Richard Baker

Mr. BAKER

Mr. BAKER. Madam Speaker, I yield myself such time as I may consume, for the purpose of just complimenting the gentleman on his statement and expressing my appreciation to him for the courtesies extended during the formulation of this legislation. At the outset, there were modest differences. I think we were able to reach compromise, and I think not only for the SEC function but for taxpayers, shareholders as well, and I appreciate the courtesies extended. Madam Speaker, I yield 3 minutes to the gentlewoman from New York (Mrs. Kelly).

Mr. BAKER. Madam Speaker, I move to suspend the rules and pass the bill (H.R. 658) to provide for the protection of investors, increase confidence in the capital markets system, and fully implement the Sarbanes-Oxley Act of 2003 by streamlining the hiring process for certain employment positions in the Securities and Exchange Commission, as amended.

Mr. BAKER. Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on this legislation.

Mr. BAKER. Madam Speaker, I yield myself such time as I may consume. It is not long ago that the revolutions of corporate misgovernance became apparent to not only those within the corporate world, but to investors around the country. The resulting consequences led many hard- working families who had planned on retirements to reconsider those plans, as the value of the 401(k)s and pensions and savings plans eroded, literally overnight. In addition to those concerns, it was revealed to the American people that there were corporate executives who had abused their privileges as the leader of an important national corporation and taken resources inappropriately, illegally, and used them for their own personal gain. In light of these revelations, the SEC came to this Congress and first asked for additional funding to enhance their regulatory and enforcement capabilities, and this Congress responded. Unfortunately, because of the rules in which the Securities and Exchange Commission is constrained, the ability to utilize that $300 million was greatly inhibited. In fact, there is a provision within the securities and exchange civil service law which provides for expedited hiring of legal counsel. This particular provision is very narrow in scope but has been utilized successfully over the years to enable the SEC to acquire those legal services as it deems necessary. This provision is known as the excepted service. It is the purpose of this resolution to expand the scope of the excepted service to enable the SEC to further respond to identified problems in the area of accountancy, examination and economics. If passed, this resolution would enable the Commission to move in an expedited manner to hire the needed accountants, examiners and economists in order to fulfill the mission described for them by this Congress. It solves these problems in a proficient and expedited manner and is important that the SEC have these authorities as stipulated to restore confidence to the investing public. This is achieved without, I am aware, any opposition to the manner in which the bill is currently constructed. In fact, the union that represents the affected class of employees has now endorsed the legislation in its current form. I am not aware of any pending objection. I am aware of broad-based support, bipartisan support, and the legislation was reported out of committee without objection. Madam Speaker, I reserve the balance of my time.

Mr. BAKER. Madam Speaker, I yield 2 minutes to the gentlewoman from Florida (Ms. Ginny Brown-Waite).

Mr. BAKER

Mr. BAKER. Mr. Speaker, in 1996, Congress designated the United States Civil War Center (USCWC) at Louisiana State University (LSU) and the Civil War Institute at Gettysburg College as the co-facilitators of the Sesquicentennial, or 150th, Commemoration of the Civil War in 2011- 2015. Legislation establishing the Sesquicentennial Commission was to be introduced in Congress in 2003. Today I rise to offer this aforementioned legislation. The American Civil War (1861-1865) was one of the most violent times in the history of the United States, touching not only every state and territory, but claiming more than 600,000 lives, bringing freedom to over 4 million black slaves and destroying property valued at $5 billion. The ripple effects of the Civil War and Reconstruction remain today as our nation continues to wrestle with its legacy of race relations and federal, state and civil rights. In 1993, the USCWC was created as a department of the LSU College of Arts and Sciences under founding director David Madden. In 2000, the USCWC became a department of LSU Libraries' Special Collections. The mission of the USCWC is to promote the study of the American Civil War from the perspectives of all professions, occupations, and academic disciplines in order to facilitate a deeper, more thorough understanding of one of the most important events in our nation's history. This mission is fulfilled through a variety of projects, including an official web site featuring over 9000 links to Civil War- related sites, the Michael Shaara Award for Civil War Fiction, Civil War Book Review, the Michael Lehman Williamson Collection of Civil War Books for Young People, the David Madden Collection of Civil War Fiction, and the Sesquicentennial Commemoration of the Civil War. Mr. Speaker, I fully support the objectives and services the USCWC provides. What is more, I am pleased to introduce legislation today that will include the USCWC in the creation of the commission to provide grants and other assistance to institutions nationwide to conduct interdisciplinary Civil War commemorative activities between the years 2011 to 2015. The commission will include members of the U.S. Senate and House of Representatives, directors of the Library of Congress and National Archives, and academics in history, anthropology, sociology, political science, art history and law. I believe this commission will provide the direction and resources needed for proper Sesquicentennial Commemorations of the Civil War throughout this nation.

Mr. BAKER

Mr. BAKER. Mr. Speaker, I rise today to congratulate four outstanding students from the 6th district of Louisiana who won an essay contest titled ``What Makes America Great.'' As you know, Mr. Speaker, following the terrorism of September 11, when Americans were attacked for who we are, and at a time when young Americans are defending our freedoms on foreign soil, it is important to recall what America is all about and what we stand for. In an effort to remind us all of the greatness of our country, I turned to high school students in my district to draft essays and poetry that expresses their feelings of ``What Makes America Great.'' I would now like to read the winning submissions to the members of Congress. The honorable mention of the essay contest is Alexander Edelen who attends Bishop Sullivan High School in Baton Rouge and is in the 10th grade. Alexander writes: What makes America great? The great diversity of cultures, religions, and people make the United States a unique melting pot. This diversity brings different voices with different views to the government, allowing the United States to prosper. There were many cultures that came to America, including the French, English, African and Spanish. Each culture brought its technology, religion, and livelihood to America. The blending of these cultures made the United States evolve into the America seen today. America also has many religious denominations, such as Native Indian religions, and the Roman Catholic and Protestant Christian denominations. These varied beliefs give the United States a unique background for viewing the world from different perspectives. America's many cultures and religions have influenced the development of the United States, but it was the amazing cooperation of the people that held the United States together through good and bad times. The bravery, strength, wisdom, and willpower of the people have made life better for the United States and for the rest of the world. It was the people who chose this republican form of government, the people who saved the Union, the people who saved the world during the World Wars, and the people who now wish to see the end of terrorism. Is the United States a great place in which to live? Yes. In the United States of America, citizens and legal aliens are free to be diverse; it is this diversity that makes America a strong and proud nation. Our third place winner from Denham Springs High School is Steven Sikes. Steven writes: What makes America great is not its military might or the strength of its industry or even some kind of technological superiority. It is something less tangible but at the same time much more powerful that makes America great. It is the unconquerable spirit of its inhabitants that makes this country so special. The nature of this American spirit is demonstrated in revolutionary war slogans such as, ``Give me liberty or give me death!'' It is the belief that the personal freedoms of the individual are more important than anything else and should be fought for no matter what the cost. It is embodied in the nature of our government, which is unique in that it exists only as a tool for achieving the will of the American people and not for its own sake. Finally, the true nature of the American spirit is most evident in the courage and strength of the ordinary American citizen. The powerful and enduring American spirit is what makes this nation so incredible. Without it America would not be what it is today. It is what has enabled America to withstand all of the trials it has faced so far, and it is what will guide our country into a prosperous future. Mallory Braud of East Ascension High School placed second with her poem America the Great: Greatness comes in many forms Not just brains and brawn Like now in this time of war We keep on, keeping on United our nation stands Always proud and true We show our heroic pride Through the red, white, and blue Our strength is in our numbers We stand together now A band of faithful brothers Our freedom shows us how We live in peaceful harmony Unless we choose to fight We welcome all these strangers To try to do what's right We are too united to fail And too determined to fall We lend our helping hands So our nation may stand tall The people who all live here By chance, choice, or fate All come together to form America the Great. Colleen Wesley wrote our first place essay and she attends Denham Springs High School. Colleen writes: What makes America great? Is it the stock market or the government? Is it the culture or the food on our plates? Many people have different views on what makes America great, but to me, freedom is the only answer. Without freedom, we would not be able to choose our religion. Without freedom, we would not be able to state our opinions. Without freedom, we would not be able to express the many talents God has given us. As Americans, we have laws protecting us against religious persecution. We are free to worship as we choose. We are also free to choose to not worship. We are able to criticize our government without being thrown in jail and we are able to decide our future career. There are many things that make America great, but freedom is most important to me. I stand strong saying, ``I'm proud to be an American!'' I ask my colleagues to join me in honoring the students who participated in the ``What Makes America Great'' essay contest, and also in offering a special word of congratulations to our four finalists.

Mr. BAKER

Mr. BAKER. Mr. Chairman, after considerable work by Chairman Oxley and Mr. Bachus, the House of Representatives is once again considering legislation to reform Federal deposit insurance. This is important legislation that will have an impact on our constituents and our economy. As I stated last year, I am concerned about the potential effects of possible FDIC actions to develop and implement risk-based assessment standards under sections 4 and 7 of the legislation. My concern is that the FDIC may give excessive weight to Federal Home Loan Bank advances in the assessment process so that insured institutions with certain amounts or percentages of such advances would be classified as more risky and, therefore, pay higher deposit insurance premiums. My concern arises from the FDIC's report on deposit insurance reform, issued in April 2001, which indicated that, under a risk-based assessment system, the FDIC could use a sample risk ``scorecard'' that would result in institutions with increased amounts of FHLB advances paying higher risk-based insurance assessments. In my opinion, the use by the FDIC of risk-based assessment authority in this way would be contrary to Congress's clear intent to broaden access to FHLB advances in the Gramm-Leach-Bliley act of 1999. In the Gramm-Leach-Bliley act, we wanted to ensure that community institutions and housing lenders would be able to obtain adequate, reasonably priced FHLB advances as a source of funds to serve the borrowing needs of their customers. Providing this source of liquidity may actually reduce risk. I would anticipate, should the FDIC place undue weight on FHLB advances for its risk-based assessment system, the agency will likewise account for the risks associated with depository institutions holding U.S. agency debt and securities. As the principal House sponsor of the FHLB provisions in the Gramm- Leach-Bliley act, I will follow very closely the FDIC's implementation of any new risk-based assessment standards to ensure such standards do not adversely affect the prudent use or cost of advances.

Mr. BAKER

Mr. BAKER. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, I wanted to express my appreciation to the gentleman from Washington (Mr. Nethercutt) for his good work. I have some concerns about the proposed amendment. It is not broad enough in its constitution. For example, when we construct the list of those who have been intransigent and unwilling to listen to the rational thoughts of those of us in America trying to free people from oppression, we have left off the list the country of Turkey who refused to let our troops cross their territory to bring about freedom to those oppressed people from Iraq. It was only a few years ago when we conducted our operation in Afghanistan, when we asked those in Mexico to stand by our side. They refused to send troops. But when they were on the verge of bankruptcy, the President of the United States went around the Congress and sent billions of dollars to rescue them from financial calamity. Vincente Fox has been unusually quiet in the recent weeks and days as America's young men have placed their lives at risk. Yes, this group of identified nations should be known as an axis. It is called the ``axis of weasels,'' those who refuse to take a stand in defense of freedom, in the face of tyranny and oppression. Tonight, as we sit and debate this resolution, the axis of weasels is watching as our young men and women storm the streets of Baghdad, trying to free young men and women from the fear of oppression and the Fejadin taking the lives of kids. Is there any doubt? Is there any question? Is any Member of this House standing here tonight listening to this debate in question about what should be done about the axis of weasels? Are we going to tax the American workers, take their money and send it back to people to rebuild Iraq who criticized our efforts from its outset? What are we thinking? They are our allies who have laid their lives on the line, who have more than adequate resource and contracting capability to join with American hardworking people and give back the people of Iraq the standard of living to which they are entitled, which was taken from them not by a coalition forces, but by the despot Saddam Hussein, whose fortunes I hope are not favorable this evening. We have to join together in this House, stand up not only to this axis of weasels, but to all of those who stand in the face of Americans who fight only for one thing, to bring democratic opportunities to poor people around the globe. Oh, I know there are those who say this was fought for the case of big oil. If we wanted oil, we would have simply taken Kuwait. If we wanted to oppress, we would not have left Afghanistan. Look at our record. We stand here tonight united as a Congress not for the cause of dominating the world interests. We stand united in the face of tyranny to free people who are oppressed. It was only a few short months that the women of Afghanistan got the right to drive a car, to teach their children how to read publicly. Their tyranny cannot be fully comprehended, but what we are about tonight is the beginning of a new day, a day that brings justice and responsibility to those who refuse to give dignity to humans.

Mr. BAKER

Mr. BAKER. Mr. Chairman, I wish to address some comments made earlier in the debate where a vote for this bill was characterized as eliminating the only hope for the suffering and the dying. I just hope that that is an insensitive representation, and not based on a true understanding of the issue. By voting for this bill, Members are not casting themselves as scientific Luddites nor moral zealots; they are merely saying there are alternatives that are existent in the current scientific community that are relevant to developing the cures and promises that have been held out by that of embryonic research but not yet fulfilled. Much of the limitations on embryonic research's success has come from the results of cellular meiosis. When the cell has divided, those genetic defaults it would sometimes trigger that were developed to terminate are artificially preserved, thereby limiting the effectiveness of the embryonic cell line, which has been touted as the only hope for medical survivability. Other than that, placental embryonic and cord blood research has moved far beyond clinical research, and in fact now there is a corporation within my own district that is in the process of marketing products. For example, a corneal implant used after surgery produced from stem cells, put over the surgical incision, does not have to be removed because it is incorporated into the body. Stem cells from placental research inserted after a myocardial infarction has provided 100 percent recovery of heart function. The list goes on and on and on. By voting for this bill, Members are not religious zealots, not scientific Luddites, but they are merely saying that the issue of cloning is entirely different from stem cell research. There are avenues highly successful, highly provable, and I can take anyone who cares to see it to Baton Rouge, Louisiana, and walk through the halls of this facility where this research has moved beyond where human suffering has been responded to and addressed, and offers the hope and promise that all of us seek with the passage of this bill.

Mr. BAKER

Mr. BAKER. Mr. Speaker, I appreciate the chairman yielding me this time and certainly want to compliment his leadership on this most important matter, and certainly the gentleman from New York (Mr. LaFalce) and the gentleman from Pennsylvania (Mr. Kanjorski), who have worked tirelessly with us to propound a resolution to this most difficult problem. The important point I wish to speak to tonight is the significance of the mechanism by which we assist the industry while requiring repayment of taxpayer dollars. When one of these tragic events occurs, certainly the most important thing we can do is to keep our economy working and not have the tragic event of terrorism which takes the lives of innocent human beings, which causes the destruction of properties, to extend into the workforce and cause people to lose their employment by the loss of construction jobs or other opportunities. Without the passage of this act, should there be another unfortunate event, which all of us hope never occurs, we would face very uncertain times. The industry was able to respond, gratefully, to the horrific events in New York, but capital is depleted and we do not know what ability they may have if we suffer an event on such a grand scale again. Tonight we are responding to those eventualities by saying yes, we will help industry, we will help you in times of short-term liquidity, when your bank account is low, when you have paid out the claims and you cannot meet the next obligation, but we are going to require that industry to put their money up first; we do not go to the taxpayer as the first stop. But then we say to those companies, here is the taxpayer loan and it is in fact a loan where we are going to enable you to continue to operate by extending credit to you during this time of crisis, but we are going to expect you to pay it back. That is a unique standard. This House has acted in other areas of concern relating to business operation in times of terrorist attack and we have not required the extension of taxpayer funds to be repaid. Tonight, we establish a new standard. Yes, we are willing to help big business; yes, we are willing to do what is necessary to keep our economy going, but when the economy returns and the industry is enjoying a profit, we are going to expect to get our money back. I think that is not only entirely appropriate, but the highest standard of conduct for this committee to have exercised. We should not ever open the taxpayer checkbook to industry of any sort without demanding a high standard of conduct. Tonight we are setting it: You are going to give us the money back. Now, the Secretary of the Treasury does have the discretion, should we be in desperate economic circumstance where the imposition of the repayment would not be wise, meaning it would raise the premiums on homeowners, on business owners, or that the industry simply could not generate the resources to pay the money back. So we have a balanced approach. We say yes, we will help in times of crisis and we expect you to pay us back, but if economic conditions do not warrant it, the Secretary of the Treasury shall report to this Congress why he believes that the repayment should not occur. I think this is an excellent balance utilizing common sense and taxpayer resources to do that which we all are driven to do: to ensure that our economy functions, that terrorists do not win, that innocent working people are not harmed, and that at the end of the day our economic interests are protected. I wish to commend all of the parties who have contributed mightily to this effort and say, job well done. With regard to those issues concerning punitive damages, I agree with our whip. I do believe that we should be very careful in opening the doors to allow those who choose to file unwarranted litigation and suits and take 30 or 40 or 50 percent of the award that is granted, particularly in the area of punitive damages, for no apparent public policy reason, and I hope it is an area that with the President's leadership we can return to next year and resolve in the favor of the American taxpayer.

Mr. BAKER

Mr. BAKER. Mr. Speaker, I ask unanimous consent that my name be removed as cosponsor of H.R. 1433.

Mr. BAKER

Mr. BAKER. Mr. Speaker, today I rise to read a poem entitled ``The Day Liberty Cried'' written by a constituent of mine, Scott Rogers. The Day Liberty Cried (By Scott Rogers) Just another Tuesday morn As people went their way The cars, the trains were bustling by Another working day Although diverse with many faces These people shared one hue They lived together with Liberty Under the colors Red, White, and Blue Liberty was the one thing that they shared They nurtured Her in their heart But little that morn did they realize That their world would be torn apart Liberty was strong She stood proud But on this fateful morn She cried In horror She watched as evil attacked So many innocent people died Liberty bowed Her head that day For She felt somehow that She Had allowed these acts to come to Her shores To the Great Land of the free But the evil that attacked Her Could not begin to understand That Liberty could not be destroyed Nor our great love for this great land Those who tried to hurt Her Could not break Her soul And proudly we fought to rebuild what was lost Although heavy was our toll Each brick that fell was carefully removed Each victim we will always remember And Liberty is there to remind us all Each Eleventh of September We will never forget, we must not forget Yes, . . . Liberty did cry that day But we will never stop pledging ``In God we trust'' Because? . . . We love this U.S.A.

Mr. BAKER

Mr. BAKER. Madam Speaker, I thank the gentleman for yielding me time and wish to express my appreciation to both the gentleman from New York and the gentleman from Ohio (Chairman Oxley) for their leadership on this important issue. Madam Speaker, in this country when we find someone engaged in the sale of drugs to minors, we think it is such a terrible offense that we not only give them jail time when convicted, we seize all their assets. We take the car from which the material was hauled; we take anything we can find related to that activity. How more appropriate when some state-sponsored activity takes the life of or tortures innocent individuals for no apparent reason, that we should go after not only those who commit the acts of terror, those who engage in it, but their assets as well? The United States Government has seized millions of dollars of assets that could be made available to the victims of these heinous acts, but the Congress must act. So I commend these individuals for taking the leadership in bringing forth this motion to instruct, which will, in some small way, bring relief to those who have been gravely harmed, and, more importantly, send a very strong message to those who engage in acts of terror: when you engage in these acts, there will be a very high price to pay. Money is not enough. We need more.

Mr. BAKER

Mr. BAKER. Mr. Speaker, I thank the chairman for yielding me time. Mr. Speaker, this is indeed a very important moment in Congressional history, and I wish to express my appreciation to the gentleman from Ohio (Mr. Oxley), the ranking member, the gentleman from New York (Mr. LaFalce), and Chairman Sarbanes and ranking member Gramm in the Senate. They have done extraordinary work in bringing us to this point in time. Much has been said about bringing those to justice who have violated their corporate responsibility. I can think of no more sweeping change in the current body of law than the conference report this House will soon consider. It offers more change, breadth of change and significance of change, than any Congressional action since the 1933 and 1934 Securities Acts themselves. It is appropriate, I think, to recount how we got to this point. Last year the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, at the direction of the gentleman from Ohio (Chairman Oxley) began its inquiry into the conduct of analysts and the apparent conflict between their recommendations and what they seemed to know about company performance. From that early beginning until now, there has been revelation after revelation as to corporate wrongdoing. Nothing perhaps made a more visual impact on American investors, shareholders, pensioners and employees than watching the news yesterday as corporate executives were handcuffed and hauled away. The people of America are not only expecting it, they are demanding it. How is it possible for a person to work all his life for a corporation, be given stock rather than salary increases, and, on the verge of retirement, be told that the stock is worthless, while the CEO of the corporation seeks to retire in a $15 million mansion in Florida where he is above and beyond the reach of the law? That is not acceptable. It is not acceptable to me, I do not believe it is acceptable to this Congress, and I know it is not acceptable to the working people of this country. This is an outrage. There is no more privileged position in America today than to be the CEO, CFO or leading manager of a Fortune 500 company. Of those people we expect the highest level of ethical and moral conduct because of the extraordinary powers and opportunities which they are granted by this wonderful free enterprise system. Today we bring an end, I believe, to those abuses. You must sign that statement, and if you sign it and it is not accurate, there are consequences. If you misrepresent the material facts of your corporation, if you lie about what is going on, there are criminal consequences for that misrepresentation. If you choose simply not to tell the truth, there are consequences for that misrepresentation. In fact, the bill before us today doubles the penalties for violations of those responsibilities. But that is not enough. It is not enough to tell the truth. It is not enough that after we catch you we put you a way for a long time. We want to go after those ill-gotten gains, that profit you made by misrepresenting the material facts of your corporation while manipulating the books and profiting for your own best interests. We want to make sure those mansions, those benefits, those golden parachutes are collapsed, folded up neatly, put into a closet and sold off so that the shareholders back home can get their hands on their money. That is what has been lost in all of this. A corporate executive takes capital from individual investors, hard- working investors saving for their first home, their child's education or their retirement, and has a fiduciary responsibility to manage that money for their mutual good. What has happened, they have taken that money and put it in their pocket. I do not know how we are going to ultimately get to all of the State bankruptcy protections that allow these corporate mansions to be built, the extreme levels of financial worth, to allow a CEO to escape all of his liabilities and move into the home, live there 6 months, sell it and take the money and move to the south of France, but we are going to get there. This bill does not go quite that far, but over the next Congresses we are going to continue the work to make sure that no one who is defrauded by an irresponsible act of corporate abuse does not get full recompense for the wrong. This is a great day, a great conference report. I salute the gentleman from Ohio (Chairman Oxley) and Chairman Sarbanes for their extraordinary work.

Mr. BAKER

Mr. BAKER. Can the gentleman tell me how we could go further in protecting shareholders and constituents with any additional penalties or assessments that would be appropriate in light of the egregious examples we have seen in the marketplace?

Mr. BAKER. Mr. Speaker, I appreciate the gentleman's explanation. It is clear to me we have taken a very bold step, and I cannot understand anyone who would want to reduce these provisions.

Mr. BAKER. I thank the gentleman for yielding me this time. Mr. Speaker, this is a very important matter that the House must consider this evening and I do appreciate the recommendations the gentleman has made in his motion to instruct. All of those issues will certainly be the subject of conversation during the course of this important conference. I am surprised that the motion to instruct did not include the specific directions to adopt the provisions contained in the Senate- passed bill, the Sarbanes bill, since it has been viewed by so many as being the answer to the problem. But as is always the case, no legislative product is the perfect answer for all issues. I respectfully suggest that the Sarbanes bill is no different. There is work to do. For example, the Sarbanes bill does not make provision with regard to real-time material fact disclosure. What does that mean? That means if the corporate manager knows it and it is something that affects shareholder value and he does not report it until the 90-day quarterly earnings statement, you have terrific volatility in the markets and prices go up and down. We unfortunately are seeing that to great extreme today. That is why companies all too often file what they call pro forma returns. They get something out early that is not really a total disclosure, but it is something to help defuse the volatility of the quarterly earnings report. Real-time material disclosure says if you know it, you got to tell it. If you know it and you do not tell it, that is a criminal penalty. If you did not know it but should have, that is a civil penalty. We want to talk about what real-time material fact disclosure means. That will be the subject of the conference, because that is in the House- passed bill. But what has not been in either bill, and unfortunately I did not see in the motion to instruct, is to do something to actually help the defrauded investor. It troubles me to get home in the evening, turn on the TV and see some millionaire in Mississippi with an $18 million mansion who has run a corporation into the ground and we cannot get the house because he built it with shareholder-defrauded funds. We want to include a fair fund that says within the SEC all fines, all penalties, everything that is disgorged, that means taken back from the guys who have gotten ill-gotten gains, put it into an account and then let the SEC be bound to distribute 90 percent or more of it to the defrauded investor. With all due respect, we are not into a transfer of wealth. We do not want to take corporate wealth and give it to trial lawyer wealth by simply creating new causes of action while the shareholder sits on the sidelines and watches assets be spent in the courts while the fellow is down in the Caribbean enjoying a $150- million-a-year lifestyle. We need to fix that, and we are going to. In summary, the gentleman from California (Mr. Cox) talked about the fact that the House-passed criminal penalties for inappropriate conduct are twice what are now suggested by the motion to instruct. If you want to be tough on criminals, if you want to get the money back and you want to give information to investors, please defeat this motion to instruct.

Mr. BAKER. Mr. Speaker, may I further inquire of the gentleman, once an individual is found to have violated or has committed criminal conduct and found guilty, that the consequence of that activity is to be banned from holding even a corporate or board position for the individual's life?

Mr. BAKER. Mr. Speaker, I would like to engage the gentleman from California (Mr. Cox) on the question of the criminal penalties issue which seems to be still in some contention. As I understand the Sensenbrenner bill we passed in the House on yesterday, there was a provision that required the CEO of a corporation to certify the accuracy of financial statements and also to certify the accuracy of reports to the Securities and Exchange Commission. In both of those cases, it was my understanding that the penalties that were adopted in that matter dramatically exceeded the prior existing criminal penalties for misrepresentation. Is that the gentleman's understanding?

Mr. BAKER. I yield to the gentleman from California.

Mr. BAKER. It was also my understanding that there were additional personal liabilities associated with underperformance or inappropriate conduct that either did not exist in prior law or that the penalties associated with that conduct were dramatically increased. Is the gentleman familiar with those provisions, and is that accurate?

Mr. BAKER

Mr. BAKER. Mr. Speaker, I yield 1 minute to the gentlewoman from Pennsylvania (Ms. Hart), a member of the Committee on Financial Services.

Mr. BAKER. Mr. Speaker, I thank the chairman for yielding me the time, and I wish to extend my appreciation to the gentleman from Wisconsin (Mr. Sensenbrenner) as well as the gentleman from Ohio (Mr. Oxley) for their good work on this most important matter. Most Americans at home today are watching anxiously as the volatility of the stock market takes its toll in their personal savings or retirement plans, and they are looking to this Congress to take some action to stem the flow of capital away from those markets, to sit on the sidelines. It is not only bad for corporations, it is not only bad for shareholders, it is bad for the economy when people are afraid to trust the CEO, the accountant, the analyst, anyone involved in the process, and failing to make that investment, curtail the ability to create jobs and provide opportunities. What they are saying to us is go get the bad guys, stop them from doing this in the future and make them pay a price. The gentleman from Wisconsin (Mr. Sensenbrenner) and the gentleman from Ohio (Mr. Oxley) have before us a proposal which establishes new penalties for CEOs who fail to certify their financials or certify them knowing there is a material misstatement. They create a new penalty for failure to do so up to $5 million. They require a criminal penalty be assessed to those individuals who file false statements with the Securities and Exchange Commission and create a new penalty of up to $5 million. They provide for penalties relating to mail and wire fraud. A person communicates a material fact that is incorrect, misleading or false, they go to jail, not for 5 years, for up to 25 years. With regard to those extraordinary benefits that are granted these executives who have manipulated the books and benefited themselves, this requires the SEC to freeze extraordinary payments until appropriate investigation may be concluded to determine whether such payments were warranted or not. When there is a determination that a CEO has violated his fiduciary responsibility to the shareholders and the public, there is a lifetime prohibition on that individual from ever serving on a board in a corporate management responsibility ever again. This is a first step. This is not the end. We all know the Senate has acted. The House has acted on important reforms. There will be a conference, I assume a conference, which will meet very soon of the Committee on Financial Services and all interested stakeholders in this matter to pass additional restraints on inappropriate corporate behavior with guarantees of recompense to those who have been fraudulently abused. This work deals with the criminal statutes in establishing those criminal penalties which ought to be appropriate given the egregious statements that CEOs have made across this country relative to the financial condition of their corporation, and we gave. More than 50 percent of Americans have investments in the markets today through on- line investing, which was not possible six years ago. Now 800,000 trades a day occur with moms and pops investing $100 at a time for their child's education, for their first home, for their own retirement. This is no longer about institutional investors investing hundreds of millions of dollars at a time. It is no longer a question of sharks eating the sharks. It is the sharks after the minnows, and we are going to stop it.

Mr. BAKER. Mr. Speaker, I yield 2 minutes to the gentlewoman from West Virginia (Mrs. Capito).