Edward Kaufman

Mr. KAUFMAN

Mr. KAUFMAN. I ask unanimous consent that the vote on the motion to invoke cloture on the motion to proceed to H.R. 4851 occur at 5:30 p.m., Monday, April 12, and that the time from 5 until 5:30 p.m. be equally divided and controlled between the leaders or their designees, with the majority leader controlling the final 15 minutes prior to the vote, and that the Senate resume the motion to proceed at 3 p.m. Monday, April 12; further, that the mandatory quorum be waived.

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

Mr. KAUFMAN. I ask unanimous consent that the order for the quorum call be rescinded.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of S. 3191, introduced earlier today.

Mr. KAUFMAN. I ask unanimous consent that the bill be read for a third time.

Mr. KAUFMAN. I understand there is a statement regarding the pay-go effects of the legislation, which I ask unanimous consent to have printed in the Record.

Mr. KAUFMAN. I now ask that the bill be passed and the motion to reconsider be laid upon the table and any statements relating to the bill be printed in the Record.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I ask unanimous consent that notwithstanding the upcoming recess or adjournment of the Senate, the President of the Senate, the President of the Senate pro tempore, and the majority and minority leaders be authorized to make appointments to commissions, committees, boards, conferences or interparliamentary conferences authorized by law, by concurrent resolution of the two Houses or by order of the Senate.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, under a previous order, the cloture vote on the motion to proceed to H.R. 4851 will occur at 5:30 p.m. on Monday, April 12.

Mr. KAUFMAN

Mr. KAUFMAN. If there is no further business to come before the Senate, I ask unanimous consent that it adjourn under the previous order.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I ask unanimous consent that when the Senate completes its business today, it adjourn under the provisions of H. Con. Res. 257 until 2 p.m. on Monday, April 12; that following the prayer and pledge, the Journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved for their use later in the day, and the Senate proceed to a period of morning business until 3 p.m., with the time equally divided and controlled between the two leaders or their designees; that following morning business, the Senate resume consideration of the motion to proceed to H.R. 4851, the Continuing Extension Act of 2010, as provided for under the previous order.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I was unfortunately off the Senate floor when the Senate conducted rollcall votes Nos. 68 and 101 and, therefore, missed those recorded votes. I wish to state for the record that had I been prsent for rollcall vote No. 68, I would have voted ``yea'' on the motion to table Senate amendment No. 3582, and if I had been present for rollcall vote No. 101, I would have voted ``yea'' on the motion to table Senate amendment No. 3710. Lawfully Present Immigrants

Mr. KAUFMAN

Mr. KAUFMAN. Madam President, yesterday I was joined by Senators Brownback, Lieberman and Casey, in introducing the newly formed Senate Caucus for Global Internet Freedom. I ask unanimous consent that the text of my comments be printed in the Record.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, after decades of efforts and a year of extensive debate, Americans will finally have a health care system that controls costs, reduces the deficit, improves access, adds more protections for seniors and curbs insurance company abuses. The President has signed meaningful health care reform into law that will extend immediate benefits to millions of American families and small businesses. In implementing this comprehensive legislation, the Department of Health and Human Services will be called upon, as will other Federal agencies, and the States, to make assessments in a variety of contexts as to whether the marketplace is functioning properly, or whether abuses are occurring. In making these assessments, and in deciding on appropriate steps to address any abuses or dysfunction, the Federal agencies and the States can benefit greatly from competitive analysis provided by the Department of Justice's Antitrust Division and the Federal Trade Commission. One example where this advice would be particularly beneficial is in implementing the mandate to establish State and/or regional health exchanges. At present, many State health insurance markets are characterized by their extreme concentration. According to the American Medical Association, in 2007, at least one insurer had a combined HMO/ PPO market share of 50 percent or greater in 64 percent (200) of the local markets (or Metropolitan Statistical Areas) of the United States. And the two top insurers accounted for at least 60 percent of enrollment in almost 75 percent of these markets. High concentration and barriers to entry reduce price competition and customer choice. The law just passed contains an antitrust savings clause, which clarifies that Congress did not intend health care reform to erode the reach of the antitrust laws in any way. To restore true competition however, more than a savings clause is needed. I am pleased that the law vests in State exchange regulators the power to address competition failures in the market, including the root causes of industry concentration. This means curbing anticompetitive practices designed to keep prices high and choices low, and also encouraging new market participants by mitigating barriers to entry. Obvious market abuses, such as tying agreements, predatory practices and the like, must be stopped. But success also requires that the regulators get the more delicate issues right: does a preferred rate agreement constitute a de facto boycott? Will a regulation or exchange adversely impact the ability of a new participant to gain public trust? How does a proposed rule impact the ability of young insurance companies to develop a comprehensive network of health care providers? These are difficult questions and we should not expect State regulators to develop an expertise in them overnight. But our Federal antitrust agencies, have, through years of experience, developed just this expertise. I urge the exchange regulators, as well as the Department of Health and Human Services and other responsible agencies, to make full use of their assistance.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. KAUFMAN. Mr. President, I ask unanimous consent to speak as in morning business for up to 5 minutes.

Mr. KAUFMAN. Mr. President, I rise to share the stories, once again, of some of our Nation's great Federal employees. All throughout March, libraries across America have been celebrating National Reading Month. Children from coast to coast have been learning about the importance of books, and schools have been promoting literacy as a tool for academic advancement. This month-long celebration of reading--from Dr. Seuss's classic ``The Cat in the Hat'' to Joyce's ``Ulysses''--reminds us not only of the joy found in the written word but also of the critical role libraries play in all our communities. Libraries have long been a staple of American life, dating back even to our early colonial days. In the decades before the Revolution, America's first libraries enabled the dissemination of the very ideas that inspired our founding patriots. In the eighteenth century, the athenaeums of New England and the shareholder libraries of Benjamin Franklin served as precursors to our robust, modern network of free public libraries. In 1800, our predecessors in the Sixth Congress established a research library to help those in government carry out their work with access to scholarly volumes on every subject. Today, the Library of Congress is the largest library in the world, and its ornate reading room remains an awe-inspiring cathedral of learning. I have chosen today to honor three public servants who work at the Library of Congress. Mary Klutts began her Federal career as a U.S. Marine. In 1990, she came to the Library of Congress as a budget analyst, and in her 20 years there she has become an expert in every aspect of the Library's operating budget. Since 2007, when Mary was named budget officer, she has set out to transform the way the Library's budget proposals and funding justifications are formulated. Her work has helped make the Library's budget and operations more transparent, and its funding proposals are more concise. Now Library of Congress budget proposals are often cited as the model for the legislative branch. As a result of Mary's efforts, the Library received strong support from Congress in appropriations for the last two fiscal years. During this time of economic challenges, Mary has helped demonstrate where every dollar of taxpayer money for the Library goes and why. Another outstanding Library of Congress employee is Donna Scheeder, who has worked there for over 40 years. Having worked in a number of roles throughout her career at the Library, Donna was an early champion of integrating computers into libraries, and she introduced the idea of electronic briefing books for Congress. She is recognized as a leader in the information management field, and she has guest-lectured around the world on the topic of legislative library management. Donna is also a former president of the Special Libraries Association. Until recently, Donna was serving as the Acting Law Librarian of Congress, and she was awarded the Federal Librarians Achievement Award in 2009. An active member of the Washington, DC, community, she serves as Chair of the Eastern Market Community Advisory Committee and on the Board of the Old Naval Hospital Foundation. When not spearheading innovative initiatives at the Library, Donna spends time relaxing at her home on the Delaware shore. One of the branches of the Library of Congress most familiar to those of us who serve in this chamber is the Congressional Research Service, or CRS. This nonpartisan office houses scholars who prepare reports on every policy issue and the effects of proposed and enacted legislation. They are our ``go-to guys'' for information on every topic, and they are truly great at their jobs. The third person I am honoring today has been an analyst with the CRS since 1984. When Ronald O'Rourke joined the CRS as a naval analyst, he arrived with an impressive background as a Phi Beta Kappa graduate of the Johns Hopkins University. He was also valedictorian of his class at the Nitze School of Advanced International Studies, where he obtained his master's degree. At CRS, Ronald quickly distinguished himself as a leading expert on naval strategic and budgetary issues, and he frequently briefs members of Congress and their staffs on defense programs and appropriations. He has even been called to testify as an expert at congressional hearings. Though he already had a busy schedule as a specialist in naval affairs, he stepped in when the CRS's expert in military aviation passed away suddenly last year. Ronald took responsibility for that portfolio in addition to his own, and his reports on high-profile aviation programs proved invaluable during the congressional debates on defense spending in the 2010 budget. Mary Klutts, Donna Scheeder, and Ronald O'Rourke continue their work in public service at the Library of Congress to this day. They are just three of the many talented and dedicated men and women whose work benefits not only those of us in Congress but also the tens of millions who access resources from community libraries throughout our Nation. I hope my colleagues will join me in recognizing the important contribution made by the employees of the Library of Congress. They are all truly Great Federal Employees. I yield the floor and suggest the absence of a quorum.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I ask unanimous consent to speak as in morning business.

Mr. KAUFMAN. Mr. President, I am truly pleased to join with my friends, Senator Casey and Senator Franken, today to underscore the importance of reducing our nuclear arms. I have spoken in the past about the importance of signing a successor treaty to the Strategic Arms Reduction Treaty, or START, in order to maintain verification and other confidence-building measures. I have also spoken in support of the President's fiscal year 2011 spending priorities, which include a program to modernize and secure our nuclear arsenal. Today, I wish to go back to the basics when talking about arms reduction because it is easy to get lost in the details and misconceptions and forget the big picture. First, we must remember what is at stake when it comes to our nuclear arms reduction policy. We cannot afford to lose sight of why it is so important to get a successor to START, why it must be the right successor, and why the Senate should take action on the treaty in the very near future. This treaty was signed by the Soviet Union at a time when we still had fallout shelters to prepare for nuclear war. Almost two decades later, a nuclear attack is more likely to originate from rogue regimes or nonstate actors, but it is still critical that we not take our eye off the ball when it comes to existing nuclear stockpiles. American and Russian nuclear weapons alone account for almost 96 percent of the world's nuclear arsenal, and stockpile reduction remains a significant challenge in easing residual tensions of the Cold War. The accumulation of nuclear serves as a reminder of the animosity that existed between our countries, much of which has now been relegated, thankfully, to the pages of history. Our nuclear stockpiles reflect the realities of the past, not the economic and security considerations of the present and the future. START is also symbolically significant because it serves as a cornerstone of the world's nonproliferation efforts and sets tough international standards. With no arms reduction treaty between the United States and Russia, we hand cynics an opportunity around the globe a pretext for derailing nonproliferation efforts. Now that START has expired, we need a follow-on treaty because security efforts have changed since the Cold War. This is why we must ensure that we end up with the right treaty, not just one that renews now-outdated provisions of START. It is important that a new treaty both adapts to the needs of the world today and presents a clear vision for a more secure future. It is expected that Americans and Russians have different ideas of this vision and how we can get there. Both countries have domestic and political considerations which must also complicate matters. Throughout this process, I have been thoroughly impressed with Ambassador Rose Gottemoeller and her negotiating team, who have consistently maintained their focus and core principles. The Obama administration wants the right treaty, not just any treaty, and future generations will likely benefit from its steadfast dedication and resolve. Finally, we must consider the parameters of the treaty we hope to achieve. By definition, a lasting treaty cannot be drawn unilaterally, so it must be something mutually acceptable to both the United States and Russia. At the same time, there are some important red lines which must be reflected in the final treaty from the perspective of the United States: First, it must have an intrusive verification system in order to maintain confidence and avoid catastrophic misunderstandings between the two sides. Second, it must reduce ready-to-go strategic arsenals in a meaningful way, which means addressing upload capability. Third, it must allow modernization of our existing nuclear capabilities to enhance national and international security. Fourth, it must remain a strategic offensive treaty with an intentionally narrow scope. We should not include any other weapons systems, including antiballistic missile systems, under its regulatory umbrella. The Senate should take action on a START follow-on treaty as soon as possible in order to keep Americans safe and protect global security. For anyone who has doubts, rest assured that the President and his negotiating team are working hard to finalize a treaty that first and foremost must advance U.S. security interests. I look forward to working with my colleagues on this issue because the responsible reduction of the nuclear stockpile is one of the most important measures we can take to improve global security for future generations. I yield the floor and suggest the absence of a quorum.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I ask unanimous consent to speak as in morning business for up to 5 minutes.

Mr. KAUFMAN. Mr. President, I rise once more to highlight some of our Nation's outstanding Federal employees. I have spoken before about those who, in serving our Nation, place their lives in danger in order to protect others. On March 4, a lone gunman opened fired near the main entrance to the Pentagon, wounding two security officers before being quickly subdued. These two officers and a third who assisted them provide an example of the bravery and excellence of Federal employees, and especially Federal employees in law enforcement who take risks every day. These three men all worked for the Pentagon Force Protection Agency, which oversees security for the Defense Department's headquarters as well as several other Defense facilities in the Washington area. It was created after the attacks of September 11, 2001, to provide comprehensive threat prevention for one of the buildings targeted on that fateful day. Like those serving in other law enforcement and security agencies, the men and women of the Pentagon Force Protection Agency undergo rigorous training. Many are veterans of the Armed Forces or have worked previously as police officers for States and municipalities. They train to be ready at a moment's notice for scenarios they pray will never come. Often these security officers will stand at a checkpoint for hours at a time at the ready during days and weeks and months of quiet. As a youth, I worked two summers as a lifeguard in Philadelphia, and we always used to say it was hours of boredom interspersed with seconds of sheer terror. Well, sheer terror happened for these great Federal employees. For these three officers from the Pentagon Force Protection Agency such a moment came just before 7 o'clock in the evening of March 4, 2010. Officers Marvin Caraway, Jr. and Colin Richards were standing guard at the main entrance to the building--the Pentagon--when a suspicious figure approached. Marvin sensed something was amiss, so he walked toward him to check out his identification. When the man pulled a gun from his jacket and began firing, one of the bullets grazed Marvin's thigh. Undeterred, he held his ground and fired back. Later, his fellow officer would tell reporters that Marvin was like ``Superman''--``a man of steel.'' Colin ducked behind a barricade and began to return fire. Hearing the shots, a third officer, Jeffrey Amos, ran over from his post nearby and joined the effort to subdue the gunman. In the process, he was wounded in the shoulder. The whole incident took only a minute and the three officers fatally shot the assailant. The quick reaction and undeterred professionalism of these three are inspiring. All brought to the job a strong background in law enforcement and public service. Marvin, who lives in Clinton, MD, is a former marine, who served in the first Persian gulf war, and has experience protecting our embassies overseas. Jeffrey, from Woodbridge, VA, is a retired member of the Air Force Reserve. He spent 11 years in the New Orleans Police SWAT team. Colin, who resides in Arlington, VA, recalled how his experience and training prepared him to act quickly. He said: ``My vision was big; my hearing--I could hear everything. When the shooter started running, he looked like a big target. At that point I felt like I couldn't miss.'' Federal security officers, such as Marvin, Jeffrey, and Colin, are our modern-day ``Minutemen''--trained and ready to keep us safe from threats to our liberty and security. We owe all of them our constant appreciation. I must add that we see the same dedication and professionalism right here each day in our very own Capitol Police force as well. I know how proud Majority Leader Reid is of his own service as a Capitol Police officer when, as a young man, he stood guard at one of the entrances to this building. I hope my colleagues will join me in thanking Marvin Caraway, Jr., Jeffrey Amos, and Colin Richards for their bravery and a job well done--as well as all those who serve as Federal security officers standing at the ready. They are reminders of our great Federal employees. I yield the floor, and I suggest the absence of a quorum.

Mr. KAUFMAN

Mr. KAUFMAN. Madam President, I ask unanimous consent to speak as in morning business for up to 25 minutes.

Mr. KAUFMAN. Madam President, last Thursday the bankruptcy examiner for Lehman Brothers Holdings, Incorporated released a 2,200-page report about the demise of the firm, which included riveting detail on the firm's accounting practices. That report has put into sharp relief what many have expected all along: that fraud and potential criminal conduct were at the heart of this financial crisis. Now that we are beginning to learn many of the facts, at least with respect to the activities of Lehman Brothers, the country has every right to be outraged. I yield the floor, and I suggest the absence of a quorum.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, last Thursday, the bankruptcy examiner for Lehman Brothers Holding Company released a 2,200-page report about the demise of the firm, which included riveting detail on the firm's accounting practices. That report has put into sharp relief what many of us have expected all along: that fraud and potential criminal conduct were at the heart of the financial crisis. Now that we are beginning to learn many of the facts, at least with respect to the activities at Lehman Brothers, the country has every right to be outraged. Lehman was cooking its books, hiding $50 billion in toxic assets by temporarily shifting them off its balance sheet in time to produce rosier quarter-end reports. According to the bankruptcy examiner's report, Lehman Brothers's financial statements were ``materially misleading'' and said its executives engaged in ``actionable balance sheet manipulation.'' Only further investigation will determine whether the individuals involved can be indicted or convicted of criminal wrongdoing. According to the examiner's report, Lehman used accounting tricks to hide billions in debt from its investors and the public. Starting in 2001, that firm began abusing financial transactions called repurchase agreements or repos. Repos are basically short-term loans that exchange collateral for cash in trades that may be unwound as soon as the next day. While investment banks have come to overrely on repos to finance their operations, they are neither illegal nor questionable, assuming, of course, they are clearly accounted for. Lehman structured some of its repo agreements so the collateral was worth 105 percent of the cash it received--hence, the name ``Repo 105.'' As explained by the New York Times' DealBook: That meant that for a few days--and by the fourth quarter of 2007 that meant end-of-quarter--Lehman could shuffle off tens of billions of dollars in assets to appear more financially healthy than it really was. Even worse, Lehman's management trumpeted how the firm was decreasing its leverage so investors would not flee from the firm. But inside Lehman, according to the report, someone described the Repo 105 transactions as ``window dressing,'' a nice way of saying they were designed to mislead the public. Ernst & Young, Lehman's outside auditor, apparently became comfortable with and never objected to the Repo 105 transactions. While Lehman could never find a U.S. law firm to provide an opinion that treating the Repo 105 transactions as a sale for accounting purposes was legal, the British law firm Linklaters provided an opinion letter under British law that they were sales and not merely financing agreements. Lehman ran the transaction through its London subsidiary and used several different foreign bank counterparties. The SEC and Justice Department should pursue a thorough investigation, both civil and criminal, to identify every last person who had knowledge Lehman was misleading the public about its troubled balance sheet--and that means everyone from the Lehman executives, to its board of directors, to its accounting firm, Ernst & Young. Moreover, if the foreign bank counterparties who purchased the now infamous ``Repo 105s'' were complicit in the scheme, they should be held accountable as well. It is high time that we return the rule of law to Wall Street, which has been seriously eroded by the deregulatory mindset that captured our regulatory agencies over the past 30 years, a process I described at length in my speech on the floor last Thursday. We became enamored of the view that self-regulation was adequate, that ``rational'' self- interest would motivate counterparties to undertake stronger and better forms of due diligence than any regulator could perform, and that market fundamentalism would lead to the best outcomes for the most people. Transparency and vigorous oversight by outside accountants were supposed to keep our financial system credible and sound. The allure of deregulation, instead, led to the biggest financial crisis since 1929. And now we are learning, not surprisingly, that fraud and lawlessness were key ingredients in the collapse as well. Since the fall of 2008, Congress, the Federal Reserve and the American taxpayer have had to step into the breach--at a direct cost of more than $2.5 trillion--because, as so many experts have said: ``We had to save the system.'' But what exactly did we save? First, a system of overwhelming and concentrated financial power that has become dangerous. It caused the crisis of 2008-2009 and threatens to cause another major crisis if we do not enact fundamental reforms. Only six U.S. banks control assets equal to 63 percent of the nation's gross domestic product, while oversight is splintered among various regulators who are often overmatched in assessing weaknesses at these firms. Second, a system in which the rule of law has broken yet again. Big banks can get away with extraordinarily bad behavior--conduct that would not be tolerated in the rest of society, such as the blatant gimmicks used by Lehman, despite the massive cost to the rest of us. What lessons should we take from the bankruptcy examiner's report on Lehman, and from other recent examples of misleading conduct on Wall Street? I see three. First, we must undo the damage done by decades of deregulation. That damage includes--financial institutions that are ``too big to manage and too big to regulate''--as former FDIC Chairman Bill Isaac has called them--a ``wild west'' attitude on Wall Street, and colossal failures by accountants and lawyers who misunderstand or disregard their role as gatekeepers. The rule of law depends in part on manageably-sized institutions, participants interested in following the law, and gatekeepers motivated by more than a paycheck from their clients. Second, we must concentrate law enforcement and regulatory resources on restoring the rule of law to Wall Street. We must treat financial crimes with the same gravity as other crimes, because the price of inaction and a failure to deter future misconduct is enormous. Third, we must help regulators and other gatekeepers not only by demanding transparency but also by providing clear, enforceable ``rules of the road'' wherever possible. That includes studying conduct that may not be illegal now, but that we should nonetheless consider banning or curtailing because it provides too ready a cover for financial wrongdoing. The bottom line is that we need financial regulatory reform that is tough, far-reaching, and untainted by discredited claims about the efficacy of self-regulation. When Senators Leahy, Grassley and I introduced the Fraud Enforcement and Recovery Act--FERA--last year, our central objective was restoring the rule of law to Wall Street. We wanted to make certain that the Department of Justice and other law enforcement authorities had the resources necessary to investigate and prosecute precisely the sort of fraudulent behavior allegedly engaged in by Lehman Brothers that we learned about recently. We all understood that to restore the public's faith in our financial markets and the rule of law, we must identify, prosecute, and send to prison the participants in those markets who broke the law. Their fraudulent conduct has severely damaged our economy, caused devastating and sustained harm to countless hard-working Americans, and contributed to the widespread view that Wall Street does not play by the same rules as Main Street. FERA, signed into law in May, ensures that additional tools and resources will be provided to those charged with enforcement of our Nation's laws against financial fraud. Since its passage, progress has been made, including the President's creation of an interagency Financial Fraud Enforcement Task Force, but much more needs to be done. Many have said we should of seek to punish anyone, as all of Wall Street was in a delirium of profitmaking and almost no one foresaw the sub-prime crisis caused by the dramatic decline in housing values. But this is not about retribution. This is about addressing the continuum of behavior that took place--some of it fraudulent and illegal--and in the process addressing what Wall Street and the legal and regulatory system underlying its behavior have become. As part of that effort, we must ensure that the legal system tackles financial crimes with the same gravity as other crimes. When crimes happened in the past--as in the case of Enron, when aided and abetted by, among others, Merrill Lynch, and not prevented by the supposed gatekeepers at Arthur Andersen--there were criminal convictions. If individuals and entities broke the law in the lead up to the 2008 financial crisis--such as at Lehman Brothers, which allegedly deceived everyone, including the New York Fed and the SEC--there should be civil and criminal cases that hold them accountable. If we uncover bad behavior that was nonetheless lawful, or that we cannot prove to be unlawful, as may be exemplified by the recent reports of actions by Goldman Sachs with respect to the debt of Greece, then we should review our legal rules in the United States and perhaps change them so that certain misleading behavior cannot go unpunished again. This will not be easy. As the Wall Street Journal's ``Heard on the Street'' noted last week, ``Give Wall Street a rule and it will find a loophole.'' This confirms what I heard on December 9 of last year when I convened an oversight hearing on FERA. As that hearing made clear, unraveling sophisticated financial fraud is an enormously complicated and resource-intensive undertaking, because of the nature of both the conduct and the perpetrators. Rob Khuzami, head of the SEC's enforcement division, put it this way during the hearing: White-collar area cases, I think, are distinguishable from terrorism or drug crimes, for the primary reason that, often, people are plotting their defense at the same time they're committing their crime. They are smart people who understand that they are crossing the line, and so they are papering the record or having veiled or coded conversations that make it difficult to establish a wrongdoing. In other words, Wall Street criminals not only possess enormous resources but also are sophisticated enough to cover their tracks as they go along, often with the help, perhaps unwitting, of their lawyers and accountants. Assistant Attorney General Lanny Breuer and Khuzami, along with Assistant FBI Director Kevin Perkins, all emphasized at the hearing the difficulty of proving these cases from the historical record alone. The strongest cases come with the help of insiders, those who have first- hand knowledge of not only conduct but also motive and intent. That is why I have applauded the efforts of the SEC and DOJ to use both carrots and sticks to encourage those with knowledge to come forward. At the conclusion of that hearing in December, I was confident that our law enforcement agencies were intensely focused on bringing to justice those wrongdoers who brought our economy to the brink of collapse. Going forward, we need to make sure that those agencies have the resources and tools they need to complete the job. But we are fooling ourselves if we believe that our law enforcement efforts, no matter how vigorous or well funded, are enough by themselves to prevent the types of destructive behavior perpetrated by today's too-big, too-powerful financial institutions on Wall Street. I am concerned that the revelations about Lehman Brothers are just the tip of the iceberg. We have no reason to believe that the conduct detailed last week is somehow isolated or unique. Indeed, this sort of behavior is hardly novel. Enron engaged in similar deceit with some of its assets. And while we don't have the benefit of an examiner's report for other firms with a business model like Lehman's, law enforcement authorities should be well on their way in conducting investigations of whether others used similar ``accounting gimmicks'' to hide dangerous risk from investors and the public. At the same time, there are reports that raise questions about whether Goldman Sachs and other firms may have failed to disclose material information about swaps with Greece that allowed the country to effectively mask the full extent of its debt just as it was joining the European Monetary Union, EMU. We simply do not know whether fraud was involved, but these actions have kicked off a continent-wide controversy, with ramifications for U.S. investors as well. In Greece, the main transactions in question were called cross- currency swaps that exchange cash flows denominated in one currency for cash flows denominated in another. In Greece's case, these swaps were priced ``off-market,'' meaning that they didn't use prevailing market exchange rates. Instead, these highly unorthodox transactions provided Greece with a large upfront payment, and an apparent reduction in debt, which they then paid off through periodic interest payments and finally a large ``balloon'' payment at the contract's maturity. In other words, Goldman Sachs allegedly provided Greece with a loan by another name. The story, however, does not end there. Following these transactions, Goldman Sachs and other investment banks underwrote billions of Euros in bonds for Greece. The questions being raised include whether some of these bond offering documents disclosed the true nature of these swaps to investors, and, if not, whether the failure to do so was material. These bonds were issued under Greek law, and there is nothing necessarily illegal about not disclosing this information to bond investors in Europe. At least some of these bonds, however, were likely sold to American investors, so they may therefore still be subject to applicable U.S. securities law. While ``qualified institutional buyers,'' QIBs, in the United States are able to purchase bonds, such as the ones issued by Greece, and other securities not registered with the SEC under Securities Act of 1933, the sale of these bonds would still be governed by other requirements of U.S. law. Specifically, they presumably would be subject to the prohibition against the sale of securities to U.S. investors while deliberately withholding material adverse information. The point may be not so much what happened in Greece, but yet again the broader point that financial transactions must be transparent to the investing public and verified as such by outside auditors. AIG fell in large part due to its credit default swap exposure, but no one knew until it was too late how much risk AIG had taken upon itself. Why do some on Wall Street resist transparency so? Lehman shows the answer: everyone will flee a listing ship, so the less investors know, the better off are the firms which find themselves in a downward spiral. At least until the final reckoning. Who is to blame for this state of affairs, where major Wall Street firms conclude that hiding the truth is okay? Well, there is plenty of blame to go around. As I said previously, both Congress and the regulators came to believe that self-interest was regulation enough. In the now-immortal words of Alan Greenspan, ``Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity--myself especially--are in a state of shocked disbelief.'' The time has come to get over the shock and get on with the work. What about the professions? Accountants and lawyers are supposed to help insure that their clients obey the law. Indeed they often claim that simply by giving good advice to their clients, they are responsible for far more compliance with the law than are government investigators. That claim rings hollow, however, when these professionals now seem too often focused on helping their clients get around the law. Experts such as Professor Peter Henning of Wayne State University Law School, looking at the Lehman examiner's report on the Repo 105 transactions, are stunned that the accountant Ernst & Young never seemed to be troubled in the least about it. Of course, the fact that a Lehman executive was blowing a whistle on the practice in May 2008 did not change anything, other than to cause some discomfort in the ranks. While saying he was confident he could clear up the whistleblower's concerns, the lead partner for Lehman at Ernst & Young wrote that the letter and off-balance sheet accounting issues were ``adding stress to everyone.'' As Professor Henning notes, one of the supposed major effects of the Sarbanes-Oxley Act was to empower the accountants to challenge management and ensure that transactions were accounted for properly. Indeed, it was my predecessor, then-Senator Biden, who was the lead author of the provision requiring the CEO and CFO to attest to the accuracy of financial statements, under penalty of criminal sanction if they knowingly or willfully certified materially false statements. I don't believe this is a failure of Sarbanes-Oxley. A law is not a failure simply because some people subsequently violate it. I am deeply disturbed at the apparent failure of some in the accounting profession to change their ways and truly undertake the profession's role as the first line of defense--the gatekeeper--against accounting fraud. In just a few years time since the Enron-related death of the accounting firm Arthur Andersen, one might have hoped that ``technically correct'' was no longer a defensible standard if the cumulative impression left by the action is grossly misleading. But apparently that standard as a singular defense is creeping back into the profession. The accountants and lawyers weren't the only gatekeepers. If Lehman was hiding balance sheet risks from investors, it was also hiding them from rating agencies and regulators, thereby allowing it to delay possible ratings downgrades that would increase its capital requirements. The Repo 105 transactions allowed Lehman to lower its reported net leverage ratio from 17.3 to 15.4 for the first quarter of 2008, according to the examiner's report. It was bad enough that the SEC focused on a misguided metric like net leverage when Lehman's gross leverage ratio was much higher and more indicative of its risks. The SEC's failure to uncover such aggressive and possibly fraudulent accounting, as was employed on the Repo 105 transactions, provides a clear indication of the lack of rigor of its supervision of Lehman and other investment banks. The SEC in years past allowed the investment banks to increase their leverage ratios by permitting them to determine their own risk level. When that approach was taken, it should have been coupled with absolute transparency on the level of risk. What the Lehman example shows is that increased leverage without the accountants and regulators and credit rating agencies insisting on transparency is yet another recipe for disaster. Mr. President, last week's revelations about Lehman Brothers reinforce what I have been saying for some time. The folly of radical deregulation has given us financial institutions that are too big to fail, too big to manage, and too big to regulate. If we have any hope of returning the rule of law to Wall Street, we need regulatory reform that addresses this central reality. As I said more than a year ago: At the end of the day, this is a test of whether we have one justice system in this country or two. If we don't treat a Wall Street firm that defrauded investors of millions of dollars the same way we treat someone who stole $500 from a cash register, then how can we expect our citizens to have faith in the rule of law? For our economy to work for all Americans, investors must have confidence in the honest and open functioning of our financial markets. Our markets can only flourish when Americans again trust that they are fair, transparent, and accountable to the laws. The American people deserve no less. I yield the floor, and I suggest the absence of a quorum.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I ask unanimous consent that when the Senate resumes consideration of the House message with respect to H.R. 2847, there be 10 minutes of debate time, with the time equally divided and controlled between Senators Gregg and Schumer or their designees, at which time Senator Gregg is expected to make a budget point of order and Senator Schumer would move to waive any relevant points of order; that if the waiver is successful, then no further debate or motions be in order, and the Senate proceed to vote on the Durbin motion to concur; further, that the order with respect to the DeMint motion to suspend be vitiated; that upon disposition of the House message, the Senate then resume consideration of H.R. 1586, and any other provisions with respect to the House message remaining in effect.