Byron Dorgan

Mr. DORGAN

Mr. DORGAN. Mr. President, I ask unanimous consent that the Senate Committee on Finance be authorized to meet during the session of the Senate on Tuesday, February 5, 2002, at 2:30 p.m., to hear testimony on the President's fiscal year 2003 budget and tax proposals.

Mr. DORGAN. Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet on Tuesday, February 5, 2002, at 2:30 p.m., on implementation of the Aviation and Transportation Security Act.

Mr. DORGAN. Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on Tuesday, February 5, 2002, at 9:30 a.m., in open session to receive testimony on the Defense authorization request for fiscal year 2003 and the future years Defense program.

Mr. DORGAN. Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on Tuesday, February 5, 2002, at 4:30 p.m. in executive session to meet with members of the Canadian Senate Committee on National Security and Defense.

Mr. DORGAN. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on Tuesday, February 5, 2002, at 9:30 a.m., to conduct the first in a series of hearings on ``The State of Financial Literacy and Education in America.''

Mr. DORGAN. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a hearing on ``Human Cloning: Must We Sacrifice Medical Research in the Name of a Total Ban?'' on Tuesday, February 5, 2002, at 2 p.m., in Dirksen room 226. Witness List Panel I: The Honorable Dave Weldon and the Honorable James C. Greenwood Panel II: Dr. Irving L. Weissman, Chair, Panel on Scientific and Medical Aspects of Human Cloning, the National Academy of Sciences and Professor, Stanford University School of Medicine, Stanford, CA; Professor Henry T. Greely, Stanford University Law School, Stanford, CA; Professor R. Alta Charo, University of Wisconsin Law School, Madison, WI; Kris Gulden, Coalition for the Advancement of Medical Research, Washington, DC; Andrew Kimbrell, Executive Director, International Center for Technology Assessment, Washington, DC; and Father Kevin T. FitzGerald, Georgetown University Medical Center, Washington, DC.

Mr. DORGAN. Mr. President, I ask unanimous consent that the Subcommittee on Science, Technology, and Space of the Committee on Commerce, Science, and Transportation be authorized to meet on Tuesday, February 5, 2002, at 9:30 a.m., on Fighting Bioterrorism: Using America's Scientists and Entrepreneurs to find Solutions.

Mr. DORGAN. Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet on Tuesday, February 5, 2002, at 9:30 a.m., on pending committee business Executive Session Agenda 1. To authorize the issuance of a subpoena to compel testimony from Mr. Kenneth L. Lay, former Chairman and Chief Executive Officer and current board member of the Enron Corporation (Kevin Kayes, Jeanne Bumpus).

Mr. DORGAN

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

Mr. DORGAN. Mr. President, I send an amendment to the desk. This is an amendment I had filed. It is called the travel industry stabilization amendment. I offer it as a second-degree amendment to the Reid-Kyl amendment that was offered previously.

Mr. DORGAN. Mr. President, I ask unanimous consent that the amendment proposed by Senator Reid and Senator Kyl, amendment No. 2764, which had previously been offered but set aside, be brought back so I can offer a second-degree amendment to it. I ask that amendment No. 2764 be the pending business.

Mr. DORGAN. Mr. President, I wish to offer a second-degree amendment. I ask unanimous consent that we be on amendment No. 2764 which has been proposed by Senator Reid and Senator Kyl.

Mr. DORGAN. Mr. President, I will not take 2 minutes because I will speak on this at another time. I indicated previously I support the underlying Reid-Kyl amendment which deals with travel and tourism- related issues. The amendment I have offered is an amendment that deals with some loan guarantees to those businesses that have a connection to the airports and the airlines that had been shut down by the Federal Government post-September 11. Many of them remain in very difficult straits. They face some very difficult financial troubles. The Federal Government did provide loan guarantees and grants to the airlines. I was supportive of that. But there were ancillary businesses that are related to the airlines and related to the airports that suffered substantial losses as a result of actions by the Federal Government to shut down air service. This is legislation I have written to address that situation in the form of loan guarantees. I have spent time with my colleague from Nevada, Senator Reid, and others of my colleagues who are supportive of this approach. I offer it as a second-degree amendment because I believe it is appropriately something that should be attached to the Reid-Kyl amendment which I intend to support as well. Mr. President, I yield the floor.

Mr. DORGAN

Mr. DORGAN. What is currently pending?

Mr. DORGAN. Mr. President, is the Senate currently in morning business?

Mr. DORGAN. Mr. President, I ask unanimous consent the order for the quorum call be dispensed with.

Mr. DORGAN

Mr. DORGAN. Mr. President, how much time do I have remaining?

Mr. DORGAN. Mr. President, I asked for 2 minutes in addition to the minute and a half remaining at that point. I expect I will have 3 and a half minutes.

Mr. DORGAN. Mr. President, I come to the floor of the Senate to discuss, just for a few minutes, the action taken this morning in the Senate Commerce Committee. We voted unanimously to support a subpoena being delivered to Mr. Kenneth Lay, who is the former chairman and CEO of the Enron Corporation. I want to describe for my colleagues what brought us to this point and why we believed we had to vote to authorize a subpoena being issued. About 4 to 6 weeks ago, Mr. Lay's attorneys told us that Mr. Lay would be willing to appear before the Senate Commerce Committee. That was in response to a request by us as we began to investigate what happened with respect to the Enron Corporation. As you know, this is the largest bankruptcy in American history. There is substantial information that has been available for some while now, prior to and since the bankruptcy, about things that had happened inside the corporation that cause a great deal of concern. A memo by one of the vice presidents of Enron was presented to the CEO, Mr. Lay, in August of last year. That memo by Vice President Watkins talked about accounting hoaxes and irregularities of sorts, and warned about what people would find if they dug into the partnerships that were being created in this corporation. Then, in November and December, that company's auditors, Arthur Andersen and Company, talked about possible illegal acts with respect to that corporation and the review of some documents. Then, last Saturday, a report that was commissioned by the board of directors of the Enron Corporation, the Powers report, described a broad range of very serious problems that went on inside that corporation. At any rate, during this period of time we had requested the testimony before the subcommittee and the full committee of the Commerce Committee by Mr. Lay. His attorneys said he would be made available on February 4 at 9:30 in the morning. They continued to say that even through last Friday and Saturday. On the Sunday evening before Mr. Lay's scheduled appearance, we were called his attorneys. They told us that Mr. Lay had changed his mind and he would no longer be available to testify and would therefore not appear on Monday morning. Mr. Lay's attorneys wrote a letter saying the problem was that Mr. Lay had heard comments about his company that concerned him. They felt it would probably be a prosecutorial kind of environment in the committee hearing on Monday, and therefore he did not want to appear. The fact is, the comments that were made by a number of Members of the Senate prior to Sunday were no different than the assertions made to the CEO of Enron by his own employee last August, by his accounting firm in November and December, and especially by his own company's board of directors on Saturday last. Mr. Lay, in my judgment, following the report by the board of directors of this corporation, decided that he did not want to talk to anybody publicly and decided to lay it off on some Members of Congress, saying that is the reason he did not want to come and testify. Let me tell you what was in that report, just to give one small example. This report says that in this corporation, one of the corporate officers, Mr. Fastow, in creating one of the partnerships-- incidentally, there were a lot of secret partnerships created here--Mr. Fastow invested $25,000 of his own money in a partnership in a corporation of which he was an officer. Sixty days later, that $25,000 was $4.5 million to Mr. Fastow. Does anybody in this room know of investments like that? Would you like to make a $25,000 investment that, in 60 days, becomes $4.5 million? Where can you do that? The lottery, but that is not a sure thing. No, this wasn't gambling inside the corporation. This was just people playing fast and loose with the truth and with other people's money. When someone takes $25,000 and turns it into $4.5 million in 2 months, in my judgment, that is stealing. That is just stealing--yes, quote unquote, stealing--from investors who own the shares in that corporation. At the same time that you have an officer of the company taking $25,000 and in 60 days turning it into $4.5 million, at the same time that is happening, one of my constituents in North Dakota is writing a two-page letter to me. That letter, an anguished cry from this family, asks the following question: What on Earth has happened? I worked for this company's subsidiary for many, many years and have put away $300,000 into a retirement account. Do you know what my retirement account is worth today?--$1,700; from $300,000 to $1,700. He and his family have lost it all. But inside that corporation we had people making millions. Was that a corporate culture of corruption? You bet your life it was. And the reason Mr. Lay has decided not to come to the Congress to testify was not because of anything anyone has said. It is because of what this Powers report has found that went on inside this company. I will give another example. This company decided to create a little partnership called Braveheart to accommodate some business they were going to do with the Blockbuster Corporation. They were actually going to have Blockbuster be the repository of movies. They were going to stream these videos or movies to consumers around the country. It was going to be a big business. It was announced in March of 2000. By February of the next year it was gone. But in the meantime they created a little partnership called Braveheart to take care of all this. Do you know what Braveheart did? Braveheart borrowed roughly $112 million from a Canadian bank. Then it sold its assets to the Enron Corporation for slightly over $100 million. The Enron Corporation booked it as a business profit, when in fact all it was a bank loan from a Canadian bank, run through a partnership that wasn't doing any business at all--just a few test markets with a few customers. You tell me whether that is honest business. It is not. Can someone come to the Congress and defend that? They can't. That is why we have people who were at the head of this corporation who were unwilling to talk. I just wanted to make the point that the assertions by attorneys on behalf of principals in this corporation are suggesting that they have been offended because they might find a prosecutorial approach at some of these hearings. No one suggested that a hearing before this Congress would ever be a walk in the park, especially when you have a record inside this corporation of financial manipulation, of dishonest accounting, and of personal enrichment of officers and directors. I wanted to make that point about what we had to do this morning. We issued a subpoena for Mr. Lay. It was issued on a unanimous vote by the Senate Commerce Committee. That is nearly unprecedented. We don't issue subpoenas in the Commerce Committee. We have the power and authority to do so, but we don't do it very often. But we did it because we felt we had no choice. Mr. President, I had asked permission to speak in morning business. I have just a couple of other things to mention very briefly, and I want to do that in a separate section of morning business. How much time is remaining, Mr. President?

Mr. DORGAN. Let me ask if I can extend that by 2 minutes by consent.

Mr. DORGAN

Mr. DORGAN. Mr. President, I'd like to talk a moment about several items I think ought to be included in the economic recovery package. One, I have filed an amendment that would provide for a 5-year extension of the wind energy production tax credit. We really must get that done. Regrettably, this credit was allowed to expire at the end of last year. As a result, many lenders have stopped providing financing for new wind energy projects. Wind development projects underway have come to a screeching halt. Extending the wind energy production tax credit would provide an immediate boost to the economy. We have a lot of projects on the books that aren't moving because the credit expired. A long-term extension will jump-start development activity, create jobs and help this country meet its future energy needs. Each new wind turbine placed into service creates about $1 million in economic activity. I would like to make the wind energy production tax credit permanent. My proposal today would extend it for 5 years. Clearly, a shorter term extension will not provide developers the certainty and stability they need to plan and finance new wind energy projects. I think Congress must act quickly to ensure the availability of the wind energy tax credit over the long term. If we don't act now, many wind energy initiatives will be scrapped at a time when this country can least afford it. Second, I intend to offer and have filed an amendment to permit companies that have recently suffered net operating losses to carry back those losses for 5 years for federal income tax purposes. I will not go into a lengthy description of why we ought to do that. But my amendment should provide some needed financial help for those companies that have been hurt most during the current economic downturn. It will increase cash flow for many of these firms and help them make payroll, avoid additional layoffs and, hopefully, encourage new hiring. It will also help them to make investments in equipment and machinery they need to rebuild, grow and prosper. There is bipartisan support in both the Senate and the House of Representatives for net operating loss carry-back relief proposals. We ought to include in a 5-year net operating loss carry-back provision in the economic recovery package. Finally, I've filed an amendment that would provide tax relief for many S-corporations that sell ``built-in'' gain assets and reinvest the proceeds from those sales back into their companies. Today, there are hundreds of thousands of firms that operate as S corporations that would have a huge tax impediment if they were to sell certain appreciated business assets. The taxes they would be required to pay on that gain, even if they reinvest it, would be prohibitive. As a result, many S-corporations are forced to keep these assets--even if they are no longer productive and could be converted into assets that generate new growth and jobs. The amendment I filed today would allow those who are involved in these S-corporations to sell built-in gain assets without facing a massive federal tax bill, provided they reinvest the proceeds into the business within a two-year period. That, too, is stimulative. Many of these companies are the job-producing companies in this country. To allow them to sell less productive assets and reinvest into more productive assets will be very stimulative to this country's economy. It will produce jobs and economic growth and opportunity. But they are locked out of that at the present time by the Tax Code. My amendment proposes to change that result and I hope we will get an opportunity to consider it during the debate on the economic stimulus package. One final point: The Kyl amendment, of which I am supportive, dealing with tourism is an amendment to which I want to offer a second-degree amendment dealing with loan guarantees. It would cost $200 million or $300 million over the 10-year period. It deals with a subject about which I have spoken with Senator Kyl and Senator Reid. Many of the businesses connected to the airports and the airlines that were shut down post-September 11 are in desperate condition. A program of loan guarantees dealing with the most fragile of those businesses which were shut down through no fault of their own--through edict by the Federal Government--would be appropriate in those unusual circumstances and would be guaranteed by an amendment attached to the Kyl amendment. I hope to be able to offer that as a second-degree amendment dealing with travel agents, car rentals, and others attached to airports which suffered just as much as the airlines did when the airlines were ordered to be shut down and there was no travel anywhere in the country for a specific period. As I indicated, I noticed the previous amendments yesterday. I wanted to indicate that I would be prepared to offer a second-degree amendment to Senator Kyl's amendment. I yield the floor.

Mr. DORGAN

Mr. DORGAN. I just listened to a rather lengthy discussion by the Senator from Arizona about where we are and how we got here. He characterized the position of the majority leader as having been unwilling to compromise on virtually anything at any time for any period of time. That, it seems to me, is at odds with what has happened in the last couple months in relation to economic recovery or the stimulus package. I wonder if the Senator from South Dakota could respond to those rather lengthy comments about his so-called failure to compromise on these provision. My observation, I would say, has been that the majority leader has been willing to compromise on virtually all of these provisions in order to try to reach an agreement. But despite those compromises, there has not been any budging on the other side. Could the Senator from South Dakota, the majority leader, respond to the assertions we have just heard from the Senator from Arizona?

Mr. DORGAN. I ask if I might inquire of the majority leader.

Mr. DORGAN. I ask to be added as a cosponsor of the amendment offered by the Senator from Montana, Mr. Baucus. I know he has offered this amendment previously on a different vehicle. This amendment is critically important to farm States, to farmers, and Main Street businesses that are trying to do business in a pretty tough economy. This is an awfully good amendment, as has been stated by a number of colleagues on both sides of the aisle. I hope we get a strong bipartisan vote for it. I commend Senator Baucus for this amendment. It is a great idea. It is important. I ask unanimous consent to have my name added as a cosponsor.

Mr. DORGAN. I suggest the absence of a quorum.