Patrick Leahy

Mr. LEAHY

Mr. LEAHY. Madam President, I raise a point of order en bloc that the pending amendments are not germane postcloture.

Mr. LEAHY. Madam President, I understand the vote will be tomorrow on the bill. Would it be in order to ask for the yeas and nays at this point?

Mr. LEAHY. I ask for the yeas and nays.

Mr. LEAHY. I thank the distinguished Presiding Officer, and I yield the floor.

Mr. LEAHY. Madam President, I thank the distinguished Presiding Officer. The bill, S. 386, is the bipartisan Fraud Enforcement and Recovery Act of 2009, the Leahy-Grassley bill. When I mention my name and Senator Grassley's name, we are only two of a large number of people on this bill. We have Senators Kaufman, Klobuchar, Schumer, Murray, Bayh, Specter, Snowe, Harkin, Levin, Dorgan, Whitehouse, Rockefeller, Shaheen, Stabenow, Sanders, Bennet of Colorado, Durbin, Mikulski, Gillibrand, Begich, Burris, Dodd, Menendez, Cardin, Reid, and Pryor as co-sponsors. I mention those names because they go across the political spectrum. They know we have to strengthen the Federal Government's capacity to investigate and prosecute the kinds of financial frauds that have severely undermined our economy and hurt so many hard-working people in this country. The reason so many of us came together, again, across the political spectrum--and I note there are several former prosecutors in that group--is we have seen what some of these unscrupulous people have done. They have set up these mortgage frauds in basically an unregulated area. They will come to somebody who is facing difficulty in paying off a mortgage--there has probably been a foreclosure and they come and say: Here, we can take care of you. Sign these papers. Put this money down. Send payments to us. We will take care of everything. So people exhaust their life savings. Maybe they send the money they put away for their kids to go to college. Probably it is part of their retirement account. By the time they get done, the people committing the fraud are gone. The mortgage on the house, however, has not been paid off. In fact, the bank is still going to foreclose. They have lost their life's savings. They have lost all the money they have set aside for whatever reasons so many millions of Americans set money aside for. And these people who committed the fraud are gone. They have been robbed of their savings, their retirement accounts, their children's college funds, their equity, and, of course, many have lost their homes on top of that. When the testimony of the FBI and the Department of Justice and others showed this type of fraud--which was bad enough in years past-- has skyrocketed in the last couple of years, the Senator from Iowa and I decided we should bring a piece of legislation that would allow the FBI and the Department of Justice to go after these people defrauding Americans. I do not want to just have a simple fine. If somebody steals $100 million, and they get a fine of $5 or $10 million, it is a matter of doing business. I want enough teeth in here that they will go to jail. If you steal somebody's home, if you steal their dreams, if you steal their retirement, you should go to jail. We send kids to jail for sealing a car. How much more important is it that we should send these white-collar thieves to jail for stealing someone's life and someone's dreams? That is what we want to do here. The bill will help provide the resources and legal tools needed to police and deter fraud but also to protect the taxpayer-funded economic recovery events now being implemented. I was disappointed that last week our efforts to enact this legislation were stalled. But I take a great deal of hope now to know that by tomorrow midday it should be passed. It is, as I said, a bipartisan bill. It does strengthen the tools available to law enforcement to combat financial and mortgage fraud. We were delayed a number of times before we got on the floor of the Senate, and I compliment the distinguished majority leader for bringing it to the floor last week. And when we did, we began to work on 18 amendments that were offered to the bill. We had votes on a number of them. By Thursday afternoon, we had voted on all the germane amendments. We also worked in good faith on a number of amendments not related to the underlying fraud enforcement legislation. I would like to mention the kind of cooperation we had. The distinguished Republican deputy leader, Senator Kyl, had a series of amendments that I believe would have passed the test of germaneness. He talked with Senator Grassley and myself, and we arranged a vote on one amendment. He had wanted to bring up several similar ones. They were objected to. He pulled them down, and we had a vote on the one. We spent very little time doing that. We had plenty of time for Senator Kyl to make his points, Senator Grassley and I to make ours, and then we had a vote on it. So we voted on all the germane amendments. For the remaining amendments, we sought an agreement to proceed to vote on each of those pending amendments, the ones that had not been voted on. When the offer was rejected, after being on this bill for several days, the majority leader was forced to file cloture to conclude consideration of this bipartisan legislation. Majority Leader Reid did the only thing he could responsibly do because this is timely legislation. It is needed to protect people from losing their retirement funds, their homes, and their savings for their children to go to college. Americans are seeing their life's savings taken from them by unscrupulous criminals. I think of my parents who came up during the time of the Great Depression and started a small business. They saved all their lives for their own retirement, to send their children to college. I think of how I would have reacted if I had seen somebody steal from them. Well, it is happening to a lot of other parents and grandparents around this country. It is time for the Senate to act before more people have their lives destroyed. The Fraud Enforcement and Recovery Act will make necessary changes to criminal laws, including criminal fraud, securities, and money- laundering laws. It will increase the funding available to Federal law enforcement agencies to combat mortgage fraud and financial fraud. It will revise the False Claims Act to ensure that the Government can recover taxpayer dollars lost to fraud. This is a very important part of the bill. If somebody is stealing the taxpayers' dollars too, we want to get that back for the taxpayers. Throughout this debate, I have several times commended the Senator from Iowa, Mr. Grassley, our lead cosponsor. I commend him and I thank him for his contributions to the bill and the debate, his work in the Judiciary Committee, in getting us this far, and for his dedication to protect taxpayer funds by deterring, investigating, and prosecuting fraud. I thank our many cosponsors for their steadfast support. I have named them. I shall not again. But everybody I have heard from across this country supports this bill. No one should want to see taxpayer money intended to fund economic recovery efforts diverted by fraud. No one should want to see those who engage in mortgage fraud escape accountability. That is what is going to happen unless we vote to conclude the debate on this bill, pass it, get it to the other body, get it passed, get it signed into law, and give law enforcement the resources and tools they so desperately need. During the first months of this year, the Judiciary Committee has concentrated on what we can do legislatively to assist in the economic recovery. Already we have considered and reported this fraud enforcement bill and the patent reform bill, and worked to ensure that law enforcement assistance was included in the economic recovery legislation. The recovery efforts are generating signs of economic progress. That is good. That is necessary. But that is not enough. We need to make sure we are spending our public resources wisely. We want to make sure they are not being taken by fraud. We also need to ensure that those responsible for the downturn through fraudulent acts in financial markets and the housing market are held to account. It should not be a case where we taxpayers pay for what they did and they get away scot-free. Two decades ago we responded during the savings and loan crisis by hiring more agents, analysts, and prosecutors. We allocated the resources needed to catch those who took advantage to profit through fraud. We have to do it again. At our February hearing, we heard from the FBI, the Special Inspector General for the Troubled Assets Relief Program, and the Justice Department. All of our law enforcement witnesses testified of the need for this legislation and these additional law enforcement resources. Deputy Director John Pistole of the FBI warned that the losses of this economic crisis dwarf those of the savings and loan debacle, and the need for more enforcement is even greater now than it was then. Special Inspector General Neil Barofsky described how law enforcement resources had understandably been diverted from traditional white collar crime to terrorism, but that had left the Justice Department's capacity to respond to financial and securities fraud significantly weakened. He warned that with trillions of dollars being spent under TARP and other associated programs, ``it is essential that the appropriate resources be dedicated to meet the challenges of both deterring and prosecuting fraud.'' I agree. Acting Assistant Attorney General Rita Glavin of the Justice Department testified that our bill would provide the Justice Department with needed tools ``to aggressively fight fraud in the current economic climate'' and ``provide key statutory enhancements that will assist in ensuring that those who have committed fraud are held accountable.'' We then held a hearing with FBI Director Robert Mueller. Director Mueller reiterated law enforcement's message. Here is what he said: ``[The bill] will be tremendously helpful in giving us the tools to investigate . . . to help prosecutors prosecute, and finally to obtain the convictions and the jail sentences that are the deterrent to this activity taking place in the future.'' Each week we learn of additional scandals in the financial industry, as leading money managers are charged with multimillion dollar fraud schemes carried out over the years. We need to clean up the mess. That means providing the tools and resources that law enforcement needs to get to the bottom of this, restore order, and exact accountability. To show how severe this is, reports of mortgage fraud are up 682 percent over the past 5 years, more than 2,800 percent over the past decade. Some say we are losing more than $4 billion a year to mortgage fraud. And massive, new corporate frauds, like the $65 billion Ponzi scheme perpetrated by Bernard Madoff, are being uncovered as the economy has turned worse, exposing many investors to massive losses. The problem is getting worse, not better. The victims of these frauds have to be protected now more than ever. The victims include, as I have said, homeowners who have been fleeced by unscrupulous mortgage brokers, retirees who have lost their life savings in stock scams and Ponzi schemes, which have come to light only as corporations collapse and the market falls. They also include American taxpayers who have invested billions of dollars to restore our economy. These American taxpayers expect us to protect the investment they have made to make sure those funds are not exploited by crime. Each one of us is among those taxpayers. We all want to make sure the money is not stolen. I urge all Senators to support our efforts and work with us to pass this bill without further delay. That means to vote for cloture so that we can conclude the amendment process and vote on the bill. I see the distinguished cosponsor of this bill, Senator Grassley, on the floor and I yield to him.

Mr. LEAHY. Madam President, we have about a minute left. I reiterate for my colleagues that this is a bill that, when it is voted upon, I predict--and I am fairly good about such predictions--will pass almost unanimously, certainly with 80 to 90 votes for it. We handled a number of amendments--mostly Republican amendments--and we either included them or voted them down. Most were included in this bill. Cloture was filed only because a huge number of amendments came in that had absolutely nothing to do with the jurisdiction of either the Judiciary Committee or this bill. That is the only way to get on to the bill and give our law enforcement the tools they need. Many law enforcement groups in this country has spoken in favor of this. I ask unanimous consent that a group of letters from law enforcement organizations and other groups in favor of it be printed in the Record.

Mr. LEAHY

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

Mr. LEAHY. Madam President, what is the parliamentary situation?

Mr. LEAHY

Mr. LEAHY. That was not my understanding of what the Senator was asking, so I would object. Amendment No. 1004

Mr. LEAHY. Reserving the right to object, and I shall not object, it is my understanding that we now have about 7 minutes or 8 minutes. Then we will go off this and go back to the Kyl amendment. I want to protect the Senator from Arizona on his amendment. Even though it is one I disagree with, I want to protect his right to have that.

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

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

Mr. LEAHY. Mr. President, I understand that the Senator from Arizona and I have 2 minutes equally divided between us before the vote?

Mr. LEAHY. Mr. President, I ask for the yeas and nays on the amendment.

Mr. LEAHY. Madam President, what is the parliamentary situation?

Mr. LEAHY. I thank the Chair. Madam President, yesterday, when we were finally allowed to proceed to the Fraud Enforcement and Recovery Act, we began making real progress. Ten amendments were offered during the course of the day, four amendments were adopted, and six remain pending. I believe, had we not stopped voting at 5 o'clock, we could have finished the bill and passed it last night. As things stand, we hope to dispose of the six remaining amendments through the course of this morning. We should complete Senate consideration of the bill without further delay. I should note that the number of Senators who have cosponsored this bill continue to grow--now at 17 Senators. Most of the Senators who offered amendments yesterday praised the underlying bill. I think we have only one pending amendment that regards the underlying bill; only one that actually directly relates to it. Senator Grassley will speak to that amendment. Most of the amendments that have been offered, almost all the remaining amendments pending, aren't within the jurisdiction of the Judiciary Committee, they are within the jurisdiction of the Banking Committee, and I look forward to the leadership of that committee--the committee of jurisdiction--with respect to guidance on those amendments. In my view, it would have been better if Senators had withheld their amendments and waited to offer them on the housing and banking legislation that is going to be considered next week by the Senate. Then you would have at least had a bill that was relevant to the amendments. But, of course, every Senator can do whatever he or she wants to. Now, the banking/housing amendments that have been added to this Judiciary bill will complicate passage and enactment of what everyone agrees is needed--the fraud enforcement legislation. I think that is unfortunate. Among the examples are amendments affecting the use of TARP funds. Modifying the Troubled Asset Relief Program is a complicated matter. I wish it were not complicating this bill. I have no problem with such amendments being on a bill that actually relates to TARP, but this one does not. Indeed, in the 6 weeks, the month and a half since the fraud enforcement bill was reported by the Judiciary Committee, my staff and I reached out to Senators and no one raised these TARP issues. Had they, we would have engaged with Chairman Dodd and Senator Shelby and tried to work them out as best we could in the proper setting. The Obama administration has reformed the TARP process. It is doing its best to get a handle on the use of these funds. I intend to look to their views and to those of Chairman Dodd, but I believe complicating passage of this fraud enforcement bill with those issues is not helpful. Nonetheless, we will do what we have to in order to complete this process. The Obama administration's Statement of Administration Policy expresses their strong support for enactment of the underlying fraud enforcement bill. They note: Its provisions would provide Federal investigators and prosecutors with significant new criminal and civil tools and resources that would assist in holding accountable those who committed financial fraud. To give an idea, the Justice Department, the FBI, the Secret Service, the Special Inspector General for the TARP, law enforcement officers, good government advocates--all support the underlying bill. The New York Times wrote last weekend: Senators should not be asking if the expenditure on fraud enforcement called for in this bill is affordable, but whether it is enough. Fraud has damaged our economy. It has wrecked the lives and life savings of thousands of hardworking Americans. That is why this bill should not be complicated with a lot of extraneous material that is not in the jurisdiction of this bill. We have people around this country facing economic crises. They are preyed upon by some of these mortgage fraud groups. They promise to help them out of any kind of a mortgage difficulty they have and then they steal their retirement accounts. They steal the money they may have saved for their children to go to college. They steal the equity in their homes. Then they disappear, so people are left with no homes, no equity, no retirement accounts. If they saved money for their children to go to college, there is no money there, and the people who have committed the fraud get away. On those occasions when sometimes they are chased down, they may actually face a fine. But if they have stolen $200 million and get a $10 million fine--big deal. It is the cost of doing business. But if we have very tough legislation that allows the Justice Department and others to go in right at the get-go, to be able to go in and go after these people and make it very clear: If you are involved in this kind of fraud, if you are involved in this kind of theft, you are not going to get a fine, you are going to go to prison, then they are going to pay attention. I can tell you from my own experience as a prosecutor, I know fines in this kind of fraud situation do not serve as much of a deterrent. But if we are able to send in the police to arrest these people, and they know they are going to spend years behind bars, then they start paying attention. That is the only thing that really does it, and that is the only thing that is going to protect these Americans, American taxpayers, honest, hardworking men and women--the only thing that is going to protect them from losing everything they have in a downturn in the economy. We should pass this bill without further delay. We should move to the task of helping law enforcement find and hold accountable those who engage in such fraudulent conduct. This should be fairly easy. We can pass this bill and say: We are against crime, we are against fraud, we want the good guys to win, we want the bad guys to go to jail. It is as simple as that. That is why there are Republicans and Democrats who support this--across the political spectrum. Strengthening fraud enforcement is a key priority for President Obama. During the campaign the President promised to ``crack down on mortgage fraud professionals found guilty of fraud by increasing enforcement and creating new criminal penalties.'' The President made good in his promise in his budget, calling on FBI agents ``to investigate mortgage fraud and white collar crime,'' and more Federal prosecutors and civil attorneys ``to protect investors, the market, and the Federal Government's investment of resources in the financial crisis, and the American public.'' As taxpayers, we all have a stake in this. If these people are able to get away with their fraud, if they are able to get away with siphoning off this money, we taxpayers pay the bill in the long run. Those who are hit with the fraud pay far more than that. They may pay with their life savings, with their homes, with everything they have ever worked for. This bipartisan Fraud Enforcement and Recovery Act is a chance to authorize the necessary additional resources to detect, fight, and deter fraud that robs the American people and the American taxpayers of their funds. Investing resources in detecting and deterring fraud yields dividends for the American people. That is what this bill would do, and we should pass it without further delay. I want my colleagues to know, at some point, if people are not here to offer amendments, we will call up and vote on the amendments that are pending and then go to final passage. I know the Democratic and Republican leaders talked about a budget matter that has to come up that will probably take us into the evening. I am trying to save the time of all Senators, so I urge Senators to come because at some point everything that is pending is going to be called up and is going to be voted on up or down. I would at least like to have the Senators on the floor who are sponsoring them. Then we will go to final passage. I suggest the absence of a quorum.

Mr. LEAHY. Madam President, I thank my friend from South Dakota for his courtesy in talking to me first about the amendment. As I pointed out to him, these are matters before the Banking Committee. The Judiciary Committee has really got nothing to do with it, the same as many of these. I will wait for Senator Dodd and Senator Shelby to respond; I will not. I am going to make a unanimous consent request. I have notified both sides of this. There is a Boxer-Snowe amendment No. 1000. I ask unanimous consent that at 10:50--I realize it is going to be objected to, but I am trying to save both Republicans and Democrats from being here until 2 o'clock tomorrow morning because of the bill that comes up after this. I ask unanimous consent--and if this is objected to, I will repeat the request later on--that at 10:50 the pending business be set aside, the Boxer-Snowe amendment No. 1000 be brought up, there be 8 minutes of debate evenly divided before a vote, and that it then be in order to go to a rollcall vote on the amendment.

Mr. LEAHY. I have been advised that there would be an objection because they have not heard from the Banking Committee, from Senator Dodd and Senator Shelby. I would urge them to come to the floor so we can move forward, as most of the amendments pending or about to be pending have absolutely nothing to do with the jurisdiction of the Judiciary Committee, have nothing to do with the jurisdiction of the bill on the floor, have everything to do with a bill that is coming up next week from the Banking Committee. So I would urge the Banking Committee to come to the floor and speak to the amendments that are all within the jurisdiction of their committee. I mention this because if we don't, the other alternative is to accept everything and go immediately to final passage. I don't think that would be responsible because then the fraud bill that virtually everybody in this body, Republicans and Democrats, supports is going to die because it won't go past the other body. I realize every Senator has a right to offer any amendment he or she wants, but at some point we have to be realistic. If we are against the people who are committing fraud on the American taxpayers, something for which all of us have made speeches that we are in favor of stopping them--newspapers from the right to the left have editorialized in favor of stopping them--let's be honest and actually pass a bill that does it. The message amendments should wait until an appropriate bill that has something to do with them. I am also trying to help Senators. We are going to complete this bill before we go to budget matters. We can complete it easily by noon. As Senators know, I have supported Republican amendments that came up yesterday. They have all been accepted, including an amendment by Senator Grassley and myself. But we want to complete this legislation. I am perfectly willing to stay here all night long to finish this and the budget. But every hour we take on this is an hour longer on the budget. It is somewhat frustrating that Senators who have a concern can't find time to show up on the floor. Senators from both sides of the aisle don't have time to show up on the floor on a bill which we were notified 3 weeks ago was going to be on the floor at this time. I urge them to do so. Because as soon as these amendments are disposed of one way or the other, we will go to final passage. I yield the floor.

Mr. LEAHY. Mr. President, I also ask unanimous consent that there not be any amendments to that amendment.

Mr. LEAHY. Madam President, while the Senator from South Dakota is in the Chamber, if I may ask him a question, we also have amendment No. 982 offered by Senator Coburn which allows the unused TARP funds to pay for the Fraud Enforcement and Recovery Act. I ask the Senator if the Coburn amendment and his amendment are mutually exclusive?

Mr. LEAHY. I thank the Senator. I have read it carefully, and that was my conclusion. This is a matter more in line with the Banking Committee, and I will let them speak to it. This is unprecedented, that we have amendments on bills, whether this one or others, that are mutually exclusive. I did note that. I thank my friend from South Dakota for his comments. I yield the floor.

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

Mr. LEAHY. Madam President, I was distracted in another conversation. Senator Coburn left the floor. I wished to speak to him about his amendment because it appears to have already been covered in the Isakson-Conrad amendment. I would like to ask if he also feels that way. I would hope he might come back to the floor so we could discuss that. I also wish to notify the other side I am about to renew my unanimous consent request for a vote on the Boxer amendment. I will not until they have time to talk to the Republican side. There is no Republican on the floor right now. But in a few minutes, I will renew my request for a rollcall vote on that amendment. In the meantime, Madam President, I suggest the absence of a quorum.

Mr. LEAHY. Madam President, I will object, and I will just take a moment to explain. First off, I would note, as he typically does, the Senator from Arizona came and talked to me before and was very straightforward with what he was going to do. This talks about recoveries available under the False Claims Act. I think the Senate expert on the False Claims Act is Senator Grassley, a senior member of the Senate Judiciary Committee. Senator Grassley opposes this, as do I. I know there are going to be other amounts the distinguished Republican leader is going to bring up, but my reason in opposing them--and he has explained each one of them to me ahead of time, so there is no surprise--but I will oppose them because I believe without whistleblowers, a lot of these billions of dollars in fraud that have been found wouldn't have been found. Without the whistleblowers, the Government--the American taxpayers--wouldn't recover so much. The False Claims Act--and, again, Senator Grassley and others were the leaders in putting that together--has brought back more than $22 billion into the U.S. Treasury. Now, it has a balanced approach in providing incentives for said whistleblowers. They share in such recoveries if it is warranted and if it is approved by the judge. A judge has to approve it. It has worked out very well. Rather than there being an arbitrary cap, I would rather leave it to the judge to make the determination. Simply saying, well, we will limit it to three times the cost, then I worry about seeing a padding of expenses. I think it is very well balanced the way it is, including having a judge make the final decision. I think one of the things we all agree upon--I am sure the Senator from Arizona and I agree--is that we have to find fraud, we have to root it out, and we have to bring those who commit fraud to justice. What I am thinking about, as Senator Grassley has pointed out in the past, as have I, we have to give an incentive to the whistleblowers to bring the case. After all, we have seen all too often a whistleblower will alert us to the fraud, and the first thing that happens is they lose their job. They often risk retaliation. In fact, if they are turning in their coworkers or their supervisors and bringing out the fraud, this could be life-altering. It could actually change their professional career, often for the worse. They are looked at as the bad guys, but they are not the bad guys; they are the good guys. We ought to reward them. I will vote against it in this case. I object to considering it. I know the Senator from Arizona is going to have further amendments, but I just want him to know--and I want my colleagues to know what I have told him privately. I commend him for--as we have always done in cases we have had--talking to me ahead of time, as I have with him when I have had amendments or matters that may involve him. So I yield the floor.

Mr. LEAHY. I object.