Dennis Kucinich

Mr. KUCINICH

Mr. KUCINICH. Mr. Speaker, I yield myself 3 minutes. Mr. Speaker, it has been stated over and over here that the interest here is in just research. However, we cannot separate the kind of research that will be done here from the logic that is driving biotechnology, because this bill states that for-profit companies can be involved in this research. Now, I agree with my friend from Michigan that we do not want to just leave it to for-profit companies, but it is in the bill. So I would just say that if we do not want for-profit companies involved, I would certainly be willing to entertain a unanimous consent request to strike that provision from this bill. In addition to that, the total of this bill is $36 million.

Mr. KUCINICH. Mr. Speaker, I yield myself 6 minutes. I want to thank the gentleman from Michigan and the gentlewoman from Texas for their commitment to trying to deal with this problem of world hunger. We have differences of opinion about how we can deal with it effectively. I would suggest that the research which is called for in part of this bill, Mr. Speaker, has already been done. As a matter of fact, in the AgBioForum, volume 2, number 3 and 4, summer and fall of 1999, pages 155 to 162, an article by Miguel Altieri and Peter Rosset, thoroughly researched article, I might add, that claims over 38 academic sources for their conclusions, states the following in the abstract. It says: ``Advocates of biotechnology affirm that the application of genetic engineering to develop transgenic crops will increase world agricultural productivity, enhance food security, and move agriculture away from a dependence on chemical inputs helping to reduce environmental problems. This paper challenges such assertions by first demystifying the Malthusian view that hunger is due to a gap between food production and human population growth. Second, we expose the fact that current bioengineered crops are not designed to increase yields or for poor small farmers, so that they may not benefit from them. In addition, transgenic crops pose serious environmental risks, continuously underplayed by the biotechnology industry. Finally, it is concluded that there are many other agro-ecological alternatives that can solve the agricultural problems that biotechnology aims at solving, but in a much more socially equitable manner and in a more environmentally harmonious way.'' In this article, which is entitled Ten Reasons Why Biotechnology Will Not Ensure Food Security, Protect the Environment and Reduce Poverty in the Developing World, Altieri and Rosset point out, number one, there is no relationship between the prevalence of hunger in a given country and its population. For every densely populated and hungry nation like Bangladesh or Haiti, there is a sparsely populated and hungry nation like Brazil and Indonesia. The second point they make, number two, most innovations in agricultural biotechnology have been profit-driven rather than need- driven. The real thrust of the genetic engineering industry is not to make Third World agriculture more productive, but rather to generate profits. Number three, the integration of the seed and chemical industries appears destined to accelerate increases in per acre expenditures for seeds plus chemicals, delivering significantly lower returns to growers. Number four, recent experimental trials have shown that genetically engineered seeds do not increase the yield of crops. A recent study by the United States Department of Agriculture Economic Research Service shows that in 1998 yields were not significantly different in engineered versus nonengineered crops in 12 of 18 crop/region combinations. Number five, many scientists claim that the ingestion of genetically engineered food is harmless. Recent evidence, however, shows that there are potential risks of eating such foods as the new proteins produced in such foods could, one, act themselves as allergens or toxins; two, alter the metabolism of the food producing plant or animal, causing it to produce new allergens or toxins; or, three, reduce its nutritional quality or value. In this article, Ten Reasons Why Biotechnology Will Not Ensure Food Security, Protect the Environment and Reduce Poverty in the Developing World, the authors as their sixth point indicate transgenic plants which produce their own insecticides closely follow the pesticide paradigm, which is itself rapidly failing due to pest resistance to insecticides. Number seven, the global fight for market share is leading companies to massively deploy transgenic crops around the world, more than 30 million hectares in 1998, without proper advance testing of short- or long-term impacts on human health and ecosystems. The next point that the authors make, number eight, there are many unanswered ecological questions regarding the impact of transgenic crops. Number nine, as the private sector has exerted more and more dominance in advancing new biotechnologies, the public sector has had to invest a growing share of its scarce resources in enhancing biotechnological capacities in public institutions. And, number 10, much of the needed food can be produced by small farmers located throughout the world using agro-ecological technologies. In fact, new world development approaches and low input technologies spearheaded by farmers and nongovernmental organizations around the world are already making a significant contribution to food security at the household, national and regional levels in Africa, Asia and Latin America. So again, Mr. Speaker, there already is significant research which points out concerns that need to be regarded before such legislation is brought to the floor. Mr. Speaker, I reserve the balance of my time.

Mr. KUCINICH. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I call the House's attention to a document from the Southern African Seed-Initiative which states in part with regard to the restoration of sustainable agriculture in the future, ``We are appealing to the regional international community and to organization in disaster relief and development assistance to take precautions: 1, to prevent the importation of inappropriate seeds to the southern Africa region which can undermine agrobiodiversity and thus food security for years; and 2, to support efforts to reconstitute locally adapted planning material and quality seed material/varieties, like indigenous landraces or farmers' varieties appropriate to the various ecosystems'' this sheet goes on to claim: ``Food aid, combined with the importation of often poorly adapted seed varieties, can lower yields and keep them low for years.'' This information from the Seed Initiative from Southern Africa is very instructive, and reflects most seriously on the matter at hand because the truth of the matter is that all of us in this House who are very concerned about reducing hunger in the world must be careful not to create a circumstance that in our desire to use technologies that seemingly could reduce hunger, that we inadvertently use technologies which are poorly adapted to seed varieties that can end up actually increasing hunger. Mr. Speaker, I oppose H.R. 2051, the Regional Plant Genome and Gene Expression Research Act. The bill before us is well-intentioned, but I believe it is based on an erroneous assumption. The legislation assumes that unproven technologies will solve the very serious international problem of world hunger. Technologies like genetically engineered food may have a limited role, but economics and the politics of repressive political regimes remain the significant barrier to a consistent food supply in developing nations. The development of expensive genetically engineered foods may only exacerbate the situation. There are better alternatives. Agroecological interventions have had significantly more success in helping developing nations feed themselves with higher yields and improved environmental practices, all within reasonable costs for developing countries. These alternatives do not further enrich the consolidated agricultural industry, but they can provide the poorest of citizens of a nation the opportunity to survive on their own means. Next week I am introducing the Real Solutions to World Hunger Act of 2002, which promotes this type of research that can quickly and effectively save millions of lives. The legislation before us today promotes a technology which is incompatible with the problem. The cause of world hunger has more to do with inadequate food distribution than food production. The world today produces more food per inhabitant than ever before. Enough food is available now to provide 4.3 pounds for every person each day. That information from Food First/Institute for Food and Development Policy. The poor nutrition of millions is not due to a shortage in food, but rather to problems of distribution. Why was Ethiopia exporting food during its famine in the 1980s? In an economy that is becoming increasingly market driven, food is sold to the highest bidder. But at a more fundamental level, appalling land distribution policies favoring large landowners leave land idle preventing people from growing their own food. The landless poor are at the mercy of the cash economy to buy food. This legislation follows the biotechnology industry strategy by employing bait and switch. Almost all genetic alterations are done to make food production and processing easier and more profitable for the manufacturers. A minuscule amount of research is aimed at improved nutrition, although biotechnology companies heavily advertise this tiny amount of research. In general, their crops are being engineered to increase corporate profitability, not to alleviate world hunger. During the 5-year period 1996 to 2000, herbicide tolerance accounted for 74 percent of genetically engineered plants. Insect resistance for North American insects, not insects in developing countries, accounted for 19 percent of genetically engineered plants, and stacked genes for herbicide tolerance and insect resistance accounted for 7 percent, this according to the International Service for the Acquisition of Agribiotech Applications. When added up, that leaves no commercialized crops that provide any benefits for the poor and developing nations. I quote from a statement made to the United Nations by delegates from 24 African states in 1998: ``We object strongly that the image of the poor and hungry from our countries is being used by giant, multinational corporations to push a technology that is neither safe, environmentally friendly, nor economically beneficial to us. We do not believe that such companies or gene technologies will help our farmers to produce the food that is needed in the 21st century. On the contrary, we think that it will destroy the diversity, the local knowledge, and the sustainable agricultural systems that our farmers have developed for millennia; and it will thus undermine our capacity to feed ourselves.'' So here again, the best intentions seemingly to help address and eradicate hunger in developing nations can in fact end up creating conditions that promote more hunger. So if African nations, according to their representatives, do not want it, then who does besides the biotechnology public relations consultants? Mr. Speaker, I reserve the balance of my time.

Mr. KUCINICH. Mr. Speaker, does the gentlewoman from Texas claim time in opposition?

Mr. KUCINICH

Mr. KUCINICH. Mr. Speaker, seemingly when the United States and Russia would get together to announce an arms reduction treaty, that would be important news for the world. I think any time the United States and Russia sit down and talk about what can be done to eliminate nuclear weapons is an important moment. However, the announcement by President Bush and Vladimir Putin that they will sign a nuclear pact needs to be scrutinized very carefully. If you read today's New York Times you see they say that ``the proposed treaty sets no pace for dismantling weapons over the next decade, as long as the total number of strategic weapons does not exceed 2,200 in 2012. It permits the United States to stockpile the dismantled weapons in a form that would allow them to be reinstalled on missiles or aboard nuclear armed submarines in case of an ugly turn of events with any major nuclear power. In short, it is an agreement filled with escape clauses.'' The only way that we can really protect the world against nuclear arms is to work for complete nuclear abolition. That is something that this administration has taken a path away from. It has taken a path towards deconstructing the nonproliferation treaty towards building new nuclear weapons and towards nuclear proliferation. This treaty that has been described does not do anything to bring the world one step away from the abyss.

Mr. KUCINICH

Mr. KUCINICH. Mr. Chairman, the question is not whether we should permit targets to be buried deep; the question is whether we are going to permit peace to be buried deep. We have a nonproliferation treaty that stops nuclear weapons from becoming a sword of Damocles hanging over this world. We had an ABM Treaty that stopped the United States and Russia from engaging each other. We had START II and START III that was the basis of getting rid of nuclear weapons. We had a Comprehensive Test Ban Treaty waiting to be signed. Now, we have gone from that kind of a hopeful approach to sustain the world to an approach that puts the world at an abyss, to an approach that envisions target nations, nuclear first strike, bunker busters. It is time that we took a stand for peace. It is time that we took a stand for the continuation of life on this planet. Why should that be hard to do, even for the Congress?

Mr. KUCINICH. Actually, Mr. Chairman, there are some people who believe that the world does have the possibility to live in peace and that the instrumentalities of violence will eventually give way to human reason and that our ability to talk to each other as human beings may be the basis for peace in the world as opposed to weaponizing space. The gentleman's amendment is well taken because, according to an Air Force briefing, the space-based laser is being contemplated for anti- satellite missions, denying access to space, disrupting satellite communications, knocking out high altitude aircraft, or unmanned aerial vehicles. These missions go far beyond intercepting missiles, and they echo the Quadrennial Defense Review's call for the United States to exploit space for military purposes, and the Air Force's wish in a Joint Vision 20/20 document for full spectrum dominance in space. What colossal arrogance it is to assume that we can seize the high heavens and control the world through space. Yes, work for peace on earth, and when we do that, we will not have to worry about a later generation creating peace in space.

Mr. KUCINICH

Mr. KUCINICH. Mr. Speaker, I rise today to honor Ms. Farah M. Walters for her masterful leadership of University Hospitals Health System and University Hospitals of Cleveland. As President and Chief Executive Officer of University Hospitals Ms. Walters has presided over UH's expansion from a $400 million-hospital to a nearly $2 billion health- care system serves patients at more than 150 locations in Northeast Ohio and is the region's largest private sector employer. Ms. Walters graduated from the executive MBA program at Case Western Reserve University Weatherhead School of Management and holds a Masters of Science In Nutrition from Case Western Reserve University. She has consulted and lectured for major health organizations such as the Pan American Health Organization, American Hospital Association, National Institutes of Health, the U.S. Army, and various hospitals and universities. Ms. Walters has received numerous prestigious awards for her work. For example, in May 2001 she was awarded the Ellis Island Medal of Honor by the National Ethnic Coalition of Organizations Foundation; in February 1999 she became the first woman to receive the Business Executive of the Year award from the Sales & Marketing Executives of Cleveland; and in May 1998 she became the first woman to receive Business Statesmanship Award from the Harvard Business School Club. In January 1993, Mrs. Walters was appointed to Hillary Rodham Clinton's National Health Care Reform Task Force, and in 1993 Modern Healthcare selected her one of the 50 individuals in the USA to shape the future of health care in the country. In addition, University Hospitals of Cleveland has been the recipient of many awards under her leadership, including, the North Coast 99 Diversity Award from the Employer Resource Council and Enterprise Development and the Exemplary Voluntary Effort Award from the U.S. Department of Labor. Ms. Walters serves on a variety of national and local boards and is active in civic affairs. She has served on a number of key committees of the Association of American Medical Colleges in Washington, DC. She also serves on the board of Cleveland Tomorrow, Greater Cleveland Roundtable and Ohio Business Roundtable. In 1994 Ms. Walters was appointed by Governor Voinovich to serve on the 15 member Commission to Study the Ohio Economy and Tax Structure. Within the community, she has served as Chairman for the 1997 United Way Campaign, the first woman and first CEO of a non-profit organization to be selected for the position. My fellow colleagues, I ask you to Join me in rising to honor this truly remarkable woman who has dedicated her life to the betterment of health care, and is one of Cleveland's finest citizens.

Mr. KUCINICH

Mr. KUCINICH. Mr. Speaker, the transportation of this waste will require over 96,000 truck shipments over 4 decades. Almost every major east-west interstate highway and mainland railroad in the country will experience high-level waste shipments. More highly-radioactive waste will be shipped in the first full year of repository operations than has been transported in the entire 5-decade history of spent fuel shipments in the United States. The Department of Energy proposes to directly impact 44 States and many of the major metropolitan areas in the Nation. At least 109 cities with populations exceeding 100,000, including my constituents in Cleveland, Ohio, will be subjected to repeated shipments with minimal safeguards. Highway shipments alone will impact at least 703 counties with a combined population of 123 million people. Nationally, 11 million people reside within one-half mile of a truck or rail route. This never-before-attempted radioactive materials transportation effort will bring with it many risks, including potentially serious economic damage and property value losses in cities and communities along shipping routes. The poorly tested transportation casks may be vulnerable to highway accidents and security breaches. Because of a lack of rail facilities to several reactors, the Department of Energy will use barge shipments to move this waste to a port capable of transferring the 120-ton cask to a train. Some of these shipments will occur on the Great Lakes, the world's largest source of fresh water. Over 35 million people living in the Great Lakes basin use it for drinking water. The Federal Government must radically improve the safety and security of these shipments, and that is the purpose of the Nuclear Waste Transportation Protection Amendments Act of 2002 which I have introduced. Mr. Speaker, this legislation would, one, require comprehensive nuclear waste transportation safety programs; two, protect populated communities; three, establish that the oldest fuel first should be shipped; four, require full-scale cask testing; five, require State and local route consultations; six, private carrier prohibitions; seven, advanced notification; and, eight, safety precautions. Vote against this legislation.

Mr. KUCINICH

Mr. KUCINICH. Mr. Speaker, I rise in support of this rule and in opposition to the resolution seeking to roll back steel import tariffs. We in the Congressional Steel Caucus pushed a long time for the administration to initiate a section 201 steel investigation into dumping. We pushed the International Trade Commission to recognize the devastating effect of steel imports. We gathered with 25,000 steelworkers on the Ellipse to encourage the President to impose an effective remedy. We did get a remedy. What has this tariff meant to the steel industry? It has helped us in Cleveland find a new owner to keep our steel mill running. It has helped create a climate to boost America's manufacturing output. Still, tens of thousands of steelworker retirees are losing health benefits, so we introduced the bipartisan Steel Legacy Relief Act to help obtain health benefits equivalent to what is provided by Medicare and a prescription drug benefit similar to the Blue Cross/Blue Shield program. The United States should not stand by and watch while thousands and thousands of workers who helped build this country are suffering. We must say to our Nation's retired steelworkers, ``You have worked all your life to make America strong. We have not forgotten, and we will not let you down.'' I urge my colleagues to vote for this rule, oppose efforts to roll back steel tariffs, and sign on to our bill to address steel legacy costs.

Mr. KUCINICH

Mr. KUCINICH. Mr. Speaker, I rise today in celebration of the anniversary of the Polish Constitution. The Polish Constitution of May 3, 1791 established a tradition of democracy and human rights in Poland that continues today. The Polish Constitution has the honor of being the first Constitution in Europe to guarantee inalienable human and economic rights for all. This historic document was modeled after the Constitution of the United States of America. During the turbulent 1790's of classical Europe, Poland emerged as a light of hope for the future of democracy in Poland, and across the European landscape. While other nations surrounding its sovereign borders engaged in revolution and civil war, Poland maintained its integrity for many years under this Constitution. The rise of Soviet communism in the post-World War II era stemmed the Polish democratic principle for forty years, but under the capable leadership of Lech Walesa, democracy embodied in this Constitution returned to the Eastern European ``cradle of democracy.'' The human and economic rights that were abandoned by years of communist rule have triumphantly flourished in recent years. Mr. Speaker, please join me in honoring the people of Poland, the Polish American community, and their timeless Polish Constitution--on the occasion of the anniversary of its creation--two hundred and eleven years ago.

Mr. KUCINICH

Mr. KUCINICH. Mr. Speaker, I rise today to recognize Marty Plax, for his 26 years of service as Director of The American Jewish Committee's Cleveland Chapter. His tenure as Area Director was characterized by integrity, character, and intelligence. Marty Plax's academic background made him an ideal candidate to serve as director of the committee. After receiving an undergraduate degree from Washington University in 1963, he went on to the State University of New York at Buffalo where he earned a Masters Degree and Ph.D. in Political Science. Dr. Plax then embarked on a highly distinguished academic career, which included lecturing and holding professional positions at a number of major universities. In addition, Dr. Plax shared his expertise as the Visiting Scholar at the Hebrew Union College in Los Angeles and served as Adjunct Associate Professor at Cleveland State University since 1979. Moreover, Dr. Plax is a man with a strong social conscience, who used his academic training to assist him in community involvement. He is a prolific social writer who has published several books, numerous articles, and countless ``Letters to the Editor.'' However, his writings were only one aspect of his community work. He can be best described as a ``Contemplative in Action.'' A leader in Community Conflict Resolution, he has been involved with mediation since 1968, served as Chairman of the Ohio Boxing Commission, as a member of the Community Relations Committee for The Cleveland Orchestra, and on the State Advisory Committee of the U.S. Civil Rights Commission. I ask my colleagues to join me in rising to honor this truly remarkable individual for his distinguished years of service to Cleveland, the United States, and the world.

Mr. KUCINICH

Mr. KUCINICH. Mr. Chairman, following are excerpts from ``Enron's Pawns: How Public Institutions Bankrolled Enron's Globalization Game''--Sustainable Energy & Economy Network, Institute for Policy Studies, March 2002. I. Introduction Many public officials have described Enron's demise as the product of corporate misbehavior. This perspective ignores a vital fact: Enron would not have scaled such grand global heights, nor fallen so dramatically, without its close financial relationships with government agencies. Since 1992, at least 21 agencies, representing the U.S. government, multilateral development banks, and other national governments, helped leverage Enron's global reach by approving $7.219 billion in public financing toward 38 projects in 29 countries. The now-fallen giant, until recently the country's seventh largest corporation, marched into risky projects abroad, backed by the ``deep pockets'' of government financing and with the firm and at times forceful assistance of U.S. officials and their counterparts in international organizations. Enron's overseas operations rewarded shareholders temporarily but often punished the people and governments of foreign countries with price hikes and blackouts worse than what California suffered in 2001, causing social unrest and riots that were sometimes brutally repressed. For example: In the Dominican Republic, eight people were killed when police were brought in to quell riots after blackouts lasting up to 20 hours followed a power price hike that Enron and other private firms initiated. The local population was further enraged by allegations that a local affiliate of Arthur Andersen had undervalued the newly privatized utility by almost $1 billion, reaping enormous profits for Enron. In India, police hired by the power consortium of which Enron was a part beat non-violent protesters who challenged the $30 billion agreement--the largest deal in Indian history--struck between local politicians and Enron. The president of Guatemala tried to dissolve the Congress and declare martial law after rioting ensued, following a price hike that the government deemed necessary after selling the power sector to Enron. In Colombia, two politicians resigned amid accusations that one was trying to push a cut-rate deal for Enron on the state-owned power company. While all this was occurring, the U.S. Government and other public agencies continued to advocate on Enron's behalf, threatening poor countries like Mozambique with an end to aid if they did not accept Enron's bid on a natural gas field. So linked was Enron with the U.S. Government in many people's minds that they assumed, as the late Croatian strongman Franjo Tjudman did, that pleasing Enron meant pleasing the White House. Tjudman hoped that compliance with an over- priced Enron contract might parlay into an array of political favors, from softer treatment at The Hague's War Crimes Tribunal to the entry of his country into the World Trade Organization. Only when Enron's scandals began to affect Americans did these same government officials and institutions hold the corporation at arm's length. And only when Enron leadership revealed their greed on home turf did it become the biggest corporate scandal in recent U.S. history. Key Findings After a detailed study of Enron's overseas activities over the past decade, Institute for Policy Studies researchers have reached the following four conclusions: 1. U.S. Government agencies were the largest backers of Enron's activities abroad From 1992 to 2001, U.S. Government agencies--the Overseas Private Investment Corporation (OPIC), Export-Import Bank, Maritime Administration, and Trade and Development Agency--cleared Enron's path with $3.68 billion in approved support for 25 projects. OPIC is the clear leader in public financing for Enron, approving over $2.6 billion in risk insurance for 14 projects. Adding to this the U.S. share of financing for multilateral development banks brings the total amount of U.S. taxpayer support for Enron's overseas operations to over $4 billion. 2. The World Bank Group was an important catalyst of Enron's global expansion The U.S. government wields strong influence over the policies and projects of multilateral development banks (MDBs), particularly the World Bank Group. Despite some reluctance to support several obviously overpriced deals, the Bank did provide $761 million in support for Enron-related overseas projects from 1992 to 2001. Beyond direct support for specific projects, it also provided Enron an entree to many developing countries by pushing its agenda of privatization and deregulation of the energy and power sectors as conditions of further loans. Other MDBs, particularly the Inter-American Development Bank (IDB), also were important financial backers of Enron. The IDB approved slightly less financing ($752 million) than the World Bank Group from 1992 to 2001. 3. When the World Bank or U.S. taxpayer-backed institutions declined to support an Enron project on financial or political grounds, a raft of other export credit agencies (ECAs) and regional financial institutions eagerly stepped into the breach Enron-related projects obtained support form national and international public institutions that have no ties to U.S. taxpayers. This alphabet soup of ECAs and MDBs--obscure and often-secretive agencies with acronyms like JBIC, CDC, KfW, SACE, EIB, ADC, OND, COFACE, and CIDA--approved $2 billion toward Enron's global expansion. 4. Enron's collapse calls into question the policy of deregulation that Enron, together with its partners in the United States Government, the World Trade Organization (WTO), the International Monetary Fund (IMF) and World Bank, and the private sector have advocated Prodded by the Reagan administration in the 1980s, the World Bank and IMF have been pursuing deregulation and privatization of the power and energy sectors for two decades. Energy deregulation has resulted in the energy needs of the vast majority of citizens--the poorest as well as those in need of power for businesses, hospitals, schools and other public services to function--being routinely sacrificed for private gain. So long as the World Bank, IMF, WTO, U.S. Government and corporations continue to advance this agenda of energy and power deregulation, all signs suggest that future ``Enrons'' will continue to occur, with devastating public consequences. * * * Brazil pipeline, Enron benefited both from the World Bank's capitalization of Bolivian oil and gas fields and from the World Bank's support of the pipeline. OPIC, a U.S. export credit agency which had approved a $200 million credit toward Enron's construction of a 390-mile pipeline and thermal power project in Brazil, withdrew its support for the project in late February 2002. According to a Bloomberg article, Enron owes OPIC $453 million in 5 countries in South America, including Bolivia. Despite Enron's collapse and OPIC's withdrawal, another public institution is considering throwing more money at Transredes. On Feb. 14, 2002, the Inter-American Development Bank published a project abstract for a proposed financing of a gas pipeline extension to the fields of southern Bolivia. (See Inventory for further details.) A special congressional commission has been formed in Bolivia to investigate the legality of Enron's 1994 acquisition of its stake in the Bolivian side of the Bolivia-Brazil gas pipeline, as well as the consequences for Transredes given Enron's bankruptcy. The commission's seven members will hear testimony from current and former executives of YPFB as well as government officials, including three former presidents, regarding their involvement in the Enron contract. Opposition parties are using the case as a political campaign issue ahead of June presidential elections. Colombia Although Colombia's energy sector is, for the most part, still publicly-owned, Enron was able to build and operate a gas pipeline in that country through a special contractual arrangement with the government, and with the financial support of the World Bank. The World Bank approved a $30 million loan toward the Ballena- Barrancabermeja gas pipeline in 1994, and an additional $35 million in 1996. The pipeline's owner and operator is Centragas, a company in which Enron has a 50% stake, with the balance held by Tomen Corporation (Japan, 25%) and Promigas, S.A. (Colombia, 25%). Through a Build, Own, Operate and Transfer (BOOT) mechanism, Enron built a 357-mile pipeline that carries gas from the offshore Ballena gas field to a petrochemical complex in Barrancabermeja, central Colombia. Ecopetrol, the Colombian national oil company, is its sole client. To ensure the security of its Colombian assets, Enron has lobbied in Washington to increase military and other aid to Colombia through Senate Bill 2522, the bill that funded the Plan Colombia.\23a\ This bill, later signed into law, designated nearly $1 billion ``to support Central and South America and Caribbean counternarcotics activities.'' Enron is also a member of the U.S.-Colombia Business Partnership, a corporation consortium that promotes U.S. business interests in Colombia (other members include Occidental International Corp. and BP Amoco). According to Colombian government documents, in the early 1990s, the energy sector in Colombia was expected to generate a deficit of over $1 billion for a ten-year period. Privatization sought to generate the funds needed to pay the debt (around 39% of all public debt at the time) and to finance 50%. of the new investments needed to modernize the energy sector. The privatization program began in 1996 with the sale of several electric generation facilities, and by 2001, private companies made up 62% of generation, 44% of distribution, and 30% of new project development. The government hoped to increase that to 75% of generation and 80% of distribution with the sale of ISAGEN, the largest remaining state-owned electric company.\23c\ In October 1999, in Houston, Colombian president Adreae Pastrana met with the executives of the principal oil and electricity companies in the United States, coordinated by then governor of Texas, George W. Bush. Pastrana rallied support for Plan Colombia, and promised the major oil and gas exploration concessions and the continuation of the privatization in the power sector. Enron representatives were present at this meeting with President Pastrana and Governor Bush.\23d\ Two months later, a scandal erupted in the Colombian Congress when Senator Hugo Serrano accused the Energy Minister, Luis Carlos Valenzuela, of using his political influence to strike a deal with Enron. Under this new deal, Colombia would export natural gas to Enron's power plant in Panama (Bahia Las Minas). This power plant received support from Ex-Im in 1996, the IFC in 1998, and MIGA in 2001. The World Bank's MIGA appears to have been careless in its work in this case. MIGA earmarked its $3.3 million guarantee for the Bahia Las Minas power plant to an investor in the plant named Lloyds TSB Bank of Panama, a subsidiary of Lloyds (the London-based insurance and banking empire). We can only assume that MIGA officials did not read the transcript of the Feb. 2001 U.S. Senate investigation on money laundering. One of the banks investigated by Sen. Carl Levin's staff was a Lloyd's affiliate named British Bank of Latin America (BBLA), ``a small offshore bank that was licensed in the Bahamas but accepted clients only from Colombia . . . (and) became a conduit for illegal drug money.'' \23e\ The Senate investigators reported that ``BBLA's account statements show a constant stream of large money transfers among BBLA and a handful of Lloyds affiliates, including Lloyds banks in Belgium, Colombia, Panama, (emphasis added) the UK and the US.'' Indeed, in 2000, Lloyds shut down BBLA and its ``clients, assets, loans (were) redistributed to other Lloyds banks in Bahamas, Colombia, Panama (emphasis added) and the US.'' And Footnote 268 in the report contains this interesting information: A federal prosecution (United States vs. All Funds in Certain Foreign Bank Accounts Representing Proceeds of Narcotics Trafficking and Money Laundering, USDC DC Case No. 1:99.CV- 03112) seeks forfeiture of about $295,000 in drug proceeds sent to Lloyds TSB Bank and Trust (Panama). Presumably, MIGA was unaware of these investigations last year when it decided to back the Lloyds affiliate's investment in the Enron power plant, and it also must have missed the burgeoning scandal in Colombia over Minister Valenzuela's pact to ship gas to the plant. Senator Serrano claimed that the deal would also have profited Valenzuela's former employer--investment bank and project promoter Corporation Financiera del Valle (Corfivalle)--which owned 14% of Promigas. Ecopetrol President, Carlons Rodado Noriega, who later resigned over the disagreement, refused to sign the Memorandum of Understanding with Enron because he felt it was not in the best interest of the country. Enron was to receive exclusive rights to Colombia's gas exports at very low prices. Colombia would not be able to export gas, other than that bought by Enron. Although Valenzuela denied the charges, he resigned shortly thereafter. Dominican Republic In 1990, through the National Electric Sector Development Law (Ley 14-90), the Dominican Republic opened its doors to independent power producers, to help it generate additional power for the country. On July 22, 1994, the World Bank's IFC approved a $132.3 million loan, and a year later, an additional $1.5 million currency swap, in support of a 185-megawatt combined-cycle power facility mounted on a barge at Puerto Plata. The barge-mounted power plant was owned by Enron's subsidiary, Enron Global Power & Pipelines, which acquired the parent company's 50% share in the barge power plant in 1995. `The power project is expected to be immediately additive to earnings, cash flow and earnings per share in 1996,' trumpeted Rodney Gray, chairman, of Enron Global Power & Pipelines. In December of 1996, the U.S. Maritime Administration provided a $50 million guarantee toward two Enron power barges for this project. In January 1998, the World Bank's IBRD approved a $20 million loan to privatize the country's power sector. The goal, said the World Bank, was to open up the power sector to private companies, through reforms at the state agency, Corporacion Dominicia de Electricidad (CDE). The IBRD wrote: ``The project's overall objective is to support power sector reform by establishing a competitive bulk supply market for electricity. Specifically, the project seeks to lift transmission constraints that hinder open access of publicly as well as privately owned power generators.'' When the government privatized its power sector, Enron (along with several other firms) rushed in to buy a stake in the generating capacity of the Dominican Republic, while AES and Union Fenosa of Spain bought into the distribution networks. The CDE continued to own and operate the country's power transmission companies. Shortly after the private corporations took over, rates for electricity skyrocketed by 51-100% or more. Consumers refused to pay the higher rates, and ultimately forced the government to absorb most of the tariff increase. This resulted in the government paying around $5 million per month to the power companies, a sum it was unable to sustain. By October 2001, it had accumulated a debt in the power sector of $217 million, of which 55.3% was owed to private companies. The mounting debts in turn caused Enron and others to turn off the power, with blackouts sometimes lasting as much as 20 hours, affecting hospitals, businesses, and schools. By early 2001, widespread frustration with the situation triggered protests, some of which turned violent after police clashed with demonstrators. At least eight people died in the protests, including a 14-year-old boy. In a situation with similarities to California, shortages were originally blamed on private power generators, which at the time of the crisis were only supplying 392,000 of the 815,000 kilowatts they were capable of producing. The electricity issue also sparked a confrontation between the Dominican government and the U.S. Embassy, after the former accused the Smith-Enron joint venture of outright fraud for failing to deliver its promise to generate at least 175 megawatts a day. After privatization of the CDE, power rates had more than doubled and government payments and subsidies (now to private companies) had tripled. After months of negotiation between the government and the power companies, an agreement was finally reached in October 2001 in Madrid, Spain. However, further privatization of the CDE (the remaining transmission companies) has been mentioned as a possible option for a cash infusion for the government. In April 2000 it was reported that CDE, the state power company partially owned by Enron, would privatize electricity transmission in order to comply with World Bank requirements for assistance. Officials of the current and previous administration have been publicly trading responsibility for the chaos in the electricity sector. In June 2001, the President of the Dominican Republic announced that the contracts awarded during the privatization of the power sector would be investigated. A report by a special commission for the Dominican Senate claimed that the assets of the CDE were undervalued by $907 million, resulting in the CDE's sale for 42% of its value. Suspiciously, the accounting firm that executed the market value appraisal, Ortega & Asociados, is Arthur Andersen's ``local representative'' in the Dominican Republic. In January 2002, sparked by the allegations surrounding Enron and Arthur Anderson, the Dominican newspaper, El Nacional, revealed the connection between the two accounting firms. Representatives of Ortega & Asociados were questioned about their involvement in the CDE privatization and Enron's operations. Although they have denied any wrongdoing, in a letter to the newspaper they stated that, ``This job [referring to the CDE privatization] was done by our professional Dominican staff, with the collaboration of Andersen, given its knowledge and experience in privatization and capitalization of public companies in Latin America.'' \30\'' Enron's contract in the Dominican Republic expires in 2015. Until 1992, the state-owned Instituto Nacionalede Electricidad (INDE, National Institute of Electricity) held more than 83 percent of the capacity serving Guatemala's power supply requirements. The remainder was owned by the Empresa Electrica de Guatemala S.A. (EEGSA, the Guatemala Electricity Company), of which the government was majority owner. Transformation of the power sector began in January 1993 when EEGSA signed a 15-year power purchase agreement (PPA) with Enron to build the 110MW Puerto Quetzal thermal plant that began operations in 1993. Consisting of two barges loaded with 10 diesel-fired generators, the $92 million project was partly financed by the IFC, which approved a $20 million direct loan as well as a $51 million syndicated loan toward this, the first privately-financed power project in Central America. Power from the project is sold to EEGSA. The power company, Puerto Quetzal Power Corp., was created by Enron, who initially owned 50%, in addition to operating the plant and serving as fuel supplier. King Ranch Inc., a U.S. company with energy and agribusiness interests, owned the other 50%. In 2000, the U.K.'s Commonwealth Development Corporation (CDC) acquired 25% ownership of the project. The project also gained support from the U.S. Maritime Administration (MARAD), which financed guarantees on the power barge construction in 1994 and 2000. In addition to the IFC, the U.S. Overseas Private Development Corporation (OPIC) in 1992 granted a $73 million guarantee towards this project, and in 2000, OPIC extended a loan for $50 million to expand the capacity of the plant from 110 MW to 234 MW. Shortly after it began operating, the complaints against Enron began. According to reports at the time: ``(T)he Attorney General [of Guatemala] reported that U.S.-owned Enron Power has not paid any of the estimated $14 million it owned the Guatemalan government for its electrical generation plant in Puerto Quetzal. The Guatemalan government collects less than half the revenues owned it, and it is estimated that two-thirds of businesses, like Enron Power, pay no taxes at all.'' \31\ In 1996, the IFC extended an additional $700,000 guarantee to the project. In 1997, Enron's plant was supply 15% of Guatemala's energy. In September 2000, Enron requested and was granted permission from MARAD to change the registration and flag of the barges from Guatemala to Panama, which is known world-wide for its lax and favorable terms on vessel registration. When the power sector began its transformation process in 1993, President Jorge Serrano proposed an increase in electric rates to support a market-based electric power industry. The increases in consumer rates, which totaled as much as 100 percent for some customers, were part of the principal complaints of the demonstrators who took to the streets in Guatemala City during the spring of 1993. President Serrano responded to the unrest by declaring marital law, and attempting to dissolve the Guatemalan Congress. His attempt to take control of the government by decree failed when he was unable to win the support of the military. President Serrano subsequently fled the country, and the rate increases were suspended. \32\ He is currently in exile in Panama. The privatization process continued, with Guatemala's 1996 electricity law (Decree 93-96) effectively liberalizing the power sector. The law placed no limits on foreign ownership of companies interested in providing service in the electricity sector. EEGSA was fully privatized in July 1998, when 80 percent of its assets were bought by a consortium formed by Teco Power Corporation of the U.S. Iberdrola Engeria, S.A. of Spain and Electricidad do Portugal, S.A. of Portugal. Mozambique In June 1994, the World Bank's IDA provided $30 million toward the privatization of Mozambiqe's Pande gas fields. The World Bank began to act as a broker, encouraging government officials and private investors to develop Pande, claiming that the gas fields were expected to lead to gas exports to South Africa worth $150 million annually. The privatization deal followed intensive lobbying by U.S. embassy officials on behalf of Enron. In October 1994, Enron did in fact beat out Sasol (S. Africa) and PlusPetrol (Argentina) for control of the Pande gas field. Enron also hoped to invest in another field, Pemane, but, according to Africa Energy & Mining, ``the authorities . . don't want the country's entire gas production to fall into the hands of a single company.'' ``Elements of the embassy did a bit of lobbying for the company, which I find a bit strange, because this is a commercial agreement,'' Mozambique's Minister of Energy Resources, John Kachamila told the New York Times. He added that he was ``told that other aid to Mozambique might be in jeopardy if this agreement was not signed.'' ``It was a little more nuanced than that,'' an unnamed Clinton administration official reported to the newspaper. ``It is difficult to say we should give Mozambique $40 million a year, if it's going to take an opportunity for a $700 million project and not do it.''

Mr. KUCINICH

Mr. KUCINICH. Mr. Speaker, I declare my support for the State of Israel and the security of the Israeli people. I also declare my support for a Palestinian state and the security of a Palestinian people. So I will vote present today because I believe the security of Israel requires the security of the Palestinians. I will vote present because I believe the United States can do better through honest brokering and a principled commitment to peaceful coexistence. Today we are missing an opportunity to lead people of the Middle East toward a secure and stable future together. This resolution equates Israel's dilemma, which is the outcome of the Palestinian struggle for self-determination, with the United States campaign against the criminal organization, al Qaeda. Unfortunately, our own policy is undefined, amorphous, without borders, without limits and without congressional oversight. For this Congress to place the historic Israeli-Palestinian conflict into the context of the current fashion of U.S. global policy pitches, Israelis and Palestinians alike into a black hole of policy without purpose and conflict, without resolution. The same humanity which requires us to acknowledge with profound concern the pain and suffering of the people of Israel requires a similar expression for the pain and suffering of the Palestinians. When our brothers and sisters are fighting to the death, instead of declaring solidarity with one against the other, should we not declare solidarity with both for peace so that both may live in security and freedom? If we seek to require the Palestinians who do not have their own state to adhere to a higher standard of conduct, should we not also ask Israel with over a half century experience with Statehood to adhere to a basic standard of conduct, including meeting the requirements of international law? There is a role for the Congress and the administration in helping to bring a lasting peace in the Middle East. However, this resolution does not create that role. After today, we will still need to determine a course of action to bring about peace. This course will require multilateral diplomacy, which strengthens cooperation among all countries in the region. It will require focused, unwavering attention. It will require sufficient financial resources. And it will require that our Nation have the political will to bring about a true and a fair and sustainable resolution of the conflict. When this Congress enters into the conflict and takes sides between Israel and Palestine, we do not help to achieve peace, but the opposite. Similarly, the administration should consider that when it conducts a war against terrorism without limits, the principle of war is quickened everywhere in the world, including the Middle East. When it talks incessantly about invading Iraq, the tempo of war is picked up everywhere. If we truly want peace in the Middle East, this resolution is counterproductive. I will vote ``present'' because I do not believe this resolution dignifies the role towards creating peace which this Congress can and must fulfill.

Mr. KUCINICH

Mr. KUCINICH. Mr. Chairman, I yield myself such time as I may consume to thank the gentleman for his expression of support for transparency and integrity in international transactions. Mr. Chairman, I submit for the Record the article by Bob Novak I referred to earlier: [From the Chicago Sun-Times, Apr. 29, 2002] Enron's Corporate Welfare (By Robert Novak) A bipartisan Senate Finance Committee investigation has found that Enron Corp., no paragon of free-market deregulation, gorged itself on corporate welfare. The Clinton administration gave more than $650 million in Export-Import Bank loans to Enron-related companies. While the Senate now probes whether the bankrupt energy company falsified loan requests, the bigger question is why Enron was subsidized at all. Export-Import officials early this year, expressing confidence in the accuracy of information provided by Enron in its loan applications, were not interested in an investigation. However, Ex-Im Vice Chairman Eduardo Aguirre sang a different tune in his April 23 letter to Sen. Chuck Grassley of Iowa, the Finance Committee's senior Republican. ``Please let me assure you that Ex-Im Bank takes very seriously potential violations of law . . . and works very closely with the Department of Justice,'' Aguirre wrote. Finance staffers have found that Ex-Im, as well as the Overseas Private Investment Corp., in a Democratic administration routinely approved loan requests from a supposedly Republican company. Lavish bipartisan political contributions may have helped, as well as a top Enron executive sitting on Ex-Im's Advisory Committee. Actually, one official of the agency informed a Senate investigator that all Ex-Im really monitors is loan repayment. Ironically, it is unclear whether Enron loans will be defaulted at American taxpayer expense. While the rationale for the Export-Import Bank's existence is to give U.S. businesses a level playing field against government- subsidized foreign competition, the Enron loans merely buttressed questionable projects where the company often was both producer and exporter. The classic case is a September 1994 Ex-Im direct loan of $302 million ($175 million of which remains unpaid) to Dabhol Power Co. in India, then 80 percent owned by Enron. In this deal, Enron was the ``foreign'' company, and its allies, Bechtel Group and General Electric, were the exporters. With an Indian utility that could not pay its bills (and was pressured by the Bush administration to do so) as its only customer, Dabhol went bankrupt even before Enron. A less-publicized loan scrutinized by Senate investigators provided $135 million (only $4 million of which has repaid) to the Accroven partnership for a natural gas plant in Venezuela. Nearly half the company's stock was owned by Enron while Enron also was the exporter. Thus, the U.S. taxpayer was paying Enron money so that Enron could buy gas from Enron. Enron's loan application for the Accroven project included the company's 1998 annual report, which the company has admitted was falsified. ``I'm troubled by the Ex-Im's seeming lack of interest in this matter,'' Grassley wrote Aguirre on April 2. Ex-Im lent $250 million to Trakya Elektrik of Turkey, owned 50 percent by Enron, which was buying goods and services from Enron. Ex-Im insured a $3.6 million Citibank loan to Promigas in Colombia, owned 42.3 percent by Enron. Whether or not these loans were based on misleading information, it is difficult to see how any of these deals fulfills the Export- Import Bank's avowed purpose of promoting American competition against the world. While Democratic Sen. Ernest F. Hollings delivered his memorable judgment that Enron benefitted from the Bush presidency on a cash-and-carry basis, the symbiosis between big business and the purveyors of corporate welfare is bipartisan. Just as Enron gave to both parties, Bechtel has contributed $820,000 to Republicans and $730,000 to Democrats since the 1992 elections. Rebecca A. McDonald, CEO of Enron Global Assets, was on Ex-Im's Advisory Committee under President Clinton in 2000 and remained there under President Bush in 2001. How can it be that a major recipient of government largess is advising the agency handing it out? Except for a fitful effort to trim it down in the early months of the Reagan administration in 1981 and some by the current Bush administration, the Export-Import Bank has sailed through governments of both parties--hardly noticed and never critically examined. A broader scrutiny of the agency's global pursuits is still wanting.

Mr. KUCINICH. Mr. Chairman, I offer an amendment.

Mr. KUCINICH. Mr. Chairman, I yield back the balance of my time.

Mr. KUCINICH. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, my amendment will require the Ex-Im Bank to gather information relating to compliance by applicants with the Foreign Corrupt Practices Act, as amended. The Foreign Corrupt Practices Act of 1977 makes it unlawful for any domestic corporation to corruptly bribe a foreign official in order to obtain or retain business. It also requires those companies that are required to register with the Securities and Exchange Commission to keep detailed and accurate books, records, and accounts of corporate payments and transactions. Under my amendment, Ex-Im would request that applicants report whether or not they had been found guilty by a U.S. court to be in violation of the Foreign Corrupt Practices Act, and importantly, the Ex-Im Bank would also independently keep a list of companies that had violated the Act. Mr. Chairman, this amendment is based upon the following premise: That taxpayers should not subsidize the venture of companies that use corrupt methods to obtain business or deceive taxpayers with false financial reports. Recently, a large multinational energy corporation based in the United States was revealed to have intentionally misled the public about its finances and its profits, leading to drastic consequences for shareholders and its employees. In part, Enron accomplished this deception by concealing the complex corporate transactions that allowed it to inflate its profits. Now, what if a company like this one used similar practices in order to cover up its bribery of a foreign official? How would this affect its application for financing from the Ex-Im Bank? Under current practice, applicants for Ex-Im financing are required to certify they have not violated and will not violate the Foreign Corrupt Practices Act. That is good, and this amendment is not meant to stop the Ex-Im Bank from doing this. But the Ex-Im Bank is not required on its own to compile a list of FCPA violators. So a company that lied about its Foreign Corrupt Practices Act history on its application would not be in danger of discovery by the Ex-Im Bank. Is such a scenario out of the realm of possibility? Our experience with Enron should make it clear that it is not. A recent Enron loan application to the Ex-Im Bank for a natural gas plant in Venezuela included the company's 1998 annual report, which Enron admitted was falsified. Did Ex-Im discover this? No. Has the Ex-Im taken any action against Enron for submitting falsified materials? Not that I know of. In a recent column by Bob Novak this matter is detailed. In fact, Ex-Im loaned Enron nearly $200 million for this project, according to this report by the Institute for Policy Studies. Overall, Ex-Im has financed Enron projects to the tune of $826 million. Now, ideally, this amendment should be passed in conjunction with another amendment I submitted to the Committee on Rules. The second amendment would have barred Ex-Im from providing financing to any company that violated the Foreign Corrupt Practices Act. Unfortunately, the rule for this bill did not make the second amendment in order. Nevertheless, the current amendment makes an important contribution by codifying Ex-Im's current practice of requiring applicants to certify their compliance with the Foreign Corrupt Practices Act and, further, by requiring the Ex-Im Bank to independently compile a list of companies that are in violation of this act. I encourage my colleagues to support this amendment. Mr. Chairman, I reserve the balance of my time.

Mr. KUCINICH

Mr. KUCINICH. What should we seek to change in TANF when it is reauthorized: to make TANF reduce poverty and help recipients get good jobs with adequate wages, or to punish people and increase poverty? The Herger and McKeon bills only punish people when they enact counterproductive workfare programs. Does workfare provide training? No. Does workfare provide educational opportunities? No. Does workfare provide the minimum wage? No. Does workfare provide coverage for health and safety, civil rights, and other employment laws? No. Does workfare provide a chance at being hired? No. Workfare will not help recipients find or keep a good job. TANF should allow a recipient to get a GED, learn English, and get a post- secondary degree in order to obtain a good job. TANF should allow a recipient to get rehabilitation, to deal with a physical disability, deal with domestic violence, and access mental health counseling. TANF should provide adequate funding for child care, and allow mothers to care for their children if they are very young or disabled. They should end the punitive full family sanctions, which eliminate food stamps and other benefits from poor children when their parents are not in compliance. TANF should help people out of poverty, not punish families and children for being poor.

Mr. KUCINICH

Mr. KUCINICH. Mr. Speaker, I rise today to include in the Record an urgent call for the world to end the threat of destruction from nuclear and other weapons of mass destruction. Despite the Cold War's demise over a decade ago, the possibility that a nuclear device or other weapon of mass destruction will one day wreak devastation remains real. Rather than defuse this threat by working to reduce the world's stores of these weapons, the current Administration has instead begun to explore ways to enhance our nuclear capabilities. The time has come for this Administration, this Congress, and this country to commit to the abolition of nuclear, chemical, and biological weapons. We must heed this urgent call. An urgent call ending threats of mass destruction. Today, cities and nations are threatened as never before by weapons of mass destruction. The events of September 11 have brought home to Americans what it means to experience a catastrophic attack. Yet the horrifying losses that day were but a fraction of what any nation would suffer if a single nuclear weapon were used on a city, or a deadly, contagious disease were set loose in the land. The peril from weapons of mass destruction is growing. Even as the great powers have refused to give up their nuclear arms, more nations have built nuclear weapons and threatened to use them. Terrorist groups are now seeking to acquire and use every kind of weapon of mass destruction. The threats posed by huge stocks, proliferation, and terrorists can no longer be considered in isolation from one another. The nuclear powers' refusal to disarm fuels proliferation, and proliferation makes weapons of mass destruction ever more accessible to terrorists. Despite the end of the cold war, U.S. administrations of both parties have planned to keep nuclear weapons indefinitely. Recently, the Bush administration's Nuclear Posture Review proposed to reduce ``active'' warheads; but this plan would keep the whole U.S. nuclear arsenal, active plus reserve, at its present size of about 10,000 warheads through 2012. Meanwhile, President Bush has requested funds to expand nuclear-weapons construction facilities and develop new ``usable'' nuclear weapons for a growing list of targets in the third world. This drift toward catastrophe must be reversed. The time has come to say, Enough! Enough to the great powers who hold vast populations hostage to nuclear terror. Enough to nations that are spreading the threat of annihilation to new regions. Enough to the terrorists who plan the murder of hundreds of thousands of innocent people, Safety from all weapons of mass destruction must be our goal. We can reach it only through cooperation among nations embodied in binding treaties and agreements. We therefore call on the governments of the nuclear powers to commit themselves to abolish nuclear weapons and to set forth plans to move together, step by carefully inspected and verified step, toward this goal. As a first step, we call on the United States and Russia to reduce their nuclear arsenals over the next few years, tactical and strategic, active and reserve, to 1,000 weapons each. As a second step, we call on these countries and the other nuclear powers--England, France, China, Israel, India, and Pakistan--to proceed in the following few years to reduce their arsenals to no more than 100 nuclear weapons each. As a third step, these nations should separate all nuclear- warheads from their delivery vehicles, in preparation for their ultimate elimination. Simultaneously, the nuclear powers should strengthen the Nonproliferation Treaty by ratifying the Comprehensive Test Ban and adopting a ban on the Production of Fissile Material. The United States should complete talks to end North Korea's missile program, and the UN should institute an effective inspection regime in Iraq. The existing international bans on chemical and biological weapons should be made universal and fortified with stronger means of inspection and verification. Thus, measures to prevent proliferation and terrorist uses of weapons of mass destruction would go hand in hand with nuclear reductions. Steps to eliminate weapons of mass destruction should be accompanied by steps to reduce the temptation to acquire or use them. The United States and other countries should redouble their efforts to resolve regional conflicts and prevent conventional war, and to build respect for the rule of law, protect human rights, and promote democratic institutions. And the wealthy industrial nations should launch a new Marshall Plan to help the poorest nations end starvation, illiteracy, and preventable disease, wipe out the burden of debt, and move toward sustainable development and a lasting peace, based on respect for the dignity and worth of every individual.

Mr. KUCINICH

Mr. KUCINICH. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, I include for the Record an article in the New Yorker entitled ``The Accountants' War,'' and it has many interesting details about the collapse of accounting responsibilities in this country. It says that Enron was forced to reveal that its profits had been off by about 20 percent over 3 years and that as early as 1997 Arthur Andersen had known that Enron was inflating its income, but when Enron declined to correct the numbers, Andersen certified them anyway. [From the New Yorker, Apr. 22, 2002] The Accountants' War (By Jane Mayer) Nothing, it has been said, is duller than accounting--until someone is defrauded. And after every modern financial diseaster--the stock-market crash of 1929, the bankruptcy of the Penn Central Railroad in 1970, the savings-and-loan crisis of the eighties, and now the bankruptcy of the Enron Corporation--investors have tended to ask the same question: where were the auditors? Arthur Levitt, Jr., who was the chairman of the Securities and Exchange Commission under President Bill Clinton, believes that in the years leading up to Enron's collapse the auditors were busy organizing themselves into a lobbying force on Capitol Hill--one that has been singularly effective. Levitt, who issued a series of warnings about the accounting profession in those years, suggests that the aim of the so-called Big Five accounting firms-- PricewaterhouseCoopers, Deloitte & Touche, Ernst & Young, K.P.M.G., and Arthur Andersen, Enron's auditor--was to weaken federal oversight, block proposed reform and overpower the federal regulators who stood in their way. ``They waged a war against us, a total war,'' Levitt said. Some have portrayed Enron's crash and the woes of Arthur Andersen simply as huge business failures. ``There are always going to be bad apples,'' said Jay Velasquez, a former aide to Senator Phil Gramm, who is now a Washington lobbyist for the accounting profession, and who has fought increased regulation. Barry Melancon, who heads the American Institute of Certified Public Accountants, the profession's trade group, which has three hundred and fifty thousand members, fears that those who are trying to impose political solutions will overreact. ``We live in a free-market system,'' Melancon told me. ``Businesses fail. People are not infallible.'' But Levitt casts the Enron story in starker terms. It is, as he puts it, ``the story of the nineties''--a battle between public and private interests that is being fought at a time when there is more corporate money in politics than ever before. ``This is about corporate greed,'' Levitt told me. ``It is the result of two decades of erosion of business ethics. It was the ultimate nexus of business and politics. If there was ever an example where money and lobbying damaged the public interest, this was clearly it.'' Levitt, who is seventy-one and has silver hair, exhibits a starchy correctness. He still seems bitter about his war with the accounting trade, and called one adversary ``an oily weasel'' and another ``a sly mongoose'' as he spoke about the influence of money on politics. ``It used to be that if industries had a problem they would try to work it out with the regulatory authorities,'' he said, in his sleek office at the Carlyle Group, in midtown Manhattan, surrounded by mementos of years in public life. ``Now they bypass the regulators completely, and go right to Congress.'' Their campaign contributions lend them clout. ``It's almost impossible to compete with the effect that money has on these congressmen.'' Enron's campaign contributions and its political power have received much attention, but two of the top five accounting firms--Arthur Andersen and Deloitte--and the accountants' trade association actually spent more during the 2000 elections. ``The money was enormous,'' Levitt said. ``Look at the end result.'' Not many years ago, Levitt was considered a consummate Wall Street insider, even an operator. In 1993, when President Clinton picked him to run the Securities and Exchange Commission, he was a centrist, a well-connected fundraiser who had contributed to both parties. He had founded his own lobbying organization, the American Business Conference, to advocate the interests of small business on Capitol Hill. He was also someone with a knack for cultivating famous and powerful friends. In the nineteen-sixties, he joined a successful start-up New York firm as a stockbroker, and he eventually counted among his clients Leonard Bernstein, Aaron Copland, and Kenneth Clark. Three of Levitt's original partners were Sanford Weill, who became the chairman of Citigroup; Arthur Carter, now the publisher of the New York Observer; and Roger Berlind, who became a Broadway producer. (Levitt had his own ties to Broadway; his aunt was Ethel Merman). Levitt thrived, too, and by the late sixties he was running Shearson Hayden Stone, which later became Shearson Lehman Brothers. In 1977, after being asked to head a search committee for the next leader of the American Stock Exchange, he got the job himself. A few years later, he was thinking of investing in The National Journal, a policy-oriented magazine in Washington, when he learned of the publication's interest in acquiring Roll Call, a struggling newspaper on Capitol Hill. Levitt declined to invest in The National Journal but bought Roll Call himself, for about five hundred thousand dollars. Seven years later, he sold it for fifteen million dollars. At the same time, Levitt was drawn to public life. He had grown up in a political household, the only son of Arthur Levitt, Sr., a Democrat who for twenty-four years was the New York State comptroller. Both his father and his mother, a public-school teacher in Brooklyn, were dependent on public pensions for their retirement, and they cared deeply about the protection of small investors. When Levitt began his S.E.C. job, he acknowledged the populist tradition of the Roosevelt Administration, which created the S.E.C. in 1934, to insure the integrity of American financial markets. The agency's new Web site carried the motto of his most famous predecessor, William O. Douglas: ``We are the investors' advocates.'' The S.E.C.'s basic requirement was that all publicly traded companies register with the agency and submit to annual independent audits. Douglas liked to say that the S.E.C. was ``the shotgun behind the door.'' But Levitt soon discovered that the agency's arsenal was no match for the bull markets of the nineties. The new economy spawned new accounting schemes that raised concerns almost from the start. One early fight was over stock options. Many pointed out that the accounting convention that kept these expenses, unlike ordinary executive compensation, off the books was deceptive. It meant that investors could not see a company's real liabilities. Levitt recalls that when he took office the first thing that Senators David Boren and Carl Levin, who were both active in regulatory reform, told him was that he ``had to do something about stock options.'' Congress soon got involved in the stock-option fight, and the politicization of accounting became more apparent than ever. Supporters of Wall Street and Silicon Valley, including many ordinarily pro-regulatory Democrats, fought against changing the stock-option rules; one, for example, was Senator Joseph Lieberman, of Connecticut, a state with a large concentration of Fortune 500 companies, many of which are campaign contributors. More surprising, the accounting profession, rather than remaining neutral, joined forces with its clients to fight the change. Together, they exerted pressure on the organization that sets the rules for the accounting business, the Financial Accounting Standards Board, or F.A.S.B. ``This was a defining moment for me,'' Levitt said. A lawyer who was with the S.E.C. at the time says, ``The accountants were going beyond good accounting. They were advocating a business position. They wanted to keep their customers happy. It was quite unseemly.'' At first, Levitt played a hesitant role. In what he now regards as his ``biggest mistake'' at the commission, he, too, urged the F.A.S.B. to back off. His rationale, he said, was a fear that, if the board tried to resist the anti- regulatory feeling then sweeping Congress, it would be crushed altogether. (Sarah Teslik, the executive director of the Council of Institutional Investors, an advocate for shareholders, is among those who argue that Levitt ``wasn't the hero he makes himself out of be.'') Levitt told me that the episode showed him that the accounting trade was undergoing a cultural transformation. Instead of overseeing corporate America, it was joining forces with it. ``The kind of greed that produced Enron and Arthur Anderson was symbolized by the way the companies dealt with stock options,'' he said. ``I realized something was wrong.'' Until the Second World War, the American accounting industry has stayed close to its eighteenth-century roots in bookkeeping. But with the rise of information technology the accounting firms branched into consulting. During the nineteen-nineties, the Big Five doubled their collective revenues, to $26.1 billion. Their consulting practices, in particular, were hugely profitable, and brought in three times as much revenue as auditing did, according to a study soon to be published in The Accounting Review. Auditors started coming under pressure to attract non-audit business. At some firms, like Andersen, auditors compensation depended upon their ability to sell other services to clients; equity partners began to be paid like investment bankers. Inevitably, there were conflicts between the independent role required of an auditor and the applicant role of a salesman trying to expand services. At Enron, for example, Andersen did consulting on taxes and on internal auditing. Both projects threatened to put the outside auditors in the awkward position of assessing their own company's work. The relationship was further compromised by the fact that Enron's management included many former Andersen employees, among them the company's president, vice- president, and chief accounting officer. Auditors were thus in the position of judging former colleagues--and prospective bosses. More than a year ago, well before Enron's problems became public, an internal e-mail revealed that fourteen top Andersen partners had pointed out several of the financial schemes that eventually contributed to Enron's fall. In a discussion about retaining Enron as a client the partners considered whether Enron's ``aggressive . . . transaction structuring'' was too risky. It appears from the e-mail, however, that the partners' concerns were outweighed by possible future rewards. The e-mail noted that their fees ``could reach $100 million per year.'' ``If you get too friendly and too relaxed, you can wind up nodding your head yes when you should be saying no,'' said Charles Bowsher, a former head of the General Accounting Office, who worked at Andersen for many years and has been retained to help reform the firm. ``There's a lot of art in addition to science in accounting.'' Bowsher says that ``most fraud flourishes in gray areas.'' But James Cox, a professor of corporate and securities law at Duke University, suggests that Enron's accounting gimmickry was black-and-white. ``It was not even close,'' he said. ``It was dead wrong.'' Levitt said that, as the country's senior guardian of fair markets, he watched the transformation of the accounting profession with alarm. ``The brakes on the worst instincts of the business community weren't working,'' he says. ``The gatekeepers were letting down the gates.'' The number of audit failures afflicting corporate America was increasing; Lynn Turner, who served under Levitt as the chief accountant at the S.E.C., estimates that investors lost a hundred billion dollars owing to faulty, misleading, or fraudulent audits in the six years preceding Enron's crash. Many of the best-known corporations in the country were affected, among them Cendant, W. R. Grace, Sunbeam, Xerox, Lucent, and Oxford Health Plans. In fact, the number of publicly traded companies forced to re-state their earnings went from three in 1981 to a hundred and fifty-eight last year, according to a doctoral thesis at New York University's Stern School of Business. (Barry Melancon, of the American Institute of Certified Public Accountants, calls concern over these numbers misleading, noting that they represent ``fewer than one per cent of the audits performed.'') Shareholder lawsuits against the accounting firms proliferated. In response, the Big Five and their trade association united as a political force. According to the nonpartisan Center for Responsive Politics, between 1989 and 2001 accounting firms spent nearly thirty-nine million dollars on political contributions. The contributions were bipartisan, reaching more than half the current members of the House and ninety-four of a hundred senators. By 1995, this investment had started to pay off. Congress passed the Private Securities Litigation Reform Act, making it harder for shareholders to sue businesses and their auditors when the businesses failed. The legislation was championed by the Speaker of the House, Newt Gingrich, as part of his Contract with America. ``What we were after was trying to get rid of the frivolous, merit-less cases,'' Mark Gitenstein, a lawyer and lobbyist who helped shape the legislation, said. ``We convinced Congress that you needed a system that did a better job of screening the marginal cases from the serious ones.'' The resulting legislation, Professor Cox said, reversed ``eighty years of federal procedure.'' At first, Levitt tried to fight the private-securities bill, but when it became clear that the federal regulators couldn't compete with the accountants' clout in Congress, he looked for a compromise. ``It was a case where the industry had more power that the regulators,'' he said. Then, as now, there were approximately seventy-five lobbyists for every member of the House and Senate; in the Gingrich era, they were more integrated into the lawmaking process than ever before. Jeffrey Peck, a former Democratic Senate aide who was then the head of Arthur Andersen's Washington lobbying office and is now an outside lobbyist for the firm, says that after this fight there was ``really bad feeling'' between Levitt and the profession. ``It was as if two people had gone out on a first date and had a bad time,'' he says. ``But the rules required them to keep dating.'' Levitt told me that he has always been proud of his ability to create consensus, and in the spring of 1996 he tried to involve the profession in reforming itself. He urged the big accounting firms to strengthen their oversight system and toughen discipline for transgressors. He proposed giving investors and other members of the public a bigger role. But, he said, the accountants resisted, and progress was made only after ``huge fights.'' Rules governing auditors' independence hadn't been updated in two decades. To examine the growing number of questions about conflicts of interest, Levitt created a new board, whose membership was divided between independent business leaders and people from the accounting industry. ``They were constantly deadlocked by differences of opinion,'' Levitt said, and added, ``When I asked for support, I never got it. I never heard in any speech they''--the accountants--``gave the words `public interest.' They were so stilted, and terse, and non-productive--I realized it was an industry that completely lacked leadership.''. The accounting industry hired Harvey Pitt, who was known as one of the smartest and most aggressive private-securities lawyers in the country. Pitt responded to Levitt's call for greater public oversight by arguing, in a lengthy white paper, that the accounting firms were better off policing themselves. ``The staff regarded his white paper as a kick in the stomach, because it was so one-sided and confrontational,'' Levitt said. One S.E.C. official recalls that Pitt made the negotiations over the new board ``the most horrible ever,'' and Lynn Turner says, ``It was doomed from day one.'' Pitt, who was appointed by President George W. Bush to succeed Levitt as chairman of the S.E.C., said, ``There was a lot of misperception about what the white paper said. For some reason, early on people seemed to get in their mind that I opposed what Levitt did,'' to reform accounting. ``I tried to give him may own help on a personal basis.'' In the summer of 1998, Levitt received a report about a problem in Pricewaterhouse's Tampa office. According to the report, nine executives there had made eighty investments in companies that they were supposed to be auditing--a violation of the most basic independence standards. Under the S.E.C.'s direction, the firm initiated a company-wide investigation. To the shame of the entire profession, it turned up more than eight thousand such violations. The S.E.C. fined Pricewaterhouse two and a half million dollars, and called for an investigation into compliance with independence rules at the rest of the Big Five firms; Levitt asked an independent group, the Public Oversight Board, which had been created after the Penn Central collapse, to undertake this task. Levitt also took his battle public, in the fall of 1998, he gave a speech that attacked the ``number game.'' He said, ``Accounting is being perverted. Auditors who want to retain their clients are under pressure not to stand in the way.'' He explained, ``Auditors and analysts are participants in a game of nods and winks. . . . I fear we are witnessing an erosion in the quality of earnings, and therefore the quality of financial reporting.'' In conclusion, he said, ``Today American markets enjoy the confidence of the world. How many half-truths and accounting sleights of hand will it take to tarnish that faith?'' The Public Oversight Board, made up of major business figures, was supposed to act as the profession's conscience. But in May, 2000, before its investigation could be completed, the P.O.B.'s head, Charles Bowsher, received a letter from officials at the American Institute of Certified Public Accountants, which finances the board, announcing that it would ``not approve nor authorize'' funding for further investigations. Bowsher, who had himself been a high-ranking officer with Arthur Andersen before becoming the head of the General Accounting Office, says that he was shocked; the industry was effectively stopping the investigation. Melvin Laird, a former Secretary of Defense, who was the longest- serving member of the P.O.B., called it ``the worst incident in my seventeen years.'' Barry Melancon, the head of the trade association, defended the association's position. ``We were never opposed to the concept,'' he told me, referring to the investigation. ``We just felt the P.O.B. was undertaking a project that it couldn't define.'' At the same time, the S.E.C. was uncovering a huge case of accounting fraud involving the garbage-disposal company Waste Management: Arthur Andersen had put an unqualified seal of approval on numbers that the government said it either knew or should have known were misleading. As if in anticipation of the revolving-door conflicts at Enron, practically ever C.F.O. and C.A.O. in Waste Management's history had come from Andersen, S.E.C. enforcement documents from the investigation reveal something else: at least two of the partners who were singled out for scrutiny by the S.E.C. re- mained in influential positions at Andersen while being investigated, and both have now surfaced in connection with the Enron affair. (One executive, Robert Kutsenda, who was later barred by the S.E.C. from auditing public companies for a year, was placed in charge of redesigning the firm's policy on which documents to retain and which to shred, an issue in the Enron case. Kutsenda and Steve Samek, who was also investigated in the Waste Management case but not publicly sanctioned, were among those involved in the discussion of whether to retain Enron as a client. None of the executives involved in the Waste Management matter were fired by Andersen, which last year agreed to pay a seven- million-dollar penalty to the S.E.C., without admitting or denying guilt, after it was charged with fraud. In addition, two of the Andersen partners targeted by the S.E.C. in the fraud case now serve on the profession's standard-setting board, the F.A.S.B.) By 2000, Levitt, faced with what he calls the Big Five's ``fortress mentality,'' had initiated a series of meetings with the firms at which he insisted that they needed to do more to police themselves. Levitt's message, Turner told me, was that the firms could either cooperate with an investigation into their compliance with independence rules or ``we'll issue the subpoenas tomorrow--take your pick.'' In the spring of 2000, the S.E.C. announced that it planned to draft new rules that would greatly restrict accountants' ability to consult for the same companies they audited. Arthur Andersen reportedly argued that this would cut its market potential by forty per cent, and vowed to fight back. A June meeting in Deloitte's New York headquarters with the heads of the three firms who most vehemently opposed the new rules ``was so icy you could have stored cold meat in that room,'' Turner says. The heads of Andersen, Deloitte, and K.P.M.G. joined Melancon on one side of a conference table. (Price-waterhouse and Ernst & Young were more supportive of Levitt, and didn't attend.) Levitt and two S.E.C. officials were on the other. When Levitt made it clear that he intended to move forward, Andersen's chief executive, Robert Grafton, declared, ``This is war.'' ``It was unbelievable, just unbelievable,'' Turner recalled. ``They all went after Arthur. They made clear that everything was fair game.'' Turner says that the attitude of the firms was ``You know we're going to win anyway in the end, so why not save us the expense, and give up now?'' ``As soon as I left that meeting,'' Levitt told me, ``it was clear the fight was going to Capitol Hill.'' Such clashes over commercial interests are commonplace in Congress, but ``this wasn't about legislation,'' he said. ``It was about S.E.C. rule-making--we're supposed to be an independent agency. I'd never seen anything like it at the S.E.C.'' During this period, Levitt said, he got a letter from Representative W.J. (Billy) Tauzin, of Louisiana, the chairman of the House Energy and Commerce Committee, who has received more than two hundred and eighty thousand dollars from the accounting industry over the past decade. The letter consisted of four pages of pointed questions. In a not very veiled threat, Tauzin asked how many violations Levitt and the other members of the S.E.C. would have if their stock holdings were subjected to the independence rules being proposed for the accountants. He also demanded that Levitt produce proof that non-audit consulting undermines auditors' accuracy. ``It was a shot across the bow from the industry,'' Levitt says. ``They were saying, `If you go forward, expect a lot of pain.' '' In the following weeks, he said, Tauzin ``badgered me relentlessly. He knew what the accountants were doing before I did. He was working very closely with them. I don't mean to sound cynical, but is it because he loves accountants?'' At one point, relations between the two men grew so bad that Levitt hung up on Tauzin, because he felt that ``his words and his tone were threatening.'' Tauzin was not alone. In the four weeks after Levitt announced his intention to go through with the proposed new rules, forty-six more congressmen wrote to him questioning them. Data from the Center for Responsive Politics show that in 2000 the accountants contributed more than ten million dollars to political campaigns and spent $12.6 million on federal lobbying. Arthur Andersen alone nearly doubled its lobbying budget in the second half of the year, to $1.6 million. Among the lobbyists hired by the industry were Vic Fazio, a former congressman; Jack Quinn, a former Clinton White House counsel; Ed Gillespie, a former Bush campaign adviser; Patrick Griffin, Clinton's former congressional liaison; Dan Brouillette, a former aide to Tauzin who is now an Assistant Energy Secretary; and a number of other former Hill staff people. Now, however, Tauzin has joined in the public outrage toward Enron and Andersen; in a House hearing that he chaired, he called the case ``an old-fashioned example of theft by insiders, and a failure of those responsible for them to prevent that theft.'' He told me that money hadn't influenced his earlier defense of the accountants. ``Donations have never bought anybody any slack with this committee,'' he said. ``I'm not saying that contributions don't have the power to corrupt. They do. But I always assume people contribute to me because they like the work I do.'' By early fall of 2000, Levitt says, he began to hear another kind of threat; lobbyists told him that if he didn't back off there would be a push to cut the S.E.C.'s funding. ``They were going to place a rider on our appropriations budget,'' Levitt said, still sounding as if he could not believe it. Jay Velasquez, a lobbyist for the accountants at the time, confirmed this. ``You have to consider all your options,'' he said. ``There is no doubt that the rider was a consideration. In these battles, everything is on the table.'' Henry Bonilla, a Texas Republican with an anti- regulatory temperament who is a member of the House Appropriations Committee, was prepared to attach the rider. Bowsher, the former G.A.O. head, says that such threats were once unthinkable. ``In the old days, the S.E.C. was off limits to that kind of pressure. It was a place the private sector respected. Nobody, nobody, would have thought about asking Congress to cut the budget.'' Representative Tom Udall, a Democrat from New Mexico, says that his staff urged him to sign a widely circulated letter to Levitt opposing the proposed rules, because so many of his colleagues had. ``There's sort of a herd mentality,'' he said. He refused; he knew Levitt slightly, through mutual friends in Santa Fe. ``Levitt was out to solve these things before people realized there was a problem. That's the sign of a leader. But the special interests have such a hold on members of Congress that they were able to stop a lot of things.'' Levitt initiated a nationwide series of public hearings about accounting abuses, fighting back as if he were involved in a political campaign. Damon Silvers, an A.F.L.-C.I.O. official who supported the S.E.C.'s position, recalls that ``Levitt looked like a figure from some old movie--he was sitting at a huge desk at the S.E.C. with a bank of phones, talking on several lines at once.'' But by then Levitt's eight-year term at the S.E.C. was about to expire, and the accounting-industry supporters developed a new strategy: they started to oppose the rule's substance on procedural grounds, arguing that there hadn't been enough time for public hearings. ``Of course, we knew that by calling for more time it would mean the end of Levitt,'' one lobbyist said. With the accounting firms threatening to take the S.E.C. to court if he went ahead with the rules, Levitt tried to strike a deal with the three firms who opposed him, at which point the two firms who had previously supported him turned against him. That night, one aide recalled, Levitt gave up. ``I lost it,'' Levitt said. In the end, he kept negotiating, and the S.E.C. agreed to let the firms continue to consult for the companies they audited. But the firms agreed to disclose the details to investors. ``I knew it wasn't enough, but I thought we'd be overruled by Congress in one fashion or another,'' Levitt said. ``The part of me that was insecure wanted a bird in the hand.'' Almost exactly a year later, Enron's outside auditor, Arthur Andersen L.L.P., a company whose image had virtually defined Midwestern probity, made an astonishing admission. During the previous three years, when it had vouched for Enron's financial statements, the company's net income had actually been inflated by almost six hundred million dollars. In a financial market where stocks plummet if corporate earnings fall a penny short of projections, Enron was forced to reveal that its profits had been off by about twenty per cent over three years. As early as 1997, Andersen had known that Enron was inflating its income. But when Enron declined to correct the numbers Andersen certified them anyway. Within six months, Enron had filed for bankruptcy and Andersen had been indicted on charges of obstruction of justice for destroying documents related to its Enron work. Investors lost an estimated ninety-three billion dollars, a sum nearly equal to the amount of the economic- stimulus package that President Bush requested for the entire country. In the year before Enron's crash, Andersen had collected a million dollars a week from Enron for its expertise. More than half of that, Andersen acknowledged, in compliance with the new S.E.C. rule, was for non- auditing work. ``If these reforms had been in place earlier, we wouldn't have had an Enron,'' Lynn Turner told me. He laughed, but the laugh sounded a little forced as he spoke about Congress's newfound interest in reform. ``Maybe the congressman were listening more than I thought--we just weren't giving them enough money,'' he said. Not long ago, Levitt was called to testify before Congress about what went wrong at Arthur Andersen. ``It was a play within a play,'' he told me. He said that he has little hope for meaningful change in the profession, despite all the bills under consideration, and despite commitments from Harvey Pitt, his successor at the S.E.C. Before Enron collapsed, Pitt promised the accountants ``kinder and gentler'' treatment than Levitt had shown them, but he has since sharpened his rhetoric and proposed a great many reforms. Pitt told me that his work for the accountants has made him better able to persuade them to change their ways because, ``to put it bluntly, I know where the bodies are buried.'' But Pitt dismissed Levitt's approach--separating auditing from consulting--as ``a simplistic solution to a complex problem,'' and told me that he thought it could prove counterproductive. ``A firm that does only audits may be incompetent,'' he said. ``That's the same argument that the accountants put forward,'' Levitt said with a sigh. ``I didn't accept it then, and I accept it even less today. I have to conclude it's specious. It's very sad. The Administration is missing a glorious opportunity to reform this industry.'' The failure of Arthur Andersen to provide an accurate audit of Enron for several years is not a new or isolated problem. All of the Big Five accounting firms have been implicated in failed audits that cost investors billions of dollars when earnings restatements sent stock tumbling. I have here a chart that shows how failed audits have cost investors billions, how a company named MicroStrategy with PricewaterhouseCoopers, the auditor, lost $10 billion, $10.4 billion in lost market capitalization; and the list is a pretty extensive list. For-profit private auditors have an inherent conflict of interest. They are hired and fired by their audit clients. If their draft audit does not please the firm they are auditing, they may lose future business unless they change their ways to please the firm. As a result, auditors have a strong incentive to sign-off on substandard financial statements rather than risk losing a client. The integrity and the independence of the audit is undermined by the profit-seeking motive of the private auditing firm. This amendment which I have brought before the House would ensure the independence of the audit, and I am offering a substitute amendment. Actually, this bill creates a Federal bureau of audits to regulate corporate America's books by auditing all publicly traded companies. Americans rely on the FBI to protect them from criminals and terrorists, but who protects the American shareholders from corporate criminals? The Enron scandal suggests that we need audit cops, the Federal bureau of audits. This is a conservative pro-free market amendment to the Corporate and Auditing Accountability, Responsibility, and Transparency Act because it guarantees shareholders accurate and partial information about their investments that requires an absolute separation between the auditors and companies they audit. Mr. Chairman, I reserve the balance of my time.

Mr. KUCINICH. Mr. Chairman, I yield myself such time as I may consume. It is good to see my friend from Ohio's feelings about this, particularly in light of the fact that America's investors have lost over $100 billion in a system where people are allowed to profit where they cook the books. Mr. Chairman, I yield 2 minutes to the gentlewoman from Texas (Ms. Jackson-Lee), who knows firsthand from the constituents she represents in Texas what happens under this current system. (Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks.)

Mr. KUCINICH. Mr. Chairman, I yield myself 1 minute. Americans are urged to own a piece of the rock; invest in corporate America. We have gone from a psychology of owning a piece of the rock to owning a piece of the Brooklyn Bridge. Because what is happening is that investors are not being given accurate information by accountants who have an inherent conflict of interest. It is said the pen is mightier than the sword. Well, this pencil is mightier than the free market, apparently, because a pencil can change the nature of the free market by misstating earnings and then restating earnings and having the value of the stock drop. And then what happens to investors? Nothing. They lose it all. We need to take a stand here. A free market requires accurate information to operate efficiently. My amendment is the only amendment that guarantees accurate information for investors, and my amendment is profoundly conservative. It is totally dedicated to protecting and conserving the property of investors. Who is taking a stand here for the investors, to make sure that investors get information that is accurate and upon which they can make decisions on how they are going to spend their money? Mr. Chairman, I reserve the balance of my time.

Mr. KUCINICH. Mr. Chairman, I yield myself such time as I may consume. I want to point out that Arthur Andersen not only participated in a fraud, it manipulated this Congress to ensure that the firm could participate in other frauds with deceptive company executives. Mr. Chairman, I yield 2 minutes to the gentleman from California (Mr. Filner).

Mr. KUCINICH. How much time remains, Mr. Chairman?