Marcy Kaptur

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, how many millions of more jobs have to be outsourced before Washington wakes up? It makes you wonder if the recently released report by the U.S. Chamber of Commerce is some sort of a cruel joke. It claims that U.S. trade agreements have supported 5.4 million jobs. Are we talking about the same country? Take Ohio: Since 1994, employment just in the manufacturing sector has declined by one-third. Companies like Silgan Holdings, Delphi, Georgia Pacific, GM, Dixon Ticonderoga, and Champion Spark Plug all have moved to Mexico. Remember when NAFTA promised us the promised land, claiming we would get millions of new jobs and the standard of living would rise? What we got was the giant sucking sound, more jobs going out and a cumulative trade deficit of $1 trillion to this country as a result of NAFTA. The deficits from NAFTA and NAFTA-like trade agreements have caused our great manufacturing Nation to wither as our workers and companies are asked to compete against state-managed capitalism in places like Mexico, China and Japan. It is time to wake up, stand up for this country and renegotiate those agreements that keep moving our jobs offshore.

Ms. KAPTUR

Ms. KAPTUR. Madam Speaker, the clever comedy tale that's being spun by Wall Street megabanks and their minions here in Washington is that they are paying back $700 billion our taxpayers bestowed on them in the fall of 2008. In fact, some spinmeisters say the bailout actually will cost our taxpayers just $109 billion, not the originally projected $700 billion of costs, called TARP, the Troubled Asset Relief Program. The PR spin even got CNN to report that the cost to the taxpayers will be far less than originally anticipated. If you believe that, you'll believe anything. One of the bittersweet reasons that they will pay back less is that the Obama administration originally stated that up to 4 million people could save their homes through the loan modification program that was part of the TARP. But through this February, only 170,000 distressed homeowners received any long-term modification. So that program is a failure, as the American people continue to be disgorged out of their homes. In fact, only 4 percent of those eligible have even been dealt with and their mortgages reworked. We need a full cost accounting across this economy of what these speculators did to us. They took our money, they gambled with it, and then they turned our Treasury into their insurance company. And now they're dumping all their mistakes on our generation and the next two to follow. I want to shine the light on a very dark corner where the true cost of the bailout sits. Come with me and look beyond the curtain where the wizard is really hiding. Secretary Geithner and even Elizabeth Warren, the TARP overseer, say the banks are paying us back. But what they are paying back is only part of the so-called TARP moneys. Paying back the TARP is far, far from enough. At least 12 Treasury programs have thus far cost our taxpayers over $727 billion. Perhaps $380 billion represents TARP. But there are 24 Federal Reserve programs that have already cost $1.738 billion. So the approximate total cost of the Wall Street meltdown is somewhere over $2.4 trillion put right at the taxpayers' doorstep. That number is staggering. It's huge. Thus, the TARP money being paid back is less than 1 percent of the staggering number. Paying back the TARP is hardly enough. Wall Street banks recorded record profits and record bonuses last year on the backs of the American people who are struggling without jobs and fighting to keep their homes. We expect the $2.4 trillion will continue to rise. And here is why: Treasury has promised unending support, regardless of the dollar amount, for the next 3 years to Fannie Mae and Freddie Mac to fill the holes in each institution. These are two secondary market institutions' dumping grounds for all of Wall Street's unfinished laundry. Our government has spent already $61 billion on Freddie Mac. Plus $83 billion more on Fannie Mae. That's another $144 billion--and the number is rising. We will spend more, as both companies continue their death spiral of losses. But the $2.4 trillion cost still might not be all that the financial crisis, brought on by reckless speculators on Wall Street, will cost us. What about the cost of all those bad mortgages settled in at Fannie and Freddie, as well as institutions across this country and world? You see, the heart of the financial crisis is the housing crisis, so we need to add in the losses at FHA, VA, and the Agriculture Department because they all do housing programs. Add in the cost to our economy as a decline in equity in homes across this country. We need to count that too. And what about the total cost of unemployment that came after that? Figure out how much the Federal Government has paid out in insurance in COBRA payments. What about including an accurate estimate of the cost of lost productivity? What growth potential have we lost? And what about the effect on the economy of the loss in stock earnings? How about the loss in IRAs and pension funds? The Ohio public pension funds took a $480 million hit with the failure of Lehman Brothers. What about the effect on the economy of higher premiums on the FDIC banks who had to shore up the insurance fund because so many smaller banks have collapsed under the toxic weight and potentially fraudulent practices of the big banks? Community banks can't expand, hire, or lend more since more revenue has gone into insuring their deposits. When these small banks go down due to the damaged economy brought to us by Wall Street, the big banks gobble them up and even get bigger. Can you put a dollar value on the mental and emotional strain that citizens across this country are experiencing? It's clear that Wall Street is doing just fine, and it's equally clear that Main Street is not. Madam Speaker, we need a full cost accounting of what Wall Street cost this economy, and we're far from calculating it. [From the New York Times, May 7, 2010] Ignoring the Elephant in the Bailout (By Gretchen Morgenson) If you blinked, you might have missed the ugly first- quarter report last week from Freddie Mac, the mortgage finance giant that, along with its sister Fannie Mae, soldiers on as one of the financial world's biggest wards of the state. Freddie--already propped up with $52 billion in taxpayer funds used to rescue the company from its own mistakes-- recorded a loss of $6.7 billion and said it would require an additional $10.6 billion from taxpayers to shore up its financial position. The news caused nary a ripple in the placid Washington scene. Perhaps that's because many lawmakers, especially those who once assured us that Fannie and Freddie would never cost taxpayers a dime, hope that their constituents don't notice the burgeoning money pit these mortgage monsters represent. Some $130 billion in federal money had already been larded on both companies before Freddie's latest request But taxpayers should examine Freddie's first-quarter numbers not only because the losses are our responsibility. Since they also include details on Freddie's delinquent mortgages, the company's sales of foreclosed properties and losses on those sales, the results provide a telling snapshot of the current state of the housing market That picture isn't pretty. Serious delinquencies in Freddie's single-family conventional loan portfolio--those more than 90 days late--came in at 4.13 percent, up from 2.41 percent for the period a year earlier. Delinquencies in the company's Alt-A book, one step up from subprime loans, totaled 12.84 percent, while delinquencies on interest-only mortgages were 18.5 percent. Delinquencies on its small portfolio of option-adjustable rate loans totaled 19.8 percent. The company's inventory of foreclosed properties rose from 29,145 units at the end of March 2009 to almost 54,000 units this year. Perhaps most troubling, Freddie's nonperforming assets almost doubled, rising to $115 billion from $62 billion. When Freddie sells properties, either before or after foreclosure, it generates losses of 39 percent, on average. There is a bright spot: new delinquencies were fewer in number than in the quarter ended Dec. 31. Freddie Mac said the main reason for its disastrous quarter was an accounting change that required it to bring back onto its books $1.5 trillion in assets and-liabilities that it had been keeping off of its balance sheet. None of the grim numbers at Freddie are surprising, really, given that it and Fannie have pretty much been the only games in town of late for anyone interested in getting a mortgage. The problem for taxpayers, of course, is that the company's future doesn't look much different from its recent past Indeed, Freddie warned that its credit losses were likely to continue rising throughout 2010. Among the reasons for this dour outlook was the substantial number of borrowers in Freddie's portfolio that currently owe more on their mortgages than their homes are worth. Even as its business suffers through a sour real estate market, Freddie must pay hefty cash dividends on the preferred stock the government holds. After it receives the additional $10.6 billion it needs from taxpayers, dividends owed to Treasury will total $6.2 billion a year. This amount, the company said, ``exceeds our annual historical earnings in most periods.'' In spite of these difficulties, Freddie and Fannie are nowhere to be seen in the various financial reform efforts under discussion on Capitol Hill. Timothy F. Geithner, the Treasury secretary, offered a vague comment to Congress last March, that after some unspecified reform effort someday in the future, the companies ``will not exist in the same form as they did in the past'' Fannie and Freddie, lest you've forgotten, have been longstanding kingpins in the housing market, buying mortgages from banks that issue them so the banks could turn around and lend even more. After both companies overindulged in the lucrative but riskier end of home loans, they nearly collapsed, prompting the federal rescue. Since then, the government has continued to use the firms as mortgage buyers of last resort, to help stabilize a housing Market that is still deeply troubled. To some, the current silence on what to do about Freddie and Fannie is deafening--as is the lack of chatter about Freddie's disastrous report last week. ``I don't understand why people are not talking about it,'' said Dean Baker, co-director of the Center for Economic and Policy Research in Washington, referring to Freddie's losses. ``It seems to me the most fundamental question is, have they on an ongoing basis been paying too much for loans even since they went into conservatorship?'' Michael L. Cosgrove, a Freddie spokesman, declined to discuss what the company pays for the mortgages it buys. ``We are supporting the market by providing liquidity,'' he said. ``And we have longstanding relationships with all the major mortgage lenders across the country. We're in the business of buying loans and we are one of the few sources of liquidity available.'' But Mr. Baker's question gets to the heart of the conflicting roles that Freddie and Fannie are being asked to play today. On the one hand, the companies are charged with supporting the mortgage market by buying loans from banks and other lenders. At the same time, they must work to minimize credit losses to make sure the billions that taxpayers have poured into the firms don't disappear. Freddie acknowledged these dueling goals in its quarterly report ``Certain changes to our business objectives and strategies are designed to provide support for the mortgage market in a manner that serves our public mission and other nonfinancial objectives, but may not contribute to profitability,'' it noted. Freddie said that its regulator, the Federal Housing Finance Agency, has advised it that ``minimizing our credit losses is our central goal and that we will be limited to continuing our existing core business activities and taking actions necessary to advance the goals of the conservatorship.'' Mr. Baker's concern that Freddie may be racking up losses by overpaying for mortgages derives from his suspicion that the government might be encouraging it to do so as a way to bolster the operations of mortgage lenders. That would make Fannie's and Freddie's mortgage-buying yet another backdoor bailout of the nation's banks, Mr. Baker said, and could explain the government's reluctance to include them in the reform efforts now being so hotly debated in Washington. ``If they are deliberately paying too much for mortgages to support the banks,'' Mr. Baker said, ``the government wants them to be in a position to keep doing that, and that would mean not doing anything about their status until further down the road.'' It's no surprise that the government doesn't want to acknowledge the soaring taxpayer costs associated with these mortgage zombies. The truth about Fannie and Freddie has always been hard to come by in Washington, and huge piles of money seem to circulate silently around both firms. Remember last Christmas Eve? That's when the Treasury quietly decided to remove the $400 billion limit on federal borrowings available to Fannie and Freddie through 2012. That stealth move didn't engender much confidence in either the companies or their government guardian. But because taxpayers own Freddie and Fannie, we should know more about their buying habits, as Mr. Baker points out. Unfortunately, if the government's past actions are any indication of what we can expect, then don't hold your breath waiting for the facts.

Ms. KAPTUR

Ms. KAPTUR. Would the gentleman yield?

Ms. KAPTUR. Yes.

Ms. KAPTUR. I just did that again this weekend. I went into a bakery in our district, and the owner said, Marcy, I could hire three more people and I want to add some machines and so forth because I've got orders I can't fill, but I can't get operating loans from the bank. Credit is frozen across this country because they are these big, giant, inefficient institutions, and credit needs to be more decentralized. We need more financial institutions not fewer financial institutions. And the financial reforms that this Congress should pass should go to that level to restore a robust, competitive financial system in this country. And, by the way, we not only have to make the future better; we have to go back and catch the crooks that put us on this path. I have a bill, H.R. 3995, that would add 1,000 agents to the FBI, to the SEC, and to the FDIC in order to fully investigate and go after these big institutions, because what happened after 9/11 was that the White Collar Crime division of the FBI was reduced to 75 investigators, 75. The SEC has 25 going after the largest financial institutions in this country? We need to, both on the civil side and the criminal side, investigate and prosecute. When you have this level of implosion in an economy and a few people are getting very rich and everybody else is suffering, doesn't that tell you that something was fundamentally wrong? Some people say it was rigged, that control fraud may be, in fact, what has riddled through the system from the very top down through every community that we represent. So H.R. 3995 would add 1,000 more agents and help beef up prosecution in this country.

Ms. KAPTUR. Yes.

Ms. KAPTUR. Sixty-six percent.

Ms. KAPTUR. That's right.

Ms. KAPTUR. I love that.

Ms. KAPTUR. Congressman Garamendi, I want to compliment you and Congressman Steve Driehaus of Ohio for putting this information on the Record. I think it's important to state that at the beginning of the financial crisis, these large institutions, the six of them that are the most culpable--JPMorgan Chase, Morgan Stanley, HSBC, Wells Fargo, Citigroup, Goldman Sachs--had one-third of the capital in this country, one-third of the assets in those institutions. And while they were taking all those bonuses and while this Nation has gone through this terrible washout, they now command 66 percent. They doubled the size and their importance inside this economy. So while they're taking those horrendous bonuses, they've also been gobbling up institutions. States like my own are losing their money center banks. The fees that banks that didn't do anything wrong are having to pay have gone up extraordinarily. We don't know if some of them will make it. But they are just huge leviathans that are taking over this economy, and look at what they've done.

Ms. KAPTUR. Would the gentleman be kind enough to yield?

Ms. KAPTUR. Thank you very much. I appreciate the gentleman yielding this evening and I thank you both for sponsoring this Special Order. Part of our responsibility is to restore trust in the most important financial institutions in our country--restore trust to the American people in those--and to change the laws in order to make sure that that trust in our capital markets and in our banking system is restored. We're a long way from doing that, and financial reform is a part of it. I hope that the bill improves as it moves through the Senate. The chart that I brought to the floor tonight--and this is just one chart. I would like to put in the Record, CBS News Investigates Goldman Sachs' Revolving Door, with a full list of individuals just from that company. There are many other companies, but the kind of incredible power that they wield in this city. If you just look at Goldman Sachs and then at people from Goldman Sachs who came to work for the government of the United States in the highest positions, you begin to question whether they were representing the public interest or their personal interest in many of the dealings that occurred on Wall Street. For example, you have an individual during the last administration that worked for President Bush by the name of Joshua Bolten. He was the President's Chief of Staff during the time when the TARP was voted through this Congress in the bailout in the fall of 2008. He had been the director of OMB through most of the Bush administration. But what a lot of people don't know is that before that he had been the Executive Director of Legal Affairs for Goldman Sachs based in London. That is the bank's chief lobbyist to the European Union. So when you look at the collapse of institutions in Europe, whether it was Dresdner Bank in Germany or Societe Generale, which was a counterparty in the AIG insurance situation, those deals were brokered through London. And there he sat for the whole decade of the nineties, putting together the architecture that then collapsed in this decade. But he's not alone. It's important that people understand this just didn't start in 2007 or 2008 or 2005. The pieces were put together starting in the 1980s, and then the foundation stones and all the regulatory changes were made that allowed this type of hyperinflation of the housing market and the pyramiding of equity to a point that it simply couldn't hold. These men were a part of that. If you look at the former Secretary of Treasury in the past administration, before President Obama and during President Clinton, he had come from Goldman Sachs, Robert Rubin, and he was Secretary of the Treasury from 1995-1999, when so much of the deregulation was done. But they all go back to Goldman Sachs. That's the beehive. The bees come out, they go somewhere else, and then they come back. We have to begin to unpeel this and unwind and understand who these individuals are. We heard the name of Hank Paulson, who was Secretary of the Treasury during the period time that the bailout was voted. He was the CEO of Goldman Sachs. So they come in, collect a little bit of honey, and then they go back. What the American people have to understand is what exactly did they do; who made these decisions. Now, we have over at the Secretary of Treasury the chief of staff to the Secretary of Treasury, Mark Patterson. Guess where he came from? Goldman Sachs. And the recent general counsel from the White House, Mr. Craig, he left the White House. Where did he go? Goldman Sachs. So it rises above party. We have to stand up for what's right for America, and we have to unwind these private interests that have caused such harm to our country. [From CBS News Investigates, Apr. 7, 2010] Goldman Sachs' Revolving Door (By Paula Reid) A CBS News analysis of the revolving door between Goldman and government reveals at least four dozen former employees, lobbyists or advisers at the highest reaches of power both in Washington and around the world. The Influence and Power of Goldman Sachs For example, former Treasury Secretary Henry Paulson is a former Goldman CEO; Arthur Levitt, the head of the Securities and Exchange Commission is a now a Goldman adviser; and former House Majority Leader Dick Gephardt is now a paid lobbyist for the firm. Our alphabetical list: Joshua Bolten Government: President George W. Bush's Chief of Staff from 2006-2009; Director of Office of Management and Budget from 2003-2006; White House Deputy Chief of Staff from January 20, 2001-June 2003. Goldman: Executive Director of Legal Affairs for Goldman based in London, aka, the bank's chief lobbyist to the EU from 1994-1999. Kenneth D. Brody Government: President and Chairman of the Export-Import Bank of the United States (1993-1996). Goldman: Former general partner and member of the Management Committee at Goldman Sachs where he worked from 1971-1991. Kathleen Brown Government: Former California State Treasurer. Goldman: Senior Advisor responsible for Public Finance, Western Region. Mark Carney Government: Governor of the Bank of Canada since 2008. Goldman: Mr. Carney had a thirteen-year career with Goldman Sachs in its London, Tokyo, New York, and Toronto offices. His progressively senior positions included Co-Head of Sovereign Risk; Executive Director Emerging Debt Capital Markets; and Managing Director, Investment Banking. He started at Goldman in 1995. robert cogorno Government: Former Gephardt aide and one-time floor director for Steny Hoyer (D-MD.), the No. 2 House Democrat. Goldman: Works for [Steve] Elmendorf Strategies, which lobbies for Goldman. Kenneth Connolly Government: Staff Director of the Senate Environment & Public Works Committee 2001-2006. Goldman: Vice President at Goldman from June 2008-present. E. Gerald Corrigan Government: President of the New York Fed from 1985 to 1993. Goldman: Joined Goldman Sachs in 1994 and currently is a partner and managing director; he was also appointed chairman of GS Bank USA, the firm's holding company, in September 2008. Jon Corzine Government: Governor of New Jersey from 2006-2010; U.S. Senator from 2001-2006 where he served on the Banking and Budget Committees. Goldman: Former Goldman CEO. Worked at Goldman from 1975- 1998. Gavyn Davies Government: Former chairman of the BBC from 2001-2004. Goldman: Chief Economist at Goldman where he worked from 1986-2001. Paul Dighton Government: Chief Executive of the London Operating Committee of the Olympic Games (LOCOG). Goldman: Former COO of Goldman where he worked for 22 years beginning in 1983. Mario Draghi Government: Head [Governor] of the Bank of Italy since January 2006. Goldman: Vice chair and managing director of Goldman Sachs International and a member of the firm-wide management committee from 2002-2005. William Dudley Government: President Federal Reserve Bank of New York City (2009-present). Goldman: Partner and Managing Director. Worked at Goldman from 1986-2007. Steven Elmendorf Government: Senior Advisor to then-House minority Leader Richard Gephardt. Goldman: Now runs his own lobbying firm, where Goldman is one of his clients. Dina Farrell Government: Deputy Director, National Economic Council, Obama Administration since January 2009. Goldman: Financial Analyst at Goldman Sachs from 1987-1989. Edward C. Forst Government: Advisor to Treasury Secretary Henry Paulson in 2008. Goldman: Former Global Head of the Investment Management Division at Goldman where he worked from 1994-2008. Randall M. Fort Government: Assistant Secretary of State for Intelligence and Research from November 2006-Jan 2009. Goldman: Director of Global Security 1996-2006. Henry H. Fowler Government: Secretary of the Treasury from 1965-1968. Goldman: After leaving the Treasury Department, Fowler joined Goldman Sachs in New York City as a partner. Stephen Friedman Government: Chairman of the President's Foreign Intelligence Advisory Board and of the Intelligence Oversight Board; Chairman Federal Reserve Bank of New York from 2008- 2009; former director of Bush's National Economic Council. Economic Advisor to President Bush from 2002-2004. Goldman: Former Co-Chairman at Goldman Sachs and still a member of their board. Joined Goldman in 1966. Gary Gensler Government: Chairman of the U.S. Commodity Futures Trading Commission since 2009; Undersecretary to the Treasury from 1999 to 2001; Assistant Secretary to the Treasury from 1997- 1999. Goldman: Former Co-head of Finance for Goldman Sachs worldwide. Worked at Goldman from 1979-1997. Lord Brian Griffiths Government: Head of the Prime Minister's Policy Unit from 1985 to 1990. Goldman: International Advisor since 1991. Jim Himes Government: Congressman from Connecticut (on Committee on Financial Services) since 2009. Goldman: Began working at Goldman in 1990 and was eventually promoted to Vice President. Robert D. Hormats Government: Under Secretary of State for Economic, Energy and Agricultural Affairs-designate since July 2009; Assistant Secretary of State for Economic and Business affairs from 1981 to 1982. Goldman: Vice Chairman of Goldman Sachs International and Managing Director of Goldman Sachs & Co. He worked at Goldman Sachs from 1982-2009. Chris Javens Government: Ex-tax policy adviser to Iowa Senator Chuck Grassley. Goldman: Now lobbies for Goldman. Reuben Jeffery III Government: Under Secretary of State for Economic, Business, and Agricultural Affairs from 2007-2009; Chairman of the Commodity Futures Trading Commission from 2005-2007. Goldman: Former Managing Partner of Goldman Sachs Paris Office. Worked at Goldman Sachs from 1983-2001. Dan Jester Government: Former Treasury Advisor. Goldman: Former Goldman Executive. James Johnson Government: Selected to serve on Obama's Vice Presidential section committee but stepped down. Goldman: Board of Director of Goldman Sachs since May 1999. Richard Gephardt Government: U.S. Representative (1977 to 2005). Goldman: President and CEO, Gephardt Government Affairs (since 2007). Hired by Goldman to represent its interests on issues related to TARP. Neel Kashkari Government: Interim head, Treasury's Office of Financial Stability from October 2008-May 2009; Assistant Secretary for International Economics (confirmed in summer 2008) Special assistant to Treasury Secretary Henry Paulson from 2006-2008. Goldman: Vice President at Goldman Sachs from 2002-2006. Lori E Laudien Government: Former counsel for the Senate Finance Committee in 1996-1997. Goldman: Lobbyist for Goldman since 2005. Arthur Levitt Government: Chairman, SEC 1993-200; Goldman: Advisor to Goldman Sachs (June 2009-present). Philip Murphy Government: U.S. Ambassador to Germany since 2009. Goldman: Former Senior Director of Goldman Sachs where he worked from 1983-2006. Michael Paese Government: Top Staffer to House Financial Services Committee Chairman Barney Frank. Goldman: Director of Government Affairs/Lobbyist (2009). Mark Patterson Government: Treasury Department Chief of Staff since February 2009. Goldman: Lobbyist for Goldman Sachs from 2003-2008. Henry ``Hank'' Paulson Government: Secretary of the Treasury from March 2006 to January 2009; White House Domestic Council, serving as Staff Assistant to the President from 1972 to 1973; Staff Assistant to the Assistant Secretary of Defense at the Pentagon from 1970 to 1972. Goldman: Former Goldman Sachs CEO. Worked at Goldman from 1974-2006. Romano Prodi Government: Two time prime minister of Italy. Goldman: From March 1990 to May 1993 and when not in public office, Mr. Prodi acted as a consultant to Goldman Sachs. Steve Shafran Government: Advise to Treasury Secretary Henry Paulson. Goldman: Worked at Goldman from 1993-2000. Sonal Shah Government: Director, Office of Social Innovation and Civic Participation (April 2009); advisory board member Obama-Biden transition Project; former previously held a variety of positions in the Treasury Department from 1995 to early 2002. Goldman: Vice President 2004-2007. Faryar Shirzad Government: Served on the staff of the National Security Council at the White House from March 2003-August 2006; Assistant Secretary for Import Administration at the U.S. Department of Commerce in the Bus Administration. Goldman: Global head of government affairs (Lobbyist) since 2006. Robert K. Steel Government: Under Secretary for Domestic Finance of the United States Treasury from 2006-08. Goldman: Former Vice Chairman of Goldman Sachs where he worked from 1976-2004. Adam Scorch Government: COO the SEC's Enforcement Division (October 2009-present). He was 29 years old at the time of his appointment. Goldman: Former Vice President at Goldman Sachs where he worked from 2004-2009. Richard Y. Roberts Government: Former SEC commissioner from 1990 to 1995. Goldman: Now working as a principal at RR&G LLC, which was hired by Goldman to lobby on TARP. Robert Rubin Government: Treasury Secretary from 1995-1999; Chairman of the National Economic Council from 1993-1995. Goldman: Former Co-Chairman at Goldman Sachs where he worked from 1966-1992. John Thain Government: CEO resident of NYSE (2004-07). Goldman: President and Co-Chief Operating Officer from 1999-2004. Marti Thomas Government: Assistant Secretary in Legal Affairs and Public Policy in 2000. Treasury Department as Deputy Assistant Secretary for Tax and Budget from 1998-1999; Executive Floor Assistant to Dick Gephardt from 1989-1998. Goldman: Joined Goldman as the Federal Legislative Affairs Leader from 2007-2009. Massimo Tononi Government: Italian deputy treasury chief from 2006-2008. Goldman: Former Partner at Goldman Sachs from 2004-2006. Malcolm Turnbull Government: Member of the Australian House of Representatives since 2004. Goldman: Chairman and Managing Director, Goldman Sachs Australia from 1997-2001 and Partner with Goldman Sachs and Co. from 1998-2001. Sidney Weinberg Government: Served as Vice-Chair for FDR's War Production Board during World War II. Goldman: Worked at Goldman from 1907-1969, eventually becoming CEO after starting as a $3-a-week janitor's assistant. Kendrick Wilson Government: Advisor to Treasury Secretary Henry Paulson. Goldman: Senior investment banker at Goldman where he worked from 1998-2008. Robert Zoellick Government: President of the World Bank since 2007. Goldman: Vice Chairman, International of the Goldman Sachs Group, and a Managing Director and Chairman of Goldman Sachs' Board of International Advisors (2006-07).

Ms. KAPTUR. What is unbelievable is the public relations on this, because companies like Goldman Sachs now have whole new lobbying offices here in Washington to hire people to try to convince us that the real is unreal. And what they're saying is that, well, you know, it isn't our fault that this happened. It's the fault of those Americans down there who lost their jobs and they maybe won't be able to pay their mortgages, right? Well, wait a minute. Wait a minute. Why did they lose their jobs, and why can't unemployment benefits at least be used in the interim to help people stay in their homes for the next year until we can try to get this economy to recover? And so the very institutions that are not working out loans at the local level and making billions and billions and billions of dollars more in profits and in bonuses are saying to us, Oh, it's not our fault. It's the fault of the American people who wanted to own a house. You know, it's really their problem that they got put out of work, when, in fact, these institutions aren't loaning money to our small businesses that want to employ people. They're not doing mortgage workouts at the local level. They are not taking any principle write- downs, which they could do, and in a formal FDIC bank regulatory process that would happen. They're not serious. They're not serious at the bargaining table. They are not even returning calls to our Realtors at the local level. We're trying to reach accommodation on short sales. We've been trying to reach accommodation on short sales for 2 years. They're standing up the Realtors across this country as we get more and more foreclosures around this Nation. We have to focus on the big six.

Ms. KAPTUR

Ms. KAPTUR. I want to thank Congressman King very much for coming to the floor because we share a concern that goes beyond party. This is so serious for our country, it's serious for our generation, it's serious for the next generation. If we look at the abuses of the financial system over the last 30 years, let's say, every time something bad happened, the government bailed them out. And then the next crisis was worse than the one before it. I came here during the 1980s. I saw what happened, and I saw a huge debt put on the American people, $140 billion at that point. And rather than strengthening the laws to prevent moral hazard, we loosen them. And then we got a worse crisis. If you look back to Enron, if you look back to everything that happened during the 1990s, rather than repairing it, what we did was we gave them more latitude--it's inexplicable what occurred--and the moral hazard got greater. And now with this, this is so much larger than the last two crises, and it's a real question as to whether the so-called ``reform'' coming out of the Congress will actually work. I would like to place in the Record an interview with Professor William Black, an attorney who was recently on television, that I think is very, very probing about the enormous potential here for financial fraud, control fraud, the lack of investigators inside the FBI, and as Congresswoman Speier mentioned, inside of the SEC. And then also an interview with Dr. Simon Johnson of MIT and Mr. James Kwak about what is actually happening in this crisis and how we are not addressing it fully in the reform bills proceeding through this Congress. So I just appreciate you giving me the opportunity to say that and to say we are in common cause here. I appreciate your comments very much. I am very worried about where we're headed as a country. I see community banks being destroyed in my region. I see these big money center institutions that have been prone to moral hazard having greater and greater authority in our country. And the amount of money they give to political campaigns, and with the recent decision by the Supreme Court to allow endless funding by any group in our political campaigns. Any one of them could wipe us out. That's not what this country was set up for. We were set up for opportunity. We were set up for the individual to matter, for our communities to matter, for the equity that our people, when they create it in their homes, that they just don't lose it because these people think of some scheme to raid them. And yet that's what we're facing now. So we have an enormous obligation to educate the American people and learn from them and hear their best advice on how we can dig ourselves out of this hole. I thank you for allowing me a few moments of your time. Interview: Excerpts From Bill Moyers Journal, April 23, 2010, Guest: Bill Black Bill Moyers: Bill Black is with me now. One of the country's leading experts on crimes in high places he teaches economics and law at the University of Missouri-Kansas City, and wrote this book, ``The Best Way To Rob a Bank Is To Own One.'' Welcome back to the Journal. William K. Black: Thank you. Bill Moyers: What did you think of the President's speech late this week? William K. Black: It's a good speech. He's a very good spokesman for his causes. I don't think substantively the measures are going to prevent a future crisis. And I was disappointed that he wasn't willing to be blunt. He used a number of euphemisms, but he was unwilling to use the F word. Bill Moyers: The F word? William K. Black: The F word's fraud in this. And it's the word that explains why we have these recurrent, intensifying crisis. Bill Moyers: How is that? What do you mean when you say fraud is at the center of it? William K. Black: Well, first, when you deregulate or never regulate, mortgage bankers were never regulated, you effectively have decriminalized that industry, because only the regulators can serve as the sherpas, that the FBI and the prosecutors need to be able to understand and prosecute these kind of complex frauds. They can do one or two or maybe three on their own, but when an entire industry is beset by wide scale fraud, you have to have the regulators. And the regulators were the problem. They became a self-fulfilling prophecy of failure, because they, President Bush appointed people who hated regulation. I call them the anti-regulators. And that's what they were. Bill Moyers: This hearing that, where you testified this week, looking into the bankruptcy at Lehman Brothers, had something on this. Timothy Geithner: And tragically, when we saw firms manage themselves to the edge of failure, the government had exceptionally limited authority to step in and to protect the economy from those failures. Ben Bernanke: In September 2008, no government agency had sufficient authority to compel Lehman to operate in a safe and sound manner and in a way that did not pose dangers to the broader financial system. Anton Valukas: What is clear is that the regulators were not fully engaged and did not direct Lehman to alter the conduct which we now know in retrospect led to Lehman's ruin. Bill Moyers: The regulators were not fully engaged. I mean, this is an old story. We all know about regulatory capture where the regulated take control of the regulators. William K. Black: Yeah, but this one is far worse. That's not very candid testimony on anybody's part there. The Fed had unique authority. And it had it since 1994 to regulate every single mortgage lender in America. And you might think the Fed would use that authority. And you might especially think that, if you knew that Gramlich, one of the Fed members, went personally to Alan Greenspan and said, there's a housing bubble. And there's a terrible crisis in non-prime. We need to send the examiners in. We need to use our regulatory authority. And Greenspan refused. Lehman was brought down primarily by selling liar's loans. It was the biggest seller of liar's loans in the world. And when we look at these liar's loans, we find 90 percent fraud. 90 percent. And we find that most of the frauds are not induced by the borrower, but they're overwhelmingly done by the loan brokers. Bill Moyers: And liar's loans are? William K. Black: A liar's loan is we don't get any verified information from you about your income, your employment, your job history or your assets. Bill Moyers: You give me a loan, no questions asked? William K. Black: No real questions asked. Certainly no answers checked. In fact, we just had hearings last week about WaMu, which is also a huge player---- Bill Moyers: Washington Mutual---- William K. Black [continuing]: In these frauds. Washington Mutual, which used to make, run all those ads making fun of bankers who, because they were stuffy and looked at loan quality before they made a loan. Well, WaMu didn't do any of that stuff. And of course, WaMu had just massive failures. And who got in trouble at WaMu? Who got in trouble at Lehman? You got in trouble if you told the truth. They fired the people who found the problems. They promoted the people that caused the problem, and they gave them massive bonuses. Bill Moyers: I watched the testimony where you were present the other day in the Lehman hearings. And there was a very moving moment with a former vice-president of Lehman Brothers who had gone and tried to blow the whistle, who tried to get people to pay attention to what was going on. Take a look. Matthew Lee: I hand-delivered my letter to the four addressees and I'll give a quick timeline of what happened, May 16th was a Friday, on the Monday I sat down with the chief risk officer and discussed the letter, on the Wednesday I sat down with the general counsel and the head of internal audit, discussed the letter. On the Thursday I was on a conference call to Brazil. Somebody came into my office, pulled me out, and fired me on the spot without any notification. I stayed, sorry. Bill Moyers: Matthew Lee, vice-president of Lehman Brothers, fired because he tried to blow the whistle. What does that say to you? William K. Black: Well, it tells me that they were covering up the frauds, that they knew about the frauds and that they were desperate to prevent other people from learning. Bill Moyers: Matthew Lee told the accounting firm Ernst & Young what was going on. Isn't the accounting firm supposed to report this, once they learn from somebody like him that there's fraud going on? William K. Black: Yes, they're supposed to be the most important gatekeeper. They're supposed to be independent. They're supposed to be ultra-professional. But they have an enormous problem, and it's compensation. And that is, the way you rise to power within one of these big four accounting firms is by being a rainmaker, bringing in the big clients. And so, every single one of these major frauds we call control frauds in the financial sphere has been--their weapon of choice has been accounting. And every single one, for many years, was able to get what we call clean opinions from one of the most prestigious audit firms in the world, while they were massively fraudulent and deeply insolvent. Bill Moyers: I read an essay last night where you describe what you call a criminogenic environment. What is a criminogenic environment? William K. Black: A criminogenic environment is a steal from pathology, a pathogenic environment, an environment that spreads disease. In this case, it's an environment that spreads fraud. And there are two key elements. One we talked about. If you don't regulate, you create a criminogenic environment because you can get away with the frauds. The second is compensation. And that has two elements. One is the executive compensation that people have talked about that creates the perverse incentives. But the second is for these professionals. And for the lower level employees, to give the bonuses. And it creates what we call a Gresham's dynamic. And that just means cheaters prosper. And when cheaters prosper, markets become perverse and they drive honesty out of the market. Bill Moyers: You also wrote that the New York Federal Reserve knew about this so-called three-card monte routine. But that, the man who led it, at the time, Timothy Geithner, now the treasury secretary, testified that there was nothing he could do. Timothy Geithner: In our system the Federal Reserve was a fire station, a fire station with important, if limited, tools to put foam on the runway, to provide liquidity to markets in extremis. However, the Federal Reserve, under the laws of this land was not given any legal authority to set or enforce limits on risk-taking by large financial institutions like the independent investment banks, insurance companies like AIG, Fannie and Freddie, or the hundreds of non-bank financial firms that operated outside the constraints of the banking system. Bill Moyers: Now, what I hear is the gentleman who was then chairman of the New York Fed, saying, I, we had this job to do, but we didn't have the authority to do it. William K. Black: Yeah. Bill Moyers: We were the fire truck, but we didn't have any water in our hose. William K. Black: Yeah, this was pretty disingenuous, because other portions of his testimony, he explained why there was this gap. And he said it was because we repealed Glass-Steagall. Well, the Fed pushed for the repeal of Glass- Steagall. Bill Moyers: Glass-Steagall was the act that was repealed in the late nineties that separated regular banks from investment banks, right? William K. Black: Correct. So this is a deliberately created regulatory black hole, created by the Fed. And then the Fed comes into the hearing, eight years later, and said, we were helpless. Helpless to do anything, because of a black hole we designed. Interview: Excerpts From Bill Moyers Journal, April 16, 2010, Guests: Simon Johnson and James Kwak Simon Johnson is a former chief economist at the International Monetary Fund. He now teaches at MIT's Sloan School of Management and is a Senior Fellow at the Peterson Institute for International Economics. James Kwak is studying law at Yale Law School--a career he decided to pursue after working as a management consultant at McKinsey & Company and co-founding the successful software company, Guidewire. Together James Kwak and Simon Johnson run the indispensable economic website BaselineScenario.com. Welcome to you both. Let me get to the blunt conclusion you reach in your book. You say that two years after the devastating financial crisis of '08 our country is still at the mercy of an oligarchy that is bigger, more profitable, and more resistant to regulation than ever. Correct? Simon Johnson: Absolutely correct, Bill. The big banks became stronger as a result of the bailout. That may seem extraordinary, but it's really true. They're turning that increased economic clout into more political power. And they're using that political power to go out and take the same sort of risks that got us into disaster in September 2008. Bill Moyers: And your definition of oligarchy is? Simon Johnson: Oligarchy is just--it's a very simple, straightforward idea from Aristotle. It's political power based on economic power. And it's the rise of the banks in economic terms, which we document at length, that it'd turn into political power. And they then feed that back into more deregulation, more opportunities to go out and take reckless risks and--and capture huge amounts of money. Bill Moyers: And you say that these this oligarchy consists of six megabanks. What are the six banks? James Kwak: They are Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo. Bill Moyers: And you write that they control 60 percent of our gross national product? James Kwak: They have assets equivalent to 60 percent of our gross national product. And to put this in perspective, in the mid-1990s, these six banks or their predecessors, since there have been a lot of mergers, had less than 20 percent. Their assets were less than 20 percent of the gross national product. Bill Moyers: And what's the threat from an oligarchy of this size and scale? Simon Johnson: They can distort the system, Bill. They can change the rules of the game to favor themselves. And unfortunately, the way it works in modern finance is when the rules favor you, you go out and you take a lot of risk. And you blow up from time to time, because it's not your problem. When it blows up, it's the taxpayer and it's the government that has to sort it out. Bill Moyers: So, you're not kidding when you say it's an oligarchy? James Kwak: Exactly. I think that in particular, we can see how the oligarchy has actually become more powerful in the last since the financial crisis. If we look at the way they've behaved in Washington. For example, they've been spending more than $1 million per day lobbying Congress and fighting financial reform. I think that's for some time, the financial sector got its way in Washington through the power of ideology, through the power of persuasion. And in the last year and a half, we've seen the gloves come off. They are fighting as hard as they can to stop reform. Simon Johnson: I know people react a little negatively when you use this term for the United States. But it means political power derived from economic power. That's what we're looking at here. It's disproportionate, it's unfair, it is very unproductive, by the way. Undermines business in this society. And it's an oligarchy like we see in other countries.

Ms. KAPTUR

Ms. KAPTUR. What amazed me is when all of the house of cards started to fall, sometimes in my part of the country you see chipmunks tearing across the concrete, and they go so fast. The minute they got in trouble, what did they do, they came under the umbrella of the Bank Holding Company Act so they could not be a speculator any more, now they are a legitimate bank; right? Even though they were trafficking in all of those securities, they were just like those little chipmunks. They hid themselves right under the Bank Holding Company Act. I don't agree with what was done, but they took good care of themselves.

Ms. KAPTUR. Excellent analogy. They created rules by which only they could win, and that doesn't seem to me to be the spirit of free enterprise. They created so much collateral damage it brought down the economy of the whole country. They keep using the argument if we didn't have the TARP, then things would have really gone wrong. I thought, How could it be worse? How could it be worse than this? Is what they did with the TARP just bailing themselves out, because they certainly have not done anything for the American people. They have thrown all of the bills of all of their mistakes on Fannie Mae, Freddie Mac, FHA, all of the instrumentalities of the United States for decades to come. They didn't take any losses on those themselves. They were enriched by the taxpayers of the United States who lifted them right up. And they are not dealing with the damage across this country where foreclosures continue to go up. I place on the Record the names of the six companies that now hold two-thirds of the wealth of this Nation, and they are Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo. They have enriched themselves handsomely. They doubled their importance since the beginning of this crisis while quashing community banks across this country, seeing forced mergers as institutions like PNC bought up National Citibank in Ohio, as local community banks that didn't do anything wrong and were not permitted to do this kind of wild-eyed business deal, found themselves having to pay huge FDIC fees. And the net yield of all of this is the big ones got bigger and the American people are continuing to be kicked out of their homes and these institutions won't return phone calls and they have hold of the auction process and their investment intermediaries are holding the equity and the ownership in these properties. How is that good for this country?

Ms. KAPTUR. I think he thought it was too little, didn't he?

Ms. KAPTUR. Do you happen to know what the bonuses were for Goldman Sachs? I know they totaled into the billions.

Ms. KAPTUR. It's a pleasure to join you tonight to place information on the Record related to Goldman's behavior as well as other institutions that have caused our country so much harm. And as others have mentioned, on April 16, the Securities and Exchange Commission announced that it was filing a civil lawsuit at long last against the big speculator Goldman Sachs, accusing it of committing fraud, but it was a civil filing. We know that what happened on Wall Street in the financial markets, the commodities markets, and in the housing markets led to enormous financial turmoil in our country and, ultimately, this great economic crisis that we are facing. And the American people want answers. They want to know who did what, and they ultimately want justice. A few days after that filing, over five dozen of our colleagues signed on to a bipartisan letter sent to the Attorney General on April 23, and our letter called upon the Attorney General to begin a criminal investigation and prosecution. One of our concerns continues to be that if, in fact, a civil case is filed by the SEC, could it be possible down the road that some of that evidence could be inadmissible in the event there is a criminal proceeding. So we urged Attorney General Holder to proceed quickly, and today we delivered--in addition to that letter--signatures from over 140,000 Americans who have been signing up on an e-petition to the Attorney General urging the same. We thank the organizations Progressive Change Campaign Committee and MoveOn.org for alerting citizens across this country that they don't have to be neutral in this fight. They can let their views be known to the Attorney General of our country about the importance of criminal proceedings. What makes that so important is the fact that the Attorney General's office in the Department of Justice has been understaffed throughout the last 10 years, unable to do the type of financial crimes investigations that are necessary. Back in the savings and loan crisis at the end of the 1990s and early 2000s--or I should say at the end of 1989 up until the early 1990s--we had over 1,000 investigators in financial fraud at this Department of Justice. After 9/11, that was reduced to about 75; and, therefore, we were totally unequipped at the Justice Department to deal with a lot of the wrongdoing that was proceeding through those years and those decades. I have a bill, H.R. 3995, to close that gap and increase the number of investigators. Quite frankly, I have a deep concern about some of the self-serving individuals that may have been representing private interests rather than the public interest as they were conducting their business through Goldman Sachs and other firms. I would like to place on the record, for example, the following: Joshua Bolten, who was President Bush's chief of staff in the White House at the time that the markets melted down, had actually been the person who ran Goldman Sachs' London office, and yet then he came to be President Bush's chief budget officer and then went to be chief of staff at the White House at the key moment when decisions had to be made about how to handle the financial markets In the current administration, it is no secret that the chief of staff to the current Secretary of the Treasury, Mark Patterson, had come directly from Goldman Sachs as its top lobbyist. In addition, Neel Kashkari from Goldman Sachs had gone to handle the TARP. I think this goes far beyond party, this has to do with America and standing up as patriots for this country and asking the question: Isn't that too much insider dealing? How do you know that they are really representing their client's interest or the public interest when they are personally involved both on the private side and then on the public side like a very fast revolving door? I will also place on the Record tonight the fact that since the crisis started the six institutions in addition to Goldman Sachs, that includes Citibank and Wells Fargo, HSBC, Morgan Stanley, all these big banks now control two-thirds of the deposits and GDP of this country. Six institutions. They are raiding equity out of our local communities. They are just simply too powerful and they are too irresponsible. They are not doing loan workouts in places I come from. I thank the gentlelady for calling into question their business principles as you so ably put on the floor here as to who their interests really are. That is my bottom line question: Who do these people represent? They seem to be getting bonuses at extraordinary levels, in the millions of dollars. When people in my district have fallen off unemployment benefits, these companies like JPMorgan Chase do not return phone calls to do loan workouts. Wells Fargo, they are totally irresponsible. They have too much power and they are thumbing their nose at the American people at a time when our people are just hanging on. I want to thank the gentlelady for holding this Special Order this evening and for giving us a chance to place on the Record the letter that we sent to the attorney general asking for criminal proceedings, and also the names of the Members of Congress who have signed on this letter. I urge other colleagues who wish to join us to please give us a call. I thank you for allowing me to place this information into the Record. Congress of the United States, Washington, DC, April 23, 2010. Hon. Eric Holder U.S. Attorney General, U.S. Department of Justice, Washington, DC. Dear Attorney General Holder: The U.S. Securities and Exchange Commission (SEC) announced on Friday, April 16, 2010, that it had filed a securities fraud action against the Wall Street company Goldman Sachs & Co (GS& Co.) and one of its employees for making materially misleading statements and omissions in connection with a synthetic collateralized debt obligation (``CDO'') that GS & Co. structured and marketed to investors. The SEC alleges that: 1. This synthetic CDO, ABACUS 2007-AC1, was tied to the performance of sub-prime residential mortgage-backed securities (``RMBS'') and was structured and marketed by GS & Co. in early 2007 when the United States housing market and related securities were beginning to show signs of distress. Synthetic CDOs like ABACUS 2007-AC1 contributed to the recent financial crisis by magnifying losses associated with the downturn in the United States housing market. 2. GS & Co. marketing materials for ABACUS 2007-AC1-- including the term sheet, flip book and offering memorandum for the CDO--all represented that the reference portfolio of RMBS underlying the CDO was selected by ACA Management with experience analyzing credit risk in RMBS. Undisclosed in the marketing materials and unbeknownst to investors, a large hedge fund, Paulson & Co. Inc. (``Paulson''), with economic interests directly adverse to investors in the ABACUS 2007- AC1 CDO, played a significant role in the portfolio selection process. After participating in the selection of the reference portfolio, Paulson effectively shorted the RMBS portfolio it helped select by entering into credit default swaps (``CDS'') with GS & Co. to buy protection on specific layers of the ABACUS 2007-AC1 capital structure. 3. In sum, GS & Co. arranged a transaction at Paulson's request in which Paulson heavily influenced the selection of the portfolio to suit its economic interests, but failed to disclose to investors, as part of the description of the portfolio selection process contained in the marketing materials used to promote the transaction, Paulson's role in the portfolio selection process or its adverse economic interests. As the SEC notes, financial manipulations such as this contributed to the near collapse of the U.S. financial system and cost American taxpayers hundreds of billions of dollars. On the face of the SEC filing, criminal fraud on a historic scale seems to have occurred in this instance. As an ever growing mountain of evidence reveals, this case is neither unique nor isolated. If both global and domestic confidence in the integrity of the U.S. financial system is to be regained, there must be confidence that criminal acts will be vigorously pursued and perpetrators punished. While the SEC lacks the authority to act beyond civil actions, the U.S. Department of Justice (DOJ) has the power to file criminal actions against those who commit financial fraud. We ask assurance from you that the U.S. Department of Justice is closely looking at this case and similar cases to further investigate and prosecute the criminals involved in this, and other financially fraudulent acts. Furthermore, if the DOJ is not currently looking into this particular case, we respectfully ask you to ensure that the U.S. Department of Justice immediately open a case on this matter and investigate it with the full authority and power that your agency holds. The American people both demand and deserve justice in the matter of Wall Street banks whom the American taxpayers bailed out, only to see unemployment and housing foreclosures rise. This matter is of deep importance to us. As you may know, H.R. 3995, the Financial Crisis of 2008 Criminal Investigation and Prosecution Act, has been introduced, which authorizes you to hire more prosecutors, Director Mueller of the Federal Bureau of Investigation to hire 1,000 more agent as well as additional forensic experts, and Chair Mary Schapiro of the U.S. Securities and Exchange Commission to hire more investigators to continue to pursue justice and route out the criminals in our financial system. Part of financial regulatory reform should include removing the criminals and crafting a system that supports those who follow the law. We in Congress stand ready to support you in protecting the American taxpayers from financial crimes such as the fraud that the U.S. Securities and Exchange Commission has charged Goldman Sachs with committing. We ask that you take up this case, and others, to pursue justice for the American people, to put criminals in jail, and seek to restore the integrity of our nation's financial system. Sincerely, Marcy Kaptur, John Conyers, Michael Burgess, Jim McDermott, Diane E. Watson, Christopher P. Carney, Raul Grijalva, Keith Ellison, Charlie Melancon, Tom Perriello, Betty Sutton, Jay Inslee, Pete Stark, Michael Honda, John T. Salazar, Niki Tsongas, Alan Grayson, David Loebsack, Bob Filner, Betsy Markey, John Barrow, Jesse Jackson Jr., Eleanor Holmes Norton, Grace F. Napolitano, Maurice Hinchey, Peter Welch, Marcia L. Fudge, Rush Holt, Peter DeFazio, Michael E. Capuano, Bill Pascrell, Jr., Michael H. Michaud, Steve Cohen, Bruce L. Braley, Bart Stupak, Mark Schauer, Chellie Pingree, Martin Heinrich, Jackie Speier, Janice D. Schakowsky, Sheila Jackson Lee, Tammy Baldwin, Barbara Lee, Mike Doyle, Gene Taylor, Wm. Lacy Clay, Jr., James Moran, Danny K. Davis, Ben Chandler, Dennis Kucinich, Carol Shea-Porter, Bennie G. Thompson, Laura Richardson, Loretta Sanchez, Dale Kildee, Leonard L. Boswell, Donna F. Edwards, Frank Pallone, Jr., Ann Kirkpatrick, Carolyn C. Kilpatrick, Mazie K. Hirono, James P. McGovern.

Ms. KAPTUR. I thank you very much, Congresswoman Jackie Speier, for spearheading this effort this evening and for the incredible work that you do for this House and for our country and for your superior knowledge of the financial markets and the banking industry. America really needs you now more than ever, and I thank your constituents for electing you here. You are the right person at the right time and the right place, that's for sure.

Ms. KAPTUR

Ms. KAPTUR. Madam Speaker, this week the Securities and Exchange Commission alleges, in a rather unusually constructed civil case, Goldman Sachs committed fraud. But there is growing concern that evidence presented in this case could be excluded from any subsequent criminal case that might be filed by the U.S. Department of Justice. Thus, I invite my colleagues to join me and several dozen Members in signing onto a letter to Attorney General Holder asking him to investigate Goldman Sachs and other related cases to ferret out and fight fraud in our financial system. Legal maneuvering to thwart justice should not be allowed through those who harmed our Republic so maliciously. In addition, I urge my colleagues to sign onto H.R. 3995, which enhances the FBI's, SEC's, and Department of Justice's capabilities to investigate and prosecute fraud and other financial crimes. Our citizens demand justice. Those who committed financial crimes must be brought to justice. Our letter and H.R. 3995 lead exactly in that direction.

Ms. KAPTUR

Ms. KAPTUR. Madam Speaker, I rise today to recognize the Toledo Board of Realtors on the milestone occasion of the 100th anniversary of its founding. The Toledo Board of Realtors was founded in February of 1910 by a handful of Toledo real estate brokers. The association's first president was Irving B. Hiett, who eventually assumed the presidency of the National Association of Realtors. Formed as the Toledo Real Estate Board, its first membership consisted of about 28 brokers. The Board was formed to ``Collect and circulate valuable and useful information pertaining to the real estate, manufacturing, industrial and mercantile interests of the city of Toledo and it's citizens; To oppose the enactment of laws detrimental to said interest; to encourage legislation for needed public improvements; to foster an equitable system of taxation and assessment and to secure the enactment and enforcement of laws and ordinances for the further protection, convenience and welfare of the real estate owners, leaseholders and brokers.'' In 1910 the Board developed a map of every manufacturing site in the city indicating whether the site was on the water, rail or inland. In 1912 Multiple Listing Service was established and it was mandatory that all members include their listings. The brokers gathered in the Board office each week and exchanged information about their listings. The Toledo Realtor magazine was first published, semi-monthly in 1928. Since its inception, the Toledo Board of Realtors continues its efforts to protect consumers in real estate transactions, to promote affordable housing and to expand ownership and protection of private property rights. Its members maintain the highest degree of professionalism while fostering an expertise in the field in order to ensure able representation of clients. Today the Toledo Board represents approximately 1400 Realtor members. They continue a tradition of excellence over the course of a century. We celebrate their achievements and honor the efforts of those on whose shoulders they stand.

Ms. KAPTUR

Ms. KAPTUR. Madam Speaker, I rise today to recognize the Centenary celebration of the Catholic Diocese of Toledo, Ohio. The year long celebration began in October of 2009 with a Season of Preparation and now moves into its Season of Celebration. The Centenary concludes with a Season of Recommitment beginning October 8, 2010 through April 15, 2011. The Toledo Roman Catholic Diocese was established by order of Pope Pius X on April 15, 1910. Its first bishop, the Most Reverend Joseph Schrembs was installed on October 4, 1911. The Diocese covers nineteen counties in Northwest Ohio including Allen, Crawford, Defiance, Erie, Fulton, Hancock, Henry, Huron, Lucas, Ottawa, Paulding, Putnam, Richland, Sandusky, Seneca, Van Wert, Williams, Wood and Wyandot. The region is urban, rural, suburban and every variety of ethnicity. A century after its founding, the diocese serves 321,516 Catholics in 128 Parishes. Its services have grown to meet the needs of 21st Century Catholic life while adhering to traditional Catholic teaching. Today's faithful can look to a spirit of ecumenism, both lay and religious pastoral care, and ministries focused on youth, families, those who are aging and those who are alone. Pope Paul VI said, ``Liturgy is like a strong tree whose beauty is derived from the continuous renewal of its leaves, but whose strength comes from the old trunk, with solid roots in the ground.'' As the Toledo Catholic Diocese has travelled through a century of steadfast faith, challenge and opportunity, it has always been the bedrock for the faithful of our region. Even as we celebrate the milestone marker of 100 years in Christ's service, we look forward to the coming 100 years with renewed hope and faith.

Ms. KAPTUR

Ms. KAPTUR. Madam Speaker, I rise today in remembrance of Ruth Arden, a Toledoan, a pioneer, and tireless advocate for our most vulnerable people. Ruth passed away unexpectedly in December and her passing was noted by the well known and the unknown. Today those she served with and among gather to honor her efforts, pay special tribute, and remember a very fine lady. Ruth Arden was the executive director of St. Paul's Community Center for many years. St. Paul's serves people who are homeless and mentally ill, and under Ruth's extraordinary vision and leadership the shelter served hundreds of people with respect. She and her team gave people dignity and the tools to navigate a difficult life. Ruth was an advocate for people who are homeless and mentally ill, and challenged leaders at the local, State and National levels to see their need. Jesus Christ reminded all that ``whatever you do to the least among you, that you do unto me.'' Few people follow His words as did Ruth, and her work inspired all around her. Ruth Arden was an ardent advocate for the poor and downtrodden, but she was also an advocate of the arts. She enjoyed music--especially jazz--and supported local artists. Her support, advice and wise counsel were most appreciated, and in her quiet way Ruth moved mountains. Her life leaves an imprimatur on our community which stands well past her leave-taking, and her voice still echoes among those with whom she worked. She had an unforgettable spirit of caring and drive that we are guided by her spirit to carry forth.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, Wall Street speculation and the disaster it caused have been clear since the bailout in the fall of 2008. More foreclosures on Main Street, higher profits for Wall Street. I fought against that bailout, and I continue to fight for Main Street and the people who are not high powered gamblers nor high paid investors nor the mega banks. My fight is for people to regain their jobs, for people to save their homes, and for people to have their hope restored. I've been observing the U.S. Securities and Exchange Commission taking a baby step, long overdue, as watchdog of the markets that they are supposed to be regulating as enforcers of securities law. As the New York Times reports today, rather than asserting that Goldman misrepresented a product it was selling, the most commonly used grounds for securities fraud, the Securities and Exchange Commission said in a civil lawsuit filed on Friday that the investment bank misled customers about how the product was created. In fact, the SEC can only file civil cases, so it's high time to look, rather, at the apparent criminal fraud involved in and around the hidden works of Wall Street and the financial crisis it precipitated. Last year I introduced H.R. 3995, the 2008 Financial Crisis Investigation and Prosecution Act, authorizing the Director of the FBI to hire 1,000 additional agents and additional forensic accounting experts to probe down into the misdeeds that brought down the economy of our Nation. Though the FBI is slightly beefing up their ranks on investigating fraud, during the savings and loan scandal of the late 1980s and early 1990s 1,000 agents, as well as forensic experts, exacted justice. Today, if there are even 300 over there doing part-time work on this, that would be a high number. Back in the eighties and nineties, that savings and loan crisis cost the people of our country $170 billion placed right squarely on the back of our taxpayers. The 2008 financial crisis could cost our people trillions of dollars. So it must be the focus of the Department of Justice to find and fight the fraud in our financial system. And they simply need more financial white collar crime agents to do so. Citizens following the law have nothing to fear. Those committing criminal acts should know they will be caught. That is why, in addition to authorizing more FBI agents, H.R. 3995 also authorizes the hiring of more prosecutors in the Department of Justice to take those cases to trial. In addition, the SEC has an important role in enforcement, as shown on Friday of last week, and H.R. 3995 strengthens the SEC by authorizing the hiring of more investigators. Many groups support this effort and recognize the necessity of ensuring our financial system is rid of these criminals, and also pointing out who's profited from the harm that has been caused to the American people through their moral hazards. No one knows exactly how much the financial crisis of 2008 will cost our taxpayers, but one way to lessen that blow to them is to claw back to the assets of those who rigged the system to their benefit and our Republic's detriment. Our citizens want those who committed crimes to be held accountable, and H.R. 3995 supports the agencies who can work for real justice. I ask my colleagues to support this bipartisan bill and work to support the agencies tasked with finding and fighting massive fraud in our financial system. Furthermore, Congress should be assured that the Department of Justice is on task to find and fight this fraud. The charges against Goldman Sachs, the speculators there, by the SEC have released a wave of response across this country. And in today's New York Times Letters to the Editor, Oliver Revell, who served for 30 years as Special Agent and Senior Executive of the FBI and as an Associate Deputy Director, wrote to the Times, ``It is clear to me that the SEC charges should be held in abeyance, and that the FBI and Justice Department should immediately open an investigation in the apparent fraud that occurred in this area.'' He states that out of concern that the SEC's civil charges might result in future criminal actions being impossible, as evidence in civil trials can be excluded as inadmissible from criminal trial if it is used first in a civil trial. I agree. And I'm circulating a letter among my colleagues asking Attorney General Holder to investigate Goldman Sachs and other related cases to find and fight fraud in our financial system. Many questions are yet to be answered and situations investigated. How much of this was under the watch of then CEO of Goldman Sachs, Henry Paulsen, the former Secretary of the Department of the Treasury, who then bailed out the big banks with which he was so intimately implicated? AIG must be one of these cases since Goldman Sachs was the largest domestic recipient of counterparty payments through AIG. Goldman's excessive profits in this first quarter have gone up more than $3.5 billion. Imagine if you could borrow at one-half percent interest from the Federal Reserve and then lend that money out at 3.5 percent interest rate. You'd be making billions, too. And it's not just all about Goldman Sachs. It's about Lehman Brothers, Washington Mutual, other banks, our speculative firms, hedge funds, mortgage companies. Fraud is against the law, and right now fraud appears to be rampant and getting away with it. We need to be investigating and catching the criminals and leaving those who abide the law alone. I fought the bailout in part because I was concerned that rampant fraud was highly likely. And Congress needs to fight for Main Street and support those agencies that are responsible for fighting fraud in our system. I ask my colleagues to join me by also signing the letter we have composed to Attorney General Holder asking for a criminal investigation with fraud related to these institutions; and also invite my colleagues to cosponsor H.R. 3995. [From The New York Times, April 20, 2010] The Uproar Over Goldman Sachs To the Editor: It is clear to me that the Securities and Exchange Commission charges should be held in abeyance and that the F.B.I. and the Justice Department should immediately open an investigation into the apparent fraud that occurred in this situation. Goldman Sachs officials who approved of this insider manipulation, including Fabrice Tourre, the apparent creator of the Abacus 2007-AC1 fund, should be the immediate targets of this investigation, as should John A. Paulson, the apparent beneficiary of the fund. If the S.E.C. proceeds with a civil case, much of the evidence may be inadmissible in a criminal proceeding because of Fifth Amendment issues. In my experience as an agent and former associate deputy director of the F.B.I. who was in charge of criminal investigations, this case should go to the top of the F.B.I.'s priority list. There should be an intensive investigation of all potentially criminal acts in this apparent scam. Oliver Revell, Zurich, April 17, 2010. To the Editor: Re ``S.E.C. Accuses Goldman of Fraud in Housing Deal'' (front page, April 17): The securities fraud lawsuit against Goldman Sachs exposes a serious flaw in modern Western capitalism. Adam Smith taught us that the point of a robust capital market is to direct capital to its best and highest use, where, combined with labor, it will produce the goods and services most valued by society. Asset bubbles are a problem, but at least mortgage-backed securities enabled people to live in their overvalued houses. The Goldman ``Abacus'' transaction involved ``synthetic'' collateralized debt obligations, derivatives whose value rose and fell with the value of real C.D.O.'s elsewhere. It produced no goods or services, financed no consumption-- nothing at all. Money that could, and should, have been used to add value to society was not invested; it was squandered as surely as if the parties had wagered on a horse race. Legitimate hedging is one thing. Gambling with people's savings, university endowments and municipal funds, on the other hand, should be a crime. Caroline Poplin, Bethesda, Md., April 18, 2010. To the Editor: Goldman Sachs's ethical failures and hypocrisy are more important than whether it is legally guilty of fraud. Goldman presents itself as having higher standards than other Wall Street firms. It even posts ``Our Business Principles'' on its Web site, something most firms do not do. Among these are ``Our clients' interests always come first'' and ``Integrity and honesty are at the heart of our business.'' In the Abacus 2007-AC1 transaction, according to the Securities and Exchange Commission lawsuit, Goldman knowingly sold a product that was designed to fail, favoring its own interests and the interests of one client (John A. Paulson, a hedge fund manager) over the interests of other clients. Further, it failed to fully disclose how the Abacus portfolio was assembled. Goldman clearly did not adhere to its stated business principles in this deal. Jeffrey Cohen, Arroyo Seco, N.M., April 18, 2010. To the Editor: As a real estate agent on the North Fork of Long Island in the roaring housing market here from 1998 to 2005, I was puzzled by the willingness of banks to give ``no doc'' (no documentation) and ``liars'' (self-explanatory) bans. Some of these buyers were borrowing more than the cost of their new homes. Today we can see why the banks were so generous. The Securities and Exchange Commission charges that at least one bank, Goldman Sachs, knowingly sold packages of subprime loans that were meant to fail so that a savvy investor could most profitably short a pool of them. Some subprime mortgage borrowers who are underwater, owing more on their homes than they are worth, are walking away, leaving their homes and the payments they have already made to the banks. These days the North Fork real estate sales market isn't roaring anymore, but many of those former homeowners are keeping the rental market purring. Janice Keller, Mattituck, N.Y., April 17, 2010. To the Editor: Re ``In a Rush to Judge Goldman?'' (column, April 17): In questioning a rush to judgment against Goldman Sachs, William D. Cohan seemingly tries to turn the table by asking: if ``Goldman had lost billions instead of making billions, would the S.E.C. have filed a lawsuit against Abacus's investors?'' This ignores the fundamental issue in this case: fraud is fraud, whether the perpetrator profits from his misdeeds or not. The Securities and Exchange Commission is alleging that Goldman omitted material information from a prospectus that it was required by law to disclose so that the investors could make an informed decision about whether to buy the securities being offered. Moreover, if Goldman did lose money--whether from the actual trades or the recent drop in share price--and the S.E.C. proved that Goldman had committed fraud, then Goldman's shareholders have been hurt by this activity and would have a right to sue to recoup their losses from those responsible. James O. Chamberlain, Forest Hills, Queens, April 17, 2010. To the Editor: Re ``So Many Ways to Almost Say I'm Sorry'' (Week in Review, April 18): Its the ``say you're sorry'' season for highly compensated bankers, but the apologies ring hollow. An apology without a commitment to make amends by way of financial reparations is similar to the ``thank you'' note that arrives six months after the gift has been received. It's better than nothing, but not by much. Joan Evangelisti, Racine, Wis., April 19, 2010.