Jim Leach

Mr. LEACH

Mr. LEACH. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, I rise in support of the amendment. First, let me congratulate and thank my good friend, the gentlewoman from California (Ms. Lee), for her leadership in this effort; and I would also express my deep respect for the gentleman from Arizona (Mr. Kolbe) for his commitment in this area. I know it is awkward for the Committee on Appropriations, after putting substantially more money into this process, to have Members come to the floor and ask for more. But let me explain why I think this is important. If one were sitting on the moon and were to look down at this country and the world at this time, it is hard not to conclude that the greatest difficulty we have is disease control, particularly AIDS. Our Surgeon General has said that this is going to be the largest pandemic in human history, exceeding that of the bubonic plague of the 1300s and the epidemic of flu in the early part of the last century which both killed over 20 million people. Twenty-two million have now died from AIDS, and in Africa alone 25 million have the HIV virus. Obviously, this is a disease that knows no borders. Obviously, it cannot be contained in continents. It is rapidly spreading into the subcontinent of Central Asia, into Southeast Asia, into the former Soviet Union. Over 1 million American citizens have the HIV virus. Mr. Chairman, now with regard to where the resources for this amendment come from, this is a very modest amendment. It takes about $60 million from a military interdiction program in Peru and from foreign military sales. Intriguingly, from a national security perspective, one of the great questions is, is the security of the average American citizen going to be more likely protected with giving guns and bullets to others at the turn of this century or through dealing with this disease in this kind of way--expecially when those guns and bullets apply to foreign military sales, not provisions for the military of the United States of America? Finally, let me say why it is with some concern that I rise with the gentlewoman. In the last Congress, the Committee on Banking and Financial Services established a World Bank AIDS Trust Fund and authorized a substantial sum of money. Unfortunately, the appropriations process did not come forth with the matching obligation. So what the gentlewoman from California (Ms. Lee) and I are attempting to do is to meet the beginning of that obligation in a much more serious way. This is the will of the Congress in an authorizing sense, and it is our view it ought to be matched in an appropriations way. Finally, let me just say that it is self-evident that we have a humanitarian crisis, but it also is an economic crisis. It is a national security crisis. It is a crisis that has to be dealt with on a worldwide basis. That is precisely what the leaders of the world met this last week to talk about. It is precisely what this Congress has to deal with today.

Mr. LEACH. Mr. Chairman, let me just conclude by thanking again the gentlewoman from California (Ms. Lee), who is a stalwart and wonderful leader on this cause, and her fine staff.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I rise today to introduce my colleagues to John S. Koza of Iowa City, Iowa, Junior Achievement's National Middle School Volunteer of the Year. Over the past 12 years, John has taught 38 classes in basic business methods as a Junior Achievement instructor. His open, honest and caring teaching style creates a fun, relaxed environment in which students both learn the skills needed to be successful entrepreneurs and are imbued through John's example with the importance of giving back to your community. John's work in the Junior Achievement exemplifies the history of program as a quintessential American success story. As the exodus from farm to city accelerated in this country at the beginning of the 20th century, so did the need to prepare young people for the demands of a changing workplace. Junior Achievement was founded in Massachusetts in 1919 as a collection of small, after school business clubs to help meet that need, with students learning how to create business plans, to set up appropriate accounting procedures, and to learn basic manufacturing, advertising and marketing techniques. In 1925, President Calvin Coolidge hosted a White House reception to kickoff a national fundraising drive for Junior Achievement, and by the late 1920s there were nearly 800 JA Clubs with 9,000 participants in 13 cities throughout New England. During World War II, enterprising students in JA business clubs applied their ingenuity to aid the war effort. In Chicago, JA students won a contract to manufacture 10,000 pants hangers for the Army; in Pittsburgh, JA students developed a specially lined box to dispose of incendiary devices which was approved by Civil Defense and sold locally; elsewhere, they organized drives to obtain badly needed scrap metal. The 1950s saw Junior Achievement increase five-fold, with President Eisenhower declaring the week of January 30 to February 5, 1955, ``National Junior Achievement Week.'' By then, Junior Achievement was operating in 139 cities in most of the 50 states. By 1982, JA's formal curricula had expanded to Applied Economics, Project Business and Business Basics; by 1988, more than one million students were participating in its programs. Today, through the efforts of more than 10,000 volunteers like John Koza in the classrooms of America, Junior Achievements reaches over 4 million students in grades K to 12 annually. JA International takes the free enterprise message of hope and opportunity to more than 1.5 million students in 111 countries. Mr. Speaker, I congratulate John Koza of Iowa City for his outstanding service to Junior Achievement and the young people of Iowa. He is a wonderful example for us all.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I yield 2 minutes to the gentleman from Indiana (Mr. Pence).

Mr. LEACH. Mr. Speaker, I move to suspend the rules and concur in the Senate amendment to the bill (H.R. 428) concerning the participation of Taiwan in the World Health Organization.

Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, in conclusion, let me stress that arguably the greatest issue in the world today may well be disease control. What the WHO symbolizes is a people-oriented concern for control of disease. Taiwan should not be precluded from expanding its capacity to meet its people's needs, nor precluded from assisting others in less sophisticated health care centers from receiving the support of Taiwanese doctors and health care delivery specialists. Mr. Speaker, this is a common-sense bill. I urge support of it.

Mr. LEACH. Mr. Speaker, on that I demand the yeas and nays.

Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise today to support this legislation which would authorize the administration to initiate a plan to endorse and obtain observer status for Taiwan in the World Health Organization during the May 2001 World Health Assembly in Geneva. Mr. Speaker, I would like to congratulate the gentleman from Ohio (Mr. Brown) for sponsoring this resolution. It should be stressed that nothing in this bill implies a change in this country's one China policy, which has been based for over 30 years on three communiques and the Taiwan Relations Act. At the same time, however, care should be taken not to arbitrarily exclude the 23 million people of Taiwan from appropriate economic and humanitarian venues. Mr. Speaker, the House previously passed this bill 407-0 on April 24. Today we are considering the legislation as amended by the Senate. We should support it for at least two reasons: First, Taiwan's participation in the WHO will advance the cause of public health worldwide. In January, Taiwan played an important role in providing relief to earthquake victims in El Salvador. By gaining observer status at the WHO, Taiwan will be able to participate more meaningfully in meeting its, and our, global health challenges in the future. Disease and national disasters know no borders. Secondly, where sovereignty is not at issue, Taiwan's participation in international organizations makes common sense. Taiwan thrives economically and politically. Economically, Taiwan has raised the standard of living on a more equalitarian basis than any developing country over the past half century. Politically, reminiscent of Sun Yat-Sen's call for staged democratic development, Taiwan has moved, particularly over the past two decades, to expand and refine representative democracy. Today it is a model for the world. Mr. Speaker, the Senate has modified this bill to reflect the concerns of the senior Senator from the State of Utah, Mr. Hatch. The bill now authorizes rather than requires the Secretary of State to formulate and pursue a plan to win observer status for Taiwan in the World Health Organization. The administration supports this change, and I urge that the House do so as well. Mr. Speaker, I reserve the balance of my time.

Mr. LEACH. Mr. Speaker, I yield back the balance of my time.

Mr. LEACH. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 428.

Mr. LEACH

Mr. LEACH. Mr. Chairman, I thank the distinguished gentleman from California (Mr. Lantos) for yielding time on this issue. Mr. Chairman, I cannot say that UNESCO is the most important international body that has ever been created. I can say it is a credible international body. The United States chose to withdraw from UNESCO in the 1980s for a variety of reasons. Some stem from management styles; some stem from politicalization on several kinds of issues. But in each of these circumstances, there has been reform. We object to not being reelected to another U.N. body and we may be, in the eyes of some, poor losers. But the fact of the matter is, in UNESCO, we are a poor winner. We have achieved the objectives we wanted. Not to return implies that, when the United States gets its way, we continue to put our head in the sand. It is interesting that Secretary of State George Shultz, who signed the withdrawal notice in the 1980s, now supports returning. There are 188 member nations of UNESCO. While UNESCO does have a cost, for the United States to say we cannot afford our share is a bit awkward for the world's wealthiest country. I do acknowledge that there is a costliness of Paris. Having said that, France was our first ally. For the United States simply to be opposed to institutions in Paris is not a very credible circumstance. Finally, let me say education, science, culture are esoteric. On the other hand, they matter in the world. For the United States of America to argue we are better off with empty chair diplomacy is an error if not an oxymoron. Therefore, for very decent, credible reasons that apply to UNESCO itself but also have ramifications for our whole role in international organizations in the world today, it is very appropriate for the United States to resume a world leadership position. That is exactly what we should do. Therefore, with great respect, I hope this amendment would be turned back.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume. I would just like to conclude by again congratulating the gentleman from Ohio (Mr. Brown) for this fine resolution. Mr. Speaker, I yield back the balance of my time.

Mr. LEACH. Mr. Speaker, on that I demand the yeas and nays.

Mr. LEACH. Mr. Speaker, I reserve the balance of my time.

Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise to support this legislation which would require the administration to initiate a plan to endorse and obtain observer status for Taiwan in the World Health Organization during the May 2001 World Health Assembly meeting in Geneva. Mr. Speaker, I would like to congratulate the gentleman from Ohio (Mr. Brown) for initiating this resolution. I would like to stress that nothing in this bill implies a change in this country's one China policy, which has been based for over 30 years on three communiques and the Taiwan Relations Act; but care should be taken not to arbitrarily exclude the 23 million people of Taiwan from appropriate economic and humanitarian venues. This legislation recommends a symbolic step underscoring that where sovereignty is not in question, Taiwan ought to be brought into as many international organizations as possible. It already is a member of the Asian Development Bank, as well as APEC. In this context, WHO is a constructive and thoughtful avenue for international participation by the government and people of Taiwan. Mr. Speaker, disease and national disasters know no borders. Indeed, arguably the greatest international issue in the world today may be disease control, whether we are discussing the issue of HIV/AIDS, TB or other communicable diseases. What the WHO issue symbolizes is a people-oriented concern for control of disease. Taiwan should not be excluded from such concern, and in fact has stepped forward to provide, in a number of instances, assistance and relief in other parts of the world, such as the recent earthquake circumstance in El Salvador. Let me say this is a very modest step. It is a symbolic step, and it is a step towards achievement of observer status in a very appropriate humanitarian international organization. Other groups, such as the PLO and the Knights of Malta, have observer status at the World Health Assembly, and it would be very appropriate that Taiwan should accede to the same type of status. Mr. Speaker, I reserve the balance of my time.

Mr. LEACH. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 428) concerning the participation of Taiwan in the World Health Organization, as amended.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on H.R. 428.

Mr. LEACH

Mr. LEACH. Mr. Chairman, I thank the distinguished chairman for yielding this time to me. Bankruptcy is an extraordinarily sensitive subject. The issue here, we must bear in mind, is balance, rather than the need for a bankruptcy law itself. After all, one of the first laws of the first Congress was a bankruptcy law, which was passed because we had debtors prisons in the United States. We ended debtors prisons, which were part of our experience as well as the European experience. We never had the pound- for-the-pound experience that was in Merchant of Venice in the European experience, but we had debtors prisons. This bill is about balance, that is, who bears the cost, not about the principle of bankruptcy itself. I do not know if the balance is exactly right, but I am convinced its thrust is and that it is a better circumstance than current law. I rise to stress one provision in this bill which I do not believe is controversial and was strongly supported by the Clinton administration Treasury as well as this Treasury and by the Federal Reserve, and that is the provision that relates to netting. We have a circumstance in international trade where the new phenomenon in international finance is a multi-trillion dollar trade in derivatives contracts, now over $30 trillion. These are the notional values of derivatives contracts. If they are allowed to net out, they come to less than a trillion dollars and can be managed. So what this bill does is call for the automatic netting of derivatives contracts in the event of a bankruptcy circumstance. What this does is protect the international financial system and the domestic economy from true calamity in the event of a major derivatives party declaring bankruptcy. In essence, in awkward economic times, this is the overwhelmingly most important provision of the bill. On its basis alone, this bill should be adopted. I thank the distinguished chairman of the Committee on the Judiciary for putting this provision in his bill. I am very appreciative that this step will become one of stabilizing rather than destabilizing the international economy. I urge my colleagues to support the bill.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I invite my colleagues' attention to the career and life story of Dr. Philip Gamaliel Hubbard, a groundbreaking American educator who will celebrate his 80th birthday later this week. Dr. Hubbard is truly an extraordinary Iowan, and his journey through the last eight decades of the 20th century is a story all Americans should know. Philip G. Hubbard was born in the small town of Macon in north central Missouri on March 4, 1921--the day that Warren Gamaliel Harding was inaugurated President of the United States. His parents clearly had big plans for him, giving him the new President's unusual middle name for his own. His father died when he was only 18 days old, and four years later his mother gave up a teaching career to move 140 miles north to Des Moines, where her children would have the opportunity to attend Iowa's unsegregated schools. Phil graduated from Des Moines' North High School and enrolled in the University of Iowa's College of Engineering in 1940, buttressed by a $252 savings account earned from shining shoes. Since African Americans were not permitted to live in university housing at the time, he first boarded in a private home with the relatives of Lulu Johnson, the first African American woman to earn a Ph.D at an American university, and then in the Kappa Alpha Psi fraternity house. In 1943, after pawning his great uncle's gold watch to buy a wedding suit and a ring, Phil married his fiancee, Wynonna Marie Griffin, and eight days later reported for active duty in the Army. Returning to the university at the end of the war, Phil finished his undergraduate degree in electrical engineering and his doctorate in hydraulics. He was appointed an associate professor in 1956 and a full professor in 1959, meritoriously triumphing over an unacknowledged, hurtful and short-sighted tradition to become the first African American tenured professor in the university's history. Teaching and research in one of the nation's premier research institutes occupied his next several years, although he combined scholarship with a quiet but determined social activism, pushing Iowa City to adopt one of the nation's first fair housing ordinances and encouraging Iowa's congressional representatives to support the Civil Rights Act of 1965. His effective blending of academic life with his work in human and civil rights led to his 1965 appointment as dean of academic affairs. Dr. Hubbard became vice president of the university in 1972, a position in which he gave distinguished service until his retirement in 1991. Dr. Hubbard's quarter century at the center of university administration was a period of dramatic social change in the university, in the State of Iowa, and in the larger world. The theme that runs through his career as an administrator is his steadfast commitment to expanding human rights on and off campus. Working with university presidents Howard Bowen, Willard ``Sandy'' Boyd, James O. Freedman, and Hunter Rawlings III over more than twenty-five years, Dr. Hubbard succeeded in fully opening the resources of the University of Iowa to students from all ethnic backgrounds and to both genders. He accorded new respect for the opinions of students, creatively developed educational opportunity programs and scholarships for low-income and minority students, and helped to institute affirmative action at all levels of the university. The University of Iowa's reputation as a welcoming place where all people may secure a quality education is in large part a result of the vision and hard work of Philip G. Hubbard. Dr. Hubbard's place in Iowa history books is ensured by his service as the University of Iowa's first African American professor, dean and vice president. His real place in Iowa history, however, is guaranteed by two far more significant things: his role in opening the university to the kind of board diversity that reflects the best in American values and deeply enriches the educational experience, and the powerful effect he has had on the hearts of those given the privilege of crossing his path. The university, the State of Iowa and the world are better for the contributions of this truly exemplary American.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I rise today to extol the virtues and lament the retirement of Anthony F. ``Tony'' Cole after more than 25 years of federal service. A scholar and a gentleman, Tony graduated Phi Beta Kappa from the College of William and Mary, earned a Masters in history from Rutgers, and his law degree from the Marshall-Wythe School of Law at William and Mary. In 1975 Tony joined the staff of the Board of Governors of the Federal Reserve System, where he served as Deputy General Counsel of the Depository Institutions Deregulation Committee and later as Special Assistant to the Board as its liaison with Congress. Leaving these real jobs, Tony came to the Hill in 1986 to serve first as Minority Counsel and then as Minority Staff Director for the House Committee on Banking, Housing and Urban Affairs. During my tenure as Chairman of the House Committee on Banking and Financial Services, from January 1995 to the end of last year, Tony was the Staff Director for the Committee. Tony's fine hand may be seen in all of the major legislation the Committee considered over the past 15 years, from the reform of the savings and loan industry (FIRREA), to the financial modernization bill (Gramm-Leach-Bliley), to debt relief for the poorest countries in the world. As my colleagues know, the job of a committee staff director is one of the most demanding on Capitol Hill. It requires assuaging the easily bruised egos of the Members, administering a multimillion dollar budget, managing a 50-member professional and support staff, and coordinating with leadership. All this must be accomplished while having at one's finger tips an encyclopedic knowledge of both current statute and the legislative process. Nobody did it better than Tony. A consummate professional, Tony was respected by both sides of the aisle and revered by the staff he led by precept and example. A person of grace and good humor, he gave of himself unstintingly to this institution and in so doing to serving the people of the United States. The House needs the likes of Tony Cole and he will be sorely missed. It is with profound gratitude that I wish Tony all the best in a well-deserved retirement.

Mr. LEACH

Mr. LEACH. Mr. Speaker, today I express my gratitude and appreciation for the work of Mary Virginia ``Ginny'' Burrus. Ginny joined my staff on January 16, 1985, providing constituent service in my Burlington, Iowa, office. She and her late husband David owned their own business in Burlington and she had long been active in promoting tourism, the arts as well as the economy of southeastern Iowa. After redistricting, Ginny helped open my Iowa City office in 1992, continuing to provide outstanding service to the residents of Iowa's First Congressional District. All of my colleagues know how essential to the functioning of government is the ombudsman role in Congressional offices, and particularly caseworkers within them, play. For constituents with problems, be it with veterans benefits, Social Security, Medicare or student loans, the federal bureaucracy can be a bewildering maze, the applicable laws and regulations often seemingly irrational. An experienced, knowledgeable and sympathetic caseworker can be indispensable in getting the answers needed and problems resolved. In the 16 years she worked with me, Ginny epitomized the consummate professional and her file is fat with letters from Iowans thanking her for the help she provided. In recent years, as immigration casework increased, her knowledge of immigration law, regulations, processes and paperwork has become legendary. Equally well known has been her patience, both with harried staffers at INS and with newcomers to this country, unfamiliar with both its language and its ways. Ginny has provided me and the citizens of Iowa a model of what public service is all about. She will now have more time to enjoy her daughters, Alicia, Alexandra and Anita, and her grandson Kerr and granddaughter Hannah, as well as the opportunity to play more bridge. It is with profound gratitude that I wish Ginny all the best in a well-earned retirement.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I wish to note the passing of an individual of considerable stature in the history of this nation's financial system, Michael P. Mortara. Mr. Mortara, who was the victim of an aneurysm last month, was instrumental in the creation of mortgage- backed securities, a market now valued at over $2 trillion. By devising a means for banks to package and sell mortgage loans to the broader capital markets, he helped enlarge the pool of credit available to millions of middle and low income American families, making it possible for them to purchase their first homes at affordable mortgage rates. Asset securitization, as the technique that Mr. Mortara helped pioneer is called, is the primary tool Ginnie Mae, Fannie Mae and Freddie Mac have used the carry out their missions--the establishment and maintenance of a stable and fluid nationwide secondary mortgage market essential to widespread, affordable housing finance. This technique was also adapted with success by the Resolution Trust Company, saving American taxpayers millions of dollars, and it has served as a model for housing finance markets around the world. In addition to his contribution to our country's economic well-being, Mr. Mortara was dedicated to the community in which he lived, the community in which he worked, as well as to his family--his wife Virginia and his two sons, Michael and Matthew. At his death, Mr. Mortara was a senior member of the Wall Street firm Goldman Sachs. There and wherever he came into contact with them, he mentored and guided hundreds of young men and women throughout their careers. He served on many educational boards, including those of Georgetown University, The Taft School, Rumsey Hall School, and the Connecticut Junior Republic. Mr. Mortara was the embodiment of a free-enterprise minded American citizen--a proponent of free markets, education, and family values. Mr. Speaker, what Mr. Mortara's life symbolizes is the mark an individual can make in the private sector that has positive ramifications for society as a whole. It is innovations in finance that have helped curb inflation and in the case of the secondary housing securities market made access to home ownership available to millions who would otherwise be precluded from participation in the American dream. Mr. Mortara will be much missed by this family and colleagues and so many who never knew him but benefited from the innovations in finance that he pioneered.

Mr. LEACH

Mr. LEACH. Mr. Speaker, last year, after nearly two decades of work, the U.S. Congress passed the Financial Modernization Act to bring our nation's banking and securities laws in line with the realities of the marketplace. Today, an analogous opportunity presents itself to modernize the Commodity Exchange Act (CEA) that governs the trading of futures and options. The important role of the over-the-counter derivatives industry in the historic economic expansion of the last decade is largely unchronicled. These contracts, which allow manufacturers, multi- national corporations, energy producers, governments and others to hedge themselves against the risk of financial calamity, ensure that unforeseen market movements do not bankrupt business and thus constrain economic productivity. Because of anachronistic constraints established under the CEA, however, legal uncertainty exists for trillions of dollars of existing contractual obligations. The issue facing the Congress has been whether an appropriate regulatory framework can be established to deal not only with certain problems that confront today's risk management markets, but new dilemmas that appear to be on the horizon. The compromise language before us today as a part of this appropriations bill largely accomplishes our goals. The fact is that the Commodity Exchange Act (CEA) is an awkward legislative vehicle designed in an era in which financial products of a nature now in place were neither in existence, nor much contemplated. Indeed, the Commodity Futures Trading Commission (CFTC) was fundamentally designed to supervise agriculture and commodities markets, not financial institutions. Legislation of this nature involves different committees with different concerns and sometimes-competitive jurisdictional interests. From the Banking Committee's perspective, I would like to make clear my respect for the work of the Agriculture Committee, led by Chairmen Combest and Ewing, which produced a bill that reflected a credible way of dealing with the concerns that had developed during much of the last decade as derivatives-related products have grown. Nonetheless, the Banking Committee in July adopted on a bipartisan manner a number of clarifying amendments, and this fall the House approved H.R. 4541 with only a handful of dissenting votes. After continued negotiation, involving the other body and the Administration, further modifications have been made to the legislation to provide an even greater level of assurance that over-the-counter derivatives will continue to be a vital part of America's financial innovation and continued success. The legislation will ensure that most over-the-counter derivatives offered by banks and other financially sophisticated parties are legal and enforceable. It provides that these contracts will be allowed to be negotiated via new means of electronic commerce. While retaining the role of the Federal financial regulators, it will allow these new contracts to be offered, sold and cleared without having to jump through new, unwarranted bureaucratic processes. While this legislation represents a great leap forward there remain issues that will require the further scrutiny and due diligence of this body and it will be necessary to closely monitor the application of this bill, with a mindful eye on further innovation, to ensure that the genius of our financial services industry is not again restricted by outdated and overly burdensome laws. In this regard, H.R. 5660 contains several provisions which require further clarification. Title II of the legislation empowers the Securities and Exchange Commission (SEC) to regulate certain securities-based futures contracts. It is important to note that excluded from the definition of ``security future,'' contained in section 201 of the legislation, and thus from the jurisdiction of the SEC, are contracts excluded from the Commodity Exchange Act under section 2(c), (d), (f) and (g) of that Act, and those products excluded under Title IV of the Commodity Futures Modernization Act of 2000. These exclusions are intended to clarify that over-the-counter derivatives transactions among eligible contract participants related to the prices of securities are outside the jurisdiction of the SEC, and the SEC is not to use the new authority granted the agency by this act to attempt to regulate over-the-counter derivatives activities. The jurisdiction granted the SEC by this Act, like that granted to the Commodity Futures Trading Commission (CFTC) under the Commodity Exchange Act, is limited to transactions conducted on organized exchanges otherwise regulated by the respective agency. Over-the- counter derivatives transactions offered by banks and other highly sophisticated end users remain outside the jurisdiction of the SEC. Additionally, Title III of the act contains further limitations on the authority of the SEC with respect to the jurisdiction of that agency related to swap agreements. As Title III makes clear, ``security based swap agreements'' are not securities, and the SEC is prohibited from regulating them as such. In general, it should be clear that nothing in this legislation is intended to permit the SEC to regulate equity securities derivative transactions entered into by banks. The exclusions from the definition of ``security future,'' as well as Title III, are designed to ensure that the regulatory reach of the SEC is limited to entities over which the securities laws explicitly require registration. Banks have been engaging in equity related derivatives for well over a decade, under the supervision of the appropriate banking regulators. Nothing in this legislation is intended to alter that regulatory structure, nor to place new regulatory burdens on banks. A separate matter which requires attention is the treatment to be afforded ``principal-to-principal'' transactions. Section 101 of the legislation contains a definition of ``organized exchange'' which incorporates this ``principal-to-principal'' concept. Under this legislation, whether an entity is an organized exchange or not has ramifications as to whether the entity might be regulated by the CFTC and, in some cases, the SEC. Additionally, sections 103, 106, 202, and 402 of the legislation utilize this ``principal-to-principal'' concept in providing exemptions and exclusions from the jurisdiction of the CFTC and SEC. A ``principal-to-principal'' transaction includes any transaction whereby a party to the transaction books the transaction for the party's own account. It includes ``riskless principal'' transactions, whereby one party enters into a transaction and thereafter or contemporaneously enters into an offsetting transaction so that the risk or payments under the transactions net out. The fact that the party has entered into off-setting transactions in no way alters the ``principal-to-principal'' nature of the transaction, and any party that has entered into a ``riskless principal'' transaction may be assured that its contracts remain legally enforceable and excluded or exempted from the jurisdiction of the CFTC and/or SEC, as applicable. A final matter which deserves attention is the definition of ``trading facility'' contained in section 103 of the legislation. Whether an entity is a ``trading facility'' has ramifications as to whether or not the entity might be regulated by the CFTC and/or the SEC. It should be made clear that the definition of ``trading facility'' is not to be construed so broadly as to include existing and developing electronic systems which permit parties to negotiate and enter into over-the-counter derivatives transactions. For instance, Derivatives Net Inc., which maintains the ``Blackbird'' electronic trading system, operates a facility whereby parties may meet in a centralized electronic forum to conduct over-the-counter derivatives transactions. The swap agreements entered into by participants entered into on this system are themselves excluded from the jurisdiction of the CFTC, and will remain excluded from the jurisdiction of the SEC under the new powers granted that agency under this bill. Nothing in the definition of ``trading facility,'' nor anything else in this legislation, is intended to provide authority to either the CFTC or the SEC to exercise jurisdiction over entities such as Blackbird. Mr. Speaker, I congratulate all who worked from so many different perspectives to develop this landmark legislation and urge its passage.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on H.R. 5640.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I thank the gentleman for yielding. I particularly thank the gentleman for holding this Special Order in honor of his great Texas friend. In my time in the United States Congress, I have served with no more honorable a man. Henry was an old-fashioned liberal, and he never had a conflict of interest. He did not just simply advocate, he lived campaign reform. His only special interest was his constituents. He never let them down. Nor did they ever countenance an alternative. Honesty has its rewards. I might say that, while a bit more conservative and bent, I believe his values are very much reflected in his son, with whom we are also very honored to serve. As colleagues on the Committee on Banking, Henry and I held differing positions on a number of issues, particularly matters involving the Federal Reserve. But Henry Gonzalez always had an element of justice, an element of good judgment on the side as, for example, when he sought to bring more transparency to certain operations of the Federal Reserve. He also led Congress in efforts to uncover money laundering in all parts of the country, particularly in his own region, the San Antonio Federal Reserve District. It is sometimes said that the true riches in one's life can be measured by the lives that one has touched and changed for the better. Throughout his history in public service, Henry Gonzalez has served as a model for millions of Americans. And throughout his career, he steadfastly stood for those less advantaged. He has literally represented and improved the lives of hundreds of thousands of Americans. For his honorableness, his commitment to basic values, for his remembrance of his roots, we in this House are deeply honored to have served with this man and we honor his memory.