Dianne Feinstein

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, the States also propose compromise language that would still place some of these engines off limits. To quote the letter from the Southeastern States Air Managers: Please note that other compromise amendments which fall short of fully restoring section 209(e)(1)(a) are, in our opinion, unacceptable and will constrain States as discussed above. This association and your State air pollution control agencies would appreciate your support of removal of the Bond amendment from S. 1584, the HUD VA appropriations bill. Many other States are just beginning to realize the importance of this small engine provision. As we move forward with more protective air quality standards, more and more States will need to reduce emissions to comply with national standards. Those States will also need to reduce pollution from these very engines because there are so many of them and they are so very dirty. I strongly believe we should protect a State's right to do so. We should not use this appropriations bill to take rights away from the States without knowing what we are doing, without a hearing, and without review by the authorizing committee. As I said, this rider is the mother and father of all riders because it authorizes a major reduction in States rights with no hearings whatsoever, no ability to question Briggs & Stratton, and no ability to ask them why they said on their SEC report that this would cause no financial disadvantage to the company, that California is such a small portion of their market, and they would just pass on any additional costs to the consumer. Why would they tell the Senate or the Senator from Missouri they would move jobs to China if this passed? The statements of Briggs & Stratton make me very suspicious. The Clean Air Act has long recognized that States with serious air pollution problems need to be able to set strong standards to protect public health. The hard-fought 1990 Clean Air Act amendments give the States the ability to regulate these off-road engines. With respect to the California regulation, I will work with fire officials, air resources boards, the industry, and the Senator from Missouri to ensure that the final regulation is safe. But I believe it is clear that this should not be a debate about a specific State regulation. That is our problem. We will handle it. California is entirely able and capable of handling this problem. We don't need someone else to tell us what to do. This is a debate about making sure the States have the flexibility necessary to protect the public health. It is hard for me to understand why anyone would do this on an appropriations bill when the consequences are so dire, with over 300 premature deaths likely to be caused by worsening air pollution, or if the State moves to further tighten stationary sources and really send a whole magnitude of companies offshore. I don't think in an appropriations bill we should take well-earned States rights away from every State in this Union to benefit one company. Remember, every other manufacturer of small engines is going along with what California is doing. They have all said they could do it. They have all said they could adapt these standards into their manufacturing. They have all said they could change. They have all said they can add adequate heat shields. Furthermore, the pollution from these engines under 175 horsepower accounts for 17 percent of California's mobile smog emissions. This is not minor. We are talking about 17 percent of a State that has seven nonattainment areas in it, 17 percent of their pollution, and an Air Resources Board that has accepted the industry's proposal, an industry trade council, to which Briggs & Stratton belongs, submitted a proposal they could live with to the Air Resources Board. The Air Resources Board accepted it. And now Briggs & Stratton is coming back and saying: We do not agree; we will get our Senator to put a rider in a bill--with no hearing, without understanding the consequences that this provision will move the right for every single State to protect its citizens. That is truly wrong. This morning, I ask my colleagues to stand up for their states rights. I ask them to stand up and protect public health. I ask them to oppose this special provision on this appropriations bill put there to benefit one company when every other company says they can comply. Exhibit 1 [From the Outdoor Power Equipment Institute] OPEI Succeeds in Dramatically Improving California Emission Regulations For the last two years, OPEI has been working proactively with the staff of the California Air Resources Board (CARB) to improve proposed catalyst-based Tier III exhaust standards for wheeled products, as well as new evaporative emission regulations, based on the use of carbon canisters and/or sealed fuel tanks, as well as less-permeable fuel tank materials and fuel lines. On August 8, 2003, CARB staff issued a proposed regulation that would have required wheeled products to install high-efficiency/high-heat generating catalysts in order to meet exhaust standards that were 50% more stringent than the current Tier II standards. CARB's August 8th proposal would also have required all lawn and garden equipment to be subject to shed-based performance testing to demonstrate that the entire piece of equipment complied with an overall evaporative/diurnal emission standard. CARB's August 8th proposal evaporative compliance program and exhaust stand would have: (1) imposed enormous compliance and product integration problems for both engine companies and OEMs; and (2) resulted in significant safety concerns as well, principally because of the substantial heat generated from the high-efficiency catalysts. Through written correspondence, the U.S. Congressional House Committee on Government Reform, the California Fire Chiefs Associations (CFCA), the National Association of State Fire Marshals (NASFM), and the U.S. Consumer and Product Safety Commission (CPSC) have gone on record as strongly opposing CARB's August 8th proposal because of the unresolved safety issues with high-efficiency/high-heat generating catalysts and pressurized fuel systems. In direct response to OPEI advocacy, the California Air Resources Board (CARB) unanimously adopted on September 25th a modified alternative framework which: (1) relaxes the stringency of CARB Staff's proposed Tier III exhaust standards; and (2) substantially improves the overall general framework for the still-to-be-defined evaporative emission regulations. The CARB Board has adopted industry's proposed exhaust standards which are roughly 25% less stringent for Class I engines (less than 225 cc displacement) and 33% less stringent for Class II engines (greater than 225 cc displacement). Based on an economic study prepared for OPEI, the compliance costs of the industry counterproposal should be roughly one-third less than the costs associated with the August 8th CARB proposal. CARB's August 8th exhaust and evaporative proposed standards would have increased the average compliance cost for lawn mowers by $106 and the average compliance cost for riding mowers by $321. CARB's adopted less stringent exhaust and more flexible evaporative program are expected to result in an average total compliance cost increase of $73 for walk-behind-mowers and $189 for riding mowers. The provisions in OPEI/EMA's counterproposal (as generally adopted by the CARB Board) also establish a much more straightforward and less burdensome, design-based (rather than shed-testing) program (for all products others than walk-behind-mowers) to demonstrate compliance with the evaporative requirements. OPEI has also persuaded CARB to allow the use of smaller and less-expensive carbon canisters. The provisions in OPEI's/EMA's counterproposal (as generally adopted by the CARB Board) provide industry with much longer lead-time compared to the August 8th CARB proposal. Specifically, industry has more than five years of additional lead time to achieve the ultimate evaporative emission requirements. This additional lead time should allow manufacturers with adequate time to develop and use new low- permeation barriers (such as co-extruded materials) in constructing their fuel tanks. The Outdoor Power Equipment Institute (OPEI) is the major international trade association representing the manufacturers and their suppliers of consumer and commercial outdoor power equipment such as lawnmowers, garden tractors, utility vehicles, trimmers, edgers, chain saws, snow throwers, tillers, leaf blowers and other related products. Founded in 1952, the Institute is dedicated to promoting the outdoor power equipment industry by undertaking activities that can be pursued more effectively by an association than by individual companies.

Mrs. FEINSTEIN. Madam President, I thank the Senator from Maryland for her comments. She is a superior ranking member. When she is chairman of the subcommittee, she is a superior chairman of the subcommittee. I do not know any Senator who loves her assignment more than the Senator from Maryland. If we hear one thing from her, it is about her VA-HUD bill. She does a super job. I am just so grateful for her service to our country, to our veterans, and to housing. It has just been exemplary. I yield the floor.

Mrs. FEINSTEIN. Will the Senator yield?

Mrs. FEINSTEIN. Or we can go back and forth through the Chair if the Senator is in agreement. The problem is that because of the severe conditions in the State, 7 nonattainment zones, this is 17 percent of mobile sources. If we do not deal with it, we cannot meet the clean air standards and we jeopardize our highway funds. There is the rub, so to speak. States do not have to follow. Clearly, States have followed, a large number of them. I don't know what else to do. Every State's air, as we have discussed with forests, Senator, is different. Pollution comes from different kinds of sources in every State. That is why this ability of a State, particularly one as large as California, fifth largest economic engine on Earth, should have the right to protect its people. The concern is that EPA, (a) won't move fast enough; (b) will not do enough to severely reduce the pollution to enable California to come within its containment standards.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. The point is, these were all controversial nominees. A controversial nominee's hearing can run 8 hours. If you schedule three, you truncate the hearing for each, and you do not allow the minority to do their due diligence in terms of their homework. I thank the Chair and I yield the floor.

Mrs. FEINSTEIN. May I finish my statement?

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, today, on Veterans Day, we commemorate and pay special honor to all the veterans who have made such great sacrifices in the name of country and democracy. This day is particularly poignant as our Nation is at war. There are more than 150,000 military service members in harm's way, fighting overseas in Iraq and Afghanistan. They fight for freedom of the Iraqi people, who have faced decades of extreme oppression and brutality under Saddam Hussein, and against the Taliban forces, who continue to pose a challenge in Afghanistan. Sadly, nearly 500 have paid the ultimate sacrifice and many more have sustained life altering injuries. And as we prepare to send thousands more in harm's way, I believe that it's our obligation to ensure that our military service members and veterans receive full support from Congress, and that our efforts are tailored to benefit those who proudly serve this Nation. We have recently granted the Administration an additional $87 billion dollars in supplemental funding for Iraq and Afghanistan. While I would have preferred that some of those funds be in the form of a loan to Iraq, and that there be more safeguards to ensure the funds are well-used, I believe that it was necessary to provide these funds. It is clear to me that we must stay the course, and we must rebuild the infrastructure, prevent civil war, and see to it that Iraq does not become a base for terror and instability throughout the region. We must see to it that a stable governmental structure and viable economy apart from Saddam's tyrannical dictatorship can be put in place. And most importantly, we must see to it that our troops are given all the tools necessary to accomplish these objectives. Approving the additional funding was the only way to truly support our military service members and aid their ultimate success. As we seek to ensure that the current war efforts are well funded, we also need to realize that very soon, the young men and women of our armed forces will be returning home. Some will require extraordinary care for a long period of time. It is incumbent upon us to ensure that they have adequate facilities to aid them in their recovery and recuperation. There must not be any doubt by any of our injured veterans that they did the right thing in sacrificing health to defend our nation's interest. The best way to prove to them that they have our full support is to ensure that they receive good health care and adequate benefits once they return home. It is our responsibility to make sure that our veterans are not waiting six months or longer for appointments at VA hospitals, nor should they have to wait for 15 months for disability claims to be finalized, as is now often the case. And prescriptions costs must be affordable. We need to make room available in VA hospitals to ensure that all of our veterans whether active duty or reserves are adequately served. In order to accomplish this task we must be cautious as we close hospitals under the Capital Assets Realignment for Enhanced Services-- CARES--program to ensure that we don't leave our veterans stranded without accessible services. As our veterans return home, some with great and debilitating injuries, we must also ensure that their compensation is just, full, and reflective of the American spirit. Finally, we need to remember the families of the great men and women who are separated from their loved ones. We must make sure that their concerns are the Nation's concerns. While their loved ones are overseas fighting for America's interest, Congress must ensure that their medical needs are covered. As I reflect on the origin of Veterans Day, it brings me great hope that our service members will be home and peace will reign again. On June 4, 1934, Congress enacted a concurrent resolution, recognizing November 11, 1918. The resolution states: ``Whereas the 11 of November 1918, marked the cessation of the most destructive, sanguinary, and far reaching war in human annals and the resumption by the people of the United States of peaceful relation with other nations, which we hope may never again be severed, and Whereas it is fitting that the recurring anniversary of this date should be commemorated with thanksgiving and prayer and exercises designed to perpetuate peace through good will and mutual understanding between nations; . . . '' On May 13, 1938, the 11 of November was approved as a legal holiday dedicated to world peace, known as Armistice Day. Finally, on June 1, 1954, Congress renamed Armistice Day to Veterans Day, thereby commending all veterans. Veterans Day is often associated with war, but its true significance lies in peace and humanity. Since September 11 this country has undergone tremendous struggle and uncertainty. We have shown that our resiliency is greater than our fears and our convictions of freedom and right can not be compromised. This country is great because its citizens are great. This country was born from the sacrifice of its citizens and the vision they saw. Today we honor the citizens who served and continue to serve our great country. They are the protectors of our democracy and our way of life; they are our veterans.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, I rise today to express my support for the Syria Accountability Act of 2003, a bipartisan piece of legislation of which I am proud to be a cosponsor. The time has come for the Senate to send a strong message to Syria that its support for terrorism, its occupation of Lebanon, and its development of weapons of mass destruction are unacceptable and will not be tolerated. This legislation, introduced by my friend and colleague from California, Senator Boxer, and Senator Santorum provides the President with maximum flexibility to target specific sanctions against Syria subject to a national security waiver. Specifically, it requires that sanctions be imposed on Syria unless the President certifies that Syria: is not providing support for international terrorists; has withdrawn all military, intelligence, and other security personnel from Lebanon; has ceased the production, development, acquisition, or transfer of weapons of mass destruction and long range ballistic missiles, and; has ceased support for terrorist activities inside of Iraq. If the President does not make such a certification, the bill requires the President to prohibit the export to Syria of military items and dual use technology and impose two or more sanctions from a list of options including: prohibiting the export of products of the United States--other than food and medicine--to Syria; prohibiting United States businesses from investing or operating in Syria; restricting the travel of Syrian diplomats in Washington, D.C. and New York; and reducing diplomatic contacts with Syria. I, for one, believe that sanctions should be imposed only as a last resort and that all avenues should be explored to change another state's behavior before taking such action. With regard to Syria, Congress has passed numerous resolutions calling on Syria to change its ways and Republican and Democratic administrations alike have made it clear that Syria's actions are wholly inconsistent with a peace-loving and productive member of the international community. Nevertheless, words have not achieved the results we are looking for and as a result, we must take further substantive action. Syria's behavior and actions leave a lot to be desired and have severely hindered the Arab-Israeli peace process. First, it continues to be listed as a state sponsor of terrorism by the State Department and is reported by the Secretary of State to provide ``safe haven and support to several terrorist groups'' including Hizballah, Hamas, and the Popular Front for the Liberation of Palestine. Despite repeated calls by Secretary of State Colin Powell that Syria cease its support for terrorism and close the facilities and offices of these groups, it has refused to do so. Second, for over 20 years Syria has ignored United Nations Security Council resolutions and has failed to withdraw completely from Lebanon, maintaining 20,000 troops and security personnel in that sovereign country. The presence of those troops restricts the political independence of Lebanon and harms relations between Israel and Lebanon. Finally, Syria has continued its development and deployment of short and medium range ballistic missiles and biological and chemical weapons. It has not signed the Chemical Weapons Convention and has one of the largest missile inventories in the Middle East. It is reported to have three production facilities for chemical weapons and has a stockpile of the nerve agent sarin. In the post-September 11 world, we all understand the dangers posed by states who sponsor terror and seek weapons of mass destruction. I had hoped that Syria would realize that it is in its best interests to turn a new page in its relations with the United States and the international community and cease its support for terror, withdraw from Lebanon, and halt its pursuit of chemical and biological weapons. It has not done so and it is time for the United States Senate to respond. I urge my colleagues to support this legislation.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, I rise to submit S. Con. Res. 795, a Senate concurrent resolution calling upon the President to address Mexico's failure to fulfill its obligations under the U.S.-Mexico Extradition Treaty, which entered into force in January 1980. I am delighted that Senators Brownback, Bill Nelson, Hutchison, Bingaman, Domenici, Kyl, and Campbell join me in submitting this resolution. Specifically, this resolution calls upon President Bush to renegotiate the Extradition Treaty or take other actions to ensure that the U.S. can extradite serious criminals back to the U.S. for appropriate prosecution and punishment. In my view, this treaty--at least as interpreted by Mexico--is simply not working as intended. While the U.S. is currently attempting to extradite hundreds of fugitives from Mexico, since 1996, Mexico has sent back only a relative handful every year. For example, in fiscal years 1996 through 2002, Mexico only extradited an average of 14 individuals to the U.S. each year. Even worse, Mexico's recent interpretation of this treaty has effectively eliminated our ability to extradite persons charged with serious crimes who flee to Mexico to avoid prosecution in the United States. This interpretation has jeopardized the safety of both American and Mexican citizens, undermined the integrity of our criminal justice system, denied basic rights and closure to crime victims, and allowed serious felons to escape just punishment. The result is that Mexico is becoming a safe haven for hard-core criminals. If you steal a car in the U.S., Mexico will return you to face prosecution and punishment. If you kill the driver, Mexico will protect you. The problem in a nutshell is that, since October 2001, Mexico has read the U.S.-Mexico Extradition Treaty as barring the extradition to the United States of anyone who faces a potential life term. In other words, if a person commits a serious crime in the U.S.--one that could subject them to a maximum life term--and heads south, Mexico will refuse to extradite that person to the U.S. to face prosecution and punishment in this country. While it has been difficult to determine the full scope of the problem, I am informed by prosecutors in California that, as a result of Mexico's interpretation of the Extradition Treaty, there are as many as 350 people who have committed murder and other serious crimes in California who have either not been extradited or have been effectively rendered non-extraditable. These 350 people have thus escaped appropriate prosecution and punishment under California law. Many of these people are living free and unpunished in Mexico. In some cases, we even know where they are. Let me quote from a recent Santa Barbara News Press article: A half dozen people wanted in the slayings of Santa Barbara residents are believed to be living free in Mexico. Santa Barbara police detectives even know where three of them live. But there's not much they can do about it. ``If I had unfettered access to the proper investigative tools and contacts, we could have them in custody in a matter of days,'' said Detective Tim Roberts . . . ``But that's not the case.'' Let me give you an example of another especially heinous case. On April 29, 2002, Armando Garcia, a Mexican national who had been previously charged in the U.S. with two counts of attempted murder, allegedly shot and killed, execution-style, 33-year-old Los Angeles County Deputy Sheriff David March during a routine traffic stop in Irwindale, CA. Garcia then fled to Mexico, where he remains a free man. Los Angeles District Attorney Steve Cooley has not formally requested Garcia's extradition because he says that there is no point. Mexico will demand that Cooley promise that Garcia will not receive life in prison for his crime--a promise that cannot be made because in this country sentences are up to a judge to set, once a person has been convicted of a crime. The results is that Garcia remains at large in Mexico. And earlier this year there was a horrific case in Santa Cruz implicating the Extradition Treaty. Miguel Ramirez Loza, 27 years old, allegedly attacked his 17-year-old girlfriend in an abandoned preschool building, slashing her throat and then spitting on her. As his girlfriend lay dying, he then raped the victim's 17-year-old friend. Loza's girlfriend was in a coma for months after the crime and just recently died. Loza is now in Mexico and is apparently in a Mexican jail as a result of a stabbing in Mexico unrelated to the Santa Cruz incident. However, according to Santa Cruz District Attorney Bob Lee, Loza cannot be extradited for the murder and rape in California because of Mexico's interpretation of the Extradition Treaty. It is true that Mexico does sometimes prosecute individuals in Mexico who committed crimes in the U.S. under Article IV of its Criminal Code. But often Mexico fails to do this. And, in any event, there is no substitute for extraditing the person to the United States. There are credible reports that defendants in Mexico sometimes buy their acquittals. And, at least by U.S. standards, Mexican standards of justice can be quite low. Trials often take place with no testimony and no witnesses. Victims and their families are not invited or consulted. And sentences--often reduced on appeal--frequently bear little resemblance to those authorized by U.S. sentencing laws. Not surprisingly, according to an article in the Las Vegas Review- Journal, ``More than a dozen prosecutors in Nevada, California and Arizona who were interviewed for this story criticized Article IV as an ineffectual alternative to extradition.'' One prosecutor, Jan Maurizi of the Los Angeles District Attorney's Office, stated that she ``sent demands to the Mexican government asking what happened to 97 Article IV cases that have seemingly disappeared from the justice system. Mexico . . . never responded. But from others we've talked to in unofficial channels, it's clear the vast majority of them are grossly inadequate sentences. Most of them, nothing happens.'' Another prosecutor, Val Jimenez, the special agent supervisor of the Foreign Prosecution Unit at the California Attorney General's Office, has mentioned one recent case where a defendant ``got 20 years for doing a homicide, appealed, and he was out in 18 months.'' And even if defendants were convicted, they may not serve real time. It was not until last year that Mexico finally tore down the infamous La Mesa State Penitentiary in Tijuana. La Mesa was a place where prisoners were free to purchase $25,000 townhomes with cell phones, tiled bathrooms, Jacuzzis, microwaves, computers, DVD players, and guard dogs such as Rottweilers. One murder in the prison was committed with a Uzi. The U.S.-Mexico Extradition Treaty provides that neither country is bound to deliver up its nationals for extradition. It further provides that where the offense for which extradition is sought is punishable by death, a country may refuse to extradite unless the country seeking extradition assures that it will not impose the death penalty. Under the Treaty, the death penalty is the sole punishment for which assurances may be required. For decades, Mexico has extradited suspects to California and other states without inordinate problems. Then, in October 2001, the Mexican Supreme Court ruled that life imprisonment violates the Constitution of Mexico and extended this interpretation to the Extradition Treaty. Specifically, the Court decided that Mexico could no longer extradite a fugitive who is subject to life imprisonment with or without the possibility of parole, unless assurances are given that guarantee a determinate term of years. Here is what the Mexican Supreme Court said in Opinion No. 125/2001, which is about a half-page long: [T]he punishment of life imprisonment is considered an unusual penalty and is prohibited by . . . article 22 of the [Mexican Constitution], inasmuch as it departs from the essential purpose of the penalty, which is the rehabilitation of the offender to incorporate him/her into society. It is, therefore, unquestionable that the requesting [i.e., extraditing] State must bind itself not to impose the penalty of life imprisonment, only another less serious punishment. Article 22 of the Mexican Constitution prohibits ``[p]unishment by mutilation and extreme cruelty, branding, flogging, beating with sticks, torture of any kind, excessive fines, confiscation of property and any other unusual or extreme penalties. . . .'' In light of the fact that the Extradition Treaty prohibits Mexico from extraditing criminals to the U.S. unless the U.S. agrees to waive the death penalty, it is interesting to note that Article 22 of the Mexican Constitution specifically allows the death penalty for ``high treason committed during a foreign war; parricide; murder that is treacherous, premeditated, or committed for profit; arson; abduction; highway robbery; piracy; and grave military offenses.'' So, in other words, according to the Mexican Supreme Court, the Mexican Constitution allows the death penalty for highway robbery in Mexico but, should an American criminal murder a police officer in California and then flee to Mexico, Mexico will refuse to turn this person over to the U.S. if he would face either the death penalty or a possible life term. In my view, this makes no sense. However, Mexico as a sovereign nation is free to interpret its domestic law as it sees fit. I do not quarrel with their interpretation of their own law. But I do question whether Mexico can unilaterally rewrite the U.S.-Mexican Extradition Treaty. And that is exactly the effect of its interpretation of the Treaty as barring extradition to the U.S. of any alleged criminal who faces a possible life term. In fact, Mexico's interpretation of the Treaty is unsupported by and inconsistent with the Treaty's language, purpose, structure, and history. It is also conflicts with the Vienna Convention on the Law of Treaties, which states that a treaty shall be interpreted ``in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in light of its object and purpose.'' As the U.S. State Department has made clear in a Protest Note to the Mexican Government after the October 2001 decision, [R]equiring assurances for a punishment other than the death penalty is unsupported by the Treaty, which provides the substantive extradition requirement. . . . To give [the Treaty] the reading Mexico has given it eviscerates the Treaty, for such a reading would disregard the substantive exceptions found in Articles 5 through 9, and would permit each Party to refuse each other's extradition requests based on its domestic law on sentencing, which could be changed unilaterally at any time, even if that change rendered the law inconsistent with the Treaty. Moreover, Mexico's interpretation of the Treaty has made it effectively impossible to extradite from Mexico individuals who commit murder or other serious crimes in California and many other States. In California, for example, over 40 different crimes are punishable by possible life sentences and neither a judge nor a prosecutor can give assurances of a determinate term for these crimes. As a result, Mexico's policy encourages people committing serious crimes in California to flee to Mexico and escape just punishment. Indeed, individuals in the United States with a criminal history have a perverse incentive to kill an arresting police officer and head for Mexico rather than face possible prosecution and imprisonment in the United States. Given Mexico's interpretation of the Treaty, the only way to extradite a Mexican national charged with a ``life'' crime is to seek extradition on reduced charges punishable by a determinate sentence. But this would mean treating more harshly those who commit a crime and remain in California than those who commit the same crime and flee to Mexico. This is not only unfair and a blow to the integrity of our criminal justice system. But it also just encourages criminals to flee to Mexico to reduce their potential punishment. Moreover, it is unclear exactly what assurances will suffice. In at least one Federal major narcotics trafficking case, a Mexican court determined that a twenty-year sentence was ``cruel and unusual'' and thus unconstitutional. And some Mexican courts have ruled that only a judge can give sufficient assurances--a legal impossibility under California's judicial system. Mexico's interpretation of the U.S.-Mexico Extradition Treaty has unquestionably had a particularly harmful effect on my home state of California. I would like to commend the Los Angeles District Attorney Steve Cooley and Deputy District Attorney Jan Maurizi for their work in identifying cases of individuals who have committed murder and other serious crimes in California who have either not been extradited or have been effectively rendered non-extraditable. As I noted before, there are at least 350 such cases just in my home state. Many district attorneys do not keep adequate records of which suspects fled to Mexico, which cases are potentially extraditable, and which cases have been or could be subject to Article IV prosecution. In fact, when we asked the National Association of District Attorneys to conduct a survey of how many cases have been affected by Mexico's interpretation of the Treaty, it received responses from only 17 jurisdictions, and much of this information was anecdotal. This survey, though, does demonstrate that the problem caused by Mexico's interpretation of the Extradition Treaty also afflict a number of other states. Based on the information we received, there are at least 60 cases around the country outside of California--and this number probably grossly understates the problem. These cases are in Arizona, Florida, Hawaii, Nevada, New York, Oregon, Tennessee, Texas, and Washington. These numbers, though, do not tell whole story. In every case, there is a horrible crime, a victim, a shattered family, and a horrible injustice. I have already discussed a couple of specific criminal cases implicating the U.S.-Mexico Extradition Treaty. But now I would like to talk about four more. In every case, the perpetrator of a heinous crime has escaped appropriate punishment because of Mexico's interpretation of the U.S.-Mexico Extradition Treaty. In August of 1999, Daniel Perez, a Mexican national, was convicted in absentia in Los Angeles County by a jury for the crimes of attempted first degree murder, use of a firearm, espousal battery, kidnapping, false imprisonment and stalking his estranged wife. Perez and the 21-year-old victim, Anabella Vera, were separated. They met at a pizza place. After kidnapping her at gunpoint and terrorizing her for two hours, Anabella finally convinced Perez that she would return home with him. Perez then drove Anabella to her car. After Anabella tried to drive away from him, Perez chased her in his car, ramming her vehicle and forcing her to run red lights. Ultimately, Anabella became stuck in traffic and, in a desperate bid to save her life, abandoned her car and tried to flee. Perez then caught Anabella at a gas station and shot her in the head. Miraculously, she survived. During the trial and while out on bail, Perez drove to Fontana, CA to the home of Anabella's father, who had been a key witness against Perez. In front of Anabella's siblings, Perez shot and killed Anabella's father. Perez then allegedly fled to Mexico, where he is still at large. Perez was sentenced in absentia in Los Angeles County for attempted murder to a term of 33 years to life, plus an additional life term. In addition, the San Bernardino County District Attorney's Office has charged Perez with the murder of the victim's father and the special circumstances of killing a witness. These charges carry a potential punishment of life in prison without the possibility of parole or, if it is not waived, the death penalty. Because Mexico does not recognize convictions in absentia, my understanding is that Mexico will neither extradite Perez for attempted murder nor prosecute him under Article IV of the Mexican Federal Penal Code. Alvara Luna Jara has been charged with the special circumstances murder of 12-year-old Steven Morales and the attempted murder of three others. On August 29, 1998, Steven was playing with several other children in front of their apartment, near three members of a local sheet gang. As Jara drove by, he and the three gang members exchanged hand gestures. Jara then extended his arm out of the car window and fired three rounds into the crowd, killing Steven with a gunshot to the head. Jara then fled to Mexico. If convicted in the United States, Jara could face life without possibility of parole or, if it is not waived, the death penalty. However, while Jara is not a Mexican national, the Mexican government has refused to deport him because his parents are Mexican nationals. After this refusal, Los Angeles District Attorney Cooley began formal extradition proceedings. However, because of Mexico's interpretation of the October 2000 Mexican Supreme Court decision, Cooley never submitted the formal request. On May 7, 1988, Father Nicholas Aguilar Rivera, a Catholic priest, was charged with 19 counts of child molestation. The day after he was charged, Father Rivera fled to Mexico. Although the case was supposed to be prosecuted promptly under Article IV, Mexican prosecutors failed to submit the case for prosecution until 1995. The Mexican court dismissed the matter as untimely and entered an acquittal. Now, both countries are barred from further prosecution. On May 17, 1998, Ruben Hernandez Martinez and Luis Castanon allegedly broke into the Nashville apartment of Kelly Quinn and her roommate after waiting for Ms. Quinn to return home. They then attacked her, raping her continuously for hours. When they were done, they made Ms. Quinn shower to remove any DNA evidence. However, Ms. Quinn was able to conceal semen that was on her neck. Castanon was arrested and, on the basis of fingerprint and serology evidence, convicted of aggravated sexual assault. He was sentenced to 60 years. Martinez, whom Nashville police believe committed several other rapes as well, fled to Mexico. I am informed that, while Martinez has been in custody in a Mexico City jail for over a year, Mexico has still refused to make a decision as to whether they will extradite him. The United States can and must retain discretion to prosecute and punish its most dangerous and violent offenders who commit crimes in the United States according to U.S. laws. Criminals should not be allowed to escape justice in the U.S. for the price of a bus ticket to Mexico. I would now like read a letter I received from a youngster in California about this problem. Here is what he says: My mom is a deputy sheriff for Los Angeles. Every night she goes to work. I say a prayer for her she will come home safely. So far she has. Deputy March was not so lucky. I wonder how his kids must feel not having a dad any longer. Could you please help catch the man that killed Deputy March. I listen to the radio a lot and they said the bad man that did this is in Mexico and he is not in jail. Could you please get him back here so my mom will be safer when she goes to work. Thank you. It is unfortunate that we live in a country where we cannot assure a youngster that the man who killed his mom's colleague won't come back and hurt her too. That is why we need to pass this resolution now. That is why we need the President to act. I ask my colleagues for their support. I also ask unanimous consent that an October 24, 2003 Resolution of the International Association of Chiefs of Police be printed in the Record.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, I thank the Senator from North Dakota. Mr. President, I very much hope we do not pass the underlying bill today. I believe it is premature. In my 10 years in the Senate, I have never heard from more California cities, specifically 104 of them, indicating their concerns about what the underlying bill would do to the budgets of their cities. Here in my hand are some of the letters. This issue has energized cities in my State like no other. City mayors are incensed that we would pass a law without knowing with certainty how it would impact local revenues. I have received letters from the League of California Cities, which represents all of California's 478 cities, from county administrators, police officer associations, firefighter associations, all of whom are concerned about this bill--and I cannot answer their questions about it. But, they understand the larger issue. They are telling us the bill contains language that threatens their ability to collect existing taxes on certain telecommunications services. And, again, I cannot answer these questions, and these questions cannot be answered on the floor of the Senate today. They are too complex. This is precisely why the Carper-Alexander amendment is the most appropriate approach: extend the moratorium for another 2 years and do a study. Bring the cities together with the professionals, and see exactly what taxes are impacted by the underlying bill. I want to take a moment to commend Senators Allen and Wyden for their work and also to thank Senators McCain and Hollings for guiding the issue through the Commerce Committee. I also know the minority and majority staff on the Commerce and Finance Committees have been working to provide the Senate with the information it needs to weigh the competing views, and I thank them. But the competing views are still there, and there are no answers for the cities. Since we originally passed the Internet Tax Freedom Act, we knew this day would come, the day when we would need either to extend the tax moratorium or allow the temporary moratorium to expire. California has a passionate interest in maintaining unfettered access to the Internet. We have a globally recognized concentration of high- tech and telecommunications firms. We provide much of the infrastructure required to gain access to the Internet and many of the services that make the Internet so useful. However, we have to make sure that maintaining tax-free access to the Internet does not inadvertently destroy the budgets of cities and counties throughout my State and the Nation. Many of them have come to rely on a variety of telecommunications services fees and taxes as an important part of their revenue base. Now, I support the permanent extension of the Internet Tax Freedom Act, but if I had to vote today on it, I would have to vote no. I am a cosponsor of Senator Wyden's original legislation that would make permanent the current moratorium. But if I had to vote today on the Allen-Wyden bill, I would vote no because a number of uncertainties have arisen and nobody can answer those uncertainties. Additionally, as a letter circulating through the Senate today indicates, we have been told that we violate the Unfunded Mandates Act. I was here when that Act was passed in 1995. I voted for that Act. Now we hear from the Congressional Budget Office that the underlying bill would, in fact, create an unfunded mandate on States and local jurisdictions. I think we need to find out how and what can be done to prevent that from happening. If this bill's definition of telecommunications services is interpreted in an overly broad way, as many of us think it may be, it will negatively impact local budgets. It will lead to the possibility of reduced preparedness in our firehouses and our police stations and less money for our schools, and it will do so at a time when States and cities face large budget deficits. Right now, in San Diego, CA, a huge debate is going on as to whether the San Diego County firefighting forces are adequate; whether they have the vehicles, whether they have the training, whether they have the ability to really respond to fire conflagration. If we move ahead precipitously today, this bill will make that situation worse. I must tell you, as a former mayor, these are my concerns. For San Francisco, the city in which I served, the bill's current definition of telecommunications services could lead to a loss of $30 million annually. San Francisco, as their experts compute, will lose $30 million of existing taxes if we pass this bill in its present form. That translates into 300 police and firefighters. In the city of Pasadena, the mayor, Bill Bogaard, says this would cost his city $11.4 million. That is the legislation before this body today. Let me quote from his letter: By using vague language to include broadband Internet access under the moratorium, we fear that the bill will allow telephone and cable companies to use that protection to avoid paying local franchise or utility fees. He goes on to state: It is our understanding that it was not the intent of the bill's sponsors to endanger local franchising authority, but the legislation has yet to be changed to correct these unintended consequences. Mr. President, this is not the first time in this debate we have heard someone mention unintended consequences. The distinguished Senator from New Jersey, Mr. Lautenberg, mentioned last night that since this debate has started we have been hearing it from all of our mayors and State officials all across this great land. I wish to quote from one more of the letters I have received from our mayors. This is from Judith Valles, the mayor of the City of San Bernardino, which was the focus of one of California's main wildfires. She wrote to me to point out, and I quote: Currently, 150 cities in California levy a utility users tax, or what is called a UUT, which in many cases includes telephone and cable television services. Utility users taxes provide a critical contribution to local discretionary revenue, on average 15 percent of general purpose revenues, making the utility users tax vital in helping fund critical city services, particularly public safety. This comes from a mayor who is still dealing with the threat that her city faced due to the recent California wildfires. And why? Because we are afraid to step back and give the telecommunications industry and cities more time to work out a solution to this issue with which they can both live? I appreciate Senator Wyden's frustration that if we let the debate rage on too long, it will never end. I appreciate that sometimes you have to make a decision, and that if it is not perfect, you fix it along the way. But this is not one of those times. If you run the risk of repealing taxes that are already in place, you unavoidably affect local budgets, and I am not willing to do that at this time. I believe people want their tax dollars used on the local level. They want better police. They want better fire protection. They want the emergency services for adequate protection, particularly at this point when America stands a risk from terror. And it makes no sense to rush to pass a bill when you have cities all across this country saying: Don't do it. It is going to inevitably impact what we now levy. This will not affect the telecommunications companies because the Carper-Alexander amendment extends the current law with minor changes. Just extend the moratorium for 2 years, do the study, permit the parties to come together and work this out. I do not think it is one Member's goal to undermine the existing tax base of local cities and counties across this great Nation in passing a permanent moratorium. We have never wanted to do that. We are told today that the underlying bill does, in fact, do that. So why--why-- rush to pass it? My goodness. I love my high-tech companies, but the cities and counties are where the people are, and they need police and fire and emergency services. In a day of cutbacks, it makes no sense, because we don't know what we are doing today--and to simply willy-nilly pass a bill that may well do that makes no sense. We then will have to shuffle around and find a way to correct it at some point in the future. In the meantime, budgets are upset all across the Nation. That is not good government, it is not good public policy, and it is not good legislation. I am here to add my support and the support of 104 cities in California to the Carper-Alexander amendment. I would be most happy to offer my services in any way I can to work with the committee chair, the ranking member, and Senators Wyden and Allen, to try to find a solution. It makes no sense to pass something without an adequate study and the reconciliation of the industries. I remember when we were working out a solution to the taxation of cellular phone calls. At that time, we told the parties that we needed them to develop a mutually agreeable solution to the problem of how to tax mobile phone calls and then present it to Congress. The cellular industry and local governments did exactly that. We now have a cellular phone tax standard in place that most people can live with. It is my understanding that the cities and States would be comfortable with this same approach to Internet access taxes. That is the kind of approach I believe will make this debate much more productive. The debate on this issue should not be centered on who is right and who is wrong. Unfortunately, that is where we are today. On one side we have the telecommunications industry saying the cities are overreacting to the impact this bill will have on their budgets. On the other side, we have the cities saying the telecommunications industry is seeking special, nearly unprecedented, tax treatment. Why is it we would not want to give these two stakeholders time to put their heads together and bring Congress an agreement they can both live with? Let me be clear: I want a permanent extension but not at the cost of laying off firefighters, police officers, and teachers. Should the Carper-Alexander amendment not be adopted, I will offer my own amendment that simply strips out this confused language in the context of a permanent moratorium. While not a perfect solution to the complex problem we face, it is far better than forcing our cities and States to send out pink slips to public safety personnel. I am hoping it will not come to that. Cities and their technical experts have my attention. This is true throughout the rest of the United States. I hope the Carper-Alexander amendment will be passed and that the moratorium will continue for 2 years so a study can be conducted and a reconciliation of conflicts within this legislation settled so that we can move ahead knowing we have not inadvertently decimated up to 15 percent of the tax base of local communities. I yield the floor.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, once again, I thank the subcommittee, and I wish to raise one more issue that relates to getting the best possible use of the research dollars. Both the Senate and House bills include funding for the Viticulture Consortium at last year's level of $1.8 million from CSREES. I remain hopeful that this funding level can be increased to $2.5 million. The Viticulture Consortium is a truly unique and effective research program that addresses unmet national research needs important to the winegrape growing industry. The consortium is an active partnership of Federal, State, and industry resources which enhances research coordination, improves research efficiency, and eliminates duplication of effort. This is a collaborative program administered by Cornell University, Penn State University, and the University of California. Research proposals have been received from 20 States and research priorities are developed by a national network of key industry research and extension representatives known as the American Viticulture and Enology Research Network, AVERN. This type of collaborative program can serve as a model for research involving other commodities. Again, recognizing the limits facing us, I ask the leaders of the subcommittee to work with me to provide a modest increase in the funding level for the Viticulture Consortium in this bill.

Mrs. FEINSTEIN. Will the Senator yield for a colloquy?

Mrs. FEINSTEIN. I thank the Senator. I hasten to point out another attribute of this project. As the water quality problems on the Santa Ana River are gradually resolved--and this project certainly contributes to resolving some of those problems--the supply of clean, usable water in Southern California is expanded. It is yet another way to ensure that the Quantification Settlement Agreement on the Colorado River is implemented in a timely and meaningful manner. Utah and the rest of the Colorado Basin States should welcome these types of investment in Southern California.

Mrs. FEINSTEIN. I thank my distinguished colleague and the chairman of the Agricultural Appropriations Subcommittee. As the committee completes its work on the floor and heads to conference to finalize this important bill, I want to call the committee's attention to a unique project in California that has national implications. I want to call the committee's attention to the Chino Basin Manure Management Project in Southern California. This project is funded through the National Resources Conservation Service of the U.S. Department of Agriculture. In fiscal year 2002, this committee provided $10 million for the Chino Basin project. Half of the money was spent for regional flood control, and the other half went to the development and construction of an anaerobic digester facility. The Manure Management Project is cosponsored by the Inland Empire Utilities Agency and the Milk Producers Council, both in San Bernardino County. The purpose of this project was to explore an innovative and effective solution to the problems associated with vast quantities of animal pollution which naturally results from large-scale dairy operations. This project collects manure from several thousand local dairy cows, transporting it to a local facility equipped with an industrial size anaerobic digester. The animal waste is placed in a closed, sealed vat, where it is then simultaneously starved of oxygen and heated for several days. Under normal circumstances, we would typically think of manure as both a cost and a pollutant. However, the end result of this project is the development of two marketable products: methane gas and organic fertilizer. The methane is used in the production of electricity, and the project's proponents are currently in the process of developing a market for the resulting fertilizer. In addition to creating marketable methane and fertilizer, this project also produces an impressively long list of additional benefits, including improved air quality, reduced groundwater contamination, and even improved health of the cows at the dairy. A recent estimate indicates that if all the manure in the Chino area was processed in anaerobic digesters this would eventually produce approximately 50 megawatts of renewable electric power per year. Even more significantly, it will also remove significant amounts of air pollutants. For example, the current operational digester removes 15,000 tons of carbon dioxide or its equivalent from the atmosphere per year. The next anaerobic digester built because of its larger capacity will likely triple that amount to about 45,000 tons of CO2 or its equivalent per year. The Inland Empire Utility Agency and the Milk Producers Council are seeking funding to expand and refine the application of this and similar technologies. The cost of a second digester is approximately $9 million dollars, and they have already received a commitment from the California Energy Commission for the balance of the necessary funds. The Inland Empire Utility Agency and the Milk Producers Council are requesting that a $5 million grant be inserted into this appropriations bill. The first plant--a demonstration of this technology--was built on time and on budget, and is successfully operating today. Although the next phase of this project was contemplated as part of their original program, the National Resources Conservation Service has informed Inland Empire and the Milk Producers Council that funds are unavailable at this time. The National Resources Conservation Service highlights and salutes this project nationally, as this project has become a de facto ``national demonstration project.'' Communities, water districts, dairymen, and even Indian tribes from across the Nation have gone to Chino to examine this unique partnership between the Chino Basin dairy industry and the local water agency. The Inland Empire Utilities Agency and Milk Producers Council's request deserves consideration by this committee in the pending appropriations bill. I ask the subcommittee chairman to consider this project as the appropriations bill is finalized.

Mrs. FEINSTEIN. Mr. President, I wish to express my support for the Fiscal Year 2004 Agriculture appropriations bill and to commend the leadership of the subcommittee for crafting this bill under very difficult financial constraints. I wish to thank the subcommittee for recognizing the importance of the winegrape and wine industry for the U.S. economy and the economy of California. Winegrapes account for two-thirds of the total U.S. grape crop. Furthermore, grapes are the highest value fruit crop in the U.S. and are the seventh largest agricultural crop in our nation. For my home State of California, the winegrape industry produces $33 billion for the economy, making winegrapes the State's largest agricultural crop. Yet, unlike most of our Nation's largest crops, winegrapes receive no direct farm subsidies. I would like to ask Ranking Member Kohl about two items in this legislation that involve cooperative research efforts that are essential to the future of the winegrape and wine industry. First, the House legislation includes $3 million in ARS funding for a Grape Genomics Research Center at the University of California at Davis. It is important that this funding level be maintained in the final version of this bill. Funding for such projects is crucial since cooperative research has been behind the success of the winegrape industry. Investment in research must continue if we are to withstand the rigid competition from our world neighbors who would love to replace our industry with their own products. This can only be done with the cooperation of the U.S. Congress to ensure the American wine industry has the necessary resources to continue the cutting edge research and development that has kept this industry competitive. In California, winegrapes are grown in areas being rapidly developed into urban uses. If our winegrape and wine industry is to continue to thrive, we must be more efficient with our land; we must produce grapes more resistant to diseases; and we must be good neighbors to the surrounding environment. This proposed $3 million investment in viticulture research will ensure that already successful collaborative efforts among the grape and wine industry, universities, and USDA is continued in the years to come. It is a wonderful investment into our industry's future. I ask Senator Kohl that in conference with our House colleagues, we make every effort to ensure this important funding in the House bill is kept in the final version of the fiscal year 2004 Agricultural appropriations bill.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. It may not be. I will try to move it rapidly along. These Senators have indicated they wish to come to the floor.

Mrs. FEINSTEIN. Will the Senator be quick? I want to address some of the comments that have been made.

Mrs. FEINSTEIN. I would be very happy to yield my 2 minutes to the ranking member if I might have 3 minutes to conclude.

Mrs. FEINSTEIN. If I might respond, I believe Senator Levin will speak, Senator Lugar wishes to speak, and Senator Cantwell wishes to speak. So on our side of this issue, I believe it will be at least an hour and a half.

Mrs. FEINSTEIN. I ask unanimous consent that reading of the amendment be dispensed with.

Mrs. FEINSTEIN. On behalf of Senators Lugar, Levin, Harkin, Cantwell, Boxer, Leahy, Wyden, Durbin, and Hollings, I send an amendment to the desk.

Mrs. FEINSTEIN. I thank the Senator from Michigan. More than just thank him, I thank him for his brilliance and for his willingness to be part of this effort. I think Senator Levin is really one of the fine minds in this Senate. It has been a great delight for me to have the opportunity to work with him. I think he has helped us make this a much better bill. I thank him so much. Mr. President, at this point I would like to read into the Record a colloquy between the two leaders, Senators Frist and Daschle, which makes clear the parameters of this and why we are on the floor on this bill. If I may: Senator Daschle: Mr. President, Senator Feinstein has a market manipulation amendment that she was seeking a vote on. It is my understanding that the agricultural appropriations bill would be the appropriate bill for that amendment. I would inquire of the majority leader, should she offer her amendment to that bill, would she be assured of a vote on or in relation to her amendment with no second-degree amendments, prior to such vote? The majority leader responds: The Democratic leader is correct. If Senator Feinstein offers her amendment to that bill, she will get a vote on or in relation to it. I just offer that to clarify the present legal situation.

Mrs. FEINSTEIN. Mr. President, this amendment has to do with providing some regulatory oversight over energy trading. It has to do with closing the Enron loophole. It has to do with providing transparency. Energy trades today are not subject to the 2000-passed Commodity Modernization Act. Rather, these energy trades take place electronically, take place in secret, without transparency, with no records kept, with no audit trail available, and with no regulatory oversight to prevent fraud and manipulation in energy trading. I would like, first of all, from the Derivatives Study Center, to indicate and read a couple of paragraphs from the letter they have sent, which I think defines the issue very well. I quote: This regulatory assistance comes at a critical time. According to the Federal Energy Regulatory Commission's Director of the Office of Market Oversight, ``energy markets are in severe financial distress.'' Along with the decline in credit quality in these markets, the loss of confidence and trust has led to a ruin in the liquidity and depth of these markets. This legislation will go a long way to address this problem. Then he defines what derivatives are. This is important for Members to know. It is complicated. We went through this once before. I would like to give you this definition because it is a good one: Derivatives are highly leveraged financial transactions, allowing investors to potentially take a large position in the market without committing an equivalent amount of capital. Moreover, derivatives traded in over-the-counter markets are devoid of the transparency that characterizes exchange-traded derivatives, such as futures, and this lack of transparency introduces a greater potential for abuse through fraud and manipulation. That is exactly what happened. He goes on to say: Derivatives are often combined into highly complex, structured transactions that are difficult, even for the seasoned securities trader and finance professionals, to understand and price in the market. Enron used such over-the- counter derivatives extensively in order to hide the nature of their activities from investors. The failure of Enron and the demise of other energy derivatives dealers has had a devastating impact on the level of trust in energy markets. That is a good definition of what we are trying to do, why we are trying to do it, and what we are trying to involve. Now I would like to read into the Record a portion of a letter from Eliot Spitzer. Mr. Spitzer is the attorney general of the State of New York. That is the place where many of these cases are now coming to trial. He says: I firmly support your efforts to make energy markets competitive and protect those markets from fraud and manipulation. The bill sponsored by Senators Feinstein, Levin, and Lugar, and under consideration as an amendment to the proposed 2004 agricultural appropriations bill, is a major step toward both goals. He goes on to say: The amendment makes a major contribution to competitive energy markets by initiating an electronic information system to be operated through the Federal Energy Regulatory Commission. This system will provide open access to comprehensive, timely, and reliable wholesale electricity and transmission, price and supply data, greatly expanding the choices of both buyers and sellers. In addition, the reliability of market information would be markedly improved by the amendment's general prohibition on manipulation of the purchase or sale of electricity or the transmission services needed to deliver electricity, and by specific prohibition of the round-trip trading manipulation used so effectively to inflate electricity prices to the public's injury. This is a letter from the attorney general of the State of New York. As such, it places an imprimatur of correctness, of need, and of value on the amendment that we introduce today. Now, what is in that amendment? Specifically, the amendment would improve price transparency in wholesale electricity markets. The amendment directs the Federal Energy Regulatory Commission to do just what Mr. Spitzer said it would do: to establish an electronic system to provide information about the price and availability of wholesale electricity to buyers, to sellers, and to the public. This provision is actually similar to the transparency provision offered by my colleague from New Mexico, Senator Domenici, in the Energy bill. Secondly, this legislation would prohibit round-trip electricity trades. What is a round-trip trade? It is the simultaneous buying and selling of the same quantity of electricity at the same price, in the same location, with no financial gain or loss. In other words, no commodity ever changes hands. Again, this is similar to a provision that Senator Domenici offered during consideration of the Energy bill. Round-trip or wash trades are bogus trades. No electricity changes hands but the profits from the trades enrich the bottom line of a company's financial report. In fact, I think we had one company--I believe it was CMS--say that 80 percent of their balance sheet in a given year was from bogus trades. And there is nothing we can do about it? Does anyone believe that is right? I think not. I don't think the American people do, and that is one of the reasons these markets are so decimated. Next we would increase penalties for violations of the Federal Power Act and the Natural Gas Act. Maximum fines for violations of the Federal Power Act would be increased from $5,000--that is nothing to a big company--to $1 million. And maximum sentences are increased from 2 to 5 years. Remember, these rip-offs were tremendous. Just look at the people plea-bargaining from Enron, look at what they did, look at the amounts of money they fraudulently compromised. This language is identical to section 209 of the Senate-passed Energy bill. Current fines are extraordinarily low and, therefore, provide no deterrence to illegal activity. We also amend the Natural Gas Act to do essentially the same thing. Senator Domenici, in his substitute electricity title to the Energy bill, increased the fines in the Gas Act but he did not do so in the Federal Power Act. We would do both in this amendment. Next the amendment would prohibit manipulation in electricity markets. Manipulation is prohibited in the wholesale electricity markets, and FERC is given discretionary authority to revoke market- based rates for violators. Strangely enough, manipulation of energy markets is not prohibited in current law. Can you believe that? Manipulation of energy markets is not prohibited in current law. This would add language to part 2 of the Federal Power Act to do just that. Most importantly, this bill would repeal the Enron exemption and allow the Commodities Futures Trading Commission, which has oversight over virtually all other trading, to monitor the over-the-counter energy market. This would repeal what happened in 2000 when Enron pushed the Commodities Futures Modernization Act exemption for large traders in energy commodities. And it would apply antimanipulation and antifraud provisions of the Commodities Exchange Act to all over-the-counter trades in energy commodities and derivatives. In my view, when Congress exempted energy from the Commodities Futures Modernization Act of 2000, it created the playing field for the western energy crisis of 2000 and 2001. The western energy crisis cost millions of people millions of dollars in my home State of California. So this is a charge I am making. When this Congress permitted the Enron loophole to exist in the Commodities Modernization Act, they created the loophole for the playing field that Enron and others used to manipulate the western energy markets. Next, our bill would provide the Commodity Futures Trading Commission the tools to monitor over-the-counter energy markets. Over-the-counter energy trade in energy commodities and derivatives performs a significant price discovery function, including trade on electronic trading facilities. Our amendment requires large, sophisticated traders to keep records and report large trades to the Commodity Futures Trading Commission. This doesn't change the law. It only applies the law that exists for futures contracts to over-the-counter trades in energy markets. We would limit the use of data. This requires the CFTC to seek the information that is necessary for the limited purpose of detecting and preventing manipulations in the futures and over-the-counter markets for energy, to keep proprietary business data confidential, except when used for law enforcement purposes. This does not require the real-time publication of proprietary data. It does not. This would have no effect on nonenergy commodities or derivatives. The amendment would not alter or affect the regulation of futures markets, financial derivatives, or metals. We have specifically stated on page 20 the following: The amendments by this title have no effect on the regulation of excluded commodities under the Commodity Exchange Act. In addition, we state: The amendments made by this title have no effect on the regulation of metals under the Commodity Exchange Act. Mr. President, my colleagues may be asking themselves why I continue to press this cause. Here I note that Senator Levin has come to the floor. I want the Senate to know how helpful the Senator from Michigan has been in working on this complicated issue. He has spent hours and hours of his time. His staff has worked with my staff in evolving this measure. We have carefully vetted it. I believe we really know what we are doing here. The energy crisis in the West demonstrated that, without Federal oversight, a business becomes solely concerned with its bottom line and not with any sense of ethical behavior; and arrests and convictions to date have clearly documented this to be the case. Californians are still paying the price of this unethical behavior. I make the point that we are not talking about one bad player in the California market. This goes way beyond Enron. It extends to others as well--to Reliant, Dynegy, Williams, AEP, CMS, El Paso Merchant Energy, Duke, Mirant, Coral, Sempra Energy Trading--unfortunately, in my own State--Aquila, the City of Redding, Morgan Stanley Capital Group, Pacificorps, and to the Puget Sound Energy. We believe California was duped out of $9 billion. The Federal Energy Regulatory Commission has illustrated its inability to refund California the money it is owed by recently recommending settlements that in no way, shape, or form reflect the damage that was caused to both consumers and the economy of the largest State in the Union. In fact, FERC settled with Reliant on August 29, allowed them not to admit wrongdoing, and fined them $836,000. That was $836,000 for rules of conduct that cost the State $13 million--hardly fair. This disproportionately low fine gives credibility to the fact that the price one would have to pay in penalties, if caught manipulating the market, is worth the risk since the benefits of not getting caught far outweigh any penalty that may be levied upon a company. I think it is pretty clear that this disproportionately low fine gives credibility to the fact that the price one would have to pay in penalties, if caught manipulating in the market today, is worth the risk. There is no deterrence, since the benefits of not getting caught far outweigh any penalties that may be levied on a company. That is what we are trying to change. If I left any doubt in my colleagues' minds about the widespread manipulation that took place during the western energy crisis, let me point out some recent examples of a case that was brought by the Securities and Exchange Commission against David Delaney, a former chief executive with two of the most prominent divisions of Enron. On October 30, 2002, Delaney pled guilty to insider trading. The SEC brought charges against him for selling millions of dollars in Enron stock at a time he knew it was being manipulated. While these charges appear to be financial in nature, the underlying facts of the case were that Enron was engaged in manipulative business practices, especially in California. In March of 2003, the FERC staff report on price manipulation in western markets: Investigators said they suspected Enron was using price information obtained in regulated deals to manipulate trades in unregulated energy derivative markets. In one instance, Enron manipulated the price of physical gas, upward, then downward. Although the price change in the physical markets was only 10 cents per million Btus, Enron profited due to the effect that this small change in the physical price had on its large financial position. Enron earned more than $3 million in the unregulated over- the-counter markets, while losing only $86,000 on the physical sale of natural gas. I think it is important to note that the FERC report also states: Enron's corporate culture fostered a disregard for the American energy customer. The success of the company's trading strategies, while temporary, demonstrates the need for explicit prohibitions on harmful and fraudulent market behavior and for aggressive market monitoring and enforcement. That is what we are trying to provide in this amendment. That is what FERC says is missing. Our amendment would provide greater oversight over these markets so that fraudulent and manipulative behavior could be prevented. It would increase the penalties if, in fact, a company engaged in fraudulent or manipulative behavior, and it would outlaw all types of manipulation including round-trip trading, wash trades, false reporting, churning, and deliberately withholding generation. All of the Enron trading strategies, such as Ricochet, Death Star, Get Shorty, Fat Boy, Non-Firm Export, Load Shift, Wheel Out, Black Widow, Red Congo, and Cuddly Bear: these are euphemisms for fraud and manipulation and our amendment would cover them all. It is not clear to me why energy derivatives are not regulated while the Federal Government oversees some physical energy transactions. In other words, if I buy natural gas, and it is delivered to me, then that transaction is overseen by FERC, which has the authority to ensure that this transaction is both transparent and reasonably priced. But a giant loophole is opened where there is no Government oversight, when transactions are carried out in electronic exchanges. As a result, if I sell natural gas to you, and you sell it to someone else who sells it to another person who then sells it again, none of these transactions are covered by FERC or the CFTC. Because of that, what we saw in the western energy crisis is that this particular loophole allowed energy companies to manipulate prices and to escape any investigation or prosecution by any regulatory agency. Our amendment will close the loophole, as Senator Levin said, created in 2000 when Congress passed the Commodities Futures Modernization Act. The loophole exempted energy trading from regulatory oversight, and it excluded it completely if the trade was done electronically. At the time, Enron was the main force behind getting this exemption in this act. By closing this loophole, the amendment will prohibit fraud and price manipulation in all over-the-counter energy commodity transactions and provide the CFTC the authority it needs to investigate and prosecute allegations of fraud and manipulation. Opponents of this amendment have questioned why we need to explicitly give the CFTC this authority. The answer is we need to give the Commodities Futures Trading Commission this authority because we learned during the western energy crisis that there was, in fact, pervasive manipulation and fraud in energy markets, and that FERC and the CFTC were either unable or unwilling to use the authority they had to intervene. I think Mr. Delaney's plea bargain is eloquent testimony to that. We need to give the CFTC this authority because we need regulators to protect consumers and make sure they are not taken advantage of. We need to give the CFTC this authority because, when there are inadequate regulations, consumers are ripped off. Let me be clear. Our amendment will provide the same protections to consumers in energy markets as these same consumers have in all other commodity markets such as the New York Merchantile Exchange or the Chicago Merchantile Exchange. Our amendment does not provide more regulation or greater oversight than what currently exists for other commodity markets, merely the same protections: Protections which are currently lacking. In fact, in an effort to avoid onerous or complicated requirements, Senator Levin, Senator Lugar, and I have worked together to make sure the recordkeeping and reporting requirements are very clear. Our amendment only requires traders to keep records of over-the-counter trades in energy commodities and derivatives that perform a significant price discovery function. In other words, these are the trades that affect the pricing for everyone. These are the big trades, and these are the trades where there needs to be transparency because they affect the market. If I am a large company and I sell you 1,000 decatherms of natural gas in a typical transaction on the spot market, this is a price discovery transaction because the prices of these transactions are usually covered and reported by the press and will affect prices of subsequent transactions. Trades on electronic markets serve, by their very nature, as price discovery functions. They should be available for everyone to see because they will very likely influence what price the next trader will buy or sell at in an open and transparent fashion. Our amendment would require traders to keep records of their trades and to maintain an audit trail. This requirement would simply regulate energy trading in the same way other finite commodities are handled. Why should pork bellies or frozen concentrated orange juice have more protection for consumers than electricity? There is nothing in this amendment that should be burdensome for traders in any way. I would think responsible traders would already be keeping records and maintaining an audit trail for their own protection in this world. In fact, the amendment only allows the CFTC to seek information to investigate allegations of wrongdoing. We have worked for almost 3 years to craft this provision. It has had hearings in the committee. It has been discussed on the floor. We have met with dozens of people. We understand there are those who do not want to support it. But in not supporting it, what they are doing is condoning a marketplace that has practiced deep fraud and deep manipulation and for the most part gotten away with it. I don't think we do our job as Senators if we can't protect an unsuspecting public. As the Derivative Center pointed out, these markets are in disarray now. Why are these markets in disarray? They are in disarray because people do not have confidence in them. They are in disarray because there is no transparency because there are hidden markets, and when they explode, they explode big time. Why should Mrs. Smith from Texas or Mr. Jones from Pennsylvania or Mr. Cornyn from Texas invest in these markets? Why should he? He wouldn't have confidence in them. He would have no transparency. He would have no ability to know what is going on. What we are trying to do is put that confidence back in the marketplace by providing some prudent, commonsense, antifraud, antimanipulation oversight by saying: If you trade this way, you must keep a record of the trade. You must keep an audit trail. And these trades must be transparent so that the Smiths, the Jones, and the Cornyns, if they so desire, can find out what in fact is going on. Let me stress that this does not impact financial derivatives in any way whatsoever. We have clarified that. Our opponents persist in using the argument that financial derivatives are affected. They are not. Look at page 20, lines 17 to 20, if you want to see it in black and white. Nothing in this provision affects the authority of the Federal Energy Regulatory Commission. We don't change it in any way. To respond to concerns about trading platforms that only match buyers and sellers, there is no capital requirement. Let me repeat that because people are going around saying there is. To respond to concerns about trading platforms that only match buyers and sellers, there is no capital requirement. Bottom line: Our amendment merely gives back to the CFTC most of the authority it had before Congress passed the Commodity Futures Exchange Act. I note that Senator Levin is in the Chamber. I wonder if it would be appropriate for him, if other Members would agree, to make some comments at this time.

Mrs. FEINSTEIN. Mr. President, I thank the Senator from Indiana. He has taken a position based on extraordinary knowledge, having served on that committee for 27 years, having been its chair, having seen what happened with the Commodity Futures Oversight Act. In resisting, as he termed it, the movement just to have anything go, let anything go, if they are not regulated, let it go that way, he realizes the American people are not well served and the investment community is not well served when every day you pick up a newspaper and someone else is being arrested for fraud or manipulation. Our laws can prevent that from happening. I thank the Senator very much. You have been terrific. Your support is very meaningful to us. I have stated in the Senate numerous times it is the duty of this Congress to make sure our regulators have all the authority they need to prevent fraud and manipulation in the energy markets. Simply put, this is what our amendment does. Enron remains the perfect example of how the systems were so easily gamed. After Enron successfully lobbied for an exemption to the Commodity Futures Modernization Act in 2000, they and others in the energy sector quickly took advantage of this new freedom by trading energy derivatives absent any transparency and regulatory oversight. In other words, in secret. Thus, after the 2000 legislation was enacted, Enron began to trade energy derivatives literally without being subject to proper regulatory oversight. That is how all these schemes came about. Some hot-shot trader, sitting in front of his computer, found a way to evolve a strategy for the fraudulent and manipulative action of the marketplace. They let these various strategies play out. Unlike the NASDAQ, from which timely electronic trade reports are available to the public, even prior to its transparency-enhanced reforms in 1997--in 1997, the NASDAQ reformed itself to make their traders more transparent--EnronOnline did not offer timely reporting of executions. This means EnronOnline provided no data regarding recently executed transactions. Consequently, even after the trades, basic market information was not provided to market participants. It should not surprise anyone that without basic transparency, without the ability to see what is happening, prices would soar. What interests me is they did and yet there is still resistance to this legislation. In 2 years, Enron's derivatives business had been a stand-alone company. It would have been the 256th largest company in America. That year, according to author Robert Bryce, Enron claimed it made more money from its derivatives business, $7.23 billion, than Tyson made from selling chickens. That is huge, if you think about it. Think what that means. This segment of the market in one year made $7 billion and nobody knew how. No one knew what the trades were. They were all in secret. Nothing was registered. There was no audit trail. There was no antifraud, antimanipulation oversight. Boom. It happened. EnronOnline rapidly became the biggest platform for electronic energy trading. But unlike the regulated exchanges, such as the New York Mercantile Exchange, the Chicago Mercantile Exchange, and the Chicago Board of Trade, EnronOnline was not registered with the CFTC. So Enron set its own standards. In other words, it had a very secure, quiet, protected niche on the market. Others have tried to replicate that. The banks, for example, Senator Levin said, devised something called the IntercontinentalExchange so they could do the same thing Enron has done. It is wrong. Traders and others in the energy sector came to rely on EnronOnline for pricing information. Yet the company's control over this information and its ability to manipulate it was tremendous. As author Robert Bryce went on to describe--and this is very colorful and true-- Enron did not just own the casino. On any given deal, Enron could be the house, the dealer, the oddsmaker, and the guy across the table you are trying to beat in diesel fuel futures, gas futures, or the California electricity market. You tell me that is a good situation? You tell me this Senate and this Congress should let that happen. We should not. That is just plain wrong. Those who want to protect this secret niche are just dead wrong. It is not in the American people's interest to have a secret trading niche that can be an empire for fraud and manipulation. We need to protect consumers from future Enron-like scams because they are going to happen. Now, was Enron and its energy derivative trading arm, Enron Online, the sole reason California and the West had an energy crisis? Absolutely not. Was it a continuing factor to the crisis? I certainly believe that evidence has shown it was. Unfortunately, because of the energy exemptions in the 2000 Commodity Futures Modernization Act, which took away the CFTC's authority to investigate, we may never know for sure. In other words, quite purposely, this Congress, in 2000, let this secret world be created and said: We are going to take energy and metals out of the entire trading regulatory structure and we are going to let them go ``on operating'' on their own, without the proper oversight. That is exactly what happened. It is just plain wrong. I repeat, once again, the amendment we offer will subject electronic exchanges such as EnronOnline to the same oversight as other commodity exchanges, such as the Chicago Mercantile Exchange, the New York Mercantile Exchange, and the Chicago Board of Trade--no more, no less. Without this type of legislation, there is insufficient authority to investigate and prevent fraud and price manipulations since parties making the trade are not required to keep a record. This amendment is not going to do anything to change what happened in California and the West. That is done. But it does provide the necessary authority for the CFTC to protect other parts of this country against this kind of thing happening again. And it well could happen. Nobody thought we would ever see the kind of event that blacked out most of the east coast and the Midwest, but we did. Nobody thought we would ever see what happened in the West, but we did. Nobody ever thought anybody would come up with schemes like ``Ricochet,'' ``Death Star,'' ``Get Shorty,'' ``Fat Boy,'' but they did. Nobody thought they could use them to commit a manipulation of the market, but they did. I will leave you with one fact: The total cost of electricity in California in 2000 was $7 billion. The cost the next year was $28 billion. Does anyone believe that market forces--namely, supply and demand--could account for a 400-percent increase in the cost of electricity in a year? The answer has to be no. The answer has to be that bad things were done. So we have worked on this amendment. I sit on the Energy Committee. I have tried to pay a great deal of attention to these matters, to follow this, and I am absolutely convinced that America and the business climate of America is much better off when things are transparent, when there are records kept, when there is a regulatory authority that can say: Whoa. Something may be going haywire. Let's take a look at it. That is all we do--no more and no less than for any commodity. I wish to say one other thing. A financial derivative is not like an energy derivative. For people to confuse this and say it affects financial derivatives is not right. Energy is a finite commodity. There is a beginning and there is an end, and it is different from a financial derivative. Mr. President, may I ask how much time our side has remaining?

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, I have decided to vote against the National Consumer Credit Reporting System Improvement Act because, bottom line, this bill reduces the privacy rights of 36 million Californians. These rights were obtained through the passage of landmark legislation sponsored by Senator Jackie Speier earlier this year in California, which gave consumers the right to tell financial institutions that they don't want their most sensitive personal information shared with hundreds or even thousands of affiliated companies. This practice--affiliate sharing--can include your most sensitive information--the stocks you own, the certificates of deposit you hold, or the amount of money in your checking account. Importantly, California's financial industry signed off on Senator Speier's bill, rather than face a ballot initiative, which likely would have succeeded. Industry executives said at the time that the California bill ``encompasses all aspects of the workability needed to ensure protection of customers' privacy'' and that it is ``a workable, reasonable compromise.'' In fact, the only major reservation expressed about that provision was that the bill did not represent a national standard. But now, given the opportunity to set such a national standard, these same companies worked to wipe out such protections--and I find this conduct particularly concerning. Attached is a letter from Senator Speier that attests to the behavior of California's financial industry. So in response to calls for a national standard and to protect the rights of Californians, Senator Boxer and I developed an amendment that would have established a strong national standard on affiliate sharing, consistent with California's law, which would have given consumers a real voice in how their personal information is used. This amendment came up for a vote and, unfortunately, it was defeated. I think time will show that this was the wrong vote, and I have no doubt that this issue will resurface as consumers learn more about the misuse of their most sensitive personal information. I am disappointed that we did not achieve our main goal of adopting an amendment which would allow consumers to have control over their personal data, but I am pleased that the Senate approved two amendments, which I sponsored along with Senator Boxer, to protect consumers. The first amendment, authorized by Senator Boxer, which I cosponsored, would give consumers greater protection against unwanted marketing. Most importantly, the amendment would allow consumers to permanently opt-out of marketing by unrelated affiliates, while the underlying bill would have only limited the opt-out to 5 years. This means that if a consumer asks a corporation not to share information with its affiliates for the purpose of marketing, the affiliate cannot solicit them--forever. Without this amendment, a consumer would have been required to go back to the corporation and reiterate his request after 5 years. Additionally, this amendment clarified what the bill meant by a ``pre-existing business relationship'', where there was no definition before. With this amendment, a company's affiliate would only be able to market to consumers who have: One, purchased, rented or leased the seller's goods or services or completed a financial transaction between the consumer and seller, within the 18 months immediately preceding the date of a solicitation; or Two, inquired about or applied for a product or service offered by the seller, within the 3 months immediately preceding the marketing contact. Without this clarification, companies might have been able to market to customers who purchased goods as many as 5 or 10 years earlier, or who made the mildest inquiry a few years ago. It is the same definition developed by the Federal Trade Commission in creating a national ``Do Not Call'' registry for telemarketers. The Senate also adopted a second amendment, which I authored and was cosponsored by Senators Boxer and Kennedy, that essentially provided a far more encompassing definition of medical information than is contained in current law. Simply put, this amendment will help ensure that consumers aren't discriminated against based on their medical or health information when they apply for credit, insurance, or employment. The amendment also has the support of the American Medical Association, the American Cancer Society, and the California Medical Association. The Feinstein amendment would broadly expand the definition of ``medical information'' to read: Information or data except age or gender, whether oral or recorded in any form or medium, created by or derived from a health care provider or the consumer that relates to: (1) The past, present or future physical, mental or behavioral health or condition of an individual; (2) The provision of health care to an individual; or (3) Payment for the provision of health care to an individual. This is the same definition of medical information established by the National Association of Insurance Commissioners in 2002. This definition has been implemented in a vast majority of our states. Even with these modest amendments, however, I cannot support the reauthorization of the Fair Credit Reporting Act. The Boxer-Feinstein marketing amendment will help prevent consumers from receiving unwanted solicitation, but it will do nothing to limit the ability of companies to share information with their affiliates. Affiliates, therefore, will continue to be able to use personal information to profile consumers in a way that leads to unfair increases in premiums or interest rates, to giving certain consumers inferior service, or to outrightly deny them credit cards, insurance policies, or other products. Furthermore, the bill will do nothing to stop the creation of ``internal credit reports'' by large financial institutions. Unlike with traditional credit reports, consumers will continue to have no ability to access or correct errors in these documents. Most Americans consider their personal information their private property. Yet, this bill will continue to deprive ordinary American consumers from having any choice over how their information is shared in the business world. This is the fundamental issue. To give you a sense of the deep support for privacy, I would point to a survey of California voters completed on February 7 of this year. The statewide survey found that by a 91-to-7 percent margin, California voters would favor a ballot proposition that ``would require a bank, a credit card company, insurance company, or other financial institution to notify a customer and receive a customer's permission before selling any financial information to any separate financial or non-financial company.'' This means that 9 out of 10 Californians support even stronger protections--where companies would have to gain your prior consent-- opt-in--to share your financial data--than the amendment which Senator Boxer and I offered. And polls across the country reflected similar levels of support by Americans for stronger privacy laws. This only underscores the need for strong federal standards. Clearly, businesses should be able to manage customer information in order to enhance services. But there must be strong rules that protect consumers. That is why Congress should have given consumers a choice-- allowing them to tall companies that they don't want their most personal information shared. So despite the fact that I support efforts in this legislation to combat identity theft and improve consumer access to credit report information, I believe that the bill doesn't do enough to protect consumer's privacy, and that is why I am voting against it. Mr. President, I ask unanimous consent that a letter from Senator Jackie Speier be printed in the Record.