Carl Levin

Mr. LEVIN

Mr. LEVIN. Mr. President, today I am introducing, along with my colleagues Senator Grassley, Senator Sarbanes, Senator Bill Nelson, Senator Mike DeWine, and Senator Jon Kyl, the Money Laundering Abatement Act, a bill to modernize and strengthen U.S. laws to detect, stop and prosecute money laundering through U.S. banks. The safety and soundness of our banking system, the stability of the U.S. dollar, the services our banks perform, and the returns our banks earn for depositors make the U.S. banking system an attractive location for money launderers. And money launderers who are able to use U.S. banks can take advantage of the prestige of these banks to lend credibility to their operations, reassure victims, and send wire transfers that may attract less scrutiny from law enforcement. So whether it is to protect their funds or further their crimes, money launderers want access to U.S. banks, and they are devising one scheme after another to infiltrate the U.S. banking system. The funds they want to move through our banks are enormous. Estimates are that at least $1 trillion in criminal proceeds are laundered each year, with about half of that amount, $500 billion, going through U.S. banks. Stopping this flood of dirty money is a top priority for U.S. law enforcement which spent about $650 million in taxpayer dollars last year on anti-money laundering efforts. That's because money laundering damages U.S. interests in so many ways, rewarding criminals and financing crime, undermining the integrity of international financial systems, weakening emerging democracies and distorting their economies, and impeding the international fight against corruption, drug trafficking and organized crime. The bill we are introducing today would provide new and improved tools to stop money laundering. Because it includes provisions that would outlaw the proceeds of foreign corruption, cut off the access of offshore shell banks to U.S. banks, and end foreign bank immunity to forfeiture of laundered funds, this bill would close some of the worst gaps and remedy some of the most glaring weaknesses in existing anti- money laundering laws. For example, the bill would: 1. add foreign corruption offenses, such as bribery and theft of government funds, to the list of foreign crimes that can trigger a U.S. money laundering prosecution; 2. bar U.S. banks from providing banking services to foreign shell banks, which are banks that have no physical presence in any country and carry high money laundering risks; 3. require U.S. banks to conduct enhanced due diligence reviews to guard against money laundering when opening (a) a private bank account with $1 million or more for a foreign person, or (b) a correspondent account for an offshore bank or foreign bank in a country posing high money laundering risks; and 4. make a depositor's funds in a foreign bank's U.S. correspondent account subject to the same civil forfeiture rules that apply to depositors' funds in other U.S. bank accounts. These provisions are the product of almost three years of work by my staff at the Senate Permanent Subcommittee on Investigations examining money laundering problems in the private and correspondent banking fields. Countless interviews with money laundering experts, bankers, regulators, law enforcement personnel, criminals and victims, and the careful review of literally tens of thousands of pages of documents led to the issuance of two staff reports in 1999 and 2001, and several days of Subcommittee hearings, setting out the problems uncovered and recommendations for strengthening U.S. enforcement efforts. The first Subcommittee investigation examined private banking, a growing and lucrative banking sector which offers financial services to wealthy individuals, who usually must deposit $1 million or more to open a private bank account. In return, the client is assigned a ``private banker'' who provides the client with sophisticated financial services, such as offshore accounts, shell corporations, and high dollar wire transfers, which raise money laundering concerns. A key issue to emerge from this investigation is the role that private banks play in opening accounts and accepting hundreds of millions of dollars in deposits from senior foreign officials or their relatives, even amid allegations or suspicions that the deposits may be the product of government corruption or other criminal conduct. The 1999 staff report described four case histories of senior government officials or their relatives depositing hundreds of millions of suspect dollars into private bank accounts at Citibank, the largest bank in the United States. These case histories showed how Citibank Private Bank had become the banker for a rogues' gallery of senior government officials or their relatives. One infamous example is Raul Salinas, the brother of the former President of Mexico, who is imprisoned in Mexico for murder and is under indictment in Switzerland for money laundering associated with drug trafficking. He deposited almost $100 million into his Citibank Private Bank accounts. Another example involves the three sons of General Sani Abacha, who was the former military leader of Nigeria and was notorious for misappropriating and extorting billions of dollars from his country. His sons deposited more than $110 million into Citibank Private Bank accounts. The investigation determined that Citibank's private bankers asked few questions before opening the accounts and accepting the funds. It also found that, because foreign corruption offenses are not currently on the list of crimes that can trigger a U.S. money laundering prosecution, corrupt foreign leaders may be targeting U.S. banks as a safe haven for their funds. Another striking aspect of the investigation was how a culture of secrecy pervaded most private banking transactions. Citibank private bankers, for example, routinely helped clients set up offshore shell companies and open bank accounts in the name of these companies or under other fictional names such as ``Bonaparte'' or ``Gelsobella.'' After opening these accounts, secrecy remained such a priority that Citibank private bankers were often told by their superiors not to keep any record in the United States disclosing the true owner of the offshore accounts or corporations they manage. One private banker told of stashing with his secretary a ``cheat sheet'' that identified which client owned which shell company in order to hide it from Citibank managers who did not allow such ownership information to be kept in the United States. On some occasions, Citibank Private Bank even hid ownership information from its own staff. For example, one Citibank private banker in London worked for years on a Salinas account without knowing Salinas was the beneficial owner. Salinas was instead referred to by the name of his offshore corporation, Trocca, Ltd., or by a code, ``CC- 2,'' which stood for ``Confidential Client Number 2.'' Citibank even went so far as to allow Mr. Salinas to deposit millions of dollars into his private bank accounts without putting his name on the wire transfers moving the funds, instead allowing his future wife, using an assumed name, to wire the funds through Citibank's own administrative accounts. Later, when Mr. Salinas' wife was arrested, Citibank discussed transferring all of his funds to Switzerland to minimize disclosure, abandoning that suggestion only after noting that the wire transfer documentation would disclose the funds' final destination. That's how far one major U.S. private bank went on client secrecy. The Subcommittee's second money laundering investigation focused on U.S. correspondent accounts opened for high risk foreign banks. Correspondent banking occurs when one bank provides services to another bank to move funds or carry out other financial transactions. It is an essential feature of international banking, allowing the rapid movement of funds across borders and enabling banks and their clients to conduct business worldwide, including in jurisdictions where the banks do not maintain offices. The problem uncovered by the Subcommittee's year-long investigation is that too many U.S. banks, through the correspondent accounts they provide to foreign banks that carry high risks of money laundering, have become conduits for illicit funds associated with drug trafficking, financial fraud, Internet gambling and other crimes. The investigation identified three categories of foreign banks with high risks of money laundering: shell banks, offshore banks, and banks in jurisdictions with weak anti-money laundering controls. Because many U.S. banks have routinely failed to screen and monitor these high risk foreign banks as clients, they have been exposed to poorly regulated, poorly managed, sometimes corrupt, foreign banks with weak or no anti- money laundering controls. The U.S. correspondent accounts have been used by these foreign banks, their owners and criminal clients to gain direct access to the U.S. financial system, to benefit from the safety and soundness of the U.S. banking system, and to launder dirty money through U.S. bank accounts. In February of this year, my staff released a 450 page report detailing the money laundering problems uncovered in correspondent banking. The report indicated that virtually every U.S. bank examined, from Chase Manhattan, to Bank of America, to First Union, to Citibank, had opened correspondent accounts for offshore banks. Citibank also admitted opening correspondent accounts for offshore shell banks with no physical presence in any jurisdiction. The report presents ten detailed case histories showing how high risk foreign banks managed to move billions of dollars through U.S. banks, including hundreds of millions of dollars in illicit funds associated with drug trafficking, financial fraud or Internet gambling. In some cases, the foreign banks were engaged in criminal behavior; in others, the foreign banks had such poor anti-money laundering controls that they did not know or appeared not to care whether their clients were engaged in criminal behavior. Several of the foreign banks operated well outside the parameters of normal banking practices, without basic fiscal or administrative controls, account opening procedures or anti- money laundering safeguards. All had limited resources and staff and relied heavily upon their U.S. correspondent accounts to conduct operations, provide client services, and move funds. Most completed virtually all of their transactions through their correspondent accounts, making correspondent banking integral to their operations. The result was that their U.S. correspondent accounts served as a significant gateway into the U.S. financial system for criminals and money launderers. In March 2001, the Subcommittee held hearings on the problem of international correspondent banking and money laundering. One witness was a former owner of an offshore bank in the Cayman Islands, John Mathewson, who pleaded guilty in the United States to conspiracy to commit money laundering and tax evasion and has spent the past 5 years helping to prosecute his former clients for tax evasion and other crimes. Mr. Mathewson testified that he had charged his bank clients about $5,000 to set up an offshore shell corporation and another $3,000 for an annual corporate management fee, before opening a bank account for them in the name of the shell corporation. He noted that no one would pay $8,000 for a bank account in the Cayman Islands when they could have the same account for free in the United States, unless they were willing to pay a premium for secrecy. He testified that 95 percent of his 2,000 clients were U.S. citizens, and he believed that 100 percent of his bank clients were engaged in tax evasion. He characterized his offshore bank as a ``run-of-the-mill'' operation. He also said that the Achilles' heel of the offshore banking community is its dependence upon correspondent banks to do business and that was how jurisdictions like the United States could take control of the situation and stop abuses, if we had the political will to do so. I think we do have that political will, and that's why we are introducing this bill today. Let me describe some of its key provisions. The Money Laundering Abatement Act would add foreign corruption offenses such as bribery and theft of government funds to the list of crimes that can trigger a U.S. money laundering prosecution. This provision would make it clear that corrupt funds are not welcome here, and that corrupt leaders can expect criminal prosecutions if they try to stash dirty money in our banks. After all, America can't have it both ways. We can't condemn corruption abroad, be it officials taking bribes or looting their treasuries, and then tolerate American banks profiting off that corruption. Second, the bill would require U.S. banks and U.S. branches of foreign banks to exercise enhanced due diligence before opening a private bank account of $1 million or more for a foreign person, and to take particular care before opening accounts for foreign government officials, their close relatives or associates to make sure the funds are not tainted by corruption. This due diligence provision targets the greatest money laundering risks that the Subcommittee investigation identified in the private banking field. While some U.S. banks are already performing enhanced due diligence reviews, this provision would put that requirement into law and bring U.S. law into alignment with most other countries engaged in the fight against money laundering. The Money Laundering Abatement Act would also put an end to some of the extreme secrecy practices at private banks. For example, if a U.S. bank or a U.S. branch of a foreign bank opened or managed an account in the United States for a foreign accountholder, the bill would require the bank to keep a record in the United States identifying that foreign accountholder. After all, U.S. banks already keep records of accounts held by U.S. citizens, and there is no reason to allow U.S. banks to administer offshore accounts for foreign accountholders with less openness than other U.S. bank accounts. The bill would also put an end to the type of secret fund transfers that went on in the Salinas matter by prohibiting bank clients from independently directing funds to be deposited into a bank's ``concentration account,'' an administrative account which merges and processes funds from multiple accounts and transactions, and by requiring banks to link client names to all client funds passing through the bank's concentration accounts. Our bill would also take a number of steps to close the door on money laundering through U.S. correspondent accounts. First and most importantly, our bill would bar any U.S. bank or U.S. branch of a foreign bank from opening a U.S. correspondent account for a foreign offshore shell bank, which the Subcommittee investigation found to pose the highest money laundering risks of all foreign banks. Shell banks are banks that have no physical presence anywhere--no office where customers can go to conduct banking transactions or where regulators can go to inspect records and observe bank operations. They also have no affiliation with any other bank and are not regulated through any affiliated bank. The Subcommittee investigation examined four shell banks in detail. All four were found to be operating far outside the parameters of normal banking practice, often without paid staff, basic fiscal and administrative controls, or anti-money laundering safeguards. All four also largely escaped regulatory oversight. All four used U.S. bank accounts to transact business and move millions of dollars in suspect funds associated with drug trafficking, financial fraud, bribe money or other misconduct. Let me describe one example from the Subcommittee's investigation. M.A. Bank was an offshore bank that was licensed in the Cayman Islands, but had no physical office of its own in any country. In 10 years of operation, M.A. Bank never underwent an examination by any bank regulator. Its owners have since admitted that the bank opened accounts in fictitious names, accepted deposits for unknown persons, allowed clients to authorize third parties to make large withdrawals, and manufactured withdrawal slips or receipts on request. Nevertheless, M.A. Bank was able to open a U.S. correspondent account at Citibank in New York. M.A. Bank used that account to move hundreds of millions of dollars for clients in Argentina, including $7.7 million in illegal drug money. After the Subcommittee staff began investigating the account, Citibank closed it. After the staff report came out, the Cayman Islands decided to close the bank, but since the bank had no office, Cayman regulators at first didn't know where to go. They eventually sent teams to Uruguay and Argentina to locate bank documents and take control of bank operations. The Cayman Islands finally closed the bank a few months ago. The four shell banks investigated by the Subcommittee are only the tip of the iceberg. There are hundreds in existence, operating through correspondent accounts in the United States and around the world. By nature, shell banks operate in extreme secrecy and are resistant to regulatory oversight. No one really knows what they are up to other than their owners. Some jurisdictions known for offshore businesses, such as Jersey and Guernsey, refuse to license shell banks. Others, such as the Cayman Islands and the Bahamas, stopped issuing shell bank licenses several years ago. In addition, both the Cayman Islands and Bahamas announced that by the end of this year, 2001, all of their existing shell banks, which together number about 120, must establish a physical office within their respective jurisdictions, or lose their license. But other offshore jurisdictions, such as Nauru, Vanuatu and Montenegro, are continuing to license shell banks. Nauru alone has licensed about 400. Here at home, many U.S. banks, such as Bank of America and Chase Manhattan, will not open correspondent bank accounts for offshore shell banks as a matter of policy. But other banks, such as Citibank, continue to do business with offshore shell banks and continue to expose the U.S. banking system to the money laundering risks they bring. Our bill would close the door to these money laundering risks. Foreign shell banks occupy the bottom rung of the banking world, and they don't deserve a place in the U.S. banking system. It is time to shut the door to these rogue operators. In addition to barring offshore shell banks, the bill would require U.S. banks to exercise enhanced due diligence before opening a correspondent account for an offshore bank or a bank licensed by a jurisdiction known for poor anti-money laundering controls. These foreign banks also expose U.S. banks to high money laundering risks. Requiring U.S. banks to exercise enhanced due diligence prior to opening an account for one of these banks would not only help protect the U.S. banking system from the money laundering risks posed by these foreign banks, but would also help bring U.S. law into parity with the anti-money laundering laws of other countries. Another provision in the bill would address a key weakness in existing U.S. forfeiture law as applied to correspondent banking, by making a depositor's funds in a foreign bank's U.S. correspondent account subject to the same civil forfeiture rules that apply to depositors' funds in all other U.S. bank accounts. Right now, due to a quirk in the law, U.S. law enforcement faces a significant and unusual legal barrier to seizing funds from a correspondent account. Unlike a regular U.S. bank account, it is not enough for U.S. law enforcement to show that criminal proceeds were deposited into the correspondent account; the government must also show that the foreign bank holding the deposits was somehow part of the wrongdoing. That's not only a tough job, that can be an impossible job. In many cases, the foreign bank will not have been part of the wrongdoing, but that's a strange reason for letting the foreign depositor who was engaged in the wrongdoing escape forfeiture. And in those cases where the foreign bank may have been involved, no prosecutor will be able to allege it in a complaint without first getting the resources needed to chase the foreign bank abroad. Take the example of a financial fraud committed by a Nigerian national against a U.S. victim, a fraud pattern which the U.S. State Department has identified as affecting many U.S. citizens and businesses and which consumes U.S. law enforcement resources across the country. If the Nigerian fraudster deposits the fraud victim's funds in a personal account at a U.S. bank, U.S. law enforcement can freeze the funds and litigate the case in court. But if the fraudster instead deposits the victim's funds in a U.S. correspondent account belonging to a Nigerian bank at which the Nigerian fraudster does business, U.S. law enforcement cannot freeze the funds unless it is prepared to show that the Nigerian bank was involved in the fraud. And what prosecutor has the resources to travel to Nigeria to investigate a Nigerian bank? Even when the victim is sitting in the prosecutor's office, and his funds are still in the United States in a U.S. bank, the prosecutor's hands are tied unless he or she is willing to take on the Nigerian bank as well as the Nigerian fraudster. That is one reason so many Nigerian fraud cases are no longer being prosecuted in this country, because Nigerian criminals are taking advantage of that quirk in U.S. forfeiture law to prevent law enforcement from seizing a victim's money before it is transferred out of the country. Our bill would eliminate that quirk by placing civil forfeitures of funds in correspondent accounts on the same footing as forfeitures of funds in all other U.S. accounts. There is just no reason foreign banks should be shielded from forfeitures when U.S. banks would not be. The Levin-Grassley bill has a number of other provisions that would help U.S. law enforcement in the battle against money laundering. They include giving U.S. courts ``long-arm'' jurisdiction over foreign banks with U.S. correspondent accounts; expanding the definition of money laundering to include laundering funds through a foreign bank; authorizing U.S. prosecutors to use a Federal receiver to find a criminal defendant's assets, wherever located; and requiring foreign banks to designate a U.S. resident for service of subpoenas. These are realistic, practical provisions that could make a real difference in the fight against money laundering. One state Attorney General who has reviewed the bill has written that ``there is a serious need for modernizing and refining the federal money laundering statutes to thwart the efforts of the criminal element and close the loopholes they use to their advantage.'' He expresses ``strong support'' for the bill, explaining that it ``will greatly aid law enforcement'' and ``provide new tools that will assist law enforcement in keeping pace with the modern money laundering schemes.'' Another state Attorney General has written that the bill ``would provide much needed relief from some of the most pressing problems in money laundering enforcement in the international arena.'' She predicts that the bill's ``effects on money laundering affecting victims of crime and illegal drug trafficking would be dramatic.'' She also writes that the ``burdens it places on the financial institutions are well considered, closely tailored to the problems, and reasonable in light of the public benefits involved.'' This country passed its first major anti-money laundering law in 1970, when Congress made clear its desire to not allow U.S. banks to function as conduits for dirty money. Since then, the world has experienced an enormous growth in the accumulation of wealth by individuals around the world, and in the activities of private banks servicing these clients. At the same time there has been a rapid increase in offshore activities, with the number of offshore jurisdictions doubling from about 30 to about 60, and the number of offshore banks skyrocketing to an estimated worldwide total of 4,000, including more than 500 shell banks. At the same time, the Subcommittee investigations have shown that private and correspondent accounts have become gateways for criminals to carry on money laundering and other criminal activity in the United States and to benefit from the safety and soundness of the U.S. banking industry. U.S. law enforcement needs stronger tools to detect, stop and prosecute money launderers attempting to use these gateways into the U.S. banking system. Enacting this legislation would help provide the tools needed to close those money laundering gateways and curb the dirty funds seeking entry into the U.S. banking industry. I ask unanimous consent that letters in support for the bill from the two State Attorneys General of the States of Massachusetts and Arizona, as well as a short summary of the bill, and the text of the bill be printed in the Record.

Mr. LEVIN

Mr. LEVIN. Mr. President, I am very disappointed by the Emergency Agricultural Supplemental that this body has just passed because of the President's opposition to the much better legislation reported by the Senate Agriculture Committee and the fact the House of Representatives already left for the August recess. The Senate has passed a bill that fails to provide adequate aid to America's farmers and rural communities. Some on the other side of the aisle claimed that the bill passed by Senate Agricultural Committee spends too much money in support of America's farmers and that the farm economy is improving. I wish that were the case, but the facts in rural America do not support that assertion. The major farm groups do not agree with that conclusion, that is why they supported the stronger alternative, the bill proposed by the Chairman of the Agriculture Committee Senator Harkin. As we all know, our Nation's farmers have not shared in the prosperity which many Americans have experienced over the past decade. In the past three years, Congress has assisted America's farmers by providing substantial assistance to agricultural producers. No one, not least of all America's farmers, likes the fact that annual emergency agriculture supplementals have seemingly become routine. Senator Harkin, chairman of the Senate Agriculture Committee, crafted an impressive bill that addressed the needs of specialty crop farmers, in a more comprehensive fashion, than does the bill that just passed the Senate. The bill that just passed provides nearly a billion dollars less in AMTA payments for traditional row crops than did the committee version. In addition, the passed bill makes no real effort to address the problems faced by farmers in States that do not rely on AMTA payments. It is difficult for a Senator with a large base of specialty crops to support it. This bill provides no more than a pittance for specialty crops. None of this pittance even goes directly to farmers of specialty crops. We have told farmers that they need to diversify if they are to succeed, yet the States that have diversified and specialized receive next to nothing in the House bill. I am concerned about some of the arguments made to support the exclusion of funds for specialty crops. In particular, I am troubled by those who claim that payments should not be made to specialty crops because aid to producers of these crops cannot be dispensed by the end of the fiscal year. It was argued that payments should only be made to crops that can easily receive funds before the end of this fiscal year. I understand the need to get money to farmers as soon as possible. However, this money must also not only be distributed promptly it must be distributed fairly. Providing assistance chiefly to program crops may be prompt, but it ignores the needs facing many farmers throughout the Nation. Senator Harkin, and the Senate Agriculture Committee, drafted a bill that, just like the last three emergency supplementals, dispensed money credited to two fiscal years. This bill would have allocated the $5.5 billion in FY01 funds to AMTA payments which can be dispensed this year, while specialty crops and conservation will be addressed in fiscal year 2002 monies that are already provided for in the budget resolution. This bill provides less assistance for row crops than does the committee, passed bill, and it is unfair to farmers who do not grow specialty crops. The passage of this bill will lead to the loss of the following programs: $150 million in market loss assistance for apple growers. It is estimated that apple growers have lost $500 million last year due to unfair trade and weather related disasters. Furthermore, some estimate that the industry may lose as much as 30 percent of its farmers this year without some form of aid. $270 million in commodity purchases of specialty crops. These purchases provide food for shelters, food banks and schools, yet that money, $50 million of which will be used for the school lunch program, is not in the House version. The $44 million sugar assessment, which has been suspended the past two years due to our budget surplus is not waived this year. $542 million needed to fund conservation programs is excluded from the House version. As a result many important programs will lie dormant. The number of farmers in our nation has been declining for well over a century. Now, farmers comprise only 1 percent of our population. The declining number of farmers and the increasing scarcity of Federal dollars makes it harder and harder to sustain the level of assistance we provide our farmers. Part of the success of current farm policy is that programs such as Women Infants Children program, WIC, balance rural and urban interests and attempt to meet the needs of each community. Assistance to the agricultural sector must address the concerns of all Americans if it is to continue at the needed level. The bill passed by the Senate fails to do that. This trend of narrowly focused farm programs cannot be sustained. The next farm bill that this body undertakes must help all Americans while helping farmers. The committee-passed bill addressed issues important to all of us: hunger, conservation and energy independence. This bill does not. Gone is the $270 million allocated for commodity purchases that would have helped specialty crop farmers, like cherry, bean and asparagus farmers in Michigan, while providing foodstuffs to school lunch programs, food banks and soup kitchens that guarantee a healthy diet is available to all Americans. The conservation programs included in S. 1246 but not in the bill we just passed would have prevented erosion, preserved green space, increased wildlife habitat and ensured a clean water supply. Currently, in the State of Michigan there are three farmers who apply for every open slot in Federal conservation programs. These farmers will now have to wait even longer to participate in these programs. I commend the chairman and the Senate Agriculture Committee for the hard work they put into the Agriculture Supplemental Bill which they reported to the Senate. The bill passed by this body, because the President's opposition to the better alternative left us no choice, ignores the needs of specialty crop producers and fails to fund farm programs that have the broader effect of helping all Americans.

Mr. LEVIN

Mr. LEVIN. Mr. President, we often rise on this floor to speak on the subject of gun violence and what we can do to prevent it. The debate frequently centers on how we can keep guns out of the hands of criminals and what penalty is appropriate for using a gun to commit a crime. While the importance of these debates cannot be overstated, these discussions all too often ignore a second related and equally important issue--gun-related suicide. According to statistics from the Brady Campaign to Prevent Gun Violence, most gun deaths in America are not the result of murder, but suicide. The numbers are particularly shocking for young people. According to the Centers for Disease Control and Prevention, from 1993 through 1997, an average of 1,409 young people took their own lives with guns each year. The connection between access to guns and suicide is particularly strong. In fact, The Brady Campaign reports that the presence of a gun in the home increases the risk of suicide fivefold. While this problem cannot simply be legislated away, trigger locks and other sensible gun safety measures can help limit children's access to firearms. It is clear that reducing our kids' access to guns can save lives.

Mr. LEVIN

Mr. LEVIN. Mr. President, as the Senate considers the fiscal year 2002 Appropriations Act for VA/HUD and Independent Agencies, which includes funding for the Environmental Protection Agency, I wonder if the distinguished Senator from Maryland would be willing to consider in conference funding for sewer projects in Michigan. In Michigan, we are facing an urgent need to maintain and improve our aging sewer systems. In southeast Michigan alone this will cost between $14 and $26 billion over the next 30 years. I would greatly appreciate the committee's assistance in protecting water quality in Michigan by funding these much-needed sewer projects.

Mr. LEVIN. I thank my friend from Maryland and the committee for their hard work in putting together this important legislation. georgia community redevelopment initiative

Mr. LEVIN

Mr. LEVIN. Mr. President, for the Committee on Armed Services, I report favorably the following nomination lists which were printed in the Records on the dates indicated, and ask unanimous consent, to save the expense of reprinting on the Executive Calendar that these nominations lie at the Secretary's desk for the information of Senators.

Mr. LEVIN

Mr. LEVIN. Mr. President, I join my colleague from Michigan in urging you to give this worthy project consideration in conference. The Detroit-Chicago Corridor has been designated as one of only ten high- speed rail corridors in the nation. In order to make that designation a reality we must develop the necessary technology to allow high-speed rail to operate safely on existing infrastructure. That means completing the development of an effective train control system. This project, as a public-private partnership, has had the ongoing participation and support from the State of Michigan, the Federal Railroad Administration, Amtrak and Harmon Industries, the company developing the technology. It also has the support of Michigan's two Senators and I hope we can find a way to continue Federal support for this project.

Mr. LEVIN

Mr. LEVIN. Madam President, I am pleased to be joined by Senator Craig Thomas in introducing the Federal Prison Industries Competition in Contracting Act. Our bill is based on a straightforward premise: it is unfair for Federal Prison Industries to deny citizens in the private sector an opportunity to compete for sales to their own government. I repeat: the bill that we are introducing today, if enacted, would do nothing more than permit private sector companies to compete for Federal contracts that are paid for with their tax dollars. It may seem incredible that they are denied this opportunity today, but that is the law, because if Federal Prison Industries says that it wants a contract, it gets that contract, regardless whether a company in the private sector may offer to provide the product better, cheaper, and faster. This bill would not limit the ability of Federal Prison Industries to sell its products to Federal agencies. It would simply say that these sales should be made on a competitive, rather than a sole-source basis. FPI also has a significant advantage in any competition with the private sector, since FPI pays inmates less than two dollars an hour, far below the minimum wage and a small fraction of the wage paid to most private sector workers in competing industries. And of course, the taxpayers provide a direct subsidy to Federal Prison Industries products by picking up the cost of feeding, clothing, and housing the inmates who provide the labor. Given those advantages, there is no reason why we should still require Federal agencies to purchase products from FPI even when they are more expensive and of a lower quality than competing commercial items. I can think of no reason why private industry should be prohibited from competing for these Federal agency contracts. We have made several changes to this bill since it was introduced in the 106th Congress. The three new sections are intended to address new abuses by FPI that have arisen in the last few years: section 3 of the bill would prohibit FPI from granting prison workers access to classified information or information that is protected under the Privacy Act; section 4 of the bill would clarify that private sector businesses and their employees must be permitted to compete for federal subcontracts as well as prime contracts; and section 5 of the bill would clarify that the general prohibition on sales of prison-made goods into private commerce is also intended to apply to sales of services. These changes should strengthen the bill and reinforce its underlying intent. Federal Prison Industries has repeatedly claimed that it provides a quality product at a price that is competitive with current market prices. Indeed, the Federal Prison Industries statute requires them to do so. That statute states that FPI may provide to Federal agencies products that ``meet their requirements'' at price that do not ``exceed current market prices''. Yet, FPI remains unwilling to compete with private sector businesses and their employees, or even to permit Federal agencies to compare their products and prices with those available in the private sector. Indeed, FPI has tried to prohibit Federal agencies from conducting market research, as they would ordinarily do, to determine whether the price and quality or FPI products is comparable to what is available in the commercial marketplace. Instead, Federal agencies are directed to contact FPI, which acts as the sole arbiter of whether the product meets the agency's requirements. The reason for FPI's position is obvious: it is much easier to gain market share by fiat than it is to compete for business. Under FPI's current interpretation of the law, it need not offer the best product at the best price; it is sufficient for it to offer an adequate product at an adequate price, and insist upon its right to make the sale. Indeed, FPI currently advertises that it offers Federal agencies ``ease in purchasing'' through ``a procurement with no bidding necessary.'' The result of the FPI's status as a mandatory source is not unlike the result of other sole-source contracting: the taxpayers frequently pay too much and receive an inferior product for their money. When FPI sets its prices, it does not even attempt to match the best price available in the commercial sector; instead, it claims to have charged a ``market price'' whenever it can show that at least some vendors in the private sector charges as high a price. As GAO reported in August 1998, ``The only limit the law imposes on FPI's price is that it may not exceed the upper end of the current market price range.'' The result is frustrating to private sector businesses and their employees who are denied an opportunity to complete for Federal business, as well as to the Federal agencies who are forced to buy FPI products. One letter that I received from a frustrated vendor stated with regard to UNICOR--the trade name used by Federal Prison Industries: If the Air Force would purchase a completed unit as described in UNICOR's solicitation directly from a . . . manufacturer we estimate the cost will be approximately $6,500. UNICOR is going to purchase a kit for $9,259 and add their assembly and administrative costs to the unit. If UNICOR only adds $1,500 to the total cost of the unit, it will cost the Air Force $10,759. This is 66 percent higher than the current market price. If the Air Force purchases 8,000 units over the next five years it will cost the taxpayers an additional $34,072,000 over what it would cost if they dealt directly with a manufacturer. A letter from a second frustrated vendor stated, also with regard to UNICOR: UNICOR bid on this item and simply because UNICOR did bid, I was told that the award had to be given to UNICOR. UNICOR won the bid at $45 per unit. My company bid $22 per unit. The way I see it, the government just overspend my tax dollars to the tune of $1,978. The total amount of my bid was less than that. Do you seriously believe that this type or procurement is cost-effective? I lost business, and my tax dollars were misused because of unfair procurement practices mandated by federal regulations. This is a prime example, and I am certain not the only one, of how the procurement system is being misused and small businesses in this country are being excluded from competition, with the full support of federal regulations and the seeming approval of Congress. It is far past the time to curtail this `company' known as Federal Prison Industries and require them to be competitive for the benefit of all taxpayers. I am a strong supporter of the idea of putting federal inmates to work. I understand that a strong prison work program not only reduces inmate idleness and prison disruption, but can also help build a work ethic, provide job skills, and enable prisoners to return to product society upon their release. However, I believe that a prison work program must be conducted in a manner that is sensitive to the need not to unfairly eliminate the jobs of hard-working citizens who have not committed crimes. FPI will be able to achieve this result only if it diversifies its product lines and avoids the temptation to build its workforce by continuing to displace private sector jobs in its traditional lines of work. For this reason, I have been working since 1990 to try to help Federal Prison Industries to identify new markets that it can expand into without displacing private sector jobs, with a particular emphasis on markets for products that are currently imported. Avoiding competition is the easy way out, but it isn't the right way for FPI, it isn't the right way for the private sector workers whose jobs FPI is taking, and it isn't the right way for the taxpayer, who will continue to pay more and get less as a result of the mandatory preference for FPI goods. We need to have jobs for prisoners, but can no longer afford to allow FPI to designate whose jobs it will take, and when it will take them. Competition will be better for FPI, better for the taxpayer, and better for working men and women around the country. The fight to allow private industry to compete against Federal Prison Industries is far from over, but I am optimistic that it can be won in this Congress.

Mr. LEVIN

Mr. LEVIN. Madam President, according to a study by the Brady Center to Prevent Gun Violence, in 1998, there was a gun in more than four out of every ten households with children and a loaded gun in one in every ten households with kids. These numbers are frightening. While most parents think to ask where their kids are going, who they are going with and when they will be home, how many think to ask the parents of their children's friends whether they keep a gun in their home and whether they keep it locked? Unfortunately, the Brady Center's study reports that more than 60 percent of parents have never even thought about asking other parents about gun accessibility. If we want to protect our children from gun violence, these are questions we probably need to start asking. After all, while in 1 year firearms killed no children in Japan, 19 in Great Britain and 153 in Canada, guns killed 5,285 children in the United States. Asking another parent whether they keep a gun in their home is tough. But the question could save a child's life.

Mr. LEVIN

Mr. LEVIN. Mr. President, I rise today to pay tribute to a dedicated and distinguished public servant. Paul W. Johnson, the Deputy Assistant Secretary of the Army for Installations and Housing, is retiring at the end of this month after over 50 years of government service. Paul Johnson began his career with the Federal Government serving on active duty with the Corps of Engineers beginning in 1949, and served as an engineer with the Army and the Air Force until he arrived at the Pentagon in 1962. During his nearly forty years there, Paul Johnson became an institution in the Army and in the Pentagon. Since 1983, Paul has been the senior career official in the Army responsible for military construction, family housing, base realignment and closure, real property management and disposal, and real property maintenance issues for the active duty Army; the Army National Guard; and the Army Reserve. In this capacity, Paul is responsible for the management of over $200 billion in assets. For decades, whenever there has been an Army installation or property issue where the Congress needed information or help, we called ``PJ'', because we knew we could rely on his leadership and sound judgment. And PJ did not hesitate to reciprocate and let us know when the Army needed help from the Congress to solve a problem. When you were talking to PJ, there was never any doubt that he was working to do what was best for the Army. We will miss him, and the Army will miss him even more. I am sure all members of the Senate who have worked with Paul over the years, especially my colleagues on the Armed Services and Appropriations Committees, will join me in congratulating him on his astonishing record of over half a century of public service and wish him and his family all the best as he begins a well-deserved retirement.

Mr. LEVIN

Mr. LEVIN. I join my colleague from Michigan in asking the chair to give this important project consideration in conference, especially since no Michigan project is funded under this account. The Ambassador Bridge in Detroit, MI is a critical project for the State's trade infrastructure. It is one of the three busiest border crossings in North America, and more trade moves over this bridge than the country exports to Japan. It is crucial that we keep traffic moving safely and efficiently at this crossing. The Ambassador Bridge Gateway project will provide direct interstate access to the bridge, and improve overall traffic flow to and from the Ambassador Bridge. This project also has a wide range of support from the State, local government, metropolitan planning and the business community.

Mr. LEVIN

Mr. LEVIN. I join the distinguished Senator from Michigan in asking the distinguished chairwoman to give this important project consideration in conference. The Ambassador Bridge in Detroit, MI is a critical project for the State's trade infrastructure. It is one of the three busiest border crossings in North America, and more trade moves over this bridge than the country exports to Japan. It is crucial that we keep traffic moving safely and efficiently at this crossing. The Ambassador Bridge Gateway project will provide direct interstate access to the bridge, and improve overall traffic flow to and from the Ambassador Bridge. This project also has a wide range of support from the state, local government, metropolitan planning and the business community.

Mr. LEVIN

Mr. LEVIN. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. LEVIN

Mr. LEVIN. As the Senator from Michigan knows, thousands of Hmongs immigrated to the United States after the Vietnam War. The transition to life in the United States has not always been easy, but the Hmong community has grown and is prospering. There are nearly 200,000 Hmong in the United States, and many of them live in our home State of Michigan. It is important that those who fought in the Special Guerrilla Units are honored for their actions. These units, like all those who served the cause of freedom, must know that we appreciate the great sacrifices made by the Special Guerrilla Units.

Mr. LEVIN. Mr. President, this weekend members of the Lao-Hmong American Coalition, Michigan Chapter, their friends and supporters will gather in my home State of Michigan to pay tribute to thousands of courageous Hmongs who selflessly fought alongside of and in support of the United States military during the Vietman War. The efforts of the Hmong Special Guerrilla Units were unknown to the American public during the conflict in Vietnam, and the 6th Annual Commemoration of the U.S. Lao-Hmong Special Guerrilla Units Veterans Recognition Day is part of the important effort to acknowledge the role played by the Hmong people in this war.

Mr. LEVIN. The Senator is correct. Hmong Special Guerrilla Units actively supported the United States, and risked great loss of life to save downed United States pilots and protect our troops. While the Special Guerrilla Units may have operated in secret, their efforts, courage and sacrifices have been kept secret for far too long. The word Hmong means ``free people,'' and celebrations such as this commemoration will raise awareness of the loyalty, bravery and independence exhibited by the Hmong people.

Mr. LEVIN

Mr. LEVIN. Mr. President, just last year the Congress passed and President Clinton signed into law the Violence Against Women Act of 2000. The law instituted welcome changes in Federal criminal law relating to stalking, domestic abuse and sex offense cases. In addition, VAWA 2000 created programs to prevent sexual assaults on college campuses, establish transitional housing for victims of domestic abuse and enhance protections for elderly and disabled victims of domestic violence. The importance of the Violence Against Women Act should not be underestimated. However, if we are to comprehensively address this issue, we cannot ignore the impact of gun violence on women. According to studies cited by the Violence Policy Center, in 1998, in homicides where the weapon was known, 50 percent of female homicide victims were killed with a firearm. Of those murdered women, more than three quarters were killed with a handgun. And that same year, for every one time that a woman used a handgun to kill in self-defense, 101 women were murdered by a handgun. While the firearms industry markets gun to women--asserting that owning a gun will make women safer--the statistics support the point made by Karen Brock, an analyst with the Violence Policy Center, ``Handguns don't offer women protection; they guarantee peril.''

Mr. LEVIN

Mr. LEVIN. Perhaps 15 minutes.

Mr. LEVIN. Mr. President, at the heart of this debate on the nomination of John Graham to be Administrator of the Office of Information and Regulatory Affairs is the issue of cost-benefit analysis and risk assessment in agency rule making. Some of the groups opposed to this nomination, I believe, are concerned that Dr. Graham will live up to his promise and actually require agencies to do competent and comprehensive cost-benefit analyses and risk assessments of proposed rules. I hope he will. The goal of competent cost-benefit analysis and risk assessment is to ensure that the public will be able to get the biggest bang for its buck when it comes to federal regulation and that the requirements agencies impose to protect the environment and public health and safety will do more to help than to hurt. That is what we should all want. I have been at odds over the past 20 years with some of my closest friends in the environmental, labor, and consumer movements over this notion of cost-benefit analysis. I have supported legislation to require cost-benefit analysis by agencies when issuing regulations since I first came to the Senate because, while I believe Government can make a positive difference in people's lives, I also know that Government can waste money on a good cause. When we waste money on lesser needs, when we waste our resources on things where the benefits do not justify the costs, it seems to me that we, at a minimum, have an obligation to tell the public why we are regulating them. If we don't do that, if we do not take the time to analyze benefits, analyze costs, and explain why, if benefits don't justify the costs, we are regulating, then we jeopardize public support for the very causes that so many of us came here to fight for--the environment, health, and safety, including workplace safety. I came out of local government. I fought hard for housing programs, programs to clean up the environment, neighborhood protection programs, public safety programs. I spent a good part of my life in local government fighting for those programs. Too often, I found my Federal Government wasting resources and failing to achieve the very ends which those programs were supposed to achieve. Too often. When that happens, we jeopardize public support for the very programs of which we profess to be so supportive. When we waste dollars--in whatever the program is--on things which cannot be justified, as when we spend thousands of dollars with OSHA regulations, as we used to do before some of us got involved in getting rid of hundreds of OSHA regulations that made no sense, when we spent money telling people in OSHA regulations that when climbing a ladder you had to face forward, that doesn't protect public health. It doesn't protect workplace safety; it wastes resources on things that are useless, and it brings disrepute to the regulatory process--a process I believe in. I don't make any bones about that. I believe in regulation. We need regulation to protect people against abuse, to protect their health and safety. But we don't do that if we waste money and if we are not willing to at least ask ourselves: What are the benefits of a proposed regulation? What are the costs of a proposed regulation? Do the benefits justify the costs? And if they don't, why are we regulating then? I have fought on this floor against regulatory reform measures which I thought went too far. I have filibustered against regulatory reform measures on this floor which I thought went too far, and which, in fact, would have required that agencies do some things which I thought they should not have to do. For instance, we had a regulatory reform bill here which said, even though the law said you could not consider the cost, you would have to do it anyway. No, I don't buy that. If the law says you may not consider cost, that is the law of the land and that must be enforced, and no regulatory reform bill should override that legislative intent. By the way, I have also opposed measures which said you have to quantify benefits. As my good friend from Minnesota points out, there are hundreds of benefits which cannot be quantified, at least in terms of dollars. You cannot say what the value of a life is. We don't know the value of a life. We don't know the value of a beautiful, unrestricted view in a national park. We don't know the value, in dollars, of a child who is disabled being able to get to a higher floor because of the Americans with Disabilities Act. We cannot put a dollar value on those benefits. And we should not. But we should weigh the benefit of that and ask ourselves whether or not, with the same resources, we can get more kids a better education, or more kids to a higher floor in a building--not to quantify in dollars those benefits, but to know what those benefits are. If we spend a billion dollars to save a life, if that is my loved one's life, it is worth it. But if we can spend that same billion dollars and save a thousand lives, or 10,000 lives, do we not want to know that before we spend a billion dollars? Is that not worth knowing? Are we afraid of knowing those facts? Not me. I am not afraid of knowing those facts. I think we want to know those facts. We should want to know the costs and benefits of what we propose to do. The people who should want to know them the most are the people who believe in regulation as making a difference, because if the same amount of resources can make a greater difference, people who believe in regulation should be the first ones to say let's do more with the same resources, let's not waste resources. We know that effective regulatory programs provide important benefits to the public. We also know from recent studies that some of our regulations cost more than the benefits they provide, and that cost- benefit analysis when done effectively can result in rules that achieve greater benefits at less cost. OMB stated in their analysis of costs and benefits of federal regulations in 1997, ``The only way we know to distinguish between the regulations that do good and those that cause harm is through careful assessment and evaluation of their benefits and costs.'' In a well- respected analysis of 12 major EPA rules and the impact of cost-benefit analysis on those rules, the author, Richard Morgenstern, former Associate Assistant Administrator of EPA and a visiting scholar at Resources for the Future, concluded that in each of the 12 rule makings, economic analysis helped reduce the costs of all the rules and at the same time helped increase the benefits of 5 of the rules. Report after report acknowledges the importance of good cost-benefit analysis and risk assessment for all agencies. Yet some of the groups that support regulations to protect public health and safety appear to be threatened by cost-benefit analysis and risk assessment. They seem to fear it will be used as an excuse to ease up on otherwise tough standards. But I think to fear cost-benefit analysis and risk assessment is to fear the facts, and when it comes to these vitally important issues of the environment and public health and worker safety, we shouldn't be afraid of the facts. We shouldn't be afraid to know whether the approach an agency may want to take to solving an environmental or public health problem is not as effective as another approach and one that may even be less expensive. Justice Stephen Breyer wrote about the value of cost-benefit analysis in his book called ``Breaking the Vicious Circle.'' He describes one example of the need for cost-benefit analysis in what he calls ``the problem of the last 10 percent.'' It was written by Justice Breyer when he served on the First Circuit Court of Appeals: He talks about a case ``. . . arising out of a ten-year effort to force cleanup of a toxic waste dump in southern New Hampshire. The site was mostly cleaned up. All but one of the private parties had settled. The remaining private party litigated the cost of cleaning up the last little bit, a cost of about $9.3 million to remove a small amount of highly diluted PCBs and ``volatile organic compounds'' . . . by incinerating the dirt. How much extra safety did this $9.3 million buy? The 40,000-page record of this ten-year effort indicated (and all the parties seemed to agree) that, without the extra expenditure, the waste dump was clean enough for children playing on the site to eat small amounts of dirt daily for 70 days each year without significant harm. Burning the soil would have made it clean enough for the children to eat small amounts daily for 245 days per year without significant harm. But there were no dirt-eating children playing in the area, for it was a swamp. Nor were dirt-eating children likely to appear there, for future building seemed unlikely. The parties also agreed that at least half of the volatile organic chemicals would likely evaporate by the year 2000. To spend $9.3 million to protect nonexistent dirt- eating children is what I mean by the problem of ``the last 10 percent.'' That was Justice Breyer speaking. As I have indicated, I have tried for the last 20 years just to get consideration of costs and benefits into the regulatory process. I have worked with Senator Thompson most recently, and I worked with Senators Glenn and Roth and Grassley in previous Congresses. Each time we have tried, we have been defeated, I believe, by inaccurate characterizations of the consequences of the use of cost-benefit analysis and risk assessment. That is what is happening, I believe, with Dr. Graham's nomination. Dr. Graham's nomination presents us with the question of the value of cost-benefit analysis and risk assessment in agency rule making once again. That's because Dr. Graham's career has been founded on these principles. He believes in them. So do I. And, Dr. Graham sees cost- benefit analysis not as the be-all and end-all in regulatory decisionmaking; rather, like many of us, he sees it as an important factor to consider. Dr. Graham supported the regulatory reform bill Senator Thompson and I sponsored in the last Congress--which was also supported by Vice President Gore--that would require an agency to perform a cost-benefit analysis and risk assessment and state to the public whether the agency believes, based on that analysis, that the benefits of a proposed regulation justify the costs. If the agency believes they don't, then the agency would be required to tell the public why it has decided to regulate under those circumstances. It doesn't hold an agency to the outcome of a strict cost-benefit analysis. It doesn't diminish an agency's discretion in deciding whether or not to issue a regulation. It does mandate, though, that the agency conduct a comprehensive cost-benefit analysis and, where appropriate, risk assessment before it issues a proposed rule. I believe that is a reasonable, fair and appropriate standard to which to hold our federal agencies accountable. And of course our bill also required that in doing cost-benefit analysis agencies take into account both quantifiable and nonquantifiable benefits, a principle in which Dr. Graham firmly believes. So how do Dr. Graham's opponents attack him? They attack him by saying his science has been influenced by the donors to his Center and that he supports industry in its opposition to environmental, health and safety regulation. And they attack him by taking many of his statements out of context to create what appears to be an extremist on the role of environmental and health regulation but which is really a fabricated character that doesn't reflect reality. I think Dr. Graham is a fair, thoughtful, and ethical person who believes in the value of cost-benefit analysis and risk assessment as tools we can and should use for achieving important public policy decisions. I believe Dr. Graham has also found it useful to be provocative when it comes to understanding risk, in an effort to shake us out of our customary thinking and see risks in a practical and real-life dimension. Let me first discuss the allegation of bias with respect to funding sources. When various groups have questioned John Graham's independence, they have suggested that his science has been skewed by his corporate sponsorship. Frank Cross, Professor of Business and Law at the University of Texas, said ``this criticism is unwarranted, unfair and inconsistent with the clear pattern and practice of most (if not all) similarly situated research centers.'' Yes, Dr. Graham's center received significant sums of money from corporate sponsors. But it also established a conflict of interest policy in line with Harvard University School of Public Health's conflict of interest policy, requiring peer review of research products disseminated publicly by the Center and a complete disclosure of all sponsors. The policy requires that any restricted grants received by the Center adhere to all applicable Harvard University rules including the freedom of the Center's researchers to design projects and publish results without prior restraint by sponsors. I asked Dr. Graham a number of questions on this subject during our committee hearing and found his answers to be forthright and satisfactory. Dr. Graham confirmed for the record that he has never delayed the release of the results of his studies at the request of a sponsor, never failed to publish a study at the request of a sponsor, and never altered a study at the request of a sponsor. Moreover, there are numerous studies where the conclusions Dr. Graham or the Center reached were contrary to the interests of the Center's sponsors. The other line of attack against Dr. Graham is taking Dr. Graham's statements out of context, to unfairly paint him as an extremist, and I would like to go over just a few examples where this has happened. Opponents say, ``[John Graham] has said that dioxin is an anticarcinogen'' and that he said that ``reducing dioxin levels will do more harm than good.'' Those are quotes. Standing alone, that sounds pretty shocking, but let's look at what John Graham actually said. The issue came up while Dr. Graham was participating as a member of the EPA's Science Advisory Board, Dioxin Reassessment Review Subcommittee, when the subcommittee was reviewing EPA's report on dioxin. Here is what he said during one of the meetings: (T)he conclusion regarding anticarcinogenicity . . . [in the EPA report on dioxin] should be restated in a more objective manner, and here's my suggestive wording, ``It is not clear whether further reductions in background body burdens of [dioxin] will cause a net reduction in cancer incidence, a net increase in cancer incidence, or have no net change in cancer incidence.'' And I think there would be also merit in stating not only that [dioxin] is a carcinogen-- That is John Graham speaking-- And I think there would be also merit in stating not only is dioxin a carcinogen, but also I would put it in a category of a likely anticarcinogen using the draft guidelines in similar kinds of criteria that you have used as classifying it as a carcinogen. He said this at another point in the meeting: ``I'd like to frame it''-- referring to a subcommittee member's comment--``in a somewhat more provocative manner in order to stimulate some dialogue.'' He discusses two studies that look at different levels of dioxin and identified some anticarcinogenic effects. Dr. Graham said the following: If, as body burdens of dioxin decline the adverse effects disappear more rapidly than the adaptive or beneficial effects, and this is as suggested by certain experimental data both the Pitot study I mentioned and the Kociba study. As the dose comes down, the adverse effects go away faster than the anticarcinogenic effects. Then it's possible that measures to reduce current average body burdens of dioxin further could actually do more harm for public health than good. ``Possible,'' ``if,'' as two studies suggest. I want to repeat that. ``If'' something occurs, as two studies--not his--two studies ``suggest,'' then it is ``possible'' that at low levels there are anticarcinogenic effects. That is what he said in the meeting. Then he went on to say the following: The alternative possibility which EPA emphasizes is that the adverse effects outweigh these beneficial or adaptive effects. And I think that they're clearly right at the high doses. For example, total tumor counts are up so even if there's some anticarcinogenicity in there, the overall tumor effects are adverse. The question is, what happens when the doses come down. Mr. President, I ask for 7 additional minutes. I do not know what time agreement we are under. What is the time agreement? What are the constraints?

Mr. LEVIN. I thank my friend from Tennessee. Mr. President, Dr. Graham has consistently said, as he stated in the above quotations, dioxin is a known carcinogen. What he went on to suggest as an EPA subcommittee member is that there be an additional comment, supported by two studies, that very low levels of dioxin may reduce the risk of cancer, calling for full disclosure about two studies. It turns out, Mr. President, that in the final report of that EPA subcommittee, his suggestions were adopted. The final report--not his, but the EPA subcommittee--says: There is some evidence that very low doses of dioxin may result in decreases in some adverse responses, including cancer . . . That may sound absurd to us, but we are not experts--at least I am not an expert--and it seems to me that where you have somebody of this reputation who, as part of an EPA subcommittee, points to two studies which he says suggests that it is possible that at low levels dioxin could actually be an anticarcinogen, and then the EPA subcommittee actually adopts that suggestion, for that to be characterized that he thinks dioxin is good, or something similar to that, is a serious mischaracterization of what happened. I am not in a position to defend the dioxin studies, nor am I arguing the substance of their outcome. I am pointing out, however, that Dr. Graham, when he discussed this point, wasn't making it up; he was bringing two scientific studies to the attention of the EPA subcommittee, and in the final review report by the EPA Science Advisory Panel, Dr. Graham's suggestion and the two studies to which he refers are mentioned. Who would have thought in the year 2000 that cancer victims would be taking thalidomide and actually seeing positive results. That is counterintuitive to me. I was raised believing thalidomide to be the worst, deadly substance just about known. The idea that last year people would be taking thalidomide as an anticarcinogen is surely counterintuitive to me, but we must not be afraid of knowing cost- benefits. It must not strike fear in our hearts, those of us who believe that regulation can make such a positive difference in the lives of people. We should not be terrorized by labels, by characterizations which are not accurate. We should, indeed, I believe more than anybody, say: We want to know costs and benefits. We do not want to quantify the value of a human life. That is not what this is about. We should not quantify in dollars the value of a human life. It is invaluable--every life. There is no dollar value that I can put on any life or on limb or on safety or on access. But we should know what is produced by a regulation and what is the cost of that regulation and what resources we are using that might be better used somewhere else to get greater benefits and still then make a judgment--not be prohibited from regulating, but at least know cost-benefit before we go on. Lets look at another issue where John Graham has been quoted out of context by his critics. Critics say that Dr. Graham has said that the risk from pesticides on food is ``trivial.'' In January 1995, Dr. Graham participated in a National Public Radio broadcast discussing upcoming congressional hearings on regulatory reform. At the time, he was attempting to bring to light the importance of risk-based priorities, the importance of identifying and understanding the most serious risks vis a vis less significant risks. In putting this comment in the right context, lets look at what he actually said: It [the federal government] suffers from a syndrome of being paranoid and neglectful at the same time. We waste our time on trivial risks like the amount of pesticides residues on foods in the grocery store at the same time that we ignore major killers such as the violence in our homes and communities. It was a provocative statement, and Dr. Graham did refer to pesticide residues as ``trivial,'' but it was done in the context of a larger discussion of overall risks. Dr. Graham was making a statement to make people think about risk-based priorities. Dr. Graham has consistently stated that since we have limited funds, there should be ``explicit risk-based priority setting'' of regulations. In other words, we have to make smart choices and strongly supported decisions and we need full disclosure of the differing risks to do this. Dr. Graham's statements from an op-ed that he wrote for the Wall Street Journal on the merits of conducting cost-benefit analysis have also been mischaracterized. Critics say that John Graham has said that banning pesticides that cause small numbers of cancers is ``nutty.'' In the op-ed, Dr. Graham was opining on the adequacy of EPA's risk assessments supporting proposals to ban certain pesticides. Dr. Graham points out that the EPA did not look at all the costs and benefits associated with banning or not banning certain pesticides. He wrote: Pesticides are one example of the problem at EPA. EPA chief Carol Browner has proposed banning any pesticide that poses a theoretical lifetime cancer risk to food consumers in excess of one in a million, without regard to how much pesticides reduce the cost of producing and consuming food. (The best estimates are that banning all pesticides that cause cancer in animals would raise the price of fruits and vegetables by as much as 50%). This is nutty. A baby's lifetime risk of being killed on the ground by a crashing airplane is about four in a million. No one has suggested that airplanes should be banned without regard to their benefits to consumers. Dr. Graham was making the point that we do not live in a risk-free world and that some risks are so small that while they sound bad, relatively speaking, they are minor compared to other risks we live with every day. Dr. Graham believes we should consider all the facts, that we should disclose all the costs and benefits associated with proposed regulations so we make smart common sense decisions. Dr. Graham writes in the same article that ``One of the best cost- benefit studies ever published was an EPA analysis showing that several dollars in benefits result from every dollar spent de-leading gasoline.'' His critics don't quote that part. Continuing with the pesticides issue, critics say that Dr. Graham has said that ``banning DDT might have been a mistake.'' This is not what Dr. Graham said. He actually said: Regulators need to have the flexibility to consider risks to both consumers and workers, since new pesticide products that protect consumers may harm workers and vice versa. For example, we do not want to become so preoccupied with reducing the levels of pesticide residues in food that we encourage the development and use of products that pose greater dangers to farmers and applicators. As an example, consider the pesticide DDT, which was banned many years ago because of its toxicity to birds and fish. The substitutes to DDT particularly organophosphate products, are less persistent in food and in the ecosystem but have proven to be more toxic to farmers. When these substitutes were introduced, a number of unsuspecting farmers were poisoned by the more acutely toxic substitutes for DDT. These statements were part of Dr. Graham's testimony for a joint hearing on legislative issues pertaining to pesticides before the Senate Committee on Labor and Human Resources and the House Subcommittee on Health and Environment in September 1993. Dr. Graham was addressing his concerns on the lack of disclosure and review of the costs and benefits associated with the proposal of certain pesticides regulations. To properly show where Dr. Graham is on the pesticide issue, let me quote Dr. Graham's summary comments on risk analysis he made at that hearing. Dr. Graham testified: Pesticides products with significant risks and negligible benefits should be banned. Products with significant benefits and negligible risks should be approved. We should not give much attention to products whose risks and benefits are both negligible. When the risks and benefits are both significant, the regulator faces a difficult value judgement. Before approving use of a pesticide, the regulator should certainly assure himself or herself that promising alternatives of the pesticide are not available. If they are not, a conditional registration may be the best course of action--assuming that the benefits to the consumer are significant and the health risks are acceptable (even if non-negligible). There is nothing unjust or unethical about a society of consumers who subject themselves to some degree of involuntary risk from pesticide use in exchange for consumer benefits. If possible, its preferable to let each consumer make this judgement. But our society certainly accepts a considerable amount of (irreducible) involuntary risk from automobiles and electric power production in exchange for the substantial benefits these technologies offer the consumer. In other words, Dr. Graham is saying that risks need to be disclosed and weighted based on the level of risk to make a fair decision. We need to have full disclosure and consideration of all the costs and benefits to make smart common sense decisions. In that same testimony, Dr. Graham also said: Each year thousands of poisonings occur to pesticide users, often due to application and harvesting practices that violate safety precautions. Recent studies suggest that the rates of some types of cancer among farmers may be associated with the frequency of herbicide use. It is not yet known whether or not these associations reflect a cause-and-effect relationship. Congress should examine whether EPA's recent occupational health rule is adequate to protect the health of farmworkers and applicators. But his opponents don't mention those statements. Dr. Graham was criticized in a recent op-ed for saying that our nation is overreacting ``in an emotional gush'' to school shootings at places such as Columbine High School. But the Sunday New York Times article in which those words are quoted, has a completely different context. It is an article about real dangers for teenagers, and whether schools are now dangerous places to be. The article notes that while homicide is the second leading cause of death among youngsters, according to the Centers for Disease Control and Prevention, ``fewer than 1 percent of the child homicides occur in or around schools.'' The article quotes Dr. Jim Mercy, associate director for science in the division of violence prevention at the Centers for Disease Control and Prevention, as saying, ``The reality is that schools are very safe environments for our kids.'' Later on in the article the other risks to adolescents are discussed and that's where Dr. Graham comes in. The article says: When public health experts look at risks to young people, homicides, which account for 14 percent of all deaths among children, come in second. The biggest threat is accidents, primarily car crashes, which are responsible for 42 percent of childhood deaths. Dr. Graham of Harvard says there is a danger to the ``emotional gush'' over Littleton: ``It diverts energies from the big risks that adolescents face, which are binge drinking, traffic crashes, unprotected sex''. The last mischaracterization I would like to discuss relates to Dr. Graham's work on cell phones. Dr. Graham's critics say that he has said that ``there is no need to regulate the use of cell phones while driving, even though this causes a thousand additional deaths on the road each year.'' The Executive Summary of the Harvard Center for Risk Analysis (HCRA) report, entitled, ``Cellular Phone Use While Driving: Risks and Benefits'' states that there is a risk of using a cell phone while driving, although the level of that risk is uncertain. It states: The weight of scientific evidence to date suggests that use of a cellular phone while driving does create safety risks for the driver and his/her passengers as well as other road users. The magnitude of these risks is uncertain but appears to be relatively low in probability compared to other risks in daily life. Look at the stated objective of the cell phone study. The report states, ``The information in this report does not provide a definite resolution of the risk-benefit issue concerning use of cellular phones while driving. The objective of the report is to stimulate greater scientific and public policy discussion of this issue.'' Dr. Graham states up-front that the study is promoting further discussion and research on the issue of cell phone use. The report also does not completely rule out the need for regulation; it states that further study is necessary. The Executive Summary states: Cellular phone use while driving should be a concern of motorists and policymakers. We conclude that although there is evidence that using a cellular phone while driving poses risks to both the drivers and others, it may be premature to enact substantial restrictions at this time. Indecision about whether cellular phone use while driving should be regulated is reasonable due to the limited knowledge of the relative magnitude of risks and benefits. In light of this uncertainty, government and industry should endeavor to improve the database for the purpose of informing future decisions of motorists and policymakers. In the interim, industry and government should encourage, through vigorous public education programs, more selective and prudent use of cellular phones while driving in order to enhance transport safety. Here, as is in the other examples, Dr. Graham is recommending that all data be considered so we can make a smart, common sense decision on any proposed regulation. There is no doubt that as a college professor, Dr. Graham has made some provocative statements on different issues. And I don't agree with all of the statements or considerations he has made, but, I do believe, these statements are within the context of reasonable consideration of the risks and that he has made these statements to promote free thinking to generate thoughts and ideas so we can make the best decisions. Mr. President, I don't take any pleasure today in opposing some of my good friends and colleagues on a matter about which they appear to care so much. They have characterized the nomination of John Graham as a threat to our progress in protecting the environment, consumer safety and the safety of the workplace. If I believed that, I would vote ``no'' in an instant. But, contrary to what has been said by his opponents, I find John Graham to be a balanced and thoughtful person. So do other individuals in the regulatory field whom I respect. Dr. Graham has received letters of support from, among others, former EPA Administrator and now head of the Wilderness Society, William Reilly; five former OIRA Administrators from both Republican and Democratic Administrations; 95 academic colleagues; Harvey Fineberg, the Provost of Harvard College, numerous Harvard University professors, and Cass Sunstein, University of Chicago Law Professor. Professor Sunstein has written a particularly compelling letter of support which I would like to read. Dr. Graham has supported common sense, well-analyzed regulations because they use resources wisely against the greatest risks we face. That is the best way to assure public support for health and safety regulatory programs. I think Dr. Graham will serve the public well as Administrator of OIRA, and I look forward to working with him on these challenging issues. Mr. President, I ask unanimous consent to print in the Record the letter from Professor Sunstein.

Mr. LEVIN

Mr. LEVIN. I thank my friend from Nevada and the committee for their hard work in putting together this important legislation. south dakota water projects

Mr. LEVIN. Mr. President, as the Senate considers the fiscal year 2002 appropriations Act for Energy and Water Development I wonder if the distinguished Senator from Nevada would answer a question regarding funding for environmental infrastructure. I would like to know if the Senator would be willing to consider in conference sewer infrastructure funding for Michigan projects. The need to invest in sewer infrastructure is an urgent one facing the people of Michigan and the Army Corps of Engineers is in a position to address that need. The Army Corps has had many success stories throughout the country in assisting communities in upgrading their sewer infrastructure. I would greatly appreciate the Committee's assistance in protecting water quality in Michigan by addressing this problem.

Mr. LEVIN

Mr. LEVIN. Mr. President, today marks the 100th anniversary of Ironworkers Local Number 25--the largest ironworkers local in the Nation. On Saturday, July 21, 2001, thousands of members of Local 25, their families and friends will gather in Detroit, MI to celebrate this significant milestone. Founded on July 18, 1901, and chartered by the International Association of Bridge, Structural, Ornamental and Reinforcing Ironworkers, Local 25 is responsible for the construction of much of modern day Detroit. As we continue to celebrate the 300th anniversary of Detroit, many of the most notable landmarks that dot Detroit's skyline were constructed by members of Local 25. Cobo Hall, the Broadway Theater, the Renaissance Center and many of the cities' auto plants are just a few of the facilities constructed with the help of Local 25. Dubbed ``I-beam cowboys'' or ``cowboys of the sky,'' because of their independent nature and the fact that they often work hundreds of feet above ground on steel beams only a few inches wide, ironworkers are proud of the challenging and rewarding nature of their work. Ironworkers are not to be confused with steelworkers who make steel. Ironworkers take architectural plans and turn them into massive steel structures. This work can send ironworkers all over the country--in fact, some members of Local 25 are working in our very backyard on the biggest steel project underway in North America: the Washington, DC Convention Center. The independent nature of ironworkers makes the success of Local 25 even more significant. While one should never doubt the strength of an individual ironworker, the strength of ironworkers uniting together around a common goal is something to behold. While their collective work is evident in beautiful structures across our Nation, Local 25 and the International Association of Bridge, Structural, Ornamental and Reinforcing Ironworkers have also worked together to guarantee fair wages, increased safety and needed benefits for their members. Local 25's contributions to Detroit and our Nation can be seen in skylines, bridges and facilities across our country. At the same time, Local 25 has worked to protect the rights of skilled workers enabling them and their families to build better lives. I know that my Senate colleagues join me in saluting Local 25 for all the enthusiasm they bring to their work everyday, and for all they have done to build our Nation.

Mr. LEVIN

Mr. LEVIN. Mr. President, I commend Senators Stabenow and Fitzgerald and all the cosponsors of this amendment. It is a very reasonable outcome that has been agreed to. Their leadership is really important in getting this done. We are very grateful for the support of Senator Reid and Senator Domenici for this outcome and their commitment to fight for the Senate position in conference. I yield the floor.

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