Richard Bryan

Mr. BRYAN

Mr. BRYAN. I thank the Chair. Mr. President and my colleagues, this is an amendment dealing with the statute of limitations. Some of my colleagues will recall that in 1991, the Supreme Court of the United States decided by a 5-to-4 vote a case that is referred to as the Lampf decision. The Supreme Court in that decision determined that there would be with respect to securities actions a statute of limitations that would limit an investor from bringing a cause of action to 1 year from the point that the fraud was discovered and in no event longer than 3 years. The Supreme Court gave that a retrospective interpretation as well as a prospective interpretation. A number of us came to the floor in 1991, because this would have wiped out a number of the cases in which Charles Keating had been named the defendant, and the Congress corrected it. It changed the law--that it would be 2 to 5 years. Now, this deals prospectively. Under the Lampf case, the 1- to 3-year statute was identified as the appropriate statute of limitation. This amendment would provide rather than a 1- to 3-year statute of limitation, a 2- to 5-year statute of limitation. I must say that S. 240 in its original form as introduced contained the identical provision. So, in effect, this amendment, if adopted, would restore S. 240 to its original form. The importance of the statute of limitations, as the Securities and Exchange Commission and other regulators point out, is that by the very nature of these securities frauds, they are not easily detected. The last thing in the world we would want to do is to give comfort to those who are clever enough to conceal their fraud to effectively preclude a plaintiff from bringing his or her cause of action. There will be much more debate on this on Monday, but suffice it to say what we are trying to do is to provide 2 years from the date of discovery, in no event longer than 5 years, recommended by the Securities and Exchange Commission, recommended by the North American Association of Securities Administrators, and just one point for my colleagues to contemplate. In testimony before the Banking Committee, the Chairman of the SEC advised us that even with the enormous resources available to the SEC, all of the staffing that they have, and the sophistication that they have acquired over the past 60 years, it takes approximately 2.25 years to conduct such an investigation. Obviously, individual plaintiffs have much less in the way of resources available, and their likelihood of completing an investigation in the timeframe is considerably more limited. What we seek to do is provide a 2- to 5-year statute of limitations prospectively, and we will point out in the debate with more detail on Monday the overwhelming public policy argument in favor of this. Suffice it to say this has nothing to do with frivolous lawsuits-- nothing to do with frivolous lawsuits. There are provisions in the mark which deal with enhanced enforcement provisions under rule 11 of the Federal Rules of Civil Procedure to deal with the issue of frivolous lawsuits. This simply is a provision that will provide some fairness to investors to be able to present their claim in the first instance. I thank my colleagues for permitting me to go forward at this time.

Mr. BRYAN. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. BRYAN. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. BRYAN. If I might, I can assure my colleague that I am simply going to lay an amendment down, speak for approximately 5 minutes, so that I do not in any way--we did make a commitment to lay this down, and I have a time commitment in terms of a flight to get so I will accommodate the Senator.

Mr. BRYAN. I yield the floor. Mr. FAIRCLOTH addressed the Chair.

Mr. BRYAN. In responding to the question, I would not presume to know all jurisprudence, but I can think of no instance in which, as a matter of public policy, a determination is made where the wrongdoer should benefit and that the innocent victim should suffer the consequence of the wrongdoer's conduct.

Mr. BRYAN

Mr. BRYAN. The answer to the question of the Senator is unequivocally clear. They would have been unable to recover as much as they did. I would simply point out to my distinguished colleague from California, these are innocent people. These are not people who in any way participated in any scam. They are not lawyers. They are ordinary folks whose retirement was on the line. These were retirees. [[Page S 8917]] It is interesting. As I know the distinguished Senator knows, they went to what they describe kind of as a neighborhood bank, Lincoln Savings and Loan. They knew everybody and they would come in and say, ``How are you Suzy?'' And, ``How are you John?'' And, ``How is the golf game and how are you enjoying retirement?'' And they would say, ``Look, what is this stock offering you have, American Continental Corp.?'' And they were told, ``You know, you would be crazy not to put money in that, absolutely crazy. There is a much larger return than you would get just if you put this in a regular savings account in the bank.'' These are the people, I tell my distinguished colleague from California, real Americans from every State of all political persuasions, of all political philosophies--real people, and the impact upon them is what this debate is all about this evening.

Mr. BRYAN. I will be pleased to yield.

Mr. BRYAN. Mr. President, I thank the Chair. Mr. President, I rise in opposition to S. 240. I should like to make a couple of preliminary observations. This is not the kind of riveting stuff that keeps everybody in America who is watching on television at the edge of their seats. Much of this discussion is esoteric, technical, and full of legal nuances, but no one should conclude from that preliminary observation that it does not have an enormous impact on millions and millions of Americans. Everyone who has a retirement account in which he or she has invested in securities, millions of small investors, all have a stake in this legislation. The American securities market is acknowledged by all to be the world's safest and most effectively regulated, and the underpinning for this system has been twofold. No. 1, the powers which the Congress has vested in the Securities and Exchange Commission to regulate and keep the marketplace honest, fair and open to investors is one important aspect, in addition to the adjunctive support provided by State securities administrators in the respective 50 States. But as has been pointed out by my distinguished colleague, the senior Senator from Maryland, the ranking member of the Banking Committee, private causes of action are recognized by security regulators to be an equally important part [[Page S 8912]] in keeping the marketplace free from fraud. Mr. President, we are not talking about something that is academic, as if there were problems in the past and all of those have been taken care of. The New York Times in an article dated Friday, June 9 of this year makes this observation, and I quote: Securities regulators say they are opening investigations into insider trading at a rate not seen since the mid 1980's, the era in which Ivan Boesky, who went to jail for trading on inside information, became a household name. And then later I quote again. ``It's a growth industry,'' said William McLucas, Director of the Division of Enforcement of the Securities and Exchange Commission. ``In terms of raw numbers, we have as many cases as we have had since the 1980's, when we were in the heyday of mergers and acquisition activity.'' The North American Association of Securities Administrators estimates that each year there is approximately $40 billion of fraud in the securities marketplace. So millions of investors, people who do not think of themselves as stock barons but have their small retirements invested in the securities market, can be affected by what this Congress does on this legislation. In my view, Mr. President, the bill pits innocent investors, many of whom are elderly and are dependent upon those investments for their sole source of retirement, on one side and those who are trying to immunize themselves from liability by reason of their own fraud on the other side. I recognize the need for some changes in our securities litigation system. I do not appear before my colleagues this evening as a defender of the status quo. I commend the distinguished chairman and the sponsors of this bill because in a number of areas the bill which they have introduced improves the present system, and it does so in these areas without disadvantaging the innocent investors who may have been defrauded. These areas include the prohibition of referral fees to brokers, prohibition on attorney's fees paid from SEC settlements, no bonus payments to class plaintiffs, elimination of conflicts of interest, payment of attorney's fees on a percentage basis, and improved settlement notices. Mr. President, I think all of us would agree that those are important and positive changes which impact the securities litigation system in America. And if we are not in unanimity, there is virtually a consensus everywhere that these go a long way to correcting abuses in the securities litigation system. But any system must be balanced, and it must be fair so that it does not preclude meritorious suits. The Trojan horse that brings this legislation to the floor unfurls the ensign of preventing frivolous lawsuits. I share that conclusion, as does the distinguished ranking member, who previously spoke in the Chamber. But the passengers inside this Trojan horse have very little interest in deterring frivolous lawsuits. Their primary objective is to shield themselves, to immunize themselves from liability as a result of their own, in some instances, intentional fraud and, in other instances, reckless misconduct. It is for that reason my colleague and friend, the junior Senator from Alabama, Senator Shelby, and I introduced our own bill earlier this year, S. 667, as an alternative to the legislation that is before us today. Our bill is a carefully tailored, fair approach that would prevent frivolous actions from proceeding while at the same time protecting meritorious actions. Let me make a comment about frivolous lawsuits. I think there is a legitimate problem there, but the way in which we deal with frivolous lawsuits is to impose sanctions on attorneys who file frivolous lawsuits and make them be financially responsible for their misconduct in filing those frivolous lawsuits. I favor enhancements to rule 11 under the Federal Rules of Civil Procedure, and earlier this year I was privileged to offer the Frivolous Lawsuit Prevention Act which is designed to provide an additional power to Federal judges once a determination is made that a frivolous lawsuit or claim is made to impose sanctions, and that means financial responsibility so that the defendant who is required to defend that frivolous lawsuit can make his or her or its expenses whole again. I support that. I submit to my colleagues that this legislation which we have before us this evening is far more than an attempt to curb frivolous lawsuits because if that were its purpose, I would be in the vanguard of urging my colleagues to adopt this legislation. S. 667, which has been endorsed by numerous groups including the North American Association of Securities Regulators, the U.S. Conference of Mayors, and the Government Finance Officers Association contains reform measures that will improve the system for all Americans. S. 667 also contains many provisions to eliminate abusive suits and to protect all parties to litigation including a novel proposal for an early evaluation procedure designed to weed out those cases that are clearly frivolous cases and, as I said previously, to impose sanctions when necessary. It provides for a rational, proportionate liability system. Mr. President, it protects the defrauded investors fully so that when there is an uncollectible judgment against the primary wrongdoer, they can fully recover the amounts of their losses. It provides a reasonable regulatory safe harbor provision, as my distinguished friend and colleague, the Senator from Maryland, pointed out earlier this evening. And importantly, S. 667 also contains other measures to preserve meritorious suits. It restores aiding and abetting liability eliminated last year by the Supreme Court in the Central Bank of Denver case by a 5 to 4 decision. The effect of that case was to wipe out liability of aiders and abetters and to immunize them from lawsuits based upon their own reckless misconduct that has been responsible for losses incurred by innocent investors. S. 667 would also extend the statute of limitations for security fraud action in a manner suggested by the SEC and virtually every other unbiased witness who appeared before the Banking Committee. It codifies the reckless standard of liability with current law with the Sunstrand case, which Senator Sarbanes referred to, and it restricts, Mr. President, secret settlements, protective orders, and the sealing of cases so that the public really knows what happens in these cases. In my judgment, the bill that Senator Shelby and I sponsored is reasonable, targeted, and balanced. It solved those problems that have been identified while preserving the system that has made our capital markets the envy of the world as the strongest and most safe. By contrast, Mr. President, the bill before us today makes radical changes in our securities laws, laws that have worked exceedingly well over the past six decades. Let me discuss some of the arguments made for these radical changes. The primary premise of those who support S. 240 deals with an allegation that there has been an explosion of class action security lawsuits and that we must undertake these radical reforms in order to prevent this abuse. The Congressional Research Service, at my request, prepared a report that was issued on May 16 of this year and entitled ``Securities Litigation Reform: Have frivolous shareholder suits exploded?'' Let me read to you some of the findings of the CRS study. Again, Mr. President, I quote: While some current legislation . . . and the outcry of various corporate executives suggest that the volume of warrantless securities litigation has exploded to crisis proportions, evidence of this ``explosion'' is far from definitive. We know that in the 1990's, the number of annual Federal class action, securities cases filed has returned to the proximate level of such filings during the early and mid- 1970's. And I continue with the quote. By the standards of the docket sizes faced by Federal courts, the upper limits of these potentially ``abusive'' securities suits remain exceptionally small; the filings have never exceeded 315 yearly in 20 years. ``* * * 315 cases a year in the past 20 years.'' Let me reiterate that point again. ``* * * 315 cases in 20 years.'' In fact, when multiple filings are consolidated, because some companies face more than one lawsuit as a result of the allegation of securities fraud, approximately 120 to 150 companies are sued each year. Mr. President, that is out of some 14,000 registered companies -- 14,000 registered companies. And approximately 120 to 150 companies get sued each year. The CRS goes on to say: [[Page S 8913]] There are observers who argue that shareholder suits legally and unfairly exploit the high stock price volatility often observed among high tech firms. However, another analysis of these high tech firms indicates that their unusually short, and unpredictable product cycles may, in fact, predispose their management toward a greater tendency to suppress proper disclosure or to provide false ones. On balance, the evidence does not appear to be compelling enough for one to definitively assert that warrantless class action suits have exploded. Mr. President, let us take an even closer look at the underlying premise upon which opponents would rewrite, in my view, in a radical way, our highly successful 60-year-old securities law. First, we are told there is an explosion of securities fraud cases. The CRS report demonstrates that this simply is not the case. Let me invite my colleagues' attention to a chart that I have had prepared. These are securities class action lawsuits filed from 1974 to 1993. In 1974, over here, perhaps 290 cases; 20 years later, in 1993, approximately 290 cases. So in more than 20 years, when the population of America has geometrically increased, when the amount of general civil litigation--general civil litigation, not securities class actions--has grown dramatically, the number of class actions brought on behalf of securities plaintiffs has remained relatively constant, somewhere at the highest point, 315, and currently 290 cases.

Mr. BRYAN. He went bankrupt.

Mr. BRYAN. That is precisely the case. As the distinguished California Senator knows, having read the provisions of the print before us, the thing that is particularly alarming is that there are several provisions in this law that is being proposed in its current form, as to the pleading standard, safe harbor, the ability to stay or to prevent discovery--that is ascertaining what the facts are--so long as there is a motion to dismiss; all of those were tactics that were used by Mr. Keating and his lawyers. All of those. If the law in 1991 was the same as it will be if this is passed, together with the Supreme Court decisions that S. 240 fails to correct, those people might never have gotten into the courthouse door.

Mr. BRYAN. Mr. President, I thank my distinguished colleague from California. I know some of my colleagues have waited for a while. I will finish, and yield the floor in a couple of minutes. The Senator from California speaks with such clarity and conviction. She is absolutely right to remind us that a little more than a decade ago a big mistake was made with respect to the savings and loan industry. We spent billions and billions of dollars as a result. If we do not correct this legislation, as my distinguished colleague from Maryland, the distinguished colleague from California, and others will point out, we are opening the door to every charlatan and con artist in America to prey on innocent investors with impunity, and there almost a sense of deja vu. It may not happen tomorrow. But it will happen, and the consequences will be frightening. I do not think we want to make that mistake. America's securities markets have served as the world's finest. The Lincoln Savings & Loan in Orange County could be in my State. It could be in your State. I do not want to have to explain to the good citizens of my State why I allowed this happen, and why my failure to take action precluded them from being recovered as a result of frauds perpetrated upon them. Each and every one of us share that concern. I have a number of letters from State and local officials. I am not going to belabor my colleagues this evening with all of those. But let me point out as this issue has been framed that it is the lawyers. Frankly, the lawyers do bear some responsibility here. We talked about rule 11. And I am in favor of banging the lawyers that file frivolous lawsuits over the head and hit them in the pocketbook. Count me at the head of the line for them. But under the guise of getting the lawyers, unpopular since Shakespeare's time. ``Kill the lawyers first''--every student of Shakespeare recalls that quote. Let us try to give here a more objective view. You have people such as the Association of Governing Boards of Universities and Colleges who have expressed their concern and support the kinds of amendments that we are going to be offering, and oppose the legislation in its current form; the Association of Jesuit Colleges and Universities; the Council of Independent Colleges; the Government Finance Officers Association. These are not closet groups of trial lawyers. The Association of Clerks and Recorders; Election Officials and Treasurers; the Municipal Treasurers Association of the United States and Canada; the National Association of College and University Business Officers; the National Association of County Treasurers and Finance Officers; the National Association of State Universities and Land Grant Colleges; the North American Security Administrators. Mr. President, I do not believe that one can make the case that these are simply closet advocates for trial lawyers, who I understand are the most disdained group of professionals in America. I understand that. I am not unmindful of that. But we ought not with the antipathy that we feel toward them for whatever reason wipe out the right of innocent investors to sue. And the bill before us in its current print will do precisely that unless we accept the amendments that the Senator from Maryland, the Senator from California, and I believe the Senator from Florida as well maybe have. I thank my colleagues for yielding.

Mr. BRYAN. I will be pleased to do so.

Mr. BRYAN. And I thank my colleague for posing the question. Securities class action suits have actually declined sharply in the last 20 years relative to both the number and the proceeds--the number and the proceeds--of initial and secondary public offerings, stock market trading volume, and every other measure of economic activity. To claim that suits by victims of financial swindles have constituted an explosion in civil litigation is patently false. Now, we are also told, Mr. President, that so many companies are being sued that they are being distracted from other businesses. This is simply not true. According to figures from Securities Class Action Alert, only about 140 public companies were sued in securities fraud actions last year out of some 14,000 public companies reporting to the SEC. The only suits that have been going up are business suits against each other; that is, companies suing companies--companies suing companies, not suits by individuals against businesses. So if the companies who are suing each other are so troubled by litigation, why do they not just stop suing each other? Mr. President, I think I have the answer. It is because they do not want to prevent themselves from being able to sue. They just want to prevent private individuals from being able to sue them. It is as simple as that. These companies would also have us believe that because of these suits, companies are fearful of going public, that they cannot raise the capital in the securities market. Mr. President, there is no credible evidence that I am aware of that supports this astounding proposition. The existence of these suits has had no discernible impact on capital formation of business. The Dow Jones Industrial Average has just surpassed 4,000--an all-time high. I would invite my colleagues' attention to this chart. In terms of the initial public offerings, over the period of time that we have referenced here, they have gone up by approximately 9,000 percent in the last 20 years. In the last 20 years, initial public offerings have risen by 9,000 percent--now, that is the number, Mr. President, of initial public offerings--while the capital raised, that is the amount raised by these initial public offerings, has increased by 58,000 percent. So both in terms of numbers and in terms of the dollars raised, they have gone up 9,000 and 58,000 percent, respectively. Let me say, I am glad to hear that, because that is important that we have the necessary capital formation to finance new enterprises. That is the essence of the free enterprise system. The contention is invariably made that every time a stock drops to any degree, regardless of the reason, that there is a great rush to the courthouse and lawsuits are filed based solely upon the fact that the stock has declined in value. I want to address that assertion. In examining this contention, there are three studies that have been called to my attention that reject that thesis. One study by Prof. Baruch Lev of the University of California at Berkeley, involved public companies whose share price dropped by more than 20 percent in the 5 days following a disappointing earnings report. Although there were 589 such cases where the stock dropped at least 20 percent from 1988 through 1990, class action suits were filed against only 20 of those firms, approximately 3.4 percent. Moreover, Professor Lev compared those 20 firms with similar firms that were not sued and found that the firms that faced litigation tended to put out rosy projections, or forward-looking statements, just before releasing the bad earnings report, the issue that my distinguished colleague from Maryland so ably addressed that operates under the rubric of safe harbor, of which much more will be said during the course of this debate by him and, I am sure, my other colleagues. By contrast, the firms that were not sued tended to publish more sober statements warning investors in advance that earnings would be lower than expected. There was another study conducted by the firm of Francis, Philbrick, Schipper from the University of Chicago which searched for lawsuits against companies sustaining 20 percent declines in earnings and sales. The author reported that, out of 51 such at-risk firms during 1988 to 1992, only 1 of the 51 was the target of a shareholder suit related to an earnings announcement. And still a third such study performed by Princeton Venture Research shows that between 1986 and 1992, less than 3 percent of the companies whose stock dropped by more than 10 percent a day were sued. So the claim that companies are bombarded with suits whenever their stock goes down is simply not supported by the studies I have seen. None of these studies, even using a 20-percent stock drop, found even 3.5 percent of the companies in this classification that were sued. Even the Senate Banking Committee staff report published last year, under the able direction and support of Senator Dodd and his staff, concluded, and I quote: There is also no clear evidence of the extent to which price declines drive securities class actions to be filed. But the proponents of S. 240 tell us, most of these suits are filed just so the plaintiffs can get a settlement. Again, the documentation does not support this conclusion. The Senate staff report, to which I previously referred, examined sentiments of Federal judges regarding meritless litigation and found, and this again is directly from the staff report: Seventy-five percent of the judges surveyed . . . thought that frivolous litigation was a small problem or no problem at all. [[Page S 8914]] The SEC told the subcommittee that surveys had shown that ``most judges believed that frivolous litigation was not a major problem and could be dealt with through prompt dismissals.'' And I believe the enhanced provisions of the Federal Code of Civil Procedures, that deals with frivolous lawsuits, is an absolutely appropriate and responsible way to deal with errant and irresponsible lawyers who file clearly frivolous lawsuits. I believe the strengthening of those provisions under the law, targeted and tailored, is the most effective way of curtailing lawyer abuse. The evidence clearly shows we ought not to throw the baby out with the bathwater. S. 240 goes well beyond what is needed to deal with the abuses that exist in today's system. Every Member has cause to be concerned, because once this bill is passed and the next fraud comes along, whether it be a derivative disaster in your State, another Keating, a Milken or a Boesky, your constituents will want to know why you supported legislation that took their rights away to recover for their losses as a result of such fraudulent activity. Unfortunately, there are provisions in S. 240 that would effectively gut private actions under the securities laws, eliminate deterrence and hurt average Americans who depend on the system to protect their savings, their investments, and their retirements. These provisions would give free rein to the next Charles Keating and could cause incalculable damage to States and localities that suffer the same fate that Orange County has recently faced. Among the most troublesome provisions in S. 240 is the safe harbor exemption from fraud liability for forward-looking statements that essentially allows executives to say almost anything and be immunized from liability as a result of such misstatements. Senator Sarbanes has indicated he will be offering an amendment to correct this problem, and I intend to join him as a cosponsor of that amendment. It is something that concerns the Federal and State regulators; the SEC has written, the National Association of Securities Administrators has written, government finance officers, and consumer groups all have written the committee expressing their concern. Corporate predictions, called forward-looking statements, inherently are prone to fraud as they are an easy way to make exaggerated claims of favorable developments to attract investors to part with their cash. In fact, the Federal securities laws were passed in large part because of the speculative stock projections that led to the stock market crash in 1929. Recognizing the inherent potential for exaggerated claims, forward- looking statements by public companies were not even permitted until 1979. I think that bears repeating. Until 1979, no forward-looking statements were made as a result of the experience that we had in the 1920's and the predilection of those seeking to embellish their own prospects for earnings to attract investors to invest as a result of these extravagant and flamboyant claims. Since 1979, the SEC, recognizing some forward-looking statements may be important, has allowed limited predictions and protected them from liability if they are made in good faith and with a reasonable basis. Nevertheless, false predictions continue to be a favored tool of con artists, promoters and the illegal inside traders to pump up the price of their stock in order to profit at the expense of innocent investors. S. 240 sponsors have not explained to my satisfaction why corporate statements that are made in bad faith with no reasonable basis or even with reckless disregard for their falsity need to be immunized from liability when fraud has occurred. I hope during the course of this debate we might have such an explanation. We are talking about statements made in bad faith with no reasonable basis and with reckless disregard for their falsity. I know of no public policy, Mr. President, that suggests that kind of conduct ought to be shielded from liability. Unhappily, S. 240 in its present form would do just that. Moreover, the SEC is in the middle of a rulemaking process to study forward-looking statements and has asked Congress to allow it to complete its process. The original S. 240, as my colleague from Maryland has pointed out, would have done so. It is a technical area, highly complex and, frankly, it is a subject best left to the administrative agency in a rulemaking process rather than in a broad legislative enactment. However, in committee, a virtual unlimited exemption or safe harbor-- my colleague has aptly referred to this, not as a safe harbor but a pirate's cove, and I think he makes a compelling argument. Any statement either made orally or in writing that projects estimates or describes future events, so long as it is called a forward-looking statement, is immunized as a result of the legislative draft that is before us, even if that statement is made recklessly. This is a gaping loophole through which wrongdoers or victims of fraud would be denied recovery. The effects of these changes, I think, are difficult to forecast, but I think they would have a devastating impact on the market. I remind my colleagues that it is already extremely difficult to win a securities case. Under the 1934 Securities Act, a plaintiff must prove fraud or reckless behavior. Recklessness is defined as ``highly unreasonable conduct that involves not merely simple or even gross negligence, but an extreme departure from standards of ordinary care.'' So I think it is important for our colleagues to understand that no one under the 1934 act is liable as a result of his or her simple negligence, ordinary negligence, or even gross negligence. It requires a higher standard of misconduct--namely, reckless conduct. That seems tough enough to me. Anyone who makes a projection and meets this standard ought to pay his or her victims. A second troublesome provision in S. 240 is the severe limits on joint and several liability, even when the primary wrongdoer is insolvent. America's legal system for fraud traditionally has been based on joint and several liability. Under this standard, if one wrongdoer is found liable but has no assets, the victim can be reimbursed fully by the other wrongdoers without whose assistance the fraud could not have succeeded. The underlying premise for this legal rationale is in that scale of justice--in the balance. Who should bear the burden of the loss? The innocent investor, who is totally without fault--no fault whatsoever--or a defendant whose conduct is at least reckless and may be subject to intentional fraud? Who ought to bear the burden? The philosophy that undergirds the American system of jurisprudence for centuries has said that under those cases, the scales of justice weigh in favor of the innocent victim, the one who had no responsibility, did not in any way contribute to the misdeed which caused the loss. The rule has enabled swindle victims to recover full damages from accountants, brokers, bankers and lawyers who participate in securities scams when the primary wrongdoer has no assets left, has fled the jurisdiction, or may be in jail. The original S. 240 sharply limited this rule, immunizing reckless wrongdoers from joint and several liability. If that had been the law, most investors would not have recovered their life savings in the Charles Keating/Lincoln Savings & Loan debacle. Although Keating had become bankrupt, the victims recovered their damages from the accountants, bankers, and lawyers who assisted Mr. Keating. Of the $240 million in judgments imposed in favor of class action plaintiffs, nearly 50 percent--or $100 million of those recoveries--were against accountants, bankers and lawyers--not the primary wrongdoers, but individuals who conducted and assisted Mr. Keating in perpetrating the fraud. Despite extensive testimony, particularly by the SEC, that restricting joint and several liability will reduce recoveries for defrauded victims and encourage more fraud, the bill, as reported, restricts joint and several liability even further. In the all-too-often cases in which a knowing violator is bankrupt, in jail, has fled, the liability of reckless violators to the uncollectible share would be capped. That is, there would be a limitation. Those who are proportionately [[Page S 8915]] liable under the system that is incorporated in this print of S. 240 would be subject only to their proportionate share, even though the innocent victim is unable to recover his or her full amount. There is one exception, as was pointed out, and that would be with respect to victims whose net worth is under $200,000 and have recoverable damages of more than 10 percent of their net worth. May I suggest, Mr. President, that is a very narrow window of opportunity. People who own their own homes, automobiles, and have the most modest of assets frequently might have a net worth of $200,000. So we are not talking about the goliaths of business people who are extraordinary affluent; we are talking about tens of millions of Americans who would be excluded from recovery under this provision. That cap on joint and several liability means it will be virtually impossible for a great many of those victims to recover their losses. The bill also does several other very damaging things. The bill would also turn over control of class actions to the wealthiest investors, even though their interests may not be as extensive as the small investors' that the class action device was designed to protect. It relegates small investors to a second-class status and makes the securities markets strictly a playgrounds for the big boys--the wealthy. In committee, a new provision was added that requires courts to designate the ``most adequate plaintiff''--words of art--in a private class action. This ``most adequate plaintiff''--defined as the plaintiff with the largest financial interest in the case--is given the power to select lead counsel, control the case, and even to make settlement agreements for any amount or even dismissing the case. This change to S. 240 makes plain the real motives behind the bill and makes hollow any protections that this is to protect meritorious fraud actions. This ``most affluent plaintiff" requirement would simply wipe out average investors who are defrauded. The wealthiest investors may have close ties to big corporate defendants who can afford to accept less than the full recoveries. But it gives them complete control over class actions at the expense of average investors. Aside from raising a specter of collusive intervention by large investors, and simply dismiss cases or enter into sweetheart settlements, the substitute virtually precludes small investors from being able to obtain attorneys willing to invest their time on cases over which they have no control and for which they may not be paid. This also directly contradicts the reason why class actions were devised in the first instance, and that is to give average investors, who cannot afford to fight big corporations by their own means, the ability to band together and collectively seek a remedy for their relief. Instead, this provision gives preference to wealthy investors who can afford to seek redress for their losses on their own. S. 240 also eliminates a principal investor protection provision that was originally part of S. 240, as the distinguished ranking member of the committee, the senior Senator from Maryland, points out. That deals with the statute of limitations issue. Currently, the statute of limitations is 1 year from the point of the discovery of the fraud on the part of the victim, but in no event for more than 3 years after the fraud. The SEC, the North American Association of Securities Administrators--every regulator that I am aware of, who offered testimony or correspondence, indicated that this period is simply too short. It provides insufficient time for meritorious, legitimate plaintiffs to bring their action. The original S. 240 extended the period to 2 years after the violation was, or should have been, discovered by the injured plaintiff, not more than 5 years after the fraud itself. As the Senator from Maryland pointed out, we dealt with this issue back in 1991 under the Lampf case. That case will have particular relevance to a number of my colleagues, because immediately after the Lampf case, which gave a retroactive interpretation to the law, surprising most securities litigators by concluding that there was only a one to three-year statute of limitations, immediately thereafter, Charles Keating filed a motion to dismiss. A number of my colleagues joined me in supporting an amendment to the legislation that restored the 2-5 year provision retroactively, so that those cases for dismissal would not find themselves dismissed simply because the statute of limitation provision came as a surprise. What this provision seeks to do with respect to the prospective cases is the same 2-5 year. As the distinguished Senator from Maryland pointed out, when this proposal came to the floor to correct the retroactive abridgement or shortening of the statute of limitation from 2-5 to 1-3, there was no objection. Everyone agreed. The only issue--and it was a legitimate question--should we not take a broader look at security litigation reform? There was no objection to the premise you need a longer period of time. I must say that the SEC has been very clear, and their testimony has been compelling, that even with all of the resources that the SEC can command and marshal, it takes an average of 2.25 years to complete an investigation of an alleged securities fraud. That is the SEC, with immense resources. We, by failing to provide for the statute of limitations correction which was originally part of this bill and in rejecting the advice of the SEC, the North American Association of Security Administrators, and virtually everyone that testified from a regulatory public policy point of view, we give comfort to those who perpetrate fraud on innocent investors. I will offer an amendment that deals with that issue either later this evening or tomorrow, as our time permits. I might just add that Senator Dodd, one of the prime sponsors, indicated he, too, believes S. 240 needs to be amended to reflect that statute of limitations issues we just talked about. Obviously we will welcome his support. S. 240 also fails to restore the aiding and abetting liability for private suits and eliminates the ability of the SEC to sue aiders and abettors for reckless behavior as opposed to fraudulent conduct. Members will recall, Mr. President, I cited in the Keating case that recovery of $100 million was from aiders and abettors. If S. 240, as this legislation is being processed today, was the law back in 1991, that $100 million could not have been recovered. It could not have been recovered because the court, just last year, in another case that was a surprise to those who follow the securities industry issues, held that a ruling that had been in effect for 25 years, namely, that aiders and abettors were covered under the provisions of the securities law, that aiders and abettors were, in fact, not covered, and under a 5-4 Supreme Court decision, Central Bank of Denver, such liability for aiders and abettors is eliminated. We are not talking about proportionately. We are not talking about joint and several liability. We are talking about aiders and abettors. They have a free ride. They are home free. All you need to do is get yourself in the aider and abettor category and you can have a field day. It is ``Katie bar the door,'' do whatever you wish, and insofar as a private cause of action, you are precluded from recovery. Mr. President, no matter how anyone feels on securities litigation reform, can it possibly be in the best interest of America to insulate from liability a category of persons whose conduct has inflicted upon innocent investors enormous financial loss, maybe even wiping out everything that a retired person might have in his or her investment? I indicated that the Supreme Court also imposed a limitation even on the SEC--even on the SEC. They can only move against aiders and abettors under a much stricter standard. The defendant must knowingly-- and that is the standard which even the SEC is forced to meet now as a consequence of the decision. We will be offering an amendment on this, Mr. President. I note that Senator Dodd, who has worked for many, many years--and all who work with him on the committee and consider ourselves his friend and close colleague acknowledge Senator Dodd's fine work. Last year, in an April 29, 1994, ``Dear Colleague'' letter, Senator Dodd made this observation: [[Page S 8916]] Allowing private actions against aiders and abettors is an indispensable part of our securities enforcement system, and I believe Congress must consider legislation to reinstate liability in this area. Senator Dodd was absolutely right on the mark in 1994. The reason is even more compelling in 1995, based upon some of the information that I shared with Members earlier from those on the SEC that tell us about the amount of fraudulent activity. In this particular instance we talked of insider trading. Senator Dodd reiterates: Lawyers, accountants and other professionals should not get off the hook, in my view, when they assist their clients in committing fraud. . . . The Supreme Court has laid down a gauntlet for Congress. . . . In my view, we need to respond to the Supreme Court's decisions promptly and I emphasize promptly. As Senator Dodd so often does, he speaks with precision, eloquence, and cogency. He is right on the mark, Mr. President. We need to do that in the course of processing any securities legislation. Mr. President, this bill, also as reported by the Banking Committee, deals with the Securities Act of 1933--that is another provision--not the 1934 act. The 1933 act targets fraud in initial offerings of securities to the public. Initial public offerings historically have been rife with fraud by huckster promoters peddling new securities. The 1993 act holds such wrongdoers strictly liable. The bill as reported, however, makes it nearly impossible to hold crooks who sell phony securities strictly liable for their fraud. S. 240 also retains some highly burdensome pleading requirements-- burdens that must be met by fraud victims, plaintiffs in these class actions. By ``pleadings,'' we are talking about an illegal document that commences a lawsuit in which a plaintiff--in this instance a victim of fraud--states forth his cause of action. Those pleading requirements under S. 240 are exceedingly burdensome. Under current law, fraud plaintiffs are not required to state specific facts establishing the defendant's intent. That is a subjective state of mind. It seems pretty reasonable. It is a pretty onerous burden to be able to allege with particularity what the subjective thought process would be of a defendant. The reason for that is because such facts are normally only uncovered later during a deposition or discovery process when there is a chance to examine the defendant or defendants under oath. One of the ways the original S. 240 tried to block cases was through impossible pleading standards requiring plaintiffs to state specific acts demonstrating the state of mind of each defendant. Witness after witness indicated that this would prevent, for all practical purposes, many fraud victims from recovering their money. The bill as reported merely replaces the impossible standard with the harshest standard currently used. In my view, and in the view of those who regulate the securities market, it is not much of an improvement over the original language and would prevent legitimate plaintiffs from even asserting a cause of action. S. 240 also contains an unfair and inflexible limit on victims for recovery. The bill contains a formula designed to limit the amount wrongdoers have to pay their victims. Basically, if the company stock goes up during a 3-month period following public exposure of the fraud, for whatever reason, the victims' recovery is reduced accordingly. Finally, Mr. President, S. 240 would shield evidence of fraud from the public. S. 240 purports to attempt to eliminate secret settlements. The bill fails to ban the almost universal secrecy orders that are required by defendants as a condition of producing documents during discovery. These orders remain in effect throughout litigation and generally require that, once a case is over, documents be destroyed or returned. Such secrecy orders block significant corporate wrongdoing from public scrutiny. Moreover, these orders allow defendants to proclaim their innocence after settlement without fear of contradiction--and permit them to claim the cases are frivolous when they visit with Members of Congress. And because the documents upon which the case was predicated are sealed, there is no effective rebuttal. I would note one final irony of S. 240. The bill violates one of the primary tenets of Republican theory-- this is, returning government functions to the private sector. For 60 years, private attorneys general have supplemented the antifraud efforts of Federal regulators at the SEC and at the Justice Department. Such an enforcement scheme is entirely consistent with the Republican contract. But as CBO noted in its cost estimate on S. 240, if private rights of action are curtailed, substantial government involvement, including increased SEC efforts, will be needed to assure that the markets remain fair. Morever, as CBO stated in its June 19 letter to the committee, the SEC will have to double or triple its resources allocated to this function--and the cost to the American taxpayer could be up to $250 million over the next 5 years. That is to say, by reason of the restrictions placed on private causes of action, if one has a view of regulating the marketplace effectively the burden essentially now falls almost exclusively to the SEC, and they would have to up staff and the cost as estimated by CBO is $250 million; $250 million paid by the American taxpayer. I invite my colleagues' attention to pages 30-32 of the committee report for CBO's estimate. This confirms the view of the last Republican Chairman of the SEC, Richard Breeden, who testified that the elimination of private actions would require the Commission to hire 800-900 more lawyers to police the markets. Even if Congress should choose to appropriate the added money--which I seriously doubt--the system will not be as effective. I hope each Member of this body will remember that when the next financial debacle hits, average Americans, many of whom may be people who live in your district, will be unable to runner their losses. Last week, my constituents who were victims of the Keating scandal visited Washington, along with other Keating victims from other States. One way Jeri Mellon from Henderson, NV, a community just 10 miles out of Las Vegas. She is head of the Lincoln bondholders committee. She and Joy Delfosse came to see me. Every Member of Congress should be standing up for the Joy Delfosses and Jeri Mellons in their States, not the Charles Keatings. These are retirees whose life savings would have been wiped out if they had not been able to recover as a result of the Keating fraud. And that ability to recover would have been lost if aiders and abettors had not been liable. And that ability to recover may have been lost if the statute of limitations had not been extended. And that recovery may have been lost as a result of the proportionate liability proposal contained in this legislation.

Mr. BRYAN. My colleague is correct. Over the past 20 years, the numbers have been relatively constant. This represents one-tenth of 1 percent of the 235,000 Federal suits filed in 1994--one-tenth of 1 percent. There were 235,000 cases filed in the Federal court system in America last year, and one-tenth of 1 percent involved class action securities lawsuits. So my distinguished colleague is correct in her observation.

Mr. BRYAN

Mr. BRYAN. Mr. President, I rise in opposition to the Simon amendment which would strike language currently in the bill which removes radio ownership caps. I must say, I do so with reluctance because I have a great deal of affection and find myself generally in support of my good friend from Illinois when he takes the floor. In this instance, I believe his concerns are misplaced. Currently, there are approximately 11,000 radio stations in this country. Unfortunately, far too many are losing money. The last figures that have been called to my attention would indicate that about half of those stations are actually losing money. If we do not take some action to help these stations, an increasing number will continue to fail. One way to help radio stations get out of the red is to permit them to use economies of scale that they can achieve from consolidating their operations. Lifting the ownership cap will permit radio stations to achieve these efficiencies. When the FCC raised the cap several years ago, we found that, in fact, this is what happened. Without ownership caps, economic forces will determine the appropriate size of stations. This, in my judgment, is a decision better left to the marketplace instead of some Government-mandated number. I believe an ownership cap was put on radio stations many years ago because of the concern for undue concentration. In this day and age, such a concern, in my opinion, is unwarranted. With the avalanche of entertainment sources available to the public today, there is no need to worry that a concentration will cause public harm. Cable systems already provide up to 30 channels of digital audio in a single market under a single owner. Satellite digital audio will soon be able to deliver 60 channels of digital music in every market across the country. Satellite television, like direct TV, now offer 30-plus radio channels to homes. This deluge of new entrants into the radio business will ensure that competition exists. Extending the artificial restrictions on radio ownership will give the industry the wherewithal to compete against other mass media providers. It is my view that by ending these artificial restrictions, we encourage more competition and give the public greater choice. I urge my colleagues to oppose the Simon amendment. I yield the floor.

Mr. BRYAN. Mr. President, I inquire of the floor manager, I would like about 3 minutes to speak in opposition to the Simon amendment.

Mr. BRYAN. I thank the Chair. (The remarks of Mr. Bryan pertaining to the introduction of S. 926 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'') Amendment No. 1298

Mr. BRYAN. I ask unanimous consent that I might speak for a period of time not to exceed 7 minutes as in morning business.

Mr. BRYAN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. BRYAN

Mr. BRYAN. Mr. President, today I am introducing my Child Support Enforcement Act legislation from the last Congress to help further strengthen our efforts to get deadbeat parents to responsibly provide for their children. Congress has recently taken many positive steps to increase the effectiveness of child support enforcement laws. In the 102d Congress, we were successful in enacting legislation, which I sponsored in the Senate, to require credit bureaus to indicate on an individual's credit file when he or she is delinquent in child support payments. This has provided a strong incentive for parents to stay current in their payments. The 103d Congress enacted laws to make deadbeat parents who fail to pay child support ineligible for small business loans; to designate child support payments as priority debts when an individual files for bankruptcy; to strengthen State paternity establishment procedures and to require health insurers to carry out orders for medical child support; and to restrict a State court's ability to modify a child support order issued by another State. As part of much needed welfare reform, we must include improvements to the child support enforcement system. I will introduce portions of this bill as an amendment when welfare reform is debated in the Senate, which I hope will be done before July 4. We need to find as many ways as possible to find delinquent parents, and hold them to their responsibilities. We all lament the increasing number of unwed teenage girls who have children. This situation is particularly disheartening when these young mothers are themselves mere children. But too often in the past, our public policies have focused on the mother and ignored the responsibility of the father. Those fathers, who many times have already walked away before their children are even born, must face the reality of their parental and financial responsibilities. During the past 2 months, I have visited child support enforcement offices in Las Vegas and Reno, NV. These visits included both the State welfare division and the district attorney child support enforcement offices. It was an eye-opening experience. I was overwhelmed by the thousands of case files stacked throughout these offices. Employees in these offices are literally surrounded by files. They are joined by scores of investigators and attorneys who work ceaselessly to ensure as many deadbeat parents as possible are found, and legally persuaded to fulfill their financial responsibilities. Although Nevada is the fastest growing State in the Nation, it is a comparatively small State with about 1.6 million people. Yet its State Child Support Enforcement Program had 66,385 cases in fiscal year 1994. The program was able to collect $62.7 million. The unfortunate fact, however, is that the total owed was almost $352 million, leaving an uncollected balance of almost $290 million. In April of this year, Nevada's caseload has already grown to over 69,000 cases. These cases represent only those children whose families are receiving aid to families with dependent children, or who are using the services of the county district attorney offices to enforce child support. The many Nevadans using private attorneys are not included. The facts are simple. Nationally, one in four children live in a single-parent household. But one of the most startling statistics is that only half of these single parents have sought and obtained child support orders. This means 50 percent of these single mothers either have been unable to track down the father, have not pursued support, or are unaware of their legal child support enforcement rights. Of the parents who have sought out and obtained child support, only half receive the full amount to which they are entitled. Let me make this clear--50 percent of single mothers do not even have child support orders, and of the 50 percent that do, only half of them are getting what their children are entitled to receive. Thus 25 percent of the single parents who have child support orders actually receive nothing at all. These facts should concern us. It is all too true that many single parents must seek public welfare assistance in order to be able to support their children. When we taxpayers are asked to lend a helping hand to these children, we should be assured every effort is being made to require absent deadbeat parents meet their financial responsibilities to those same children. Public assistance should not be the escape valve relied upon by those parents who want to walk away from their children. No one who shares the responsibility for bringing children into this world should later be allowed to shirk that responsibility by refusing to admit paternity or failing to pay child support. The legislation I am introducing today adds to the arsenal available to those trying to enforce child support. In April, I visited with eligibility workers in a local Las Vegas welfare office. I was incredulous when I learned many Federal welfare assistance programs do not require recipients to participate in State and Federal child support enforcement efforts. In fact, only Aid to Families with Dependent Children or AFDC, and Medicaid currently require their recipients cooperate with child support enforcement efforts. For example, if a parent with children receives food stamps, there is no requirement, as a condition of receiving that assistance, that the parent cooperate with child support enforcement agencies to collect any child support payments to which he or she is entitled. Under my legislation, all welfare assistance programs receiving Federal funds will require all recipients to cooperate with efforts to collect child support benefits as a condition of receiving benefits. Second, this legislation authorizes State and Federal Governments to deny delinquent parents an array of benefits. A delinquent parent can be denied an occupational, professional, or business license, a Federal loan or guarantee, and could even have his or her passport revoked if the threat of fleeing the country was likely. The goal is not to drive those who want to meet their obligations away, but rather to make sure those ignoring their children understand society will not tolerate that irresponsible behavior. These provisions should be particularly effective in dealing with delinquent parents who are self-employed, and who are not covered by the mandatory employer child support payment withholding. The bill also builds on our past efforts of using the credit reporting system. It permits State agencies to obtain credit files in order to track down delinquent parents, or to help determine the appropriate amount of child support payment. The bill also improves the interstate enforcement process by establishing a jurisdictional basis for State court recognition of child support orders of other States. The problems associated with collecting child support are magnified when parents live in different States. Part of the difficulty stems from differences in State laws, policies, and procedures. I have heard numerous cases of frustrating experiences in attempting to serve process on out-of-State delinquent parents, and in getting certain [[Page S8497]] evidence obtained in one State admitted at a hearing in another State. One in three children support orders involve parents in different States. On average, it takes 1 year to locate an absent parent, and 2 years to establish a court order if the parent has deserted a family. Finally, the bill makes it more difficult for parents to hide assets in an attempt to avoid paying their fair share of child support. A difficult problem to resolve is when a delinquent parent transfers property to a friend or relative for little compensation to avoid child support payments. Under this bill, States would be allowed to void conveyances of property made to avoid paying child support. We must give our courts and law enforcement agencies the tools they need to crack down on delinquent parents. We must assure taxpayers who lend the helping hand to impoverished single mothers and their children that every effort is being made to get the deadbeat parents to pay up. We must ensure the children receive adequate and consistent child support, so they are able to have the opportunity to become successful, productive and healthy adults. I believe my legislation will move us a long way on the path to meet those goals. I request my colleagues to join with me in this effort to make this law before the end of the year. The children deserve no less.

Mr. BRYAN

Mr. BRYAN. Mr. President, it is my privilege today to introduce legislation to designate the Nellis Federal Hospital in Las Vegas, NV, as the ``Mike O'Callaghan Military Hospital.'' The Nellis Federal Hospital is a newly constructed joint venture hospital facility in Las Vegas, NV. The facility is operated jointly by the U.S. Department of Defense through the Nellis Air Force Base, and the U.S. Department of Veterans Affairs through the Las Vegas Veterans Affairs Outpatient Clinic. This medical facility is the culmination of years of cooperative efforts between the Departments of Defense and Veterans Affairs to address the health care needs of both active duty military at Nellis Air Force Base and their families, and the rapidly increasing southern Nevada veterans population. The Federal hospital, formally dedicated on July 8, 1994, was opened to patients on August 1, 1994. It was my pleasure to attend the July dedication of this remarkable joint facility. For Nellis Air Force Base, the Federal hospital provides base personnel access to a new medical facility to provide quality health care. For southern Nevada veterans, the Federal hospital represents their first permanent veterans inpatient hospital in the Las Vegas area. For many of these veterans, hospital care can now be provided in State, rather than in a different State hundreds of miles away from home. This hospital will serve many Nevadans--those who, while serving at the Nellis Air Force Base, call Nevada their home temporarily, and those who, as retired veterans, call Nevada their home permanently. It is, therefore, only appropriate to name this vital health care facility after a man who has served his country militarily with honor in three branches of the armed services; the Air Force, the Army, and the Marine Corps. A man who, as disabled veteran, is reminded every day of the sacrifice of that service. A man who has spent his entire career working tirelessly to make life a little bit better for all Nevadans It is, therefore, truly a privilege for me to introduce this legislation today to name the Federal hospital for Mike O'Callaghan. Mike O'Callaghan and I both have had the honor of serving the people of Nevada as their Governor. In fact, Governor O'Callaghan is one of only five two-term Governors in Nevada's history. As Nevada's Governor, Mike O'Callaghan was a hands on worker. The lights in the Governor's office were always the first ones on, and the ones out when he was the occupant. He was always the man in charge, and he always got the job done for Nevadans. Governor O'Callaghan is also a most compassionate, caring and sensitive human being, both in his instincts and in his actions. While Governor, he always worked for the underdog. For people who could not speak for themselves, Governor O'Callaghan was their voice. He made sure they were heard. One of the highlights of his terms as Governor was passage of Nevada's fair housing law to ensure all Nevadans equal access to a home of their own. He understood how very important it is for people to have a place of their own to call home wherever they choose to live. Governor O'Callaghan's military career began early. At 16 years of age, he enlisted in the U.S. Marine Corps to serve during the period ending in World War II. During the Korean conflict, he served with both the Air Force and the Army. While in Korea, he was wounded in combat, forcing amputation of his left leg. His unflinching courage was recognized through the awarding of the Silver Star, the Bronze Star with Valor Device, and the Purple Heart. Following his Army service in Korea, Governor O'Callaghan spent the next years as a teacher and journalist. He earned a master's degree at the University of Idaho. He then taught economics, government, and history in Henderson, NV, for several years. One of his students, my colleague, Senator Harry Reid, took those classes to heart. In 1963, Governor O'Callaghan began his public service career when he became the first director of Nevada's Health and Welfare Department. He also served almost 2 years as a project manager for the Job Corps Conservation Centers. His professional career continued in 1969 when Governor O'Callaghan founded a research-planning firm in Carson City, NV. He then started his political career entering the race for Nevada's Governor as a Democrat in 1970. He was reelected in 1974, winning by an overwhelming majority. He was also honored that year by Time Magazine as one of the Nation's top 200 promising young Americans. Instead of running for a third gubernatorial term, he retired from elected office in 1978. Today, Governor O'Callaghan is currently the chairman and executive editor of the Las Vegas Sun. He continues to write provocative editorials on Nevada and national political issues, continuing always to speak for those without a voice. He is also publisher of the Henderson Home News and the Boulder City News. He travels every year to Israel, where as a private citizen, he gives his time to help work on military tank maintenance. His interest in the concerns of those currently serving in the military and in those who have already served their country has not waned. In recognition of that continued commitment, former Governor O'Callaghan was presented the Air Force Exceptional Service Award in 1982. We in Nevada are proud to have the Nellis Federal Hospital in Las Vegas. To name the hospital after Mike O'Callaghan would commemorate not only his valuable personal contributions to Nevada, but would honor all those who answer the call of duty to their country.

Mr. BRYAN

Mr. BRYAN. Mr. President, I thank the Chair and the distinguished managers of the bill.

Mr. BRYAN. Mr. President, I ask unanimous consent that we might return to morning business for 3 minutes.

Mr. BRYAN

Mr. BRYAN. Mr. President, the nation sighed with relief this morning as we heard reports that Air Force Capt. Scott F. O'Grady, the United States pilot downed by a Serbian surface-to-air missile, had been found in good health, and was resting comfortably on a United States aircraft carrier. Yesterday, in the Senate Armed Services Committee, Secretary of Defense Perry and Chairman of the Joint Chiefs of Staff, General Shalikashvili, gave a presentation on United States policy towards Bosnia. As was clear from this hearing, there is little agreement on what United States policy should be towards this war-torn region, and many deeply troubling questions continue to surface regarding the depth of United States involvement in Bosnia, and the need for a strong and coherent United States and NATO policy. But today, I would like to focus on a good news story, and extend commendations to Captain O'Grady and the American military personnel who were involved in his remarkable recovery. Although details of the rescue effort are still being released, it is clear that many American military personnel put themselves at great risk in the all-out attempt to locate Captain O'Grady and safely bring him out of Bosnia. The ability of Captain O'Grady to evade capture by the Bosnian Serbs for nearly 6 days in heavily wooded areas is a great tribute not only to the courage and survival skills of Captain O'Grady, but also to the outstanding training he has received as a U.S. Air Force pilot. Equally outstanding was the courage and competence of the marines who went into Bosnia under extremely dangerous conditions. Early reports indicate two CH-53 Sea Stallion helicopters under attack by both Serbian surface-to-air missiles and small arms fire were able to land within 50 meters of where Captain O'Grady was concealed. The commander of these marines, Col. Martin Berndt, reached out, grabbed the young pilot, and took off in a matter of seconds. Finally, many American pilots risked their lives during the past 6 days, flying through a highly sophisticated Serb integrated air defense system in an attempt to pinpoint the location of Captain O'Grady. Many of these flights were extremely hazardous routes in and out of thunderstorms. During the actual rescue mission, additional American pilots covered the Marine helicopters with fighter and electronic monitoring aircraft. Mr. President, the training, competence and experience that led to the spectacular success of this rescue mission gives credit to the outstanding job done by Secretary of Defense Perry and General Shalikashvili, as well as Adm. Leighton Smith, the NATO commander for Southern Europe. But our highest tribute should go to the courageous young men who were on the ground in Bosnia or flying low overhead. They have demonstrated the best of our U.S. Armed Forces, and the quality of the young men and women we have defending our national security. And a special tribute must go to the remarkable young man, Captain O'Grady, whose actions and courage serve as an example for us all. Mr. President, I yield the floor.