst vate health insurance plan, but does not have economic powerhouse which included vibrant emergency respondents, police officers, and the freedom to choose their physician. businesses in petrochemicals, petroleum, poly- incomprehensible loss. It is my hope that we will achieve universal esters, telecommunications, securities and cut- In this extraordinarily challenging situation, health care one day by extending, strength- ting edge technologies. Unlike many older In- critical evidence—like beams, steel work, and ening, and expanding Medicare to all Ameri- dian businesses, however, Reliance chose a cables—was being carted off before the NIST cans. Medicare has a 2–3 percent administra- new path on its ascendancy to becoming a team had a chance to even catalogue or iden- tive over-head, versus the 20–30 percent ad- Fortune World 500 Company, and Dhirubhai tify it. ministrative overhead costs of an HMO or pri- Ambani was the architect of Reliance’s suc- Given the fact that the scope of this tragedy vate health insurance plan. The CBO in 1991 cess. Dhirubhai Ambani chose not to keep his had never been seen before, it is understand- reported that we would save $ 100 billion dol- businesses as a family concern. Instead, he able that the investigation would be less than lars a year if we established a public health in- floated equity shares and thereby allowed mil- ideal. surance program for all Americans. Many lions of middle-class Indians to join with him in But it is important that we learn from this health care economists contend that a tax enjoying Reliance’s decades of economic suc- tragedy. payer financed national health insurance pro- cess. Indeed, there are now more than three And there are several lessons to be learned gram would cost the average family of three a million investors in India’s largest and most from September 11th. One lesson is the im- total of $739 dollars a year for all of their widely held company, which is also the largest portance of a swift and thorough investigation health care costs, as opposed to the thou- exporter from India, as well as the largest pri- of a building failure. sands of dollars needlessly wasted on pre- vate sector source of revenue to the Indian NIST’s response teams must have access miums, co-pays, and high deductibles of a pri- government. to building debris as soon as it’s safe to enter vate health insurance plan. If we continue to Mr. Speaker, Dhirubhai Ambani was a leg- a site. support the idea that health care must be run end in India. He was also a role model for en- And they must be able to move and pre- like a business, and we continue to worship at trepreneurs around the world, as well as hav- serve this critical evidence. This bill gives the alter of private health insurance, it will be ing served as a shining example of India’s NIST that authority. difficult if not impossible to cover the sky- economic potential. I am confident that all of Looking toward the future, it is important to rocketing costs of primary care, prescription the Members of the India Caucus join with me do all we can to prevent a building failure of drugs, mental health services, and long term in expressing our sympathy to the entire any kind from ever happening. This bill will care through a private health insurance domi- Ambani family. In particular, we send our allow us to obtain information to help prevent nated system. heartfelt condolences to his widow, Kokilaben building failures. National health insurance would save bil- Ambani, and her two sons, Mukesh and Anil, And it is important for us to swiftly and thor- lions of dollars through reduced emergency who have assumed the helm of India’s largest oughly respond to the community when build- room visits, reduced chronic illnesses, and a economic vessel. Dhirubhai Ambani’s legacy ing failures, God forbid, happen. And this bill dramatic reduction in uncompensated care for is large, but his sons will continue to build on does that also. public hospitals which treat the uninsured after their father’s many achievements. I urge your support of H.R. 4687. they have developed full blown chronic ill- f f nesses. Prevention is the key here. All Ameri- IN SUPPORT OF H.R. 4687, NA- IN RECOGNITION OF JOSE L. cans would have access to affordable primary TIONAL CONSTRUCTION SAFETY LASTRA care, and therefore, illnesses such as hyper- TEAM ACT tension, cancer, heart conditions, pre-natal health conditions, respiratory, or kidney prob- SPEECH OF HON. E. CLAY SHAW, JR. lems would be dramatically reduced due to HON. JOSEPH CROWLEY OF FLORIDA having access to regularly scheduled check- IN THE HOUSE OF REPRESENTATIVES OF NEW YORK ups. IN THE HOUSE OF REPRESENTATIVES Monday, July 15, 2002 Mr. Speaker, every sector of the American public is calling for health care coverage for Friday, July 12, 2002 Mr. SHAW. Mr. Speaker, I rise today to pay all. Citizens, business, labor, the faith commu- Mr. CROWLEY. Mr. Speaker, I rise in sup- tribute to Jose L. Lastra, a man who has nity, civil rights organizations, community clin- port of H.R. 4687, the National Construction served with distinction in the Social Security ics, public hospitals, the media, physicians, Safety Team Act. And I especially want to rec- Administration in South Florida for 30 years. state and local officials; all are calling for ognize my friend from New York, Anthony Born in Cardenas, Cuba in 1948, Jose health care for all. The time has come for Weiner for his work on the bill. Lastra arrived in the United States on Sep- Congress to act on the crisis of the uninsured. As we all know, September 11th changed tember 28th, 1961, speaking no English and Let’s join the rest of the industrialized West, New York. It changed our world. Since Sep- carrying with him nothing but a strong work and ensure that all Americans receive high tember 11th, brave workers, volunteers, and ethic and determination. Graduating from quality and affordable health care. scientific experts have traveled to Ground Miami Edison High School in 1966, Jose con- I urge my colleagues to co-sponsor House Zero in the name of recovery and under- tinued his education, earning a degree in His- Concurrent Resolution 99. Let’s show the standing. tory with a minor in Political Science from Flor- American people that we truly care about their These workers, volunteers, and experts ida Atlantic University, with post-graduate health. We can not allow another 18,000 have all pushed themselves and their skills to studies at the University of Miami School of Americans to die next year because they are the ultimate limit to deal with an unusually Hispanic American Studies and Florida Inter- uninsured. grave situation. And I commend them all. national University’s School of Public Adminis- tration. f In particular, the National Institute of Stand- ards and Technology, NIST, had to deftly work Mr. Lastra entered public service on July 17, DEATH OF DHIRUBHAI AMBANI with a myriad of concerned New Yorkers. 1972, when he was hired for the position of There are thousands of affected family mem- Service Representative in the Miami Beach HON. JIM McDERMOTT bers who are both grieving and seeking an- Social Security Office. This month marks his OF WASHINGTON swers. People like John and Kathy Ashton of 30th anniversary with the Social Security Ad- IN THE HOUSE OF REPRESENTATIVES Woodside, Sally Regenhard of Co-op City, ministration. Over the last three decades, Jose and Arthur Taub of Co-op City. Some, like Mr. has served with distinction in a number of po- Monday, July 15, 2002 Taub, had concerns about the NIST investiga- sitions in the South Florida Area, including: Mr. MCDERMOTT. Mr. Speaker, as the cur- tion itself. service, claims and field representative, His- rent Co-Chairman of the Congressional Cau- NIST has worked with constituents who panic Program Officer, and manager of the cus on India and Indian American, I note with wanted answers—and with constituents who Cuban-Haitian Emergency Processing Office great sadness the recent death of Dhirubhai had information. and the Riverside Branch Office. In recognition

VerDate 112000 05:00 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00004 Fmt 0626 Sfmt 9920 E:\CR\FM\A15JY8.007 pfrm15 PsN: E15PT1 July 15, 2002 CONGRESSIONAL RECORD — Extensions of Remarks E1257 of his outstanding work, Jose was awarded see’’ at Customs for answers on trade mat- STATEMENT ON INTERNATIONAL the Commissioner’s Citation in 1980, 1991, ters. His retirement will be sorely felt by Cus- AIDS CONFERENCE and 1992, and the Commissioner’s Team toms, Congress, and the trade community. Award in 1997. I am very grateful for all of his help through- HON. JOHN CONYERS, JR. In 1990, Mr. Lastra was appointed Area Di- out the years. John is a delightful man to work OF MICHIGAN rector of South Florida. In this capacity, he with. We wish him the best in his retirement IN THE HOUSE OF REPRESENTATIVES oversees thirty-three Social Security field of- and his future endeavors. We hope Mr. Durant Monday, July 15, 2002 fices with a total staff of 978 employees. The will return to the nation’s Capital and lend his South Florida Area includes more than 2 mil- considerable talents to the private sector. Mr. CONYERS. Mr. Speaker, last week in lion Social Security beneficiaries, many of Barcelona, Spain, 15,000 people came to- whom reside in my district. As Chairman of f gether for the 14th International AIDS Con- the House Social Security Subcommittee, I am ference for ‘‘Knowledge and Commitment for especially grateful for all of Mr. Lastra’s hard TRIBUTE TO MR. JOHN WALLACH Action.’’ work on behalf of my senior constituents. We know that in 2001, there were 5 million Today, I am pleased to recognize a man HON. JOE KNOLLENBERG new AIDS infections across the globe. Today there are 40 million people living with AIDS who has taken full advantage of what America OF MICHIGAN offers. Coming to this country as a young im- worldwide, and there are 14 million AIDS or- migrant from Cuba, he studied hard, worked IN THE HOUSE OF REPRESENTATIVES phans. Currently, in Africa more than 28 mil- tirelessly and rose from an entry level position Monday, July 15, 2002 lion people are living with HIV/AIDS, however, only 30,000 are in treatment. to one of leadership in the Social Security Ad- Mr. KNOLLENBERG. Mr. Speaker, today I In comparison, in the United States, nearly ministration. A true sign of his character, Jose join the chorus of voices around the world to 100 percent of the people who need treatment is held in the highest regard by those who express my admiration and respect for Mr. receive it. 99 percent of the African people liv- work with him and for him. Jose L. Lastra’s life John Wallach. On July 10, 2002, John Wal- ing with AIDS do not have access to and achievements represent the dream of op- lach passed away after a life of passion, hope, Antiretroviral drugs because they are simply portunity that America so proudly boasts. and heart. I offer my condolences to the family too poor to purchase them. f and friends of this truly great man. In Barcelona, thousands came together to ON THE RETIREMENT OF JOHN Throughout his life, John Wallach ap- call for treatment now, and presented the DURANT OF CUSTOMS proached all things with heartfelt passion. As ‘‘Barcelona Declaration,’’ which was also read an award-winning journalist, peace activist, during the opening session of the Conference. HON. PHILIP M. CRANE and friend to so many individuals throughout Nelson Mendela and former President Clinton the world, Mr. Wallach inspired those around have pledged their assistance to help raise OF ILLINOIS him to believe in themselves and achieve their IN THE HOUSE OF REPRESENTATIVES awareness and funding for the UN Global dreams. AIDS Trust Fund. Monday, July 15, 2002 I had the opportunity to meet Mr. Wallach This declaration called for securing dona- Mr. CRANE. Mr. Speaker, it is my honor through his work as founder of, and force be- tions of $10 billion dollars per year for global today to acknowledge the retirement of John hind, the organization Seeds of Peace. Seeds AIDS; Antiretroviral (ARV) treatment for at Durant, Director of Commercial Rulings for the of Peace promotes understanding and long- least two million people with HIV/AIDS in the U.S. Customs Service. Mr. Durant retires after term stability by uniting teenagers from areas developing world by 2004; lower, affordable 33 years of federal service, with almost 31 of regional conflict for a unique mediating pro- ARV drug prices and universal access to years of that time with Customs. John Durant gram at its neutral site in Otisfield, Maine. It generics in the developing world; and a new served in Customs field offices in Boston and was John Wallach’s confidence that hope and global partnership between government and Houston, before coming to Headquarters office progress can succeed that enabled Seeds of NGOs. in Washington DC. John is well known to all Peace to grow from simply an idea into the I am urging that Congress and the President members of the international trade community world leader in conflict resolution for youth. I in a bi-partisan spirit, bolster UN efforts to and the trade bar as a preeminent expert on have personally visited this camp in Maine, combat the AIDS pandemic, provide 2 billion Customs matters and has been instrumental in and seen first-hand the positive effect it has dollars to the United Nations Global Aids the effort to modernize Customs’ procedures on the participants. Seeds of Peace has es- Fund, to help pay for the costs of HIV/AIDS for the benefit of trade and our economy. tablished a network of peace builders, who treatment and prevention programs. This Ad- Thirty years has seen remarkable changes now serve as an inspirational part of John ministration has allocated $200 million dollars in how trade has taken on an ever more im- Wallach’s legacy. to fight global AIDS. I wholeheartedly agree portant role in our country’s economic suc- Before embarking on a second career as an with the activists in Barcelona that $200 mil- cess. Just in the last decade, trade has grown ambassador of peace and mutual under- lion is not enough to combat ‘‘the Plague’’ of 132 percent, and by 2004, Customs will be standing, Mr. Wallach had a distinguished ca- the 21st century. processing more than 30 million commercial reer in journalism and as an author. From The United States must put at least $2 bil- entries a year. This is up from 12.3 million in 1968 to 1994, he served as diplomatic cor- lion into the Global Trust Fund. Dr. Peter Piot, 1994 more than double the level of 10 years respondent, White House correspondent, and the Director of UNAIDS said that a $ 10 billion earlier. John has had the unenviable but crit- foreign editor for the Hearst Newspapers. His effort will only begin to make a dent in the cri- ical role in overseeing more than 12,000 com- articles earned many prizes, including two sis. It is a falsehood to say that spending mercial rulings that Customs issues each year Overseas Press Club awards, the Edward money on AIDS in Africa would simply be a on such arcane topics as tariff classification, Weintal Prize and the Edwin Hood Award, the waste of money. Critics of the fund incorrectly country of origin and marking. He was also the highest honor presented by the National Press say that corrupt dictators will take the money liaison with the trade community for Customs Club. In 1979, President Carter presented Mr. and use it to enrich themselves. In Uganda, during discussions leading up to the passage Wallach with the Congressional Committee of Thailand and Senegal, for example, strong na- and implementation of the Customs Mod- Correspondents Award for his coverage of the tional leadership partnered with a community- ernization Act of 1993. Egyptian-Israeli Camp David summit. As an wide response are reducing new HIV infec- For the Congress, however, Mr. Durant will author, he co-authored with his wife Janet tions and AIDS diagnoses and focusing on always be known as Customs point man, and Wallach, three books, Arafat: In The Eyes of treatment measures for their people. There sometimes lightening rod, on trade legislation. the Beholder, Still Small Voices, and The New are hundreds of AIDS organizations and gov- For the past 14 years, Mr. Durant has been in- Palestinians. Mr. Wallach has also written The ernment officials around the world that are valuable to the Congress in providing timely Enemy has a Face. monitoring the progress of the Fund. Please and useful technical comments on draft legis- John Wallach was a man with an enormous ... let’s give it a chance to work. lation. Much of trade legislation is not exciting heart. Throughout his life he took chances to I am urging today that my colleagues in or entertaining. It requires people who are pro- make progress, and motivated others to follow Congress, the Bush Administration, the private fessional, dedicated, and very attentive to de- their hearts. The world is a better place be- sector, and the celebrity community begin lob- tail. Mr. Durant is the leader of such men and cause of John Wallach, and I join many peo- bying the more affluent nations of the Euro- women at Customs and he does so with a ple around the world to commend him and pean Community and Asia to provide the re- sense of humor. He has been the ‘‘man to thank him for what he has done. maining 8 billion necessary to combat the

VerDate 112000 05:00 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00005 Fmt 0626 Sfmt 9920 E:\CR\FM\A15JY8.010 pfrm15 PsN: E15PT1 E1258 CONGRESSIONAL RECORD — Extensions of Remarks July 15, 2002 AIDS pandemic. France, Germany, Japan, after graduating from Yale, Joe and Barbara 1987–1994, Cardinal Napier went on to be ap- Taiwan, and the oil rich Countries of the Mid- could have turned their backs on the world. In- pointed Archbishop of Durban in 1992. In dle East are not providing enough funding to stead, they mortgaged their house to keep a 1998 Pope John Paul II appointed him as the UN Global AIDS Trust. promise they had made to David. They prom- Consultor to the Congregation for the I have often heard the argument that we ised that if he finished his children’s book, The Evangelization of the Peoples, and in Feb- can not afford to treat and prevent HIV/AIDS Jester Has Lost His Jingle, they would make ruary of 2001, he was named Cardinal. An patients around the world who have AIDS, or sure it would be published in the way he envi- outspoken advocate for HIV–AIDS treatment, will contract it in the future. Nobody on the sioned it and would donate it to children who poverty eradication, debt relief, and develop- planet can persuade me that America, and the were suffering from illnesses. ment, Cardinal Napier’s outstanding work to industrialized countries of the East and West, Joe and Barbara made that promise a re- create innovative new programs and initiatives nations with trillion dollar economies, do not ality producing more than 40,000 Jester books for these social justice issues is truly unparal- have the resources to combat the AlDS pan- and 35,000 Jester & Pharley Dolls that have leled. He has taken up the challenge to fight demic. But the truth of the matter, and I have been donated to ill and special-needs children. for the people of sub-Saharan Africa and con- seen this for decades, is that the international The book has also become a national best- tinues to work hard for the advancement of his community will follow our lead if we provide seller and there are more than 300,000 copies region and beyond. the moral and financial leadership on HIV/ in circulation. To further their efforts, Joe and I applaud Cardinal Napier for the work he AIDS. Again, this has not been the case. Barbara Saltzman have created The Jester & has accomplished and continues to do, and I I am also urging my colleagues to call a Pharley Phund, a non-profit charity so that welcome him to the United States and to De- meeting with the pharmaceutical companies, they can continue the mission of giving every troit, Michigan. I also applaud the Archdiocese and begin the much needed discussion on child a sense of hope, a feeling of empower- of Detroit for its leadership, commitment, and how to bring the price of HIV/AIDS prescrip- ment, a love of learning, the joy of laughter, service, and for encouraging our community to tion drugs down so that the poorer nations, in and the desire to live up to The Jester & stand in solidarity with our brothers and sisters particularly those in Africa, can afford to buy Pharley’s motto: ‘‘It’s up to us to make a dif- in Africa. I urge my colleagues to join me in them or generic drugs. In times of international ference, it’s up to us to care....’’ saluting Cardinal Napier, and pay tribute to health disasters, we must put the lives of peo- Barbara has become ‘‘The Jester’s Mom’’ him as he embarks on this historic visit. ple first; and profits second. Sadly, this has bringing the Jester & Pharley’s message of f not been the case. hope and laughter to thousands of children in In the United States, 950,000 people have hospitals and schools throughout the country. THE FREE HOUSING MARKET been diagnosed with AIDS. African Americans Joe has served the community as a professor ENHANCEMENT ACT make up only 13 percent of the total U.S. pop- of journalism at the University of Southern ulation but 54 percent of new infections. 82 California Annenberg School for Communica- HON. RON PAUL percent of women who are newly infected with tion for more than 35 years and continues to OF TEXAS HIV are African-American and Latino. serve as an educator, academic, journalist and IN THE HOUSE OF REPRESENTATIVES In Michigan, AIDS patients who are depend- administrator. Monday, July 15, 2002 ent on federal programs to help cover the Mr. Speaker, Joe and Barbara Saltzman costs of HIV/AIDS drugs are now saying that have dedicated their lives to helping children Mr. PAUL. Mr. Speaker, I rise to introduce due to budget cuts, they are having difficulty who need to hear the Jester’s message and the Free Housing Market Enhancement Act. affording HIV/AIDS drugs. We can not allow have made a significant difference in the lives This legislation restores a free market in hous- this to happen. of so many people who need to find hope and ing by repealing special privileges for the It is imperative that we as a nation provide laughter. I commend their commitment in housing-related government sponsored enter- the requisite funds necessary to provide ade- bringing a little more happiness to all our lives. prises (GSE). These entities are the Federal National Mortgage Association (Fannie Mae), quate treatment and prevention for HIV/AIDS f both at home and abroad. the Federal Home Loan Mortgage Corporation TRIBUTE TO CARDINAL WILFRID f (Freddie Mac), and the National Home Loan NAPIER, OFM, OF DURBAN, Bank Board. According to the Congressional COMMEMORATING THE 40TH WED- SOUTH AFRICA AND THE ARCH- Budget Office, the housing-related GSEs re- DING ANNIVERSARY OF JOE AND DIOCESE OF DETROIT ceived 13.6 billion worth of indirect federal BARBARA SALTZMAN subsidies in Fiscal Year 2000 alone. HON. DAVID E. BONIOR One of the major government privileges HON. MICHAEL M. HONDA OF MICHIGAN granted the GSEs is a line of credit to the OF CALIFORNIA IN THE HOUSE OF REPRESENTATIVES United States Treasury. According to some IN THE HOUSE OF REPRESENTATIVES estimates, the line of credit may be worth over Monday, July 15, 2002 $2 billion dollars. This explicit promise by the Monday, July 15, 2002 Mr. BONIOR. Mr. Speaker, I rise today to Treasury to bail out the GSEs in times of eco- Mr. HONDA. Mr. Speaker, I rise today to recognize the Archdiocese of Detroit, which nomic difficulty helps the GSEs attract inves- congratulate Joe and Barbara Saltzman who has joined with the U.S. Conference of Catho- tors who are willing to settle for lower yields were married on July 1, 1962, and are now lic Bishops and Catholic Relief Services to than they would demand in the absence of the celebrating their 40th wedding anniversary. stand in solidarity with Africa through the Afri- subsidy. Thus, the line of credit distorts the al- They are the children of Ruth and Murray ca Rising: Hope and Healing Campaign. En- location of capital. More importantly, the line of Saltzman and Sid and Lillian Epstein, the par- couraging members of the Metro Detroit credit is a promise on behalf of the govern- ents of David and Michael Saltzman, the par- Catholic community to engage in advocacy, ment to engage in a massive unconstitutional ents-in-law of Jennifer Saltzman, and the dialogue, and prayer, they have joined this and immoral income transfer from working grandparents of Samantha and Sarah campaign to truly put their faith to work. On Americans to holders of GSE debt. Saltzman. Sunday, June 30, 2002, the Archdiocese of The Free Housing Market Enhancement Act Joe and Barbara Saltzman have been active Detroit had the distinguished honor of hosting also repeals the explicit grant of legal authority as professional journalists in the community Cardinal Wilfrid Napier, OFM, of Durban, given to the Federal Reserve to purchase the for four decades, with Joe Saltzman having South Africa, as part of their Africa Rising: debt of the GSE. GSEs are the only institu- won more than 50 awards as a broadcast Hope and Healing Campaign. tions besides the United States Treasury journalist including the Columbia University- Born in Matatiele, South Africa, in 1941, granted explicit statutory authority to duPont broadcast journalism award, four Cardinal Napier studied in Ireland and France monetarize their debt through the Federal Re- Emmys, four Golden Mikes, two Edward R. and completed a Masters Degree in Philos- serve. This provision gives the GSEs a source Murrow Awards, a Silver Gavel, and one of ophy and Theology. Ordained a priest in 1970 of liquidity unavailable to their competitors. the first NAACP Image Awards, and Barbara and then appointed Administrator Apostolic of Ironically, by transferring the risk of a wide- Saltzman having been a member of the Los the Diocese of Kokstad and made Bishop of spread mortgage default, the government in- Angeles Times staff for 22 years and editor of Kokstad in 1981, Cardinal Napier’s vibrance creases the likelihood of a painful crash in the the daily Calendar section. and leadership was apparent from the start. housing market. This is because the special When their son David, a Chadwick School Serving two terms as President of the South- privileges of Fannie and Freddie have dis- graduate, tragically died of Hodgkin’s disease ern African Catholic Bishops’ Conference from torted the housing market by allowing Fannie,

VerDate 112000 05:00 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00006 Fmt 0626 Sfmt 9920 E:\CR\FM\A15JY8.014 pfrm15 PsN: E15PT1 July 15, 2002 CONGRESSIONAL RECORD — Extensions of Remarks E1259 Freddie and the home loan bank board to at- Reduction Safeguard Balance only amends has led his congregation and community to tract capital they could not attract under pure House Rules. It does not require approval by greatness. market conditions. As a result, capitol is di- the Senate. This Resolution applies to both Bishop Laster’s distinguished service and verted from its most productive use into hous- mandatory and discretionary spending. We outstanding dedication to improving the lives ing. This reduces the efficacy of the entire have maxed out Uncle Sam’s credit card and of people through faith will continue to serve market and thus reduces the standard of living until we pay down the debt it is shortsighted as an example to communities across this Na- of all Americans. for us to continue spending without restraint. tion. I applaud Bishop Laster for his leader- However, despite the long-term damage to This Resolution is about honesty with the ship, commitment, and service, and I urge my the economy inflicted by the government’s in- American public. A dollar saved should actu- colleagues to join me in saluting him for his terference in the housing market, the govern- ally be a dollar saved, not a dollar added to exemplary years of faith and service on this ment’s policies of diverting capital to other another program. I urge my colleagues to co- very special 20th Pastoral Anniversary. uses creates a short-term boom in housing. sponsor this Resolution. Like all artificially-created bubbles, the boom f f in housing prices cannot last forever. When housing prices fall, homeowners will experi- PERSONAL EXPLANATION H.R. 5017 ence difficulty as their equity is wiped out. Fur- thermore, the holders of the mortgage debt HON. TODD TIAHRT SPEECH OF will also have a loss. These losses will be OF KANSAS greater than they would have otherwise been IN THE HOUSE OF REPRESENTATIVES HON. BETTY McCOLLUM had government policy not actively encour- Monday, July 15, 2002 OF MINNESOTA aged over-investment in housing. Perhaps the Federal Reserve can stave off Mr. TIAHRT. Mr. Speaker, on Friday, July IN THE HOUSE OF REPRESENTATIVES the day of reckoning by purchasing the GSE’s 12, I was unavoidably detained and missed Tuesday, July 9, 2002 debt and pumping liquidity into the housing roll call vote numbered 295. market, but this cannot hold off the inevitable Rollcall vote 295 was on passage of H.R. Ms. MCCOLLUM. Mr. Speaker, I rise in drop in the housing market forever. In fact, 4687, legislation which would provide for the strong support of H.R. 5017, a bill that creates postponing the necessary, but painful market establishment of investigative teams to assess an opportunity for the United States to imple- corrections will only deepen the inevitable fall. building performance and emergency re- ment agreements with foreign countries to as- The more people invested in the market, the sponse and evacuation procedures in the sist us as we battle severe wildfires. greater the effects across the economy when wake of any building failure that has resulted During the devastating wildfires two years the bubble bursts. in substantial loss of life or that posed signifi- ago, both Australia and New Zealand provided No less an authority than Federal Reserve cant potential of substantial loss of life. the United States much needed help. Fol- Chairman Alan Greenspan has expressed Had I been present, I would have voted lowing the 2000 fire season, long-term agree- concern that the government subsidies pro- ‘‘yea’’ on this bill. ments for firefighting assistance were nego- vided to the GSEs make investors underesti- f tiated with these countries. Unfortunately, mate the risk of investing in Fannie Mae and these agreements have not been implemented TRIBUTE TO DIOCESE BISHOP Freddie Mac. because of concerns that foreign firefighters CHARLES M. LASTER 20TH PAS- Mr. Speaker, it is time for Congress to act could be held liable for actions taken while TORAL ANNIVERSARY PENTE- to remove taxpayer support from the housing providing assistance in the United States. H.R. COSTAL TEMPLE CHURCH GSEs before the bubble bursts and taxpayers 5017 removes this barrier and extends liability are once again forced to bail out investors protection to foreign firefighters providing serv- who where misled by foolish government inter- HON. DAVID E. BONIOR ice to our nation by treating them the same as ference in the market. I therefore hope my col- OF MICHIGAN U.S. employees. At the same time, it requires leagues will stand up for American taxpayers IN THE HOUSE OF REPRESENTATIVES those countries with which we enter reciprocal and investors by cosponsoring the Free Hous- Monday, July 15, 2002 firefighting agreements to extend the same ing Market Enhancement Act. protection to U.S. firefighters who lend support Mr. BONIOR. Mr. Speaker, as the con- f overseas, or across our borders. gregation of the Pentecostal Temple Church INTRODUCTION OF THE DEFICIT gathered together on Sunday July 14, 2002, The valuable assistance firefighters from REDUCTION SAFEGUARD RESO- they celebrated the 20th Pastoral Anniversary other countries provide to the United States is LUTION of Diocese Bishop Charles M. Laster. A life- not new. For years, the collaborative relation- long leader and devoted pastor, Bishop Laster ship we have developed with Canada has pro- HON. JOHN SULLIVAN has truly demonstrated his commitment to ad- tected property, resources and lives. Forest vancing the mission of Pentecostal Temple fires do not recognize international bound- OF OKLAHOMA aries. It is vital we continue to work with other IN THE HOUSE OF REPRESENTATIVES Church across southeastern Michigan. As the members and friends of Bishop Laster and countries to ensure that wild fires are pre- Monday, July 15, 2002 Elect Lady Jacqueline Laster gathered to cele- vented and contained. Mr. SULLIVAN. Mr. Speaker, I rise today to brate this special anniversary, they paid tribute Just last week lightening started a 450-acre introduce the Deficit Reduction Safeguard to their outstanding years of activism, leader- wildfire in the northeast corner of Minnesota, Resolution. The House Deficit Reduction Safe- ship, and faith. north of the small town of Hovland. Since the guard Resolution will allow Members of Con- Bishop Laster has been preaching the Gos- risk of wildfire is low in Minnesota, much of gress to reduce the federal deficit by crediting pel to the congregation of Pentecostal Temple the state’s firefighting resources had been money to the Deficit Reduction Safeguard Bal- Church, located in Detroit Michigan, since sent west to help with the forest fires there ance. 1982. As his glorious message and ministry leaving us shorthanded. Because of our close Under current budget and House Rules, has been received, he has shown a special working relationship with Ontario’s natural re- when a Member offers an amendment to re- dedication to making a positive difference in source agency, Canadian firefighters were duce spending the money saved is left on the the lives of others. An active force in his com- able to bring the Hovland fire quickly under table and available for someone else to spend munity, he has worked tirelessly with the Pen- control. on another program. Members are not allowed tecostal Temple Church throughout the years Unfortunately, not every country has the to offer amendments and direct the savings to in organizing several programs and ministries unique and special relationship that the United deficit reduction. As a result, there is little in- as well as working with many organizations States has with Canada in fighting wildfires. centive to reduce wasteful spending in order around the State of Michigan. With community H.R. 5017 will allow the U.S. Government to to reduce the deficit. outreach programs, social and religious develop similar firefighting relationships with The Deficit Reduction Safeguard Balance events, charity work for those in need, and other countries around the world and enhance would correct this problem by amending statewide and national conferences, his in- the relationship we have with one of our House Rules to permit a Member to dedicate volvement with church and beyond has been neighbors. We must help each other. I am the money saved from any amendment to be an inspiration to all. In fact, Bishop Laster’s pleased the House addressed this issue today dedicated to reducing the deficit. The Deficit leadership has truly become a legacy, as he and am proud to lend my support.

VerDate 112000 05:00 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00007 Fmt 0626 Sfmt 0634 E:\CR\FM\A15JY8.017 pfrm15 PsN: E15PT1 E1260 CONGRESSIONAL RECORD — Extensions of Remarks July 15, 2002 REGARDING H.R. 5068, ALLOWING TO HONOR MR. VINCENT ROIG FOR Today, on the occasion of the celebration of UNINSURED WOMEN TO OBTAIN HIS MERITORIOUS ACHIEVEMENTS Southwest Companies’ 20th Anniversary, I ask TREATMENT FOR OVARIAN AND my colleagues to join me in extending our UTERINE CANCER HON. ED PASTOR heartiest congratulations to Southwest Student Services Corporation and to Mr. Vincent Roig OF ARIZONA for his 20 years of leadership and dedication. HON. PATSY T. MINK IN THE HOUSE OF REPRESENTATIVES f Monday, July 15, 2002 OF HAWAII Mr. PASTOR. Mr. Speaker, it is with great TRIBUTE TO RAY TOWNSHIP IN THE HOUSE OF REPRESENTATIVES pleasure that I rise before you today and take Monday, July 15, 2002 this opportunity to recognize the meritorious HON. DAVID E. BONIOR achievements of an outstanding Arizonan and OF MICHIGAN Mrs. MINK of Hawaii. Mr. Speaker, Con- American, Mr. Vincent Roig. IN THE HOUSE OF REPRESENTATIVES gress passed the Breast and Cervical Cancer Mr. Roig has distinguished himself as a Treatment Act (P.L. 106–354) to help low-in- leader in the essential work of providing edu- Monday, July 15, 2002 come, uninsured women with breast and cer- cational opportunities for qualified citizens. Mr. BONIOR. Mr. Speaker, today I rise to vical cancer. From his early years as an educator and fi- recognize Ray Township, whose outstanding nancial aid administrator at a number of uni- dedication and commitment to the service of Before passing this act, low-income women versities, he dedicated himself to helping its community has led to a great accomplish- could receive free mammograms and pap young people gain the knowledge and skills ment. On Sunday, June 30, 2002, Ray Town- smears through the CDC’s National Breast that they would need throughout their life. ship will be celebrating its 175th Anniversary. and Cervical Cancer Early Detection Program. In 1982, he was one of the founders of the Ray Township today is a flourishing center However, women who were diagnosed with Arizona Educational Loan Marketing Corpora- of civic and social activities and resources for cancer could not obtain financial assistance tion, the state’s secondary market for Federal families of the community. With a great em- for treatment. The government found diseases student loans, which is now an affiliate of the phasis on community service, Ray Township that could kill these women, but it did not help Southwest Student Services Corporation. has opened its doors throughout the years to them obtain the medical treatment they need- Although the Congress of the United States welcome community members to civic gath- ed. had the foresight to create the Federal Family erings, conferences, club meetings, and P.L. 106–354 corrected this problem by pro- Education Loan Program, it takes the leader- events for the entire family. Ray Township’s viding federal funds to treat any breast or cer- ship and dedication of a person such as Mr. Historical Committee will be honoring the vical cancer detected by the CDC’s early de- Roig, Chairman and Chief Executive Officer of many years of service by presenting the State Southwest Student Services Corporation, to of Michigan’s Registered Historical Site tection program. effectively implement the Congress’ intended Plague. Congress passed P.L. 106–354 so poor goal. The Southwest Companies initially sup- Community will always serve as the corner- women suffering from breast and cervical can- ported only students at Arizona colleges and stone of Ray Township. While maintaining this cer could focus on dealing with their illness universities. However, to date, they have pro- community spirit, Ray Township is expanding, rather than paying for expensive medical bills. vided more than $3 billion to more than one by bringing in new levels of technology and re- The law allows these women to obtain medical million parents and students nationally in sup- sources. The community of Ray Township has coverage for cancer treatments and medicine. port of providing financial access to post-sec- dedicated its time and talents to bring its com- ondary education. munity into the 21st Century, and they have My bill, H.R. 5086, amends the Breast and Under the initiative and leadership of Mr. been successful. While continuing to progress, Cervical Cancer Treatment Act to include Roig, not only have the Southwest Companies Ray Township’s roots will forever be memori- ovarian and uterine cancer. It will provide facilitated the availability of student financial alized by the Historical Plaque that will be un- medical treatment for women who are support, they have reduced costs to the bor- veiled at the anniversary celebration. The screened by the CDC’s early detection pro- rowers and provided the critically important in- plaque will represent the First Religious Soci- gram and who are found to have ovarian and formational services that ensure that low-in- ety of Ray built in 1869, currently the town- uterine cancer. come families understand that educational op- ship’s Town Hall, and the Ray Township Dis- My bill takes the next logical step by helping portunity is available to them. Mr. Roig has trict School House of 1863, currently the town- low-income women with ovarian and uterine worked tirelessly with the U.S. Department of ship’s library. Because of this community un- cancer, two of the most devastating cancers Education, Congressional Subcommittees and wavering support throughout its remarkable faced by women. Ovarian cancer is the 5th the many organizations supporting student fi- history, Ray Township has become a place leading cause of cancer death in women. nancial assistance to bring about useful that will continue to cultivate its historic roots as well as reach out to younger generations. Every year almost 40,000 new cases of uter- change and modernization to improve service to educational institutions and students alike. Ray Township is a true testament to the ine cancer are diagnosed in the U.S., and ap- In recognition of his efforts, in 2001 he was hard work and dedication of community mem- proximately 6,600 women will die from uterine awarded the Jean S. Frohlicher Outstanding bers and their families. I applaud the people of cancer. Service Award by the National Council of Ray Township for their leadership, commit- I urge my colleagues to help women who Higher Education Programs. This is a pres- ment, and service, and I urge my colleagues live in poverty and cannot obtain the cancer tigious award for which he was chosen by his to join me in congratulating them on this land- treatments they desperately need. peers for his exceptional service. mark occasion.

VerDate 112000 05:00 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00008 Fmt 0626 Sfmt 0634 E:\CR\FM\A15JY8.021 pfrm15 PsN: E15PT1 July 15, 2002 CONGRESSIONAL RECORD — Extensions of Remarks E1261 SENATE COMMITTEE MEETINGS and the Russian Federation on Stra- a Member, and Carolyn W. Merritt, of Title IV of Senate Resolution 4, tegic Offensive Reductions, Signed at Illinois, to be a Member and Chair- Moscow on May 24, 2002 (Treaty person, both of the Chemical Safety agreed to by the Senate on February 4, Doc.107-08). and Hazard Investigation Board. 1977, calls for establishment of a sys- SD–419 SD–406 tem for a computerized schedule of all 2 p.m. 2 p.m. meetings and hearings of Senate com- Agriculture, Nutrition, and Forestry Indian Affairs mittees, subcommittees, joint commit- To hold hearings to examine Homeland To hold hearings on proposed legislation tees, and committees of conference. Security. to ratify an agreement to regulate air This title requires all such committees SH–216 quality on the Southern Ute Indian Governmental Affairs to notify the Office of the Senate Daily Reservation. To hold hearings to examine the nomina- SR–485 Digest—designated by the Rules com- tion of Mark W. Everson, of Texas, to mittee—of the time, place, and purpose Judiciary be Deputy Director for Management, To hold hearings to examine pending of the meetings, when scheduled, and Office of Management and Budget. nominations. any cancellations or changes in the SD–342 SD–226 meetings as they occur. 2:30 p.m. Agriculture, Nutrition, and Forestry As an additional procedure along Banking, Housing, and Urban Affairs Production and Price Competitiveness Housing and Transportation Subcommittee with the computerization of this infor- Subcommittee To hold oversight hearings to examine To hold hearings on S.532, to amend the mation, the Office of the Senate Daily public mass transit systems. Federal Insecticide, Fungicide, and Digest will prepare this information for SD–538 printing in the Extensions of Remarks Rodenticide Act to permit a State to register a Canadian pesticide for dis- section of the CONGRESSIONAL RECORD JULY 18 tribution and use within that State. on Monday and Wednesday of each 9:30 a.m. SR–332 week. Commerce, Science, and Transportation Appropriations Meetings scheduled for Tuesday, July To hold hearings to examine the role of Business meeting to markup H.R.5010, 16, 2002 may be found in the Daily Di- Enron Corporation energy services in making appropriations for the Depart- gest of today’s RECORD. the western state electricity crisis. ment of Defense for the fiscal year end- SR–253 MEETINGS SCHEDULED ing September 30, 2003; proposed legis- Aging lation making appropriations for the To hold hearings to examine issues with Departments of Commerce, Justice, JULY 17 respect to identify theft. and State, the Judiciary, and related 9:30 a.m. SD–628 agencies for the fiscal year ending Sep- Commerce, Science, and Transportation 10 a.m. tember 30, 2003; proposed legislation Consumer Affairs, Foreign Commerce, and Indian Affairs making appropriations for foreign op- To hold hearings to examine proposed Tourism Subcommittee erations, export financing, and related legislation to approve the settlement To hold hearings on proposed legislation programs for the fiscal year ending of water rights claims of the Zuni In- authorizing funds for the Federal Trade September 30, 2003; and proposed legis- dian Tribe in Apache County, Arizona. Commission. lation making appropriations for the SR–485 SR–253 Departments of Labor, Health and Judiciary 10 a.m. Human Services, and Education, and Business meeting to resume markup of Indian Affairs related agencies for the fiscal year end- H.R.3375, to provide compensation for To hold oversight hearings to examine ing September 30, 2003. the United States citizens who were the protection of Native American sa- S–128, Capitol victims of the bombings of United cred places. States embassies in East Africa on Au- 2:15 p.m. SR–485 gust 7, 1998, on the same basis as com- Foreign Relations Judiciary pensation is provided to victims of the Business meeting to consider pending Constitution Subcommittee terrorist-related aircraft crashes on calendar business. To hold hearings on S.J.Res.35, proposing September 11, 2001; and S.486, to reduce SD–419 an amendment to the Constitution of the risk that innocent persons may be 2:30 p.m. the United States to protect the rights executed; and to begin mark up of Commerce, Science, and Transportation of crime victims. S.862, to amend the Immigration and To hold hearings on the nominations of SD–226 Nationality Act to authorize appro- Frederick W. Gregory, of Maryland, to Health, Education, Labor, and Pensions priations for fiscal years 2002 through be Deputy Administrator of the Na- Business meeting to consider S.2394, to 2006 to carry out the State Criminal tional Aeronautics and Space Adminis- amend the Federal Food, Drug, and Alien Assistance Program; S.2395, to tration; and Kathie L. Olsen, of Oregon, Cosmetic Act to require labeling con- prevent and punish counterfeiting and and Richard M. Russell, of Virginia, taining information applicable to pedi- copyright piracy; S.2513, to asses the each to be an Associate Director of the atric patients; S.2499, to amend the extent of the backlog in DNA analysis Office of Science and Technology Pol- Federal Food, Drug, and Cosmetic Act of rape kit samples, and to improve in- icy. to establish labeling requirements re- vestigation and prosecution of sexual SR–253 garding allergenic substances in food; assault cases with DNA evidence; and Energy and Natural Resources S.1998, to amend the Higher Education S.Res.293, designating the week of No- National Parks Subcommittee Act of 1965 with respect to the quali- vember 10 through November 16, 2002, To hold hearings to examine S.1865, to fications of foreign schools; proposed as ″National Veterans Awareness authorize the Secretary of the Interior legislation authorizing funding for the Week″ to emphasize the need to de- to study the suitability and feasibility Child Care and Development Block velop educational programs regarding of establishing the Lower Los Angeles Grant; and the nomination of Richard the contributions of veterans to the River and San Gabriel River water- H. Carmona, of Arizona, to be Medical country. sheds in the State of California as a Director in the Regular Corps of the SD–226 unit of the National Park System; Public Health Service, and to be Sur- Banking, Housing, and Urban Affairs S.1943, to expand the boundary of the geon General of the Public Health To hold hearings on the nominations of George Washington Birthplace Na- Service. Paul S. Atkins, of Virginia, and Harvey tional Monument; S.2571, to direct the SD–430 Jerome Goldschmid, of New York, each Secretary of the Interior to conduct a Finance to be a Member of the Securities and special resources study to evaluate the To hold hearings to examine schemes, Exchange Commission. suitability and feasibility of estab- scams, and cons regarding fuel tax SD–538 lishing the Rim of the Valley Corridor fraud. Intelligence as a unit of the Santa Monica Moun- SD–215 To hold joint closed hearings with the tains National Recreation Area; S.2595, Joint Economic Committee House Permanent Select Committee on to authorize the expenditure of funds To hold hearings to examine economic Intelligence to examine events sur- on private lands and facilities at Mesa outlook issues. 2226, Rayburn Building rounding September 11, 2001. Verde National Park, in the State of 10:30 a.m. S–407, Capitol Colorado; and H.R.1925, to direct the Foreign Relations Environment and Public Works Secretary of the Interior to study the To resume hearings on the Treaty Be- To hold hearings on the nominations of suitability and feasibility of desig- tween the United States of America John S. Bresland, of New Jersey, to be nating the Waco Mammoth Site Area

VerDate 112000 05:00 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00009 Fmt 0626 Sfmt 0634 E:\CR\FM\M15JY8.000 pfrm15 PsN: E15PT1 E1262 CONGRESSIONAL RECORD — Extensions of Remarks July 15, 2002 in Waco, Texas, as a unit of the Na- restoration projects on National Forest Governmental Affairs tional Park System. System and other public domain lands. Oversight of Government Management, Re- SD–366 SD–366 structuring and the District of Colum- bia JULY 19 JULY 30 Subcommittee To hold hearings to examine consumer 10 a.m. 9:30 a.m. safety and weight loss supplements, fo- Intelligence Governmental Affairs cusing on the extent of the use of sup- To continue joint closed hearings with Investigations Subcommittee the House Permanent Select Com- plements for weight loss purposes, the To resume hearings to examine the role mittee on Intelligence to examine validity of claims currently being of financial institutions in the collapse events surrounding September 11, 2001. made for and against weight loss sup- S–407, Capitol of Enron Corporation, focusing on the plements, and the structure of the cur- contribution to Enron’s use of complex rent federal system of oversight and JULY 23 transactions to make the company regulation for dietary supplements. look better financially than it actually 9:30 a.m. SD–342 Governmental Affairs was. Investigations Subcommittee SD–342 AUGUST 1 To hold hearings to examine the role of 10 a.m. 10 a.m. financial institutions in the collapse of Indian Affairs Indian Affairs Enron Corporation, focusing on the To hold hearings on proposed legislation To hold oversight hearings to examine contribution to Enron’s use of complex concerning the Department of the Inte- the Secretary of the Interior’s Report transactions to make the company rior/Tribal Trust Reform Taks Force; on the Hoopa Yurok Settlement Act. look better financially than it actually and to be followed by S.2212, to estab- SR–485 was. lish a direct line of authority for the 2 p.m. SD–342 Office of Trust Reform Implementa- Indian Affairs tions and Oversight to oversee the To hold oversight hearings to examine JULY 24 management and reform of Indian problems facing Native youth. 9:30 a.m. trust funds and assets under the juris- SR–485 Veterans’ Affairs diction of the Department of the Inte- To hold hearings to examine mental rior, and to advance tribal manage- POSTPONEMENTS health care issues. ment of such funds and assets, pursu- SR–418 ant to the Indian Self-Determinations 10 a.m. Act. JULY 18 Indian Affairs SR–485 9:30 a.m. To hold hearings on S.1344, to provide Energy and Natural Resources training and technical assistance to JULY 31 To hold hearings to examine the effec- Native Americans who are interested tiveness and sustainability of U.S. 9:30 a.m. in commercial vehicle driving careers. technology transfer programs for en- SR–485 Finance ergy efficiency, nuclear, fossil and re- Joint Economic Committee To hold hearings to examine the Report newable energy, and to identify nec- To hold hearings to examine the meas- of the President’s Commission to essary changes to those programs to uring of economic change. 311, Cannon Strengthen Social Security. support U.S. competitiveness in the Building SD–215 global marketplace. 10 a.m. SD–366 JULY 25 Indian Affairs 10:30 a.m. 2:30 p.m. To hold oversight hearings to examine Health, Education, Labor, and Pensions Energy and Natural Resources the application of criteria by the De- To hold hearings to examine Food and Public Lands and Forests Subcommittee partment of the Interior/Branch of Ac- Drug Administration regulation of to- To hold hearings to examine S.2672, to knowledgment. bacco products. provide opportunities for collaborative SR–485 SD–430

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HIGHLIGHTS Senate passed H.R. 3763, Accounting Reform. Senate By unanimous consent, passage of S. 2673 was Chamber Action subsequently vitiated, and the bill was then returned Routine Proceedings, pages S6729–S6812 to the Senate calendar. Measures Introduced: Three bills were introduced, Corporate and Auditing Accountability, Respon- as follows: S. 2 and S. 2728–2729. Page S6808 sibility, and Transparency Act: By unanimous con- Measures Reported: sent, Committee on Banking, Housing, and Urban Report to accompany S. 2487, to provide for Affairs was discharged from further consideration of global pathogen surveillance and response. (S. Rept. H.R. 3763, to protect investors by improving the No. 107–210) Page S6808 accuracy and reliability of corporate disclosures made pursuant to the securities laws, and the bill was then Measures Passed: passed, after striking all after the enacting clause and Public Company Accounting Reform and Inves- inserting in lieu thereof the text of S. 2673, Senate tor Protection Act: By a unanimous vote of 97 yeas companion measure, as passed (listed above). (Vote No. 176), Senate passed S. 2673, to improve Pages S6779–93 quality and transparency in financial reporting and Senate insisted on its amendment, requested a independent audits and accounting services for pub- conference with the House thereon, and the Chair lic companies, to create a Public Company Account- was authorized to appoint conferees on the part of ing Oversight Board, to enhance the standard setting the Senate. Page S6793 process for accounting practices, to strengthen the Subsequently, by further unanimous consent, pas- independence of firms that audit public companies, sage of S. 2673 (listed above) was vitiated, and the to increase corporate responsibility and the usefulness bill was then returned to the Senate calendar. of corporate financial disclosure, to protect the objec- tivity and independence of securities analysts, to im- Greater Access to Affordable Pharmaceuticals prove Securities and Exchange Commission resources Act: Senate began consideration of the motion to and oversight, after taking action on the following proceed to consideration of S. 812, to amend the amendments proposed thereto: Pages S6734–79 Federal Food, Drug, and Cosmetic Act to provide Adopted: greater access to affordable pharmaceuticals. Sarbanes (for Shelby) Modified Amendment No. Pages S6797–S6801 4261, to require the SEC to conduct a study and A motion was entered to close further debate on submit a report to the Congress on aider and abettor the motion to proceed to consideration of the bill violations of the Federal securities laws. Page S6777 and, in accordance with the provisions of Rule XXII By a unanimous vote of 97 yeas (Vote No. 174), of the Standing Rules of the Senate, a cloture vote Reid (for Carnahan) Modified Amendment No. 4286 will occur on Wednesday, July 17, 2002. Page S6798 (to Amendment No. 4187), to require timely and A unanimous-consent agreement was reached pro- public disclosure of transactions involving manage- viding for further consideration of the motion to ment and principal stockholders. proceed to consideration of the bill at 10:30 a.m., on Page S6811 Pages S6735–77, S6777–78 Tuesday, July 16, 2002. By a unanimous vote of 97 yeas (Vote No. 175), Removal of Injunction of Secrecy: The injunction Edwards Modified Amendment No. 4187, to address of secrecy was removed from the following treaties: rules of professional responsibility for attorneys. Treaty with Sweden on Mutual Legal Assistance Pages S6735, S6778 in Criminal Matters (Treaty Doc. No. 107–12); and D753

VerDate 11-MAY-2000 06:42 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00001 Fmt 0627 Sfmt 0627 E:\CR\FM\D15JY2.REC pfrm11 PsN: D15JY2 D754 CONGRESSIONAL RECORD — DAILY DIGEST July 15, 2002

Treaty with Belize on Mutual Legal Assistance in Graham Hill, of Virginia, to be a Member of the Criminal Matters (Treaty Doc. No. 107–13). National Council on Disability for a term expiring The treaties were transmitted to the Senate today, September 17, 2005. (Reappointment) considered as having been read for the first time, and Joel Kahn, of Ohio, to be a Member of the Na- referred, with accompanying papers, to the Com- tional Council on Disability for a term expiring Sep- mittee on Foreign Relations and ordered to be print- tember 17, 2004. ed. Pages S6810–11 Patricia Pound, of Texas, to be a Member of the National Council on Disability for a term expiring Nominations Confirmed: Senate confirmed the fol- September 17, 2005. (Reappointment) lowing nomination: Marco A. Rodriguez, of California, to be a Mem- Lavenski R. Smith, of Arkansas, to be United ber of the National Council on Disability for a term States Circuit Judge for the Eighth Circuit. expiring September 17, 2002. Pages S6794–97, S6812 Marco A. Rodriguez, of California, to be a Mem- Prior to this action, by 94 yeas to 3 nays (Vote ber of the National Council on Disability for a term No. 177), three-fifths of those Senators duly chosen expiring September 17, 2005. (Reappointment) and sworn, having voted in the affirmative, Senate David Wenzel, of Pennsylvania, to be a Member agreed to the motion to close further debate on the of the National Council on Disability for a term ex- nomination of Lavenski R. Smith, of Arkansas, to be piring September 17, 2004. United States Circuit Judge for the Eighth Circuit. Linda Wetters, of Ohio, to be a Member of the Pages S6793–94 National Council on Disability for a term expiring Nominations Received: Senate received the fol- September 17, 2003. Page S6812 lowing nominations: Messages From the House: Pages S6806–07 Glenn Bernard Anderson, of Arkansas, to be a Measures Placed on Calendar: Page S6807 Member of the National Council on Disability for a term expiring September 17, 2002. Measures Read First Time: Page S6807 Glenn Bernard Anderson, of Arkansas, to be a Executive Communications: Pages S6807–08 Member of the National Council on Disability for a Additional Cosponsors: Pages S6808–10 term expiring September 17, 2005. (Reappointment) Additional Statements: Page S6806 Milton Aponte, of Florida, to be a Member of the National Council on Disability for a term expiring Notices of Hearings/Meetings: Page S6810 September 17, 2003. Privilege of the Floor: Page S6810 Barbara Gillcrist, of New Mexico, to be a Member Record Votes: Four record votes were taken today. of the National Council on Disability for a term ex- (Total—177) Pages S6778, S6779, S6794 piring September 17, 2002. Adjournment: Senate met at 12 noon, and ad- Barbara Gillcrist, of New Mexico, to be a Member journed at 8:12 p.m., until 9:30 a.m., on Tuesday, of the National Council on Disability for a term ex- July 16, 2002. piring September 17, 2005. (Reappointment) Graham Hill, of Virginia, to be a Member of the National Council on Disability for a term expiring Committee Meetings September 17, 2002. No committee meetings were held. h House of Representatives H.R. 4946, to amend the Internal Revenue Code Chamber Action to provide health care incentives related to long-term Measures Introduced: 11 public bills, H.R. care, amended (H. Rept. 107–572); 5115–5119, 5122–5127; and 4 resolutions, H. Con. H.R. 3048, to resolve the claims of Cook Inlet Res. 441 and H. Res. 484–486, were introduced. Region, Inc., to lands adjacent to the Russian River Pages H4604–05 in the State of Alaska, amended (H. Rept. 107–573); Reports Filed: Reports were filed today as follows: H.R. 3401, to provide for the conveyance of For- est Service facilities and lands comprising the Five

VerDate 11-MAY-2000 06:42 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00002 Fmt 0627 Sfmt 0627 E:\CR\FM\D15JY2.REC pfrm11 PsN: D15JY2 July 15, 2002 CONGRESSIONAL RECORD — DAILY DIGEST D755 Mile Regional Learning Center in the State of Cali- 100th anniversary of Dr. Carrier’s Invention of fornia to the Clovis Unified School District, to au- Air Conditioning: H. Con. Res. 413, honoring the thorize a new special use permit regarding the con- invention of modern air-conditioning by Dr. Willis tinued use of unconveyed lands comprising the Cen- H. Carrier on the occasion of its 100th anniversary; ter, amended (H. Rept. 107–574); Pages H4589–91 H.R. 5120, making appropriations for the Treas- Clarence Miller Post Office, Lancaster, Ohio: ury Department, the United States Postal Service, H.R. 4755, to designate the facility of the United the Executive Office of the President, and certain States Postal Service located at 204 South Broad Independent Agencies, for the fiscal year ending Sep- Street in Lancaster, Ohio, as the ‘‘Clarence Miller tember 30, 2003 (H. Rept. 107–575); Post Office Building’’ (agreed to by a yea-and-nay H.R. 5121, making appropriations for the Legisla- vote of 389 yeas with none voting ‘‘nay,’’ Roll No. tive Branch for the fiscal year ending September 30, 297); Pages H4591–92 (continued next issue) 2003 (H. Rept. 107–576); and H. Res. 483, providing for consideration of H.R. Blackwater National Wildlife Refuge Expan- 5093, making appropriations for the Department of sion, H.R. 4807, to authorize the Secretary of the the Interior and related agencies for the fiscal year Interior to acquire the property in Cecil County, ending September 30, 2003 (H. Rept. 107–577). Maryland, known as Garrett Island for inclusion in Page H4604 the Susquehanna National Wildlife Refuge. Agreed to amend the title so as to read: ‘‘A bill to authorize Speaker Pro Tempore: Read a letter from the Speaker wherein he appointed Representative the Secretary of the Interior to acquire the property Culberson to act as Speaker pro tempore for today. in Cecil County, Maryland, known as Garrett Island for inclusion in the Blackwater National Wildlife Page H4577 Refuge.’’; and Pages H4596–97 Recess: The House recessed at 12:48 p.m. and re- Honoring the American Zoo and Aquarium As- convened at 2 p.m. Page H4579 sociation: H. Con. Res. 408, honoring the American Presidential Message—District of Columbia FY Zoo and Aquarium Association and its accredited 2003 Budget Request Act: Read a message from member institutions for their continued service to the President wherein he transmitted the District of animal welfare, conservation education, conservation Columbia’s Fiscal Year 2003 Budget Request Act research, and wildlife conservation programs. with estimates of revenues and expenditures totaling $5.7 billion—referred to the Committee on Appro- Page H4598 priations and ordered printed (H. Doc. 107–242). Suspension Failed—Expansion of Aviation Ca- Page H4580 pacity in the Chicago Area: The House failed to agree to suspend the rules and pass H.R. 3479, to Suspensions: The House agreed to suspend the rules and pass the following measures: expand aviation capacity in the Chicago area, by a yea-and-nay vote of 247 yeas to 143 nays, Roll No. Cyber Security Enhancement Act of 2002: H.R. 298. (See next issue.) 3482, amended, to provide greater cybersecurity (agreed to by a yea-and-nay vote of 385 yeas to 3 Suspensions—Proceedings Postponed: The House nays, Roll No. 296); completed debate on the following motions to sus- Pages H4580–84 (continued next issue) pend the rules. Further proceedings were postponed until Tuesday, July 16: American Legion Amendments Act: H.R. 3988, to amend title 36, United States Code, to clarify the Honoring Ted Williams: H. Res. 482, honoring requirements for eligibility in the American Legion; Ted Williams and extending the condolences of the Pages H4585–86 House of Representatives on his death; AMVETS Charter Amendment Act: H.R. 3214, Pages H4592–94 to amend the charter of the AMVETS organization; Congratulating the Detroit Red Wings on its Pages H4586–87 Stanley Cup Championship: H. Res. 452, congratu- Veterans of Foreign Wars Charter Amendment lating the Detroit Red Wings for winning the 2002 Act: H.R. 3838, to amend the charter of the Vet- Stanley Cup Championship; and Pages H4594–96 erans of Foreign Wars of the United States organiza- 50th Anniversary of the Constitution of the tion to make members of the armed forces who re- Commonwealth of Puerto Rico: H. Con. Res. 395, ceive special pay for duty subject to hostile fire or amended, celebrating the 50th anniversary of the imminent danger eligible for membership in the or- constitution of the Commonwealth of Puerto Rico. ganization; Pages H4587–89 Pages H4598–H4601

VerDate 11-MAY-2000 06:42 Jul 16, 2002 Jkt 099060 PO 00000 Frm 00003 Fmt 0627 Sfmt 0627 E:\CR\FM\D15JY2.REC pfrm11 PsN: D15JY2 D756 CONGRESSIONAL RECORD — DAILY DIGEST July 15, 2002 Meeting Hour—Tuesday, July 16: Agreed that whether any counts in the Statement of Alleged Vio- when the House adjourns today, it adjourn to meet lations have been proven by clear and convincing at 10 a.m. on Tuesday, July 16 for morning-hour evidence. Testimony was heard from Representative debate. (See next issue.) Traficant, and the following Counsels of the House Senate Messages: Message received from the Senate Committee on Standards of Official Conduct: Berna- today appears on page H4577. dette Sargeant; Kenneth Kellner, and Paul Lewis. Hearings continue tomorrow. Amendments: Amendments ordered printed pursu- ant to the rule appear on pages H4606–08. HOMELAND SECURITY ACT Quorum Calls—Votes: Three yea-and-nay votes de- Select Committee on Homeland Security: Held a hearing veloped during the proceedings of the House today on H.R. 5005, Homeland Security Act of 2002. Tes- and will appear in the next issue. There were no timony was heard from Tom Ridge, Assistant to the quorum calls. President, Office of Homeland Security Advisor. Adjournment: The House met at 12:30 p.m. and Hearings continue tomorrow. adjourned at 10:34 p.m. f COMMITTEE MEETINGS FOR Committee Meetings TUESDAY, JULY 16, 2002 TREASURY, POSTAL SERVICE AND (Committee meetings are open unless otherwise indicated) GENERAL GOVERNMENT APPROPRIATIONS Senate Committee on Rules: Granted, by voice vote, an open rule on H.R. 5093, making appropriations for the Committee on Agriculture, Nutrition, and Forestry: to hold Department of the Treasury, Postal Service and Gen- hearings to examine livestock packer ownership issues, 10 eral Government for the fiscal year ending Sep- a.m., SD–562. Committee on Appropriations: Subcommittee on Defense, tember 30, 2003, providing one hour of general de- business meeting to mark up H.R. 5010, making appro- bate equally divided and controlled by the chairman priations for the Department of Defense for the fiscal year and ranking minority member of the Committee on ending September 30, 2003, 10 a.m., SD–192. Appropriations. The rule waives all points of order Full Committee, business meeting to mark up pro- against consideration of the bill. The rule provides posed legislation making appropriations for the Treasury that amendments printed in the Rules Committee Department, the United States Postal Service, the Execu- report accompanying the resolution shall be consid- tive Office of the President, and certain Independent ered as adopted in the House and in the Committee Agencies, for the fiscal year ending September 30, 2003, of the Whole. The rule waives points of order 2 p.m., S–128, Capitol. against provisions in the bill, as amended, for failure Subcommittee on Commerce, Justice, State, and the to comply with clause 2 of rule XXI (prohibiting Judiciary, business meeting to mark up proposed legisla- tion making appropriations for the Departments of Com- unauthorized appropriations or legislative provisions merce, Justice, and State, the Judiciary, and related agen- in an appropriations bill), except as specified in the cies for the fiscal year ending September 30, 2003, 3 resolution. The rule provides that the bill shall be p.m., S–128, Capitol. considered for amendment by paragraph. The rule Subcommittee on Foreign Operations, business meeting waives points of order during consideration of the to mark up proposed legislation making appropriations bill against amendments for failure to comply with for foreign operations, export financing, and related pro- clause 2(e) of rule XXI (prohibiting non-emergency grams for the fiscal year ending September 30, 2003, designated amendments to be offered to an appro- 5:15 p.m., SD–116. priations bill containing an emergency designation). Subcommittee on Labor, Health and Human Services, The rule authorizes the Chair to accord priority in and Education, business meeting to mark up proposed recognition to Members who have pre-printed their legislation making appropriations for the Departments of Labor, Health and Human Services, and Education, and amendments in the Congressional Record. Finally, related agencies for the fiscal year ending September 30, the rule provides one motion to recommit with or 2003, 5:30 p.m., SD–124. without instructions. Testimony was heard from Committee on Banking, Housing, and Urban Affairs: to Representatives Skeen, Dicks, and Kildee. hold oversight hearings to examine the Semi-Annual Re- IN THE MATTER OF REPRESENTATIVE port on Monetary Policy of the Federal Reserve, 10 a.m., JAMES A. TRAFICANT, JR. SH–216. Committee on Commerce, Science, and Transportation: to Committee on Standards of Official Conduct: Adjudica- hold hearings on the nomination of Jonathan Steven tory Subcommittee held a hearing in the Matter of Adelstein, of South Dakota, to be a Member of the Fed- Representative James A. Traficant, Jr., to determine eral Communications Commission, 2:30 p.m., SR–253.

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Committee on Energy and Natural Resources: to hold hear- Subcommittee on National Security, Veterans’ Affairs ings to examine the Administration’s plans to request ad- and International Relations, hearing on Missile Defense: ditional funds for wildland firefighting and forest restora- A New Organization, Evolutionary Technologies and Un- tion as well as ongoing implementation of the National restricted Testing, 10 a.m., 2154 Rayburn. Fire Plan, 2:30 p.m., SD–366. Committee on the Judiciary, Subcommittee on Commer- Committee on Environment and Public Works: with the cial and Administrative Law, to mark up the following Committee on the Judiciary, to hold joint hearings to ex- bills: H.R. 2526, Internet Tax Fairness Act of 2001; and amine new source review policy, regulations, and enforce- H.R. 3995, Housing Affordability for America Act of ment activities, with respect to clean air, 10 a.m., 2002, 5 p.m., 2237 Rayburn. SD–106. Committee on Resources, Subcommittee on Energy and Committee on Finance: to hold hearings to examine Mineral Resources, hearing on ‘‘The Growing Natural homeland security and international trade issues, 10 a.m., Gas Supply and Demand Imbalance: the Role that Public SD–215. Lands and Federal Submerged Lands could play in the So- Full Committee, business meeting to consider S. 2221, lution,’’ 10 a.m., 1324 Longworth. to temporarily increase the Federal medical assistance per- Subcommittee on National Parks, Recreation and Pub- centage for the Medicaid program, 2 p.m., SD–215. lic Lands, hearing on the following bills: H.R. 3434, Committee on Health, Education, Labor, and Pensions: to McLoughlin House National Historic Site Act; H.R. hold hearings to examine the proposed Department of 3449, to revise the boundaries of the George Washington Homeland Security issues, 10 a.m., SD–430. Birthplace National Monument; and H.R. 4953, to direct Select Committee on Intelligence: to hold a joint closed the Secretary of the Interior to grant to Deschutes and briefing with the House Permanent Select Committee on Crook Counties in the State of Oregon a right-of-way to Intelligence to examine events surrounding September 11, West Butt Road, 2 p.m., 1334 Longworth. 2001, 10 a.m., S–407, Capitol. Committee on Small Business, Subcommittee on Work- Committee on the Judiciary: with the Committee on Envi- force, Empowerment and Government Programs, hearing ronment and Public Works, to hold joint hearings to ex- on Restructuring SBA, 2 p.m., 2360 Rayburn. amine new source review policy, regulations, and enforce- Committee on Standards of Official Conduct, Adjudicatory ment activities, with respect to clean air, 10 a.m., Subcommittee, to continue hearings in the Matter of SD–106. Representative James A. Traficant, Jr., to determine Subcommittee on Administrative Oversight and the whether any counts in the Statement of Alleged Viola- Courts, to hold hearings to examine the Federal Bureau tions have been proven by clear and convincing evidence, of Investigations computer hardware problems from 1992 10 a.m., 2118 Rayburn. to 2002, 2 p.m., SD–226. Committee on Transportation and Infrastructure, Sub- House committee on Aviation, oversight hearing on Problems Committee on Armed Services, Merchant Marine Panel, with the FAA Organizational Structure, 2 p.m., 2167 hearing on U.S. ownership and control of vessels oper- Rayburn. ating in the Maritime Security Program, 1 p.m., 2212 Subcommittee on Highways and Transit, hearing on Rayburn. Long-term Outlook on Highway Trust Fund: Are Fuel Committee on the Budget, hearing on Mid-Session Review, Taxes a Viable Measure? 10 a.m., 2167 Rayburn. 10:30 a.m., 210 Cannon. Committee on Veterans’ Affairs, to mark up the following Committee on Education and the Workforce, hearing on bills: H.R. 4940, Arlington National Cemetery Burial ‘‘Access to Higher Education for Low-Income Students: A Eligibility Act; H.R. 5005, to authorize the placement in Review of the Advisory Committee on Student Financial Arlington National Cemetery of a memorial honoring the Assistance Report on College Access,’’ 10:30 a.m., 2175 World War II veterans who fought in the Battle of the Rayburn. Bulge; H.R. 3645, Veterans Health-Care and Procure- Subcommittee on Workforce Protections, hearing on ment Improvement Act of 2002; 9:30 a.m., followed by ‘‘Can a Consensus Be Reached to Update OSHA’s Permis- a hearing on H.R. 4939, Veterans Medicare Payment Act sible Exposure Levels (PELs),’’ 2 p.m., 2175 Rayburn. of 2002, 10 a.m., 334 Cannon. Committee on Energy and Commerce, Subcommittee on En- Select Committee on Homeland Security, to continue hear- vironment and Hazardous Materials and the Sub- ings on H.R. 5005, Homeland Security Act of 2002, 10 committee on Health, joint hearing on Recent Develop- a.m., 345 Cannon. ments in the EPA Office of the Ombudsman, 10 a.m., 2123 Rayburn. Joint Meetings Committee on Financial Services, Subcommittee on Capital Joint Meetings: Senate Select Committee on Intelligence, Markets, Insurance, and Government Sponsored Enter- to hold a joint closed briefing with the House prises, hearing regarding the Department of the Treas- Permanent Select Committee on Intelligence to exam- ury’s policy on the Government Sponsored Enterprises, 2 ine events surrounding September 11, 2001, 10 a.m., p.m., 2128 Rayburn. S–407, Capitol. Committee on Government Reform, Subcommittee on En- Commission on Security and Cooperation in Europe: to hold ergy Policy, Natural Resources and Regulatory Affairs, hearings to examine the state of property restitution in hearing on EPA Cabinet Elevation: Agency and Stake- Central and Eastern Europe for American claimants, 2 holder Views, 3 p.m., 2154 Rayburn. p.m., 334 Cannon Building.

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Next Meeting of the SENATE Next Meeting of the HOUSE OF REPRESENTATIVES 9:30 a.m., Tuesday, July 16 10 a.m., Tuesday, July 16

Senate Chamber House Chamber Program for Tuesday: After the transaction of any Program for Tuesday: Consideration of Suspensions: morning business (not to extend beyond 10:30 a.m.), Sen- (1) H. Res. 448, Recognizing The First Tee; ate will continue consideration of the motion to proceed (2) H.R. 4866, Fed Up Higher Education Technical to consideration of S. 812, Greater Access to Affordable Amendments; Pharmaceuticals Act. (3) H. Res. 460, Recognizing and honoring Justin W. (Senate will recess from 12:30 p.m. until 2:15 p.m., for Dart, Jr.; their respective party conferences.) (4) H. Res. 482, Honoring Ted Williams (rolled vote); (5) H. Res. 452, Congratulating the Detroit Red Wings (rolled vote); and (6) H. Con. Res. 395, Celebrating the 50th anniversary of the Constitution of the Commonwealth of Puerto Rico (rolled vote). Consideration of H.R. 5093, FY 2003 Department of Interior Appropriations (open rule, one hour of debate).

Extensions of Remarks, as inserted in this issue

HOUSE Hinchey, Maurice D., N.Y., E1253, E1254 Paul, Ron, Tex., E1258 Honda, Michael M., Calif., E1253, E1258 Riley, Bob, Ala., E1255 Boehlert, Sherwood L., N.Y., E1254 Knollenberg, Joe, Mich., E1257 Shaw, E. Clay, Jr., Fla., E1256 Bonior, David E., Mich., E1258, E1259, E1260 McCollum, Betty, Minn., E1259 Stark, Fortney Pete, Calif., E1253 Conyers, John, Jr., Mich., E1255, E1257 McDermott, Jim, Wash., E1256 Stearns, Cliff, Fla., E1254 Crane, Philip M., Ill., E1257 Mink, Patsy T., Hawaii, E1260 Sullivan, John, Okla., E1259 Crowley, Joseph, N.Y., E1256 Pastor, Ed, Ariz., E1260 Tiahrt, Todd, Kans., E1259

(House proceedings for today will be continued in the next issue of the Record.)

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