Bill Nelson

Mr. NELSON of Florida

Mr. NELSON of Florida. One final question, Madam President, if I may----

Mr. NELSON of Florida. If I may ask the Senator from New Jersey a question, can the Senator believe once we got up the live feed, 5,000 feet below the surface of the Gulf of Mexico, that once experts, specialists, professors, were able to see what, in fact, had been told to us was only 1,000 barrels a day, was revised to 5,000; that many experts in the country revised upwards, that it may be up as much as ten times as much as 5,000 barrels a day? Would the Senator acknowledge that those statements have been made?

Mr. NELSON of Florida. If the Senator would yield for a further question.

Mr. NELSON of Florida. Madam President, my question additionally to the Senator from New Jersey would be, given the fact of the pictures we now see of the devastation occurring in some of the marshlands in Louisiana, along with the shots of the few beaches that are now covered and the effect upon the wildlife, as well as the marine life--would the Senator say there is a great deal of concern among people all along the gulf coast, as well as the eastern seaboard of the United States, of what possibilities there are if there is that much oil in the gulf and what that could do to the economies of these coastal communities?

Mr. NELSON of Florida

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. NELSON of Florida. I ask unanimous consent to speak as in morning business.

Mr. NELSON of Florida. Mr. President, British Petroleum has just announced that it has conceded that the amount of oil gushing from the floor of the Gulf of Mexico is much more than what they admitted several weeks ago. You will recall that they first said it was gushing about 1,000 barrels a day. They then revised that up to 5,000 barrels a day. All along they refused the entreaties of Senator Boxer and me to release the video that is being done by the little remote submersibles that are down there in two places: at the wellhead where the broken pipe is partially broken, at the wellhead 5,000 feet below the surface, and at the other end of that pipe that used to go up to the surface with the rig that sank but is now lying on the floor of the ocean. At the end of that pipe called the riser is where additional oil is coming out. I am happy to tell you Senator Boxer and I just announced that we now have gotten BP to release the live feed of those remote submersibles, and we should be able to go on any number of sites and see this live-- those two places: at the wellhead and at the end of the riser pipe. When you look at it, what you should note is--and why BP has now publicly admitted, and AP just moved the story--that they concede the amount gushing out is much more than 5,000 barrels a day. That is obvious when you see the live feed. Now, in addition, they released to Senator Boxer and me--and I want to hear from her in just a second. What they released was 9 hours of archival value tape of this video. What we found in there is the part where they are injecting the dispersant into the gushing oil. There is a picture of that we have put on my Web site, and what is astounding is that dispersant in this photograph is so much, is it any wonder, then, at midnight last night the Environmental Protection Agency ordered the stoppage of the use of this dispersant, as it is harmful to the environment? What we have is a gusher that is out of control. Remember, this has been gushing now for a month. They say it is going to be at least another 2 months before the relief well gets there with which they can stop it. If it does gush for another 2 months, it is going to cover up the Gulf of Mexico. And we already know it is in the Loop Current on the way to the Florida Keys.

Mr. NELSON of Florida. Certainly. And I thank the Senator from California, the chairman of the Environment Committee, for her leadership in getting the truth out.

Mr. NELSON of Florida. The answer to the first question is yes. I am not sure we have had the truth, the whole truth, and nothing but the truth. That would suggest why BP was so reluctant to release the video. Each step, it was like pulling teeth to get the video released. Live video pictures don't lie. What they are showing at this moment, anyone who looks at the live video, is exactly what Senator Boxer said. There is this huge gusher of oil at the wellhead that is spewing into the gulf. There is a little pipe that one can see in the video that is coming in and is being inserted, and that was supposed to be sucking most of the oil out. But, in fact, the pictures don't lie. The live video is showing the gusher spewing black oil 5,000 feet below the surface of the Gulf of Mexico. Again, I thank my colleague from California for her cooperation. As chairman of the Environment Committee, she has the access of snapping her fingers and making things happen. I hope other Senators don't have to suffer what it looks as if those of us on the gulf coast and now in the Florida Keys and the east coast, the Atlantic coast are going to have to suffer.

Mr. NELSON of Florida

Mr. NELSON of Florida. Mr. President, I rise to commemorate the 108th anniversary of Cuba's independence. On May 20, 1902, after a long and bitter struggle, the people of Cuba established a democratic Republic. Today, the Cuban people are again fighting for democratic change and independence in their homeland. On this day, we honor Orlando Zapata Tamayo, who died this year after a prolonged hunger strike while protesting his inhumane treatment at the hands of the Cuban prison authorities. We stand in solidarity with the Ladies in White, including Zapata Tamayo's mother Reina Luisa Tamayo, who through their quiet dignity, continue to call the world's attention to the arrests of their fathers, husbands, and brothers for exercising free speech and daring to challenge the regime. We also recognize the contributions of Cuba's journalists, bloggers, and activists, who undertake great personal risk to tell the world about the realities of life in Cuba. The legacy of Cuban independence endures with these heroes past and present, who fight against the forces of repression and totalitarianism for the promise of a free and democratic society. Now more than ever, the U.S. and the international community must press the Cuban regime to free all political prisoners. On behalf of the people of Florida and all Americans, we stand in solidarity with the Cuban people in their struggle in the hope that one day freedom of expression and basic liberty are possible in Cuba without the fear of persecution.

Mr. NELSON of Florida

Mr. NELSON of Florida. Mr. President, I say to my colleagues on the Senate floor, my worst nightmare is becoming reality. Tar balls have been discovered, as reported by CNN, in Key West. Even if they are not the tar balls from this spill, since the spill is flowing southward, it is getting into the Loop Current. That current goes southward into the Gulf of Mexico, around the Florida Keys, and becomes the Gulf Stream. The University of Miami oceanographer testified to us that once it gets into the Loop Current in the northern Gulf of Mexico, it will take, maximum, 10 days to get to the Florida Keys. Eighty-five percent of North America's living coral reefs are in the Florida Keys. The Gulf Stream hugs the Florida Keys going northward and the southeast coast of Florida. The Gulf Stream parallels the entire eastern coast, the Atlantic seaboard, all the way north to Cape Hatteras, North Carolina, and proceeds across the Atlantic to Scotland. We are looking at a gargantuan economic and environmental disaster facing this Nation but particularly those States on the gulf coast and the Atlantic seaboard. We have heard all the pronouncements, and we have heard those pronouncements now going on 4 weeks. The oilspill has not been stopped. If it continues until a rescue well reaches it in another 2-plus months, this spill will eventually cover up the gulf coast, the places like the sugary white beaches of northwest Florida, where I will be this Friday, where already the cancellations are coming right and left as their tourist season starts; and hotels that would normally have 85 percent occupancy are less than 20 percent occupancy. You can see the economic consequences from this disaster. You see the economic consequences already to the fishing industry in Louisiana. What about the oyster industry in Apalachicola and those delicate bays and estuaries all along the gulf coast where so much of the marine life is spawned? Now we hear reports that it is not just on the surface, it is at a depth of 1,500 feet. Then just off the floor of the ocean at 4,500 feet, almost a mile below the surface--a slick that is 10 miles long and 3 miles wide and 2 football fields thick. What happens when that eventually gets to the surface? But in the meantime, what happens when it settles to the ocean floor? For the life of me, I can't understand someone objecting, as they are going to do, to raising an artificial limit of $75 million up to at least $10 billion--and it is probably going to exceed that. The argument you are going to hear is: Oh, it should not be this; it ought to be tied to profit. Is it really responsible public policy to say because a company makes less money, it should be responsible for less damage? No. If I seem emotional, it is because my people are scared. They are frightened at what they are facing. I yield the floor.

Mr. NELSON of Florida. Would the Senator yield?

Mr. NELSON of Florida. I thank the Senator for yielding. Isn't it interesting how all the different companies are pointing at each other now? And the real question is, Is it going to be the taxpayer who will pay for this or will the responsible parties? Why should someone say no to raising the liability simply because they say it ought to be tied to the size or the profitability of the particular company? It makes no sense.

Mr. NELSON of Florida

Mr. NELSON of Florida. I object.

Mr. NELSON of Florida

Mr. NELSON of Florida. Mr. President, if this gusher continues--and we hope and pray that by some miracle there is going to be some capping at the seabed of this well that is spewing at least 5,000 barrels of oil a day--but if this thing continues and it doesn't stop until they get the relief well, which is another 3 months--one coming from one side, one coming from the other side, another 3 months--it is going to cover up the gulf coast. Then, as soon as the winds shift from the north coming south, it is going to take that big spill about 90 miles to the south where the loop current is, which is a current that comes up the west side of the Gulf of Mexico off the Yucatan Peninsula, into the northern Gulf of Mexico, and because of the rotation of the Earth, it causes it to come around to the east and then flows south. That loop current comes right around the Florida Keys and becomes the gulf stream. It hugs the Florida Keys and the southeast coast of Florida-- and when I say hug it, I mean right off the coast--all the way up to the middle of the peninsula of Florida at Fort Pierce. There it leaves the coast a little bit, but follows the coast all the way up to Cape Hatteras, NC, where it leaves the coast of the United States and goes across the Atlantic to Scotland. It is the old gulf stream that the Spanish galleons used to catch going back to Europe from their discoveries in the New World. Come back to the wind shifting. The wind shift from the north coming south brings that spill down to the loop current. Last weekend, I had testimony by ocean specialists from the University of Miami who said that once that oil gets in the loop current, it will be at the Florida Keys in 10 days. Eighty-five percent of the live coral reefs of the United States are in the Florida Keys. The gulf stream goes right by those delicate coral reefs. The gulf stream comes up and goes right by Miami, Key Biscayne, Fort Lauderdale, West Palm Beach, and as far north as Fort Pierce, which is only about 10 miles offshore. Can my colleagues imagine what this is going to do in economic damages? We have been fortunate thus far that the winds have been from the east to the west--fortunate for Florida, unfortunate for Louisiana-- because that oil is off all of those delicate bays and estuaries where so much of the Gulf of Mexico marine life is spawned. Sooner or later the winds are going to shift, and they are going to go from the west to the east. It is going to take that oil down there off the world's most beautiful beaches and those bays and estuaries where so much of marine life is spawned that happens to be off of Florida. Let me tell you what the President of the Hotel and Restaurant Association told me 2 days ago. This is the Hotel and Restaurant Association of Florida. He said he had called a number of the hotels on the northwest gulf coast of Florida. This is the beginning of their season. He said normally they would be 85 percent occupied now. Their occupancy is 18 percent. Can you imagine the economic impact of this oilspill? What about the economic impact of the lost sales tax to the State and local governments, the counties, and the cities that if they do not have all these tourists coming to the beach, they are not buying things, and there is less revenue coming into the States. We start to see the picture of the enormous economic damage, well over and above the cost of the cleanup. That is why an artificial figure of--$75 million cap is so artificially low. I am not sure $10 billion is going to be enough as a cap, but it was a target. Let's hope it never gets to that. Thus far, nothing has worked because those backoff safety systems did not work.

Mr. NELSON of Florida

Mr. NELSON of Florida. Madam President, we have a huge potential economic and environmental disaster in the Gulf of Mexico that is occurring as we speak. It was on an exploratory rig. It is almost unbelievable how far they can now drill beneath the surface of the water. In this case it was 5,000 feet, and then, at the ocean bottom, they were able to drill another 13,000 feet down to find a pocket of oil, all of which caused this explosion because of the pressure of the oil and the gas, the natural gas, creating such an overpressure that it exploded at the wellhead at the sea bottom. A device, a so-called blowout preventer, that had three safety mechanisms in order to stop the flow of oil in the case of a blowout--none of those three safety mechanisms have worked. The first was a mechanism that would be activated by a switch 5,000 feet up from the sea bed on the surface of the Gulf of Mexico on the floating exploratory rig. There were actually two switches. One was flipped closer to the surface by workers on the rig, who unfortunately lost their lives and they have not been found. The second switch was at a higher level. I think they refer to it as the bridge. Those workers were rescued. They confirm that switch was flipped, which was to automatically cause the first safety device to go into activation, which was to drive metal plates like pistons together over the wellhead to cut off the flow of oil as it was gushing upwards from the pressure beneath. That activation mechanism did not work. The second safety mechanism was one called a dead-man switch; that is, whenever power was interrupted, automatically the second safety mechanism was to activate, driving those metal plates together to shut off the flow of oil. That did not work, as well. The third safety mechanism was to use robotic submersibles that are quite sophisticated, that have manipulator capability even at that depth, the depth of a mile, to go in and physically get hold of a handle, an actuating device that would literally pump a hydraulic pump to drive the plates together to shut off the well. That third safety device did not work either. This safety device, referred to as a blowout preventer, was designed and built by a company that was contracted to BP, British Petroleum, called Transocean. We now know from the Times of London, in a published article over the weekend, that as far back as 10 years ago, in the year 2000, British Petroleum had been concerned with the safety devices working and had asked Transocean, which built the devices, about this. I asked the CEO yesterday, the CEO of British Petroleum, what occurred 10 years ago. You were put on notice there was a safety mechanism that maybe was not working. He said that was raised and they worked it out. Apparently, 10 years later, these safety devices did not function--so that they worked it out. As you know, what is happening, the initial results provided by BP are that it was 1,000 barrels of oil a day. The Coast Guard has estimated that it is now five times that much and we are waiting for updates. So what is gushing from the ocean floor below is 5,000 barrels of oil a day. That is in excess of 220,000 gallons of oil a day that are coming into the waters of the Gulf of Mexico. It has created this slick that is now, because of the southeasterly winds, to start encountering the Barrier Islands off the southeast coast of Louisiana. Lord knows where this is going to go. So what do they do now? Right now, they are constructing a fancy dome. This is a multistory structure, probably 10 times my height, that has worked in other blowouts but only at depths of 300 and 400 feet. They have to try to place this dome 5,000 feet deep, over the wellhead, to see if they can then collect that escaping oil into this dome and then run it up a pipe to a transport and collect the oil there. But, by the way, we do not know that it is going to work at 5,000 feet because of the pressure. We do not know if they can actually locate it 5,000 feet over the wellhead. What comes up if they do--and collect it--is not just oil, but there would be a rush of oil, then there would be a rush of natural gas, there would be a rush of seawater, and all along having sand corroding the inside of that pipe like sandpaper as it rushes up the pipe 5,000 feet to the surface tanker. Let's hope it works. Because if it does not, then we have to wait 3 months for the rescue well that is presently being dug from the side, to go down 13,000 feet to the pocket of oil, to start sucking the oil out through the rescue well, thereby relieving the pressure up through the defective well that exploded. They will have to, in fact, drill not one but two rescue wells from the side. But the estimates are that will take 90 days. If this dome does not work, which they are to insert in the ocean in the next few days, then we are looking at the possibility of that oil continuing to gush for 3 months. You can see after 2 weeks how much of an oil slick there is out there. You can imagine, if you go on for another 13 weeks, how that could start to cover the Gulf of Mexico and much worse as the prevailing winds from the south would carry it onto some of the world's most beautiful beaches, those along the northwest coast and the gulf coast of Florida. But, oh, by the way, there is another threat now. That is something Mother Nature has designed, known as the Loop Current. The Loop Current is a current of water that comes up the western side of Cuba, in between Cuba and the Yucatan Peninsula of Mexico, up into the northern Gulf of Mexico, loops and comes to the south, off the southwest coast of Florida, loops down around the Florida Keys and turns northeast and northward, hugs the Florida Keys, becomes the Gulf Stream, which hugs the Keys. Those delicate coral reefs, 85 percent of North America's coral reefs are in the Keys. And then it hugs the shore of Florida along the southeast coast all the way up to central Florida, to Fort Pierce, where it then leaves the coast of Florida, goes across the Atlantic Ocean and ends up over close to Scotland. That is the Gulf Stream. That was the stream that 500 years ago used to carry the Spanish Galleons, along with the wind, back from their discoveries of the New World as they went back to Europe. You can imagine, if the spill gets so big in the Gulf of Mexico that then it encounters the Loop Current and that spill then starts carrying that oil down the southwest coast of Florida, around the Florida Keys, hugging the Florida Keys and the coral reefs and up the east coast of Florida, we are looking at potential major economic and environmental loss. So the question is: What do we do? Well, first of all, I have not only requested but, in my kind of mild way, have strongly suggested that we stop all exploratory drilling, at least until the investigation that many of us in this Chamber have asked for, until that investigation is over, as to what went wrong and what we can do to prevent it in the future. Oh, by the way, that is not going to be a few weeks' investigation. By the time you get through with all this, it is going to be months. So we should not be doing any more exploration with the possibility of more explosions such as this. I did not say production wells; they need to keep producing. This risk, this blowout, was in an exploratory rig. That ought to be stopped. I asked the CEO of BP yesterday: Have you stopped exploratory drilling? He says: Yes. I said: Where? He said: In the Gulf of Mexico. I said: How about worldwide? He said: No; only in the Gulf of Mexico. Well, what should the President do, other than what he is doing; that is--and I give credit where certainly credit is due--the operation being taken over by the top four-star Admiral of the Coast Guard, since they have the lead. I have talked to the Chairman of the Joint Chiefs; the U.S. Navy is fully supporting the lead, which is the Coast Guard; all the agencies of Government; NOAA, Dr. Lubchenco; the Department of Interior, our former colleague from the Senate, Secretary Ken Salazar. I mean, you can go on down the list. They are all pouring in to try to help because we have a disaster of monumental proportions that is in the making and ruining peoples' lives, their livelihoods, their incomes, their way of life, their culture. We are talking about all of the above. So I strongly suggest to the President that he ought to abandon his 5-year plan that was for offshore drilling in the Outer Continental Shelf, but which he proposed, at least in the Continental United States, he proposed it only in the Gulf of Mexico and off the mid- Atlantic coast. I suggest he withdraw that. If he does not, I believe it is dead on arrival. Where do we go from here in the future? Potentially, we are looking at extraordinary financial loss. So I asked the chairman and CEO of British Petroleum yesterday afternoon, I said: You realize the existing law on liability says you handle the cleanup costs but that the existing law has a cap on your liability after $75 million. Do you agree that the economic loss is going to exceed $75 million? He said: Yes. I said to him: You have been saying on TV that you think British Petroleum will be the responsible party and take care of this. When it exceeds $75 million, are you going to accept all that liability? He said: We will work that out. I said: Well, if I understand that, as far back as 2000, your company had a problem with Transocean and their safety devices and the blowout preventer. Are you not going to have some considered lawsuit against Transocean for a defective piece of equipment? He said: We are going to work that out. So I suspect what we are going to see is some of the most enormous and complicated lawsuits you have ever seen, with a lot of finger- pointing that is going to be going around many different circles, and the question of liability for all those people who are going to be losing their jobs and their livelihood and their cultures if this gusher, this underwater volcano, is not cut off. I suspect what we are going to see is an attempt to avoid that economic liability. Therefore, that is why Senator Menendez and Senator Lautenberg and I filed, Monday night, a bill that will lift that liability cap from a meager $75 million to $10 billion, because you can see that $10 billion economic loss is not an unrealistic figure and is what could happen if this oil continues to gush for another 3 months. Well, let me complicate things a little bit. Because if the gusher continues for 3 months, you know what starts on June 1? Hurricane season. Do you know it has been historically a fact that several hurricanes brew in the month of June in the Gulf of Mexico? So can you imagine a big part of the Gulf of Mexico being polluted with oil and suddenly having that all stirred up with the complications of a hurricane. This is not a pretty picture. It is a major environmental and economic disaster of the most gargantuan proportions that we can ever imagine. For my final comments, let me say, I have, this Senator, often been derided, derided for standing for the economic and environmental interests of my State, my State of Florida, which has more coastline than any other State, save for Alaska, and certainly has more beaches than any other State, for trying to protect those interests as well as the interests of the U.S. military, since most of the Gulf of Mexico off Florida is the largest testing and training area for the U.S. military in the world. From two successive Department of Defense Secretaries, Rumsfeld and then Gates, I have in writing that the policy of the Defense Department is in place that oil activities and oil structures are incompatible with the testing and training necessities of the Department of Defense in preparation for our national security interests. This Senator will continue to protect all of those interests. It is my hope people will understand that the tradeoffs of drilling close to Florida are simply not worth the risk. Why is that? Because of the statistics of the Department of the Interior concerning undiscovered oil in the Gulf of Mexico. Ninety percent of that oil is not off of Florida; it is in the central and western gulf. From the statistics of the Department of the Interior, only 10 percent of that undiscovered oil is off Florida. Is it worth the risk for that de minimis oil to have future potential economic and environmental disasters? Clearly, the answer from this Senator is as it has been for over 30 years that I have been waging this battle, first as a young congressman and now in the position of representing all of Florida: The tradeoff risk is not worth it. I wanted to bring this to the attention of the Senate. Unfortunately, this story is a continuing one because although this story began over three decades ago, it is still a drama that continues to unfold with tragic consequences. I yield the floor.

Mr. NELSON of Florida. I ask consent I be allowed to speak as in morning business.

Mr. NELSON of Florida. Madam President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. NELSON of Florida

Mr. NELSON of Florida. Mr. President, I ask unanimous consent to speak on the motion to proceed for up to 30 minutes.

Mr. NELSON of Florida. Mr. President, we have now voted three times-- once on Monday, the second time on Tuesday, and a third time today-- merely trying to get to the Wall Street financial reform bill. Each time we have been blocked from being able to proceed because we can't muster 60 votes to cut off the debate to get to the bill. The Republican leadership remains united in opposition to bringing up the bill, at a time in which we have just seen a display of extraordinarily intense, shall we say, arrogance on the part of executives at a major Wall Street firm in the way they conducted themselves in front of Senator Carl Levin's investigation subcommittee yesterday in a hearing. It is rather extraordinary that the Republican leadership is not letting us come up with the bill so we can get it out here, debate it, and amend it. This Senator has a number of amendments that I would like to offer in order to, as we say, perfect the Banking Committee's bill. But we can't even get to that. I don't know what the thinking of the Republican leadership is that they would do this, especially in light of the fact that the American people want some changes with the way investments are handled on Wall Street. They want to see some movement. They want to see some action. So when we attempt to bring up a comprehensive bill to reform Wall Street and the reckless practices that nearly brought down the global economy, we are prevented from having a free and open debate on the bill and we are prevented from perfecting that bill by adopting amendments. I guess the Republican leadership's alternative to this, since we can't do it out here in the normal legislative process, is to do this in the backroom, behind closed doors, outside of the sunshine. They want to have a deal cut before it comes to the floor in order to avoid an open and free debate to reform the financial system. Why do they want to do this? Well, it seems to me common sense would tell us it is because they want to water down the bill. They want to water it down to the point where Wall Street--where we are trying to tighten the screws in order to better regulate them and prevent another near financial meltdown such as we had--will sign off on a final compromise, and that is why they are blocking the motion to proceed to get to the bill. Does this tactic sound familiar? It is the exact kind of backroom wheeling and dealing the American people have come to resent. The only difference between now and decades ago is that in the old days those deals were cut in smoke-filled backrooms. At least now there is not a lot of tobacco that is being consumed in those backrooms. But what is similar is that the special interests are still calling the shots. So my plea is that we break this filibuster. Let's get a bill in front of the Senate so it can be in the full light and the glare of the headlights and the cameras. Let's get it in front of the American people and then let's let the legislative process work its will as we amend the bill. Listen to some of the arguments the Republican leadership, over and over and over, has used. They have said the Banking Committee bill guarantees future bailouts. Well, that is not true. It might be a good sound bite, but it is simply untrue. The Banking Committee bill puts an end to the promise of future bailouts. The Republican leadership attacks the $50 billion resolution fund created in the bill. This Senator is not convinced we need that fund, and I am certainly not convinced it is going to survive the debate on the floor, but we ought to have some honest debate about that particular provision. The fund is paid for in the Banking Committee bill directly from the coffers of the largest banks. The fund acts, in the way it is devised by the Banking Committee, as a buffer to protect taxpayers so that if there is another breakup, another potential meltdown, the fund is there--already funded by the banks--so the taxpayers don't have to go in and do the rescue operation such as we have done in the past. Under the Banking Committee bill, the fund can only be used to liquidate a financial institution, to break it up. In short, it is a funeral tax. It is a funeral tax on the largest banks, not the taxpayers. The $50 billion fund in that Banking Committee bill only gets tapped to pay for their funeral expenses. So here we are. The American people hear the Republican leadership talking about all this, and it is a red herring. The American people want action, and here we are stuck in procedural gridlock. Guess who the only real winners are. As we sit here, trying to break a filibuster on Monday, again Tuesday, and again today, shortly after noon, the only winners are the Wall Street bankers who have mastered the art of using the broken financial regulatory system to almost bring down the country's finances by deceiving investors and, ultimately, in order to save our system, milking the American taxpayer. One of the major beneficiaries of the current system is the credit rating agencies. This is a subject matter the Senator from Minnesota-- who now sits in the Presiding Officer's chair--has some familiarity with and on which he will be offering an amendment. This Senator is going to join him in that amendment. Credit rating agencies--something that normally is down in the weeds because it is so complicated--are private companies that assess the creditworthiness of various types of debt instruments, such as bonds and mortgage-backed securities, as well as the issuers--rating the issuers of those instruments. They typically assign a letter grade that is designed to convey the risk of default, and there are three major credit rating agencies on Wall Street: There is Moody's, there is Standard & Poor's, and there is Fitch Ratings. For most of the last century, the rating agencies were paid by investors who subscribed to their services. Why did they do that? Because it made sense. Investors were the ones who were investing their money and they were the consumers of the ratings. They wanted the best information regarding the risk that they would have in that investment. Well, unfortunately, in the 1970s, all this changed and the business model flipped. The rating agencies began charging the issuers of the bonds, not the people who were seeking to know if it was a good credit risk in order to invest their money. It was reversed. It was the very issuers of the credit, rather than the investors, who were charging for their services. So beginning in the 1970s, rating agencies began to be paid by the very same people who had a vested interest in receiving a high investment grade. Think about that. The very issuers of the bonds who wanted people to invest their money in these bonds needed a high credit rating on that bond in order to get people to invest. If they could be rated at AAA, as opposed to B, people were much more willing to put their money into this instrument. Well, talk about a conflict of interest. Now the issuers of the bonds, who have an interest in a high AAA rating, go out and hire the services of the credit rating agencies. Did you ever hear the old adage, ``He who pays the piper calls the tune''? Well, those who were going to pay the piper were going to call what that tune was. Do you think if you are paying the bill to the credit rating agency that you have a better chance of getting a AAA rating than a lower rating? Of course you do. That is a walking conflict of interest. How could we allow this unavoidable conflict of interest to exist and allow it to exist since the 1970s is unfathomable and unbelievable. Yet that is the way it is. Credit rating agencies failed miserably in the runup to the financial crisis, and it sure looks like--looking backward--they put profits ahead of professionalism. They failed to detect the severe deterioration in lending standards that began in the late 1990s. They failed to review all available information about the loans on which the securities they were rating were based. The conflict of interest in their business model gave the rating agencies an enormous incentive to overlook problems in mortgage-backed security markets. In 2006, Congress passed the Credit Rating Agency Reform Act. I put that in quotes, the Credit Rating Agency ``Reform'' Act. The bill was written in the Senate by the Republican leadership, and it had the full sign-off of the credit rating industry. Here is what the bill did-- 2006. It standardized the process for registering rating agencies, and it gave the SEC some new oversight powers over rating agencies. At the same time, however, this so-called reform act prohibited the SEC from regulating ``the substance of credit ratings or the procedures and methodologies by which any rating agency determines credit ratings.'' It gutted the ability to double-check credit rating agencies. Furthermore, to add insult to injury, the act also clarified that it creates no private right of action. So if a party invested in a particular financial instrument because that credit rating was high, and it turned out to be a dog and they lost lots of money, they had no private right of action through the courts. No wonder the industry supported that legislation back in 2006. The bill, written by the Republican leadership, took away any power of Federal regulators that they might have had to crack down on the baseless credit ratings that were fueling the boom in subprime lending. To make matters worse, the bill made it clear it was not empowering the private sector to hold the credit rating agencies liable for their ratings. The bill we hope one day, at some hour, to get to the floor so we can start working on it does some important things to improve credit rating agencies. It requires these agencies to disclose their methodologies and their ratings track record. Wouldn't you think you would want to know their track record if you are going to invest a lot of money based on their triple-A rating? It requires agencies to consider information in their ratings that comes from outside sources. But when it comes to addressing the fundamental conflict of interest in the credit rating agency business model, this bill coming out on the Senate floor falls short. It would require the rating agencies to separate ratings activities from their sales and marketing activities, and that is like saying my left arm has no idea what my right arm is doing. In reality, it is the brain in your head that controls both the right arm and the left arm, and no one is proposing to chop off the head. So we have to deal with this conflict of interest, and we are going to. Here is what we are going to do. We are going to do this with the help of the Presiding Officer of the Senate. We are going to offer an amendment that would establish a clearinghouse to randomly assign rating assignments with rating issuers. As simple as that, we can end the conflict of interest in the credit rating industry if, randomly, it is going to be assigned among companies that rate issuers of financial instruments. Second, this Senator is going to offer an amendment to require the rating agencies to monitor, to review, and to update their credit ratings after the initial issuance of their credit rating so it does not become stale. They are going to have to continue to look at it, to review it, to update it, and to publish it. The rating agency should not be able to walk away from a rating after it has been issued. It is going to be fresh. The rating agencies ought to conduct continued surveillance of these securities and update them along the line. The credit rating agency reform is just one of the many areas the Senate needs to debate. But as long as the Republican leadership continues to prevent the bill from coming to the floor, this broken system remains in place. The Wall Street bankers win and the American public loses. Let me give some other examples. Remember the name ``AIG''? It was this Goliath organization that started out as an insurance company. It became this huge financial institution. The core product of this company was its insurance. It was deemed too big to fail at the time of the near meltdown of our financial system. This was back in the fall of 2008. It was deemed that when we passed the Troubled Assets Relief Program, TARP, that money had to go into this big, Goliath organization, all the way to the tune of about $80 billion of taxpayer money, as I last recall. It may be a lot more than that. Guess what this did. They had already issued, in effect, an insurance policy that had a fancy name. It was called a credit default swap. It was an insurance policy against some of the companies if their investments went bad. That is not bad. But what happened was, when the American taxpayer dollars went in to save AIG, AIG took those taxpayer dollars and turned around and paid off those insurance policies, 100 cents on the dollar. Is that fair, when folks like some of these folks who have been in the news recently, such as Goldman Sachs, got paid off to the tune of $13 billion instead of going in and negotiating a lower payoff since it was taxpayer money? We ought to change that, and I think we will if we can ever get to the bill, if the Republican leadership will ever allow us to get to the bill. Let's take another example. What about the same insurance policies called credit default swaps? Let's say the same set of circumstances with AIG occurred, but AIG had not been bailed out by the American taxpayer and instead had gone into bankruptcy. AIG, in this hypothetical example, had a lot of creditors that would get in line under the bankruptcy law to get whatever they could. But, oh, no; these insurance policies called credit default swaps would be exempt from the bankruptcy laws. They would get paid off in full first instead of having to get in line with all the other creditors under the bankruptcy law. That is not right. This Senator is going to have an amendment to the Banking Committee's bill to correct that. There is no reason those insurance policies should be at the head of the line of everybody else in the case of bankruptcy. Are we pleased about the executive compensation of some of these folks who have nearly caused the financial collapse of our country? When taxpayer money, through the TARP system, was bailing out these institutions--whether it was directly, such as into AIG, or directly into a place such as Bank of America, or whether it was indirectly coming through these credit default swaps that were getting paid off 100 cents on the dollar that I just described, through the conduit of AIG--what was happening to the compensation of those executives? Were they still getting bonuses? Were they still getting high salaries? Were they having to tighten up their belts when, in fact, their financial institutions were kept alive by the American taxpayer bailing them out? No, we didn't see that tightening of the belt. We did not see any evidence of humility. We didn't see any evidence of appreciation. But, instead, we saw arrogance displayed through huge bonuses that were being given with a total disregard for the American people's sacrifice, of putting their hard-earned taxpayer dollars in to save those financial institutions. Mr. President, I think you will see once we get out here on the floor that we are, in fact, going to get a number of amendments, including the amendment of this Senator, on a limitation--not on executive compensation but a limitation on the ability to deduct from their tax liability excessive executive compensation, and a tie of that excessive executive compensation to, in fact, performance for that company that pays their salary. We are going to see that. Sooner or later, we, in fact, are going to get to the bill, even though the Republican leadership continues to try to obstruct and delay because sooner or later the American people are going to have their way. They clearly want Wall Street financial reform. I yield the floor.

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

Mr. NELSON of Florida

Mr. NELSON of Florida. Does it seem to the Senator--Mr. President, if I may continue a question--does it seem to the Senator there is something eerily symmetrical here in the way there is always the cry that it is being rushed through the Senate Chamber? Did we hear echoes of that over the course of the last year with regard to health care legislation?

Mr. NELSON of Florida. Mr. President, I ask unanimous consent to speak for up to 15 minutes.

Mr. NELSON of Florida. Mr. President, will the Senator yield for a question?

Mr. NELSON of Florida

Mr. NELSON of Florida. Madam President, I suggest the absence of a quorum.