Phil Gramm

Mr. GRAMM

Mr. GRAMM. Mr. President, I ask for a division of the amendment with sections 801, 802, and 803 in division 1, section 804 in division 2, and the remainder of the amendment in division 3.

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

Mr. GRAMM. The amendment was divisible, and my division divided it into three amendments. The amendment having to do with statute of limitations in filing a lawsuit is now division 2. So division 1 would be the pending business, as I understand it. Then division 2, and then division 3, seriatim, unless there was some other agreement that took us to another order or other amendments.

Mr. GRAMM. I sent the division to the desk. Basically, division 1 was everything up to section 804. Then division 2 is 804. And then division 3 is 805 through the end of the bill.

Mr. GRAMM. The way it was done, the easiest division was to do it in three parts.

Mr. GRAMM. It is that division on which I want an opportunity for the Senate to work its will, as well as the others.

Mr. GRAMM. Madam President, a wonderful speech, and it might be appropriate for another occasion, but what has happened is that a comprehensive bill has been offered as an amendment to the pending bill. All I asked for, which every Senator has the right to ask for, was a division of the question so that the Senate could work its will on individual parts. I know of no living person, at least anyone who is in the Senate or the executive branch of Government--I don't know about the judicial branch of Government--who is not for the provision related to putting people in jail for knowing and willful behavior where they violate the law. This bill which has been offered, however, has many different sections. The part I am concerned about has to do with statute of limitations and the security reform legislation we adopted in 1995. I remind my colleagues that in 1995 we had these massive strike lawsuits. One firm filed 80 percent of them. Almost all were settled out of court. It created an abuse that generated a bipartisan consensus that something should be done about it. We passed a law, and then, incredibly, with Democrat support, we overrode President Clinton's veto of the bill. The only veto override of the Clinton administration was on this issue. One of the reforms had to do with shortening the statute of limitations. I remind my colleagues, this has nothing to do with the SEC or the Justice Department. We are not shortening their statute of limitations. In 1995, when we passed this bill with a strong bipartisan vote, we said: If I want to sue Senator Sarbanes, I have to file the suit within a year of discovering that I believe I have been wronged, or I have to file it within 3 years of when I was wronged. That was the decision we made then. Now, hidden away in this bill, which has been offered as an amendment, is a provision that effectively extends that to 5 years. All my division of the amendment did was to say this ought to be dealt with separately so that those who are for mandatory prison sentences for knowing and willful behavior that violates the law can be for that without being for repealing our Private Securities Litigation Reform Act. The reason behind the rules of the Senate that give Members the ability to divide bills goes to exactly the heart of this point; that is, if someone could take a bill--if someone could take----

Mr. GRAMM. Let me just finish my point and I will be happy to yield, as I try to always do. Someone could take the securities bill of 1933 and they could put in it all kinds of things that the vast majority of Members of the Senate are for, and then they could put one little provision in one line in that virtually nobody is for, and they could send it as an amendment to the desk and then we would have no recourse except to vote against all the things that we are for in order to vote against the one little thing that we are against. It seems to me there is nothing worse in public life than to have someone attack you for voting against a great big old bill and say: Well, you were against. It says here motherhood and the flag and Christmas and Easter--you were against that because you voted against a bill that busted the budget and bankrupt the public. So in writing the rules of the Senate, we wrote the rules in such a way that when someone offered such a bill as an amendment that had different parts, any Member could ask for a division so it could be dealt with separately. All I have done is exercise that right. We now have three amendments pending before the Senate--I guess four, counting the Miller amendment--but that is all I have done. Two of these amendments I am supportive of, one of them I am not supportive of, but that is where we are.

Mr. GRAMM. Madam President, we do have someone who wishes to speak. I am not sure whether it is on one of these sections or not. I am not ready to do that right now. We may reach a point where I will be ready to do that, but I am not ready to do that at this point.

Mr. GRAMM. Madam President, was I recognized?

Mr. GRAMM. Madam President, first of all, let me say as the ranking member of the committee that I have yet to have an opportunity to offer an amendment. I only have two amendments I want to offer. No one is more eager to get this bill to conference where we might come up with something for which there would be virtually unanimous support. But I assume at some point during the deliberations we will have votes on division 1 and division 3. But I would like to have an opportunity to offer amendments myself. All I want to do is follow the rules of the Senate. Let me say that I am concerned, as I listen to colleagues on both sides of the aisle, that we are going to have a literal blizzard of amendments not directly related to this bill. I continue to believe that at some point, in order to finish the bill, we are going to have to file cloture. I intend, as I said at the beginning of the debate, to support that cloture motion. I think someone would have a hard time portraying me as someone who is slowing down the process when I am ready to vote to bring debate on this bill to an end and force amendments to be germane to the bill itself. My proposal is that we simply go on with the business of the Senate. I am ready to offer an amendment. I am ready to deal with the amendment of the Senator from Georgia. That amendment is amendable. All of these amendments are amendable. I suggest we simply proceed, let Members be recognized, and have those Members move forward. In light of that, I send an amendment to the desk in the form of a second-degree amendment to division 1. It is a very short amendment. I think the best thing to do is to have it read. Madam President, I suggest the absence of a quorum.

Mr. GRAMM. Madam President, let me answer what has just been said and straighten out the facts. In 1995, we had a major problem in America in that we had strike lawsuits being filed against high-tech industries where one firm filed 80 percent of the cases and settled almost all the cases out of court. We had a bipartisan consensus that this represented abuse. So under the leadership of Senator Dodd, Senator Domenici, and others, we passed a bill which President Clinton vetoed. We then overrode the veto. An important part of that reform was to say--and let me make it clear, this does not have anything to do with committing a crime where you can be put in jail. It has nothing to do with the SEC's jurisdiction. It has nothing to do with the Justice Department's jurisdiction. It simply has to do with my right to file a lawsuit against you and anybody else's right to file a lawsuit against anybody else. We had a lot of reforms in that bill. You had to actually have a client. The lawyer who was the lead lawyer in 80 percent of these cases said he loved these type lawsuits because he did not have to fool with a client. In essence, he was suing on behalf of himself. Virtually a huge percent of the money went to the lawyer filing the suit, not to the people who supposedly had been harmed. Part of the reform was to set a statute of limitation that if you believe I have done something wrong, and you want to sue me for it, you have 1 year from the time you find it out, or 3 years from when it happens to file a lawsuit. When the Senator was talking about letting people off the hook, surely everybody understands that our system has no ex post facto laws. So if the provision raising that statute of limitation to 5 years became law, it would have no effect on anybody who has committed one of these violations about which we are talking. Amendment No. 4184 to Division 1 of Amendment No. 4174

Mr. GRAMM. Mr. President, having straightened that out, that is not even the subject about which we are talking. We now have three amendments pending, and I send a second-degree amendment to the first amendment and ask for its immediate consideration. This is a very short amendment and I ask it be read because the language of it is so clear that a lot of times we have an amendment, and what we say does not have much to do with the amendment. I want people to read the language.

Mr. GRAMM. Mr. President, first, let me say, I am pleased we have reached an agreement on the Leahy amendment. This is one of these little technical things that does not mean much to many people, and it is one where, in fact, there is a dispute, but we have reached an agreement that will allow the Leahy amendment to go forward with certainty on our part that the 2-year statute of limitation is a real statute of limitation, that we simply change the number and that in the process, by the way we do it, we do not do anything that would challenge the current court ruling.

Mr. GRAMM. Madam President, I think all time has expired on the majority side. I think I have about 13 minutes. I have said all I intended to say. I think we have cleared the way for this bill to be passed. I want to reiterate that when cloture is filed in a few minutes, I will be supportive of having that cloture vote earlier than Friday, which would be the normal time it would ripen. Maybe others would not be supportive of having the vote, and they are perfectly within their rights. I think the agreement we worked out has guaranteed we are going to pass this bill either this week or very early next week. The net result is that we can go to conference with the House, and we will have an opportunity, I believe, to come back with a strong bipartisan bill. I have to say that I think we have sort of reached the point where a lot of debate on this issue is more about the next election than it is about corporate integrity. I wonder if the debate has not reached the point where we are hurting equity values by making people fear not only the disease, but the absurd prescription of the doctor that might come from the Government. I think the sooner we can finish this bill and go to conference and come out with a final product so that people know with certainty what the new rules are and how we are going to go about them, everybody will benefit. I think the only thing that will be lost by invoking cloture is that we will have fewer speeches, we will have fewer opportunities to denounce evil, however we define it, and we will be less likely to get on the 6 o'clock news; but we will also be less likely to spook the markets and more likely to get our job done; we will be more likely to produce a good bill we can all be proud of, not just when we read the editorial in the Washington Post, but when we submit it all to the front-porch-of-the-nursing-home test, as to how we feel about it someday when we are sitting on the front porch of the nursing home.

Mr. GRAMM. Madam President, I send a second-degree amendment to the desk.

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

Mr. GRAMM. Following.

Mr. GRAMM. Mr. President, let me try to explain where we are. We are about to have two votes. One vote is on a bipartisan amendment that was put together prior to our receipt of the language of the President's proposal. That was done by Senator Biden and Senator Hatch. That amendment will be voted on first. I believe that amendment deals with the same subject area as the President's proposal. The overlap is not perfect, but when you take Senator Leahy's amendment that we have already adopted, when you take this amendment, the things that are covered in the President's proposal are covered. We also have the legislative language proposed by the White House to follow on the proposals the President made yesterday in New York. When we adopt these two amendments, we will have added a substantial amount to the underlying bill. We will have added, in essence, two different variants of the President's proposal of yesterday. I assume we will get a unanimous vote for both of these amendments. I commend to my colleagues to vote for both of them. At that point, we will proceed in the outline we have. It is my understanding we will try to put together an additional list, depending on the amount of time we have. Once these two votes are taken, the subject matter of the President's proposal of yesterday will be part of this bill. I commend to my colleagues to vote for both amendments.

Mr. GRAMM. I yield back any time I may have.

Mr. GRAMM. Mr. President, on behalf of Senator McConnell, I send a second-degree amendment to the desk.

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

Mr. GRAMM. Mr. President, I am not going to talk about the amendment. Senator McConnell was concerned--he has an appointment tonight and he wanted to be recognized, so I offered the amendment for him. I wish to say a few words before I yield, giving him an opportunity to speak on behalf of the second-degree amendment. I wish to print in the Record the lead editorial from today's Wall Street Journal. I would like to read the first paragraph. I want to make it clear, I am not talking about this amendment, I am just talking about the climate we are in. This is the lead editorial in today's Wall Street Journal: As if investors weren't frightened enough, the politicians are now offering to help. That was worth more than 180 points off the Dow yesterday, but then stock prices aren't the point. Everything you're hearing now from Washington is aimed at winning the November elections, not calming financial markets. This is an excellent editorial. One can agree with it or not agree with it. The point I want to make is the following: There is a wonderful line in a very famous economics book, ``The Wealth of Nations,'' where Adam Smith is talking about government and talking about problems. A line in ``The Wealth of Nations'' goes something like: The economy is powerful and it overcomes not only the illness but the absurd prescription of the doctor that comes from the Government. I believe we have now put together the makings of a good bill. We still have differences of opinion. We still have differences not on whether we should set up a board, not on how strong it should be. We agree on those issues. We have differences about how independent the SEC should be. We have differences as to whether that board ought to set audit standards and independent standards or whether we ought to do it by law. As we go through the process in the next 2 days, if the some 30 amendments that people on my side of the aisle are proposing to offer is any index, and as someone once said--and I am sorry I cannot remember his name--I have only seen the heart of a good man, not necessarily the heart of an evil man. I have just seen these amendments. I am concerned that people who are looking at investing are going to say: My God, it is one thing that my stock has been battered because there were people who did things that were wrong, there were people who did things that were illegal, but now I am going to be battered by one- upmanship efforts to show that Congress is really tough, that Congress is tougher than the President, the President is tougher than the Congress, that Republicans are tougher than Democrats, or Democrats are tougher than Republicans. I would just like to say, not that anybody is going to be calmed by what I say, but I would like to say, in the end, I think we will end up with a fairly responsible bill, and I hope people who are thinking about investing money will take into account that this, too, will pass; that this summer will pass; that after all the charges are made and the one-upmanship has occurred, in the end, normally this process has worked pretty well for over 200 years, and my guess is it will work well again and we will end up in a give-and-take in conference, with the White House involved, measuring each amendment in terms of what we think will work and what we think probably hurts more than it helps-- the absurd prescription of the doctor about which Adam Smith talked. If we do go too far in one area or we do not go far enough in another, there is going to be another Congress next year and the year after and for every year from now until the end of the world, I hope. Just reading this article set me thinking about it. There are probably people trying to decide this afternoon what they are going to do tomorrow on Wall Street. We have this bill passed in the House where, if you are domiciled outside the United States and move your domicile, you cannot get Government contracts. This is the era of where, if you want to slap an accountant around, it is not going to do a lot of harm. It is not fair, it is not right, I am not for it, and I am not going to do it, but if you want to slap business around, this is a wonderful time to do it. The problem is the market is going to open in the morning and people are going to either buy or sell or they are going to do both. I ask unanimous consent to print this lead editorial from the Wall Street Journal in the Record.

Mr. GRAMM. Mr. President, I ask my colleagues to read the editorial and pray over it. As I say, there are some things in it one may like, some one may not like; one may not like any of it, or one may like all of it. In the next couple of days, we are going to have a lot of proposals that are going to be frightening to investors. I wanted to take this opportunity tonight to tell them that--I know my dear colleague who is sitting in the chair as a Presiding Officer remembers the old hymn, ``This is My Father's World.'' Remember that hymn? It talks about all these things that are happening, all these bad things that happen, but in the end it is going to be right. I think the Lord is going to count on us to right it. I hope it is in good hands. In any case, I wanted to say that as we hear all these ideas brought up, if you are thinking about investing money tomorrow or next week or next year, do not be frightened. I think this issue is going to move back toward a middle course, and if we go too far--and I hope we will not, and I am dedicated to not doing more harm than good--then we will fix it, and if in some areas we do not go far enough, we can come back and fix it, too. As I said, I offered the second-degree amendment for Senator McConnell who has an appointment and wanted to get his amendment in. I yield the floor.

Mr. GRAMM. Mr. President, I suggest the absence of a quorum.