John Dingell

Mr. DINGELL

Mr. DINGELL. Mr. Chairman, I move to strike the requisite number of words. (Mr. DINGELL asked and was given permission to revise and extend his remarks.)

Mr. DINGELL. Mr. Chairman, I rise in opposition to the amendment. Mr. Chairman, this is a most extraordinary day. When we considered the bill in the committee, this is the headline we got in the Wall Street Journal, a well-known bastion of left wing liberalism and excessive regulation said this: ``Fraud Shields for Companies Gain in House.'' I do not know whether we ought to amend RICO or not. There is not one scintilla of evidence in the record of the Committee on Commerce whether we should or we should not. And there is nothing there which says that we ought to take away the right of a person to sue civilly under RICO where there is interstate trafficking in stolen securities. RICO had securities violations as the subject of civil suits from the very first day that it was enacted into law. Now, we have a market which is the most trusted in the world. It is for two reasons: One, because we have good enforcement at the SEC. The other is because we have an extraordinarily good system of private enforcement, enforcement by private citizens suing wrongdoers to collect for wrongdoing. And millions and millions of dollars are collected for this reason. My colleagues never saw this language in the committee. We never knew it was coming until late last night, when the Committee on Rules decided that something should be done about this matter. No discussion was offered in the committee. The author of the legislation had nothing to say on this subject. No one on the Republican side had anything to say about the need to address the wrongdoing under RICO. It is interesting to note that in Russia they are now saying, and this is what the chairman of the Russian Securities Fund had to say, ``Each scandal chips away at investors' trust, and trust is the only thing we can rely on to get more business.'' I have told the securities industry time after time, people think that the securities industry and the markets in this country run on money. They do not. They run on public confidence. And if there is public confidence, then everyone will make lots of money. What we are doing here is sneaking out of the Committee on Rules a proposal to repeal RICO, and it is not going to contribute to the trust of the American people in the securities market or in the marketplace. The only confidence that is going to be boosted by this amendment is going to be the confidence of rascals and scoundrels, who will then be secure in the knowledge that if they engage in theft of resources belonging to others, that they are not going to get sued. That is all. This legislation comes to the floor with abbreviated hearings and not adequate opportunity for amendments to be offered. The legislation is controlled by the Committee on Rules, which has said we will add RICO, which is not germane to the bill, and which is not even in the Committee on Energy and Commerce. We are amending a statute which is not even under the jurisdiction of the Committee on Energy and Commerce, and we are amending it without ever having a word of hearings or a bit of evidence or testimony taken on the subject. Why is RICO taken up now when it could be addressed in another committee in proper fashion after appropriate hearings? I have no explanation. Perhaps the gentleman from California who offers the amendment has, but I seriously doubt if he does or will. Many Americans had hoped that the Contract on America would be an engine for progress by making needed and targeted reforms. This amendment is just another demonstration that the contract instead has become a gravy train for any special interest with enough money and resources that they can get aboard and go where they want to go at the expense of the ordinary American.

Mr. DINGELL. Mr. Chairman, will the gentleman yield?

Mr. DINGELL. I was much impressed by the comments of the gentleman from California. The quote that he gave is an excellent one: ``The purpose of the bill is to cut down on litigation and to cut down on fraud committed by the authority that is quoted in the article is, guess who? The gentleman from California [Mr. Cox].

Mr. DINGELL. What this says, Mr. Chairman, because the language of the amendment reads as it does, is that if you are charged in a civil suit with violation of wire laws, of narcotics, or any of the other things which are prohibited under RICO, you had better make darned sure that you have been involved in some way with securities, because then you get a wash. This amendment guts RICO. It guts civil suits under RICO. It should be rejected.

Mr. DINGELL. Mr. Chairman, just so that we understand, because of the redundant way in which the amendment is drawn, it says that if the suit by a citizen involves securities, you cannot sue under RICO, so you would not be able to sue under RICO for any of the other things which are prohibited under RICO: for example, murder; for example, violation of narcotics laws; for example, participating in a criminal enterprise of any kind, or for any kind of interstate fraud, gambling, narcotics, or whatever it might happen to be. Mr. Chairman, if we are going to deal with the question of RICO reform, then good sense says that we should deal with it well. We ought not offer, simply because the individual can rush into court and say ``But you cannot sue me under RICO for gambling or narcotics because I was involved in securities, and the language of the Cox amendment says that I can't be sued if securities were involved.'' I do not blame the gentleman from California for objecting, because I would not want anybody to say these things about me on the floor, but the hard fact is the legislation is poorly drawn, it is hurried to the floor without proper hearings, without any intelligent consideration, and it has results far different, far broader, far worse from the standpoint of RICO, law enforcement, and getting at criminals generally. That is what is involved here. The amendment ought to be rejected, if for no other reason than it is sloppy work. It is an embarrassment to the House. It may not embarrass the author of the amendment, but it assuredly embarrasses me, because I believe that this body should legislate well and efficiently. It should legislate wisely, so we do not surprise ourselves with the stupid consequences of irresponsible, unwise, and careless work. I urge that the amendment be rejected.

Mr. DINGELL. Mr. Chairman, I ask unanimous consent that the gentleman may proceed for 4 additional minutes.

Mr. DINGELL. I would like to address, if the gentleman would permit, the substance of the amendment, Mr. Chairman. The amendment says ``Except no person may bring an action under this provision if the racketeering activity as defined in section 1961,'' and so forth, ``involves conduct actionable as fraud in the purchase or sale of securities'' before the period. What this means is if fraud involving securities is involved in the question that is involved in the lawsuit----

Mr. DINGELL. Mr. Chairman, I ask unanimous consent to use a modest display.

Mr. DINGELL

Mr. DINGELL. Mr. Speaker, make no mistake of it, H.R. 1058 will encourage securities fraud. It is a bad bill. Milken, Boesky, people like that would have been delighted to have functioned under the provisions of this legislation. The rule is a bad rule; it is unfair, and it does not give sufficient time for the matters involved in this legislation to be properly addressed. Both should be rejected by the House. Now, I am no water or spear carrier for trial lawyers. I began pushing product liability over 10 years ago. Two weeks ago I voted for legislation to reform product liability laws. I have long felt there was a real need for reforming medical malpractice and for dealing with securities litigation, which does happen to constitute a problem. But this legislation goes well beyond meeting needs. It does what the old Chinese story tells about: It burns down the barn to cook the pig. H.R. 1058, in its zeal to eliminate abuses, goes too far. It creates shelters, it creates loopholes, and it creates incentives for securities fraud. It will impair the transparency, the fairness of our marketplace, and it will make it more difficult for the SEC to deal with problems of securities fraud, and it will raise real questions about whether Americans can continue to trust and to believe that their securities markets are the best and fairest and most open in the world. people and agencies that should be listened to carefully. It is opposed by the Securities and Exchange Commission, the State securities regulators, Attorney General of the United States, the U.S. Conference of Mayors, the Government Finance Officers Association, individual investors and all major consumers groups--all opposed. The American Association of Retired Persons, the Gray Panthers, Consumers Union, Consumer Federation of America--all oppose it. Citizen Action, Public Citizen, and the U.S. Public Interest Research Group all oppose this legislation. Why? Because it is bad legislation, because it does not adequately protect the interests of the honest, innocent and small investors, and because it threatens the trust of the American people in the American securities market. I need to remind my colleagues on the Republican side of the aisle that one of the reasons the United States is regarded as the wonders of the world in terms of our securities markets and capital-raising system is the fact that our system is known to be fair and people know they can trust it. This is a peculiarity not found elsewhere in the world. The bill suffers from multitudes of defects, and these reveal the extreme goals of the supporters, goals like ``losers pays,'' establishing a defense against recklessness that allows a miscreant to get off by the simple statement of, ``Ooops, I forgot the law,'' and imposing harsh pleading requirements that are impossible to meet for real-life plaintiffs with good cases. I would observe that under the requirements for Scienter in the pleadings in this legislation a person who has been wronged by securities fraud will need not only a layer but he will need a psychiatrist and a psychic to tell him what was going on inside the mind and head of the wrongdoer who skinned him and thousands of other Americans of their hard-won and thousands of other Americans of their hard-won and hard-earned savings. The process? The process was intolerable. Neither I nor the ranking member of the relevant subcommittee were included in the discussions on the bipartisan compromise. Members and staff received markup documents the night before markup. That is insufficient time to review and prepare amendments and statements. We were then presented with totally different documents and totally different legislation the next day, without time to review or to understand the changes. Debate was inexplicably and unfairly shut down at 2:30 p.m. on Thursday, February 16, in a markup which had already been shortened by prolonged recesses for negotiations and by a process which permitted neither adequate hearings nor opportunity to amend or to ask questions or witnesses. This was dictated by the Republican leadership because of scheduling the bill on the floor. Originally, it was not even intended for the SEC to be heard. The SEC came forward and said that the bill, as originally drafted, would even foreclose their anti-fraud actions at the Securities and Exchange Commission. This legislation still has significant defects. It ought to be recommitted, it ought to be defeated, it ought to be amended, but it should not be passed.

Mr. DINGELL

Mr. DINGELL. Mr. Speaker, I was delighted to hear the last person in the well to addres the subject of children. I would like to again address that today. Last week, my colleagues, we discussed the question of cuts in the School Lunch Program. Today we find that my Republican colleagues propose to zero out the Drug-Free Schools Program and also the Safe Schools Program. This tends to show me that my Republican colleagues know the cost of everything and the value of nothing, because the greatest trust and the greatest treasure that this Nation has is our young people. To have them in schools which are free of drugs, which are safe, and to see to it that those who have no recourse to adequate nutrition and food supplies at home, to see that they have an adequate school lunch is indeed one of the ways that we not only nurture our greatest treasure, but we look to the future of this country.

Mr. DINGELL

Mr. DINGELL. Mr. Speaker, I rise to praise our Speaker, one of the foremost figures in the field of American literature, and one of our most famous authors. He has been making generous contributions to organizations which pay children $2 for every book they read. At the same time his colleagues on the Republican side of the aisle are taking money away from needy children who need subsidies for their lunch. The teacher is teaching school children a lesson at this time. He is showing there is money to be made in book deals, perhaps enough to buy their own lunch. I would like to share some information that I find important in this callous regard to our children. The leadership nutritional block grant would terminate all nutrition standards. Seven hundred thousand Michigan children eat school lunch every day. More than half qualify for free or reduced price lunches. Michigan will lose $107 million a year. With one hand, the Speaker has offered school kids a book deal do encourage learning. With the other hand, he is taking away their lunch money which provides them with an absolute necessity for proper learning, and that is decent nutrition. At the rate Republicans are taking money from kids, the kids are going to have to read an awful lot of books to stay fed. parliamentary inquiry

Mr. DINGELL

Mr. DINGELL. Mr. Chairman, I rise in support of the motion to recommit. During the final minutes of consideration of H.R. 1022, Mr. Walker amended the bill to apply all of the cost-benefit and other decisionmaking criteria to cleanups of our Nation's hazardous and radioactive waste site. Previously the bill applied only to major rulemakings above $25 million and did not impact cleanups. The Walker amendment which was offered without time for debate, will have profound adverse consequences for Superfund cleanups, for transferring property back to communities at closing military bases, and for the Department of Energy's program to dispose of high-level nuclear waste at Yucca Mountain and the WIPP facility in New Mexico. This amendment was adopted with no hearings by the committees of jurisdiction. It will slow down cleanups by years while the new factors are grafted onto the existing program. For Members with closing military bases or property in urban cities awaiting redevelopment--you can forget reutilizing the property for economic redevelopment if the amendment is retained in the bill. State laws which are now integrated into a process for deciding the appropriate level of cleanup will be preempted. Cleanups under the Walker amendment will be based strictly on a Federal cost/benefit analysis. Litigation opportunities will abound. How do the new criteria work with the existing law? Do cleanups still have to be protective of human health and the environment? How do factors like cost-effectiveness, cost-benefit, and flexibility apply in the context of cleanup? All are rich opportunities for lawyers and litigation while no cleanup occurs. Support this motion, allow cleanups to go forward, and let the committee's of jurisdiction reform the Superfund Program in a comprehensive manner.

Mr. DINGELL

Mr. DINGELL. Mr. Chairman, we accepted that liability, and very shortly the lawyers were conducting seminars on swine flu law, and swine flu law was widely practiced by the legal bar, both by honest attorneys and, quite honestly, by shysters and ambulance chasers. The practical result was that the Federal Government wound up with a liability of $5 or $7 billion, because the lawyers went out and said, ``Here is how you do this thing.'' Then they went around and solicited clients. Then they rushed into court. Then they began collecting huge judgments against the Federal Government. The Federal Government hired enormous numbers of lawyers, and the Federal Government paid enormous sums of money. Here nobody knows what the liability is. Here the only thing we know is that if the legislation discussed by my colleagues on the Republican side of the aisle is adopted, that if the Federal Government does anything that anybody can claim impacts on the worth or the value of their land, they can be absolutely certain that they are going to be in the Federal courts or before the Federal agency to demand that they be compensated, and they will get themselves a slick appraiser who will come forward with a slick appraisal of what the land is worth before and what the land is worth after. We can bet that those slick appraisals are going to be done to assure that the Federal taxpayers come up with the most money they possibly can. Farmers are going to be paid under this for the costs of loss of value on land which has been enhanced in value by Federal irrigation projects. Does that make sense? Not to me. Maybe on the other side of the aisle it does, but not over here. All I can tell my colleagues is, they are assuming liabilities that will gray the hair of everybody else. They are adding to a valuable constitutional protection an irresponsible, incalculable liability for the taxpayers who pay our salaries and who expect us to legislate wisely, and they are assuming responsibilities for claims by every slick lawyer acting on behalf of a slippery client over claims which may or may not have value, and which may or may not have worth. If there is a good basis for legislating in this area, I say we should do it wisely and well, but not to simply come out with this kind of blank check where people can back an armored car up to the Treasury and walk off with a truckload of cash.

Mr. DINGELL. I understand that, but the amendment offered by my good friend, the gentleman from Louisiana [Mr. Tauzin], suffers from its own defects, which are also substantial. However, this is a most curious thing. It also says that where the Federal Government tells somebody they cannot build a nuclear power plant on a fault, the Federal Government has to compensate. Most curious. It sets up a circumstance where the Federal Government is going to have to hire legions of lawyers to process innumerable claims for compensations, real and imagined, bottomed on two estimates by appraisers of differing values, bottomed on some very interesting appraisals and estimates and assumptions. I would urge my colleagues, Mr. Chairman, to think very carefully before this body adopts anything this hastily drafted, this hastily considered, and this hastily brought to this body for consideration. Remember that the Congressional Budget Office and the Office of Management and Budget have said no way, they have no way, no way of judging what the costs might be of this. I have seen legislation like this come to the floor earlier in a great burst of good will. Remember one time we had legislation to compensate doctors and pharmaceutical manufacturers for their conduct under a swine flu bill, and for the manufacture of a swine flu vaccine? That was some years ago. That was in the days when $1 million was a lot of money. We passed it. We agreed we would compensate the doctors for everything, and for the manufacturers of antitoxins and vaccines, for anything which occurred: bad manufacturing, rape in the parking lot, collapse of the building, fire, whatever it might be, as long as you were in there to get a shot. The practical result of that was that the lawyers had a bonanza. We did not have any idea what the liability was. I would be happy to tell Members, I opposed the legislation, because I thought it was accepting an absolutely impossible liability.

Mr. DINGELL. I am discussing the basic legislation that is offered. I thank the gentleman for pointing that out.

Mr. DINGELL. I am glad to yield to the gentleman from Louisiana.

Mr. DINGELL. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, I have listened to this debate for a goodly period. I find myself troubled. We have a perfectly good Constitution. It provides that when there is a taking there is compensation, if it is the Federal Government that does it. That has been the law on the books since the Constitution was first ratified. This now changes that law in a fashion which no one can properly predict. I have been seeking for some while a proper statement from both the Congressional Budget Office and the Office of Management and Budget as to the cost of the proposal now before us, either the basic legislation or the amendment offered by my good friend, the gentleman from Louisiana [Mr. Tauzin]. They do not know. They say there is no way that an intelligent cost estimate can be made, but that the cost would be billions and billions of dollars. This should certainly be a warning to us that we should be very careful. First of all, the bill and the amendment are full of curious contradictions. The consequences of what they do is to impose enormous liabilities upon the taxpayers to redress grievances which are real and grievances which are not real, and to address circumstances which, in many instances, are in fact beneficial to the landowner, and where requirements of the laws would in fact protect other landowners from wrongdoing by the person who would seek relief and redress. For example, Mr. Chairman, the question of building on a flood plain. government if the Federal Government does not permit that. However, it also protects other landowners in the area from being flooded. This legislation would require the Federal Government to compensate an individual for building on a flood plain and demanding redress from the Federal Government. I do not think that makes good sense.

Mr. DINGELL. Mr. Chairman, I thank the gentleman for yielding. Mr. Chairman, what would happen would be that the individual who owned the property would go and get himself some kind of an assessor who would assay the value of the property. That individual would fix a value of the property after it was developed and before it was developed, a highly speculative process on which you could get a number of different people who would assess the value of that property quite differently depending on the assumptions they made and depending on a large number of other things, including highly speculative judgments as to the value of that property if it were in fact improved. So what a fellow really would do under this legislation is to run in with two different estimates from a surveyor or an appraiser who would give him the best selection of choices that he felt would best enable him to come in and sue the Federal Government or to make claims against the Federal Government under this particular legislation, with consequences that the cost to the Federal Government would Budget says it would cost literally billions and billions of dollars, in response to a request that I made to them. Am I correct in my assumption?

Mr. DINGELL. That seems to be consistent with the overall practices that we have observed with regard to legislation. I think that in almost every instance where we have dealt with questions which were involved in the contract in the 100 days we found that the legislation has changed faster than even the managers of the legislation could understand. And that they were incapable of explaining language which was in their own bill. I think that good legislative practice deserved better protection of the public interests and requires better than the legislation we have before us.

Mr. DINGELL. I yield to the gentleman from Massachusetts.

Mr. DINGELL. Mr. Chairman, I move to strike the requisite number of words and I rise in support of the amendment. (Mr. DINGELL asked and was given permission to revise and extend his remarks.)

Mr. DINGELL. Mr. Chairman, I have good news for my colleagues. Rejoice, the fifth amendment is alive and well. It is in the hands of the courts which are vastly more competent to interpret it, to enforce it and to provide for justice to be properly administered to the American citizens, to see to it that where there is a taking it is compensated, and to do so in a thoughtful fashion in accordance with law, and on thoughtful consideration of the requirements of the Constitution and the precedents which have interpreted that great institution of this country. The fifth amendment says no person shall be deprived of life, liberty or property without due process of law, nor shall private property be taken for public use without just compensation. This amendment implements that language. It sees to it that Americans are treated fairly, according to 200 years of constitutional law; and that where there is a taking they are properly compensated. It is remarkable to note the curious way in which this legislation has been considered, brought rapidly to the floor, without proper consideration of the facts that are associated with it. When I was a young Member, no bill was brought to the floor until we had an estimate as to the cost from the Office of Management and Budget. As I mentioned earlier in my remarks, we sought the views of the Office of Management and Budget, and of the Congressional Budget Office to find out what this legislation is going to cost the taxpayers. Those two agencies responsible for the administration of the public monies, and estimates of expenditures and costs, were not able to tell my office either how much is at stake here, how much this is going to cost, nor were they able to tell us what programs were involved. Happily, there is a possibility that there is some limitation as to the sweep and scope of the cost of this from the original bill, but that is not enough. What we really need to know is what this is going to cost, why is it that we are rushing out to spend the public monies? I have heard great groaning and great distress from my colleagues on the Republican side of the aisle about the fact that the budget is out of balance. Let me tell my colleagues that if there is a budget busting piece of legislation in this session of Congress, or indeed in any session of Congress, this will rank in the top three or four. There is not anyone on this side of the aisle who can tell this body what this is going to cost. And there are very few who could justify all of the strange and anomalous consequences that are going to flow from this, people who are going to be compensated for enrichment which they have already gotten which might be diminished by the same problem project which has contributed to their enrichment. I can understand there are people out there complaining about the fact that there are Federal laws that say you cannot pollute, that say you cannot flood your neighbor's land, that you cannot build where good sense says you should not, and taxpayers would have to pay you and want to be paid for being denied the privilege of building where you ought not. It is not good sense, but I understand that, and there is no reason why we should listen to it. What we ought to do is legislate with the full awareness of costs, a full appreciation of what it is we are doing, and whether or not it is wise public policy, the programs which we are amending and the behavior of this body. That is good legislation, that is good sense. It is not being applied here.

Mr. DINGELL. Mr. Chairman, will the gentleman yield?

Mr. DINGELL. I yield to the gentleman from Montana. (At the request of Mr. Williams and by unanimous consent, Mr. Dingell was allowed to proceed for 1 additional minute.)