Ed Markey

Mr. MARKEY

Mr. MARKEY. Mr. Speaker----

Mr. MARKEY. Mr. Speaker, I have been informed that that is, in fact, accurate, and I thank the gentleman from California for his clarification.

Mr. MARKEY. I yield to the gentleman from California.

Mr. MARKEY. I would be happy to yield on the gentleman's time.

Mr. MARKEY. Mr. Speaker, I rise in opposition to this rule for one very simple reason: It is not going to allow us enough time to debate a very complex and important issue that will potentially affect every single American. At the subcommittee level we debated only from 1 until 7, with many rollcalls on the floor during that markup. At full committee we started in the morning, but it was the day we were breaking for Jefferson/ Jackson weekend. As a result, with many rollcalls on the floor, we only had, again, a couple of hours to debate these very important issues. We went before the Committee on Rules and we asked, quite reasonably, I think, for an open rule with unlimited time so we could bring these issues out on the floor. The problem now, as we know, is that the majority is limited by their Contract With America in allocating any time to any of these very important issues. So, as a result, despite the fact we are given 8 hours here on the floor, 1 hour is on the rule, 1 hour is on general debate, 6 hours are left over. And Committee have now reported out a second rule allowing for a nongermane amendment to be made by the gentleman from California [Mr. Cox], and that will also come out of the time of the consideration of this legislation. Let me say quite simply that there are four good reasons to oppose the legislation substantively as well. One, an English rule which the very conservative----

Mr. MARKEY

Mr. MARKEY. Mr. Chairman, I yield 1 minute to the gentleman from Texas [Mr. Bryant].

Mr. MARKEY. Mr. Chairman, I yield myself the 2 minutes to conclude. Mr. Chairman, the cover of NewsWeek just out tells the story: ``The boy who lost a billion dollars, Nick Leeson, the 28-year-old trader who bankrupted England's oldest investment firm.'' Now, Nick Leeson is an interesting case. It is not directly on point here, except to the extent to which there are Nick Leesons out there and they do prey upon innocent investors, they do engage in practices that risk the life savings of individuals who believe that the holding out, the representation made by the S&L, is in fact accurate. Now, with the Dow-Jones Industrial Average rising to 4,000 this week, there is unprecedented confidence in the American marketplace, that it is honest and efficient, but honest above all. That is what our American laws have given assurances to the rest of the world over the last 60 years. If you go to Singapore, if you go to England, if you go to any other place in the world, you go to a country that has lower standards than our country. It is this system of laws which we have put in place which has given the reason for individual investors to look at the thousands of companies which we have, take their savings and put them into these companies that have allowed our what we should be extremely cautious about as we deal with this issue here today. Our system works. If we want to deal with rogue lawyers, if we want to deal with frivolous law cases let us deal with them, but let us not also kid ourselves, there are many here who are interested in ensuring that the legitimate cases that have to be brought to protect the public are also excluded as well.

Mr. MARKEY. Mr. Chairman, I yield myself 2 minutes. Mr. Chairman, I would just like to point out to my colleagues that there are 435 votes in this House to improve class action security fraud lawsuits. We want to stop the race to the courthouse. We want to sanction lawyers who bring frivolous cases or bring them in bad faith. But what we really hear from the other side about the virtues that our antifraud laws bring to our investors and to our market, we rarely hear about the need for a balanced approach to reform. We rarely hear the mention of the terrible frauds that have occurred over the last 10 years, and we never hear assurances from the other side that their legislation will not adversely impact these disastrous situations like Drexel and Milken and Boesky and Lincoln Savings and Keating and Miniscribe and many others. If the legislation brought here today was meant to shut down these legal firms that take professional plaintiffs and terrorize private corporations across this country, I think we can find a consensus. The truth of the matter is though the legislation we are considering here today shuts down the good suits, the legitimate suits, the suits that have to be brought by individuals in this country against Boesky and against Milken and against Keating and against all of those S&L scam artists that were out there in the 1980's, the scam artists that resulted in the U.S. Congress being forced to vote for 100 to 150 billion dollars' worth of taxpayer dollars in order to insure that those who had put their life savings in the S&L's and banks across this country did not in fact face bankruptcy. Mr. Chairman, I reserve the balance of my time.

Mr. MARKEY. Mr. Chairman, I yield to the gentleman from Michigan [Mr. Dingell].

Mr. MARKEY. Mr. Chairman, will the gentleman yield?

Mr. MARKEY. Mr. Chairman, I yield 5 minutes to the gentleman from Michigan [Mr. Dingell] the ranking minority member of the full committee. (Mr. DINGELL asked and was given permission to revise his remarks.)

Mr. MARKEY. Mr. Chairman, I yield 2 minuted to the gentlewoman from California [Ms. Eshoo].

Mr. MARKEY

Mr. MARKEY. They do have a balance requirement in the law. It has to be a balanced panel. But the balance, for example, for a nuclear regulation could be they have a nuclear manufacturer. They have a nuclear chemist. They have a nuclear waste disposal company. They have a nuclear, nuclear, nuclear. They all have conflicts of interest, but it is balanced in its conflicts although they all are against the public health and safety.

Mr. MARKEY. Mr. Chairman, for those who are listening right now, think about it in these terms: for every regulation that is placed upon the books or has been placed upon the books by any of these agencies, there are 25 experts in America on the subject who could potentially qualify for the peer review group. Twenty of them have no conflict of interest; five of them have a conflict of interest. The history of this country has been that the agency selects amongst the 20 that have no conflict of interest so that the public can be sure that the health and safety regulation has in fact been analyzed by people who are not going to financially benefit. Under the amendment which I have proffered, if in fact the company that has a conflict of interest has a Nobel laureate with a de minimis stake in the company, then they could make an exception saying there is no bias for that Nobel laureate. But throughout the history of our country, every time there is a regulation put on the books, they always select from the 20 with no conflict of interest. We have a lot of experts in America on a lot of subjects. The misimpression being left by the authors of the legislation is that in fact there will be no experts that will be allowed to participate. Just the opposite is the case. We will have just as many experts as we have ever had, but we will ensure that, as we have in the past, they will not have a financial conflict of interest. In that way the public can be sure of the outcome. I think that the misrepresentation that goes on with regard to the amendment and these horrific examples of regulations that have been placed upon the books, assume that they would not be placed upon the books if, in fact, the lobbyist for the company that was going to be affected by the regulation could serve on the peer review group. In fact, as we know, if that had been the case throughout the history of our country, we would have had no regulations to protect the health and safety of this country because the drug companies and the chemical companies and the nuclear industry and every other industry would have packed every one of these peer review groups. Let us not, for God's sake, leave any misimpression for anyone who is listening that there are not plenty of independent experts available to serve on every single panel that would ever be constructed by every single agency. Let us not for a second again think that if in fact the Markey amendment is accepted that the first thing that they would decide is that a single company would, and the only company that could be affected by a particular regulation, of course, would be in a clear conflict of interest and bias, if their scientists and their lobbyists sat on the panel. So to a certain extent the gentleman's amendment, while clarifying, is redundant in terms of what is already offered as a real protection inside of the Markey amendment. This is a conflict of interest, clear and simple, loaded with potential for lawsuits from here to eternity, if, in fact, the Markey amendment is not adopted.

Mr. MARKEY. Mr. Chairman, will the gentleman yield?

Mr. MARKEY. I yield to the gentleman from Texas.

Mr. MARKEY. Now although a single company with a hundred percent cannot put a hundred percent interest in that particular regulation, cannot have its lobbyist serve on the panel, what if there are two companies and one company happens to be 90 percent of the entire industry, and one other company 10 percent? In that instance, the industry lobbyists and scientists for that company with 90 percent control can put their own lobbyist on the peer review group as this scientific evaluation is going on. Absolutely unnecessary and in fact something which is going to compromise the integrity of any evaluation that is going to be made. Now let us think about, as we move down the line as well, why we should not do it. Quite simply because on the books right now there is a law. There is a law. It is 18 U.S.C. 208 which includes penalty of 2 years, or imprisonment, or a $10,000 fine if, in fact, peer reviewers Government decisions have a conflict of interest unless that conflict is explicitly waived by the agency. That is the law today. It has served our country very well. We do not want these peer review panels to be packed with the very people who have a financial conflict of interest.

Mr. MARKEY. There is absolutely no question that right now law firms all across this country are looking at new real estate space to hire the new junior attorneys who are going to have to come on board in order to begin the process of appealing each and every part of this process and for their service on the peer review panels for every regulation which is going to be put on the books. Now let us take this example. Let us look at the example of a nuclear power plant that is very concerned that a new regulation might go on the books which will ensure that all cracked or rotting pipes in nuclear power plants are, in fact, replaced so that the pipes do not break, and the water is lost, and the nuclear core is exposed without proper water. Now under this regulation the nuclear industry will be able to put their own doctor, Dr. Pangloss in fact; Dr. Pangloss will be placed on the panel, and Dr. Pangloss of course always wears his rose-colored glasses when he is looking at regulatory changes that could impact on the nuclear industry. Well, Dr. Pangloss would, in the words of Voltaire, say, ``Well, all is for the best in that this is the best of all possible worlds. There is nothing wrong with our industry, and therefore no new regulations need to be placed upon the nuclear industry.'' Now, Mr. Chairman, all of his fellow Dr. Panglosses on the panel, all the other nuclear scientists on the panel, will agree, of course, with Dr. Pangloss. Now should the regulators proceed with the adoption of the regulation notwithstanding the objection of Dr. Pangloss and all of the other nuclear scientists who have been present on this panel, notwithstanding their obvious conflict of interest? The nuclear industry lawyers who are hired can then sue the agency using the Panglossian dissent as exhibit A in their lawsuits saying that the regulation should be invalidated. Now this conflict of interest is so obvious and at such odds with the whole history of peer review panels in the history of our country that it should be removed. The entire process here has other problems as well. It excludes automatically an industry lobbyist if, in fact, there is only one company that is being reviewed for a regulatory change. That would be such an obvious conflict of interest. However, the lobbyists and the scientists for its competitors can serve on the peer review panel, so if the regulation is put in place, and it may hurt the competitors or it may help the competitors if this one company is now restrained, they serve on the----

Mr. MARKEY. Mr. Chairman, I offer an amendment. The Clerk read as follows: Amendment offered by Mr. Markey: Page 31, strike line 23 and all that follows down through line 5 on page 32 (all of section 301(a)(3)) and insert: (3) shall exclude peer reviewers who are associated with entities that may have a financial or other interest in the outcome unless such interest is disclosed to the agency and the agency has determined that such interest will not reasonably be expected to create a bias in favor of obtaining an outcome that is consistent with such interest.

Mr. MARKEY. You are building in a mandate that they not be excluded merely because their lobbyist happens to be someone that has an interest in the outcome. We are saying that that is not a high enough standard that can be established in order to protect the public health and safety.

Mr. MARKEY. Again, the point here is that there is a palpable conflict of interest when you are the only company that is going to be directly affected by the regulation. But the truth is, there is built- in bias for companies when there are three or four or five that are going to be affected by the regulation. Here we basically say that they cannot, ``shall not'' be excluded.

Mr. MARKEY. Mr. Chairman, if the gentleman will continue to yield, I would be more than willing to accept the gentleman's language to exclude any single entity. I would be more than willing to accept that language.

Mr. MARKEY. Do not forget, in that language itself, we do not exclude the competitors to the entity, which could have, which could have a financial interest in the outcome as well. So although we have excluded the company that might have the most direct financial interest, we have not excluded their competitors from stacking the panel with their own scientists. They should not be allowed to participate either, if there is bias. The point of this provision is that there is an obvious bias if you are the only company affected. The truth is, it is additional bias amongst other companies if their competitor would not have this----

Mr. MARKEY. Mr. Chairman, is the gentleman referring to the language at the end of the subsection (3) that deals with single entities that are excluded from having peer reviewers represent them?

Mr. MARKEY. Mr. Chairman, will the gentleman yield?