Patrick Leahy

Mr. LEAHY

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. LEAHY. Mr. President, I understand the distinguished Senator from Pennsylvania is about to come to the floor. As each of us probably have times we are going to have to be on and off the floor, I am going to begin my comments now. I said Monday at the outset of this debate on the motion to proceed to the fraud enforcement bill that I hoped the objection to proceeding and any filibuster effort against this bill would be short lived. I am glad to see that cooler heads have prevailed. That actually happens in the Senate now and then. After being delayed 2 days, we have agreement to turn to the Leahy- Grassley Fraud Enforcement and Recovery Act. I thank the majority leader for his persistence. I regret that the weeks we spent reaching across the aisle for a time agreement on this bill were unavailing. The majority leader was required to file cloture to get us to this point. We are talking about going after people who defrauded American taxpayers, and the sooner we can go after them, the better we all are. I commend Senators Grassley and Kaufman, Klobuchar, Dorgan, and Shaheen for their statements to the Senate on Monday in support of this fraud enforcement bill. Their strong statements no doubt contributed to the reversal of the position that now allows us to proceed to what is a bipartisan fraud enforcement bill. In total, six Senators spoke in favor of the bill on Monday and no one spoke against. Each of us who spoke on Monday is a cosponsor. The bipartisan group of 16 Senators who have cosponsored this bill include, Senators Schumer, Murray, Bayh, Specter, Snowe, Harkin, Levin, Whitehouse, Rockefeller, and Sanders. On Monday, as the Senate debated the motion to proceed to the Leahy- Grassley fraud enforcement bill, the Obama administration issued a Statement of Administration Policy on the bill. I ask unanimous consent to have a copy of the Statement of Administration Policy printed in the Record at the conclusion of my statement.

Mr. LEAHY. This statement begins: The Administration strongly supports enactment of S. 386. 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 have committed financial fraud. I thank the President and the administration for their strong support. The statement continues: [The] legislation would benefit U.S. taxpayers by both addressing existing fraud and deterring waste, fraud and abuse of public funds. That is something we all should be in favor of. They went on to add that it ``would provide needed resources to strained law enforcement agencies.'' Of course, pointing out what we all know, these additional resources will far more than pay for themselves through fines and penalties, restitution, damages, and forfeitures. But there is more of a human thing in here. We have families losing their homes, defrauded, and losing their life savings. People are defrauding them and getting away with it. I want to not only get the people who did it, but I want to deter others from doing it in the future. I said on Monday that the Justice Department and the FBI, the Secret Service, the special inspector general for TARP, law enforcement officers, and many good-government advocates supported the bill. As we continue our debate, I ask unanimous consent to have printed in the Record at the conclusion of my statement a number of editorials and news articles favorable to the legislation.

Mr. LEAHY. Just this weekend, the New York Times wrote that fraud enforcement must be one of our priorities as we rebuild our economy, not only to hold accountable those who committed fraud and contributed to these hard times but to protect our efforts to stabilize the banking system and to jump-start the economy. They wrote: While Washington is spending billions to shore up the financial system, it is doing far too little to strengthen the federal government's ability to investigate and prosecute the sort of corporate and mortgage frauds that helped cause the economic collapse. Those efforts--never fully adequate--have suffered in recent years as money and people were shifted from white- collar fraud to anti-terrorist activities. That is precisely what law enforcement officials from the Justice Department and the FBI and the special inspector general for the Troubled Asset Relief Program told us in their testimony before the Judiciary Committee. As the Times wrote, referring to the Fraud Enforcement and Recovery Act: A bipartisan measure newly approved by the Senate Judiciary Committee and now coming before the full Senate would begin to close the enforcement gap . . . and strengthen existing federal fraud and money-laundering provisions, updating the definition of ``financial institution'' in federal fraud statutes to include largely unregulated mortgage businesses, for example, and reversing flawed court decisions that have undermined the effectiveness of the False Claims Act, one of the most potent weapons against government fraud. Like a similar enforcement buildup in response to the savings and loan crises of the 1980s, this one will contribute far more than it costs to the federal Treasury through restitutions and asset recoveries. . . .Senators should not be asking if the expenditure is affordable, but whether it is enough. Every prosecutor I have talked to says they need this. I am willing to bet that every person who has been defrauded by some of these unregulated mortgage companies would give anything to have had this on the books and these people there 6 months or a year ago before they lost their life savings, before they lost their homes, their chance for their children to go to college, and before they lost the chance for retirement. But there are still millions of Americans at risk. Let's protect them. Let's show that we are against such crime and that we will provide the tools to stop it. One of the things every prosecutor knows and learns is, if you ask people if they are against crime, everybody is against crime. If you ask legislative bodies: Are you willing to pass resolutions against crime, of course they are. But then you ask the real question: Will you give us the tools to fight crime? That is where everybody goes: Well, let's see. Here are the tools to fight crime. This is something supported across the political spectrum. Look at the Washington Times, a very conservative newspaper. They raised very similar concerns about the need to fight fraud and protect the taxpayers' money being spent on the economic stimulus. In an editorial on March 26 entitled ``Stimulus Spending Ripe for Fraud,'' the Washington Times called for fraud enforcement. In commenting on an Energy Department official who was concerned with waste, fraud, and abuse in stimulus funding, they wrote: The same attitude must be adopted by all agencies overseeing the implementation of the massive spending measure. Well, they are right. They went on to say that simply having a Web site to provide greater transparency, while a good thing, is not enough. They said: [E]ven an unprecedented level of post-spending transparency will do only so much to ensure waste is kept to a minimum. . . . It will take more than a new Web site and the sort of staff training the administration has implemented to turn an understanding of the problem into real accountability. . . . The administration is, in fact, doing more than creating the most transparent Government in history. They are supporting this bill and its aggressive response to fraud enforcement. The bill will actually translate rhetoric into reality, a reality that can save billions. It is just the kind of action these editorials from the right to the left have asked for. Look at a front page article of March 12, entitled ``Financial Fraud Is the Focus of Prosecutors.'' The New York Times reported that fraud was surging, particularly mortgage fraud cases. It is very interesting. We talk about tough enforcement. The chairman of the House Banking Committee said, ``Rules don't work if people have no fear of them.'' Anybody in law enforcement can tell us that. Every State has laws against burglary, for example. But put two warehouses on the same street, one with a rusty lock on the door and no alarm system, no lights, one with a state-of-the-art alarm system, lights, the ability to call police immediately, and which one gets broken into? The law is the same. You are going to break into the one that is easy. You can have all the laws in the world on mortgage fraud, and if people think they are not going to be enforced, they are going to break those laws. If you believe the worst that will happen is you might get a fine, if you have a $100 million fraud operation going and you might get a $5 million fine, gee-whiz, that is the cost of doing business. If you find out, however, that you might go to prison, that in all likelihood you will go to prison as well as losing the money you defrauded from people and allow that money to go back to them, then you are going to think twice. Neil Barofsky, the special inspector general for the Troubled Assets Relief Program, issued a 250-page report warning yet again that the bank bailout funds are particularly vulnerable to fraud. He talked about protecting American taxpayers. He testified about similar concerns when he appeared before the Judiciary Committee in support of the bill. Strengthening fraud enforcement is a key priority for the President. During the campaign, President Obama promised to ``crack down on mortgage fraud professionals found guilty of fraud by increasing enforcement [but also] creating new criminal penalties.'' The President, in his budget to Congress, called for additional FBI agents ``to investigate mortgage fraud and white collar crime,'' as well as hiring 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.'' Additional money was included in the initial recovery package for the FBI, but it was cut out during negotiations that led to its passage. This bill is our chance to authorize the necessary resources. I can't state enough, it is not enough to have a law on the books that says: Thou shalt not commit crime. It works only if people think they are going to get caught and they are going to lose the money they have stolen and they are going to go to jail on top of that. As long as people carrying out these frauds and these scams think they will never get caught, will never get prosecuted, the laws aren't tough enough, they are in an unregulated industry, nobody is going to go after them, why not keep trying. The worst that could happen is somewhere along the line you might have to give a little bit of the money back and keep scamming people, keep ruining people's lives, keep taking people's homes away from them, keep taking people's retirement accounts, keep taking the money they have saved for their kids to go to college. If all you think you might get is a little slap on the wrist or in all likelihood you will get away with it completely, what is to stop you? Obviously not a sense of morality, as we saw with Bernie Madoff and others. We have to have laws to stop them. We have to have enforcement of the laws. We have to have people go to prison for stealing retirement accounts and stealing children's money being saved for college and stealing homes through mortgages scams. We should pass this. I see the distinguished Senator from Pennsylvania in the Chamber. He is a man with a distinguished career, first as a prosecutor before he came here and now a man who has been both chairman and ranking member of the Senate Judiciary Committee. He understands this. I yield the floor. Exhibit 1 Statement of Administration Policy

Mr. LEAHY. Well, Mr. President, I suspect my experience is probably similar to that of the distinguished Senator from Pennsylvania. Fines, especially in these commercial fraud type things, were seen as the cost of doing business. If you steal $100 million, and you get a $5 million fine, then you stole $95 million. But if they think they are going to go to prison, that is when they think twice. We saw this after Enron and other things that when people actually believe they are going to go to prison, then they start thinking twice. I am sure this was the experience the Senator from Pennsylvania had. It is the experience I had. Nothing focuses the attention of somebody who is going to want to defraud someone if they think they are going to spend years in a tiny cell. That focuses their attention, and suddenly it is not worth the effort. That is what we want to do here because the people who are being defrauded are the most defenseless. They are the people who have lost their retirement. They are the people who have lost their homes. They are the people who have lost the ability to pay for their kids to go to college. The Senator from Pennsylvania is absolutely right. (Mrs. GILLIBRAND assumed the chair.)

Mr. LEAHY. Madam President, I rise to explain what this is, and then I will try to schedule a vote on the Kyl amendment and the Grassley- Leahy amendment at some time, I hope in the next few minutes. As we begin consideration of the bill, Senator Grassley and I are offering a brief managers' amendment. I was just explaining for everybody that it makes two simple technical changes in the bill in order to clarify the original intent of the bill and in order to avoid any ambiguity in the statutory language. It makes sure the bill extends the major fraud statute to all the funds being expended to stabilize and strengthen our banking system. The original language in the bill amended the major fraud statute to protect against frauds related to many Government economic recovery programs, including the purchase of ``preferred stock in a company'' by the Government as part of our efforts to stabilize banks. The Justice Department advises that this language may be too narrow, as recovery efforts may include purchases of other types of stock or other troubled assets. So the Justice Department, which supports the Leahy-Grassley bill, has requested that the reference to ``any preferred stock in a company'' be replaced with the phrase ``any troubled asset as defined in the Emergency Economic Stabilization Act of 2008.'' This simple change will make clear that all troubled assets purchased by the Government as part of the recovery effort will be covered under the major fraud statute. This change is consistent with the original intent of the bill and simply provides greater assurances that taxpayers' money will be protected to the full extent of the Federal law. Second, the amendment strikes five words in the bill that could create unintended ambiguity in the statute and could be used to limit the effect of the bill. The phrase ``for such property or services'' appears in the original statute as a modifier of the kinds of contracts or subcontracts covered by the major fraud statute. With the changes included in the bill, the language is no longer applicable because the transactions involved in our efforts to stabilize banks include grants, loans, and purchases of assets that may not legally be characterized as ``property or services.'' If this phrase remained in the statute, it could be used improperly to limit the scope of the major fraud statute and undermine the intent of this legislation, which is to cover all of the Government's efforts to rebuild our economy and restart our banking system. Frankly, when we send prosecutors out to get people for defrauding Americans, I don't want to have something unintentionally in the statute which may limit the ability of prosecutors to go after those who are defrauding Americans. These changes that have been requested and supported by the Justice Department have the full support of Senator Grassley, the lead Republican cosponsor of this bill and the Republican manager for this bill. All Senators should support this bipartisan managers' amendment which should protect our efforts to strengthen the banking system and restart the economy. What I am going to do, Madam President, I am going to suggest that when Senator Kyl gets here and Senator Grassley gets back to the floor, we accept this managers' amendment--I think it is noncontroversial--and that we then have a vote as soon as he has had a chance to say what he would like to on the Kyl amendment. In the meantime, we will leave the managers' amendment the pending amendment just so Senators then can understand, if we can work it that way, hopefully we will have a vote relatively soon. I suggest the absence of a quorum.

Mr. LEAHY. Mr. President, I have been in discussions with the distinguished Republican deputy leader, Senator Kyl. We do not have a formal agreement but what we are looking toward doing, in the next 10 minutes or so, is having acceptance of the managers' technical amendment and then going to a rollcall vote on Senator Kyl's amendment, which I will support. I suggest the absence of a quorum.

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

Mr. LEAHY. Mr. President, we have the Leahy-Grassley technical amendment. I ask for its passage.

Mr. LEAHY. Mr. President, I move to reconsider the vote.

Mr. LEAHY. I believe it would be in order now to bring up the Kyl amendment; is that correct?

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

Mr. LEAHY. Mr. President, I thank the Senator from Arizona. He worked with me and Senator Grassley. We both support his amendment. I will vote for it.

Mr. LEAHY. Mr. President, on the particular matter, the distinguished Senator from Arizona and the distinguished Senator from North Dakota have spoken about the jurisdiction of the Judiciary Committee, and I assume the chairman of the Rules Committee will speak about it. I also understand that Senators Schumer and Coburn have amendments. I urge them to come to the floor because there has been a request for a vote on the Isakson-Conrad amendment. I will not make a unanimous consent request at the moment, but it is our intent to have a vote on that around 4:20, 4:30--on the Isakson-Conrad amendment. I understand, because of budget matters that come up tomorrow, there is an intent to try to finish this bill tonight. We can finish this bill tonight. I hope we could finish it before 6 or 7 or 8 o'clock. Having an Irish father and Italian mother, I come with a hopeful attitude by nature. But I note we will have a vote around 4:30, 4:20 or 4:30. There are a number of matters. I see the distinguished and able chairman of the Banking Committee here. There are a number of matters within the jurisdiction of the Banking Committee. I will let him speak to that. I urge Senators who have amendments to bring them to the floor because as soon as we have no amendments apparently here, we are going to try to move to final passage. I yield the floor.

Mr. LEAHY. Mr. President, I ask unanimous consent that the Senate proceed to vote in relation to amendment No. 995 at 4:32 p.m. today and that the 4 minutes immediately prior to the vote be equally divided and controlled between myself and Senator Isakson or our designees; that no amendment be in order to the amendment prior to a vote in relation thereto; and upon disposition of amendment No. 995, Senator Dorgan be recognized to offer his select committee amendment.

Mr. LEAHY. Mr. President, has the Senator from Georgia requested a rollcall vote?

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

Mr. LEAHY. Mr. President, I yield back all time and ask that the rollcall vote start now.

Mr. LEAHY. Mr. President, will the Senator yield?

Mr. LEAHY. Mr. President, I appreciate the comments of the Senator from Nevada, the distinguished majority leader. I will stay here for a few minutes, if there are some amendments pending. If there are some amendments pending that we could take by voice vote, I am perfectly willing to do that tonight. If there are rollcalls, if there are amendments people think will need rollcalls, I don't know what time the distinguished leader wants to go back on the bill in the morning, but I would suggest that if we start early on that----

Mr. LEAHY. Then if I might further inquire of the leader--and I think that is perfectly fair--I intend that at such time as there are no amendments pending, or no amendments pending that people actually expect to go forward, we will go to final passage. This is a bill that saves taxpayers' money but more importantly protects a lot of people who are being preyed upon by people wanting to defraud them out of their homes, out of their retirement, out of the money they have saved for their children to go to college. So I think, with what is happening--and it has been proven--all of these frauds that have taken place all over the country, the last thing in the world the American people want to see is us delay it. I thank the distinguished leader for bringing up this bill this week. It is my intention--my hope, anyway--to have it finished by noon tomorrow.

Mr. LEAHY. I would note further to the leader that Senator Grassley, who is not only the chief sponsor, but we have a dozen or so sponsors on both sides of the aisle--Senator Grassley and I worked very closely with a number of Senators to work out amendments. The first amendment we brought up was one we worked on with Senator Kyl on, and I think that passed 95 to 1, or something like that. So we are ready to work with people, but we will finish this bill soon. Thank you. I yield the floor.

Mr. LEAHY. Will the Senator yield for a question?

Mr. LEAHY. Mr. President, I understand there is a request for a rollcall on the Senator's amendment. I was not going to ask for one, as he knows. I wonder if he would have any problem with a unanimous consent agreement that when we come back on the bill in the morning, his amendment will be the pending amendment and there be 10 minutes a side, and we then proceed to a vote on it. I am throwing this out as a suggestion, so my colleagues will hear it. For one thing, rather than spend several hours on the same amendment in the morning, or tonight, perhaps we will be able to do this: I say to the floor staff that this is a unanimous consent request that I will be making. I do not intend to make a unanimous consent request at this time. I will soon make this request.

Mr. LEAHY. Mr. President, I ask unanimous consent that on Thursday, April 23, after the Senate resumes consideration of S. 386, the time until 10 a.m. be for debate with respect to Dorgan-McCain amendment No. 999, with the time equally divided and controlled between Senators Dorgan and myself, or our designees; that no amendments be in order to the amendment prior to a vote in relation thereto; that at 10 a.m., the Senate proceed to a vote in relation to the amendment.