Brad Sherman

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, I rise today to pay tribute to Bud Brown for his dedicated efforts to improve the quality of life in our community. His commitment and service to the San Fernando Valley is immeasurable. Throughout his life he has contributed countless hours of community service by supporting various organizations and acting as an effective leader for several groups. Since his retirement from GTE in 1993, Bud Brown has been a driving force in cultivating relations between the private and public sectors in Los Angeles. His 22 years of experience in the corporate world have been instrumental, in establishing relationships with numerous non- profit organizations throughout the Valley. Bud has found ways to utilize his professional and volunteer talents by serving on the boards of many institutions. Despite his retirement he just recently completed his eighth year as Community Relations Manager at Hamer Toyota in Mission Hills. During his career in public service he has served as founder and leader of a variety of local organizations. His commitment includes serving as President of New Directions for Youth, Board member of the Fernando Award Foundation, and Major Gifts Committee for the North Valley Family YMCA. He is also a strong supporter of the Holy Cross Medical Center, Mission Hills Chamber of Commerce, and the Los Angeles Mission College Foundation. More recently, he has expanded his efforts to serve as Commissioner for the City of San Fernando Bud Brown has been honored with a number of awards in recognition of his accomplishments as a community leader, including the City of Los Angeles Volunteerism Award and KNX Citizen of the Week. Other groups that have noted his tremendous achievements include the San Fernando Valley Girl Scout Council, Encino-Sherman Oaks Optimist Club, Valley Interfaith Council, Heaven on Earth Ranch and the Black American Political Association. Lastly, in 1995 he was one of the first recipients of the prestigious Fernando Award. Mr. Speaker, please join me in recognizing Bud Brown, an amazing individual who has dedicated his life for the betterment of the San Fernando Valley.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, I rise today to pay tribute to the late Chick Hearn, a man who served as the voice of the Los Angeles Lakers during the 42 years of his professional career as a sports broadcaster. His vibrant descriptions and ingenious perspective of the game transcended the sport as well as the art of broadcasting. Chick was not just the man behind the voice of the Lakers franchise but his career and accomplishments have also been devoted to his friends, family, and, more than anything else, his wife Marge. Chick Hearn, a resident of Encino, recently passed away at the age of 85. However, his legacy will never be forgotten. During his career he set forth an astounding record that is unlikely to ever be touched. He established an amazing streak, from November 21, 1965, through December 16, 2001, by completing 3,338 consecutive Laker broadcasts. Although he underwent heart surgery and suffered from a broken hip shortly following the streak, he bounced back and returned to the court with full spirits and energy in order to see his Laker team attain a third consecutive world championship. Hearn's longevity surpassed that of any other sports broadcaster. He managed to only miss two games throughout his career and never called in sick due to his overwhelming love for the game. Francis Dayle Hearn, a native of Aurora, Illinois born November 27, 1916, attended Bradley University. It was there where he first earned the nickname ``Chick'' when, as a young basketball player, he opened up a box of sneakers and instead a chicken came out. Shortly thereafter, he married his high school sweetheart Marge. He once said, ``I don't know what I would have done without her.'' It was her overwhelming support and unconditional love for her husband of 57 years that contributed to his so many achievements. Chick Hearn received numerous awards during his tenure as the Lakers play by play man. He was a member of the American Sportscaster's Hall of fame and a recipient of the Naismith Memorial Basketball Fame's Curt Gowdy Media award. In 1965, he was presented an Emmy Award for Excellence in Basketball Coverage. Chick, a two time National Sportscaster of the Year, was not just notorious for his basketball insight but also for his work with the NCAA, NFL, UNLV basketball, PGA golf tournaments, and the first Ali-Frazier fight. Throughout his career he made several television appearances, and in 1986 he was commemorated with a star on Hollywood Boulevard's Walk of Fame. Mr. Speaker, please join me in recognizing the legendary Chick Hearn, the man who set the standard for NBA announcers. A true icon who will be missed dearly by his family, friends, colleagues, fans and the City of Los Angeles.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, We rise today to pay tribute to Hal Bernson, for his leadership and efforts to improve the quality of life in our community. Hal is a determined hard working individual who has dedicated 25 years of invaluable service to our city as a Los Angeles City Councilman and as an Honorary Chairman of the Annual North Valley Family YMCA Booster Club Dinner. Hal Bernson, a native of the San Fernando Valley since 1957, has devoted much time and energy to improving his community. He has been a driving force in cultivating relations between the private businesses in Los Angeles and the public sector. Throughout his public career, beginning in 1979 as a newly elected official, he has focused on improving the quality of life in Southern California by spearheading ordinances to preserve Southland parks and residential areas. Beginning in 1990 Hal formed the 12th Council District TMA, the first city-side Transportation Management Association. He has served as the City of Los Angeles Earthquake Preparedness Coordinator, and as a member of the State of California Seismic Commission. Along with overseeing such committees, he has also worked to improve the state's earthquake preparedness, funding to retrofit sub-standard buildings as well as the implementations of state and local educational programs. His efforts have been instrumental in establishing a policy that considers jobs, housing and transportation, to create an environment which has strengthened the local economy. Under the direction of Hal, the Annual YMCA Booster Club Dinner has managed to raise the highest amount in its history. His commitment to the YMCA was tremendous, and as a result, the YMCA contributed $1 million in essential funds for the local chapter to meet the health and social service needs of the community. City Councilman Hal Bernson has received a number of awards recognizing his efforts as an outstanding community leader, including the Governor's award for Earthquake Preparedness; the News maker of the Year Valley Press Club Award; the North Valley YMCA Benefactor of Youth ``Golden Helmet'' Award; the Founders Awards from the 12th Council District Transportation Management Association; the Alfred E. Alquist Award for achievement in Earthquake Safety. Lastly, he was named Man of the Year in 1995 by the Association for Commuter Transit. Mr. Speaker, please join me in recognizing City Councilman Hal Bernson. A man of strong integrity. A leader with vision willing to cross partisan lines to work with all people and all constituents for the betterment and common good of our great state of California.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, I yield myself 2 minutes. Mr. Speaker, the resolution that will come before us for final passage has already been written at the White House. I very much wish that it had a different phraseology, but that is not the choice of individual Members. The only question that will come before us that we can influence as individual Members is by what margin does that resolution pass. Does it get 325 votes, or 375, or somewhere in between? Saddam Hussein does not fully understand our political process. He sees a nation in the throws of an election where we speak quite harshly to each other on domestic issues, and we will be doing more of that in the coming weeks. There is no better way to assure that Saddam capitulates on the issue of inspectors, no better way to assure that this war does not have to be fought, no better way to assure a peaceful resolution of this conflict than for us to pass this resolution by the largest possible margin and make sure that Saddam understands that America is united and capitulation on the issue of inspectors is the only rational course and the only course that will assure his own personal safety.

Mr. SHERMAN. Mr. Speaker, I yield myself 30 seconds to respond to the comments made by the gentleman from Pennsylvania (Mr. Weldon), who pointed out that our actions against Saddam during the 1990s were not as aggressive as they should have been. I would point out that we were also not aggressive until September 11 of the prior year. Both administrations failed to grasp the importance of Saddam Hussein's weapons program until September 11 of last year. I would also point out that when the prior administration did take military action against Saddam Hussein, it did not receive the level of support and unified support that it should have. Mr. Speaker, I yield 5\1/2\ minutes to the extremely distinguished and thoughtful gentleman from Tennessee (Mr. Ford).

Mr. SHERMAN. Mr. Speaker, I yield 6 minutes to the gentleman from Wisconsin (Mr. Kind), who has just arrived and is now available to convince the entire House of Representatives. (Mr. KIND asked and was given permission to revise and extend his remarks.)

Mr. SHERMAN. Mr. Speaker, I yield such time as he may consume to the gentleman from Florida (Mr. Boyd). (Mr. BOYD asked and was given permission to revise and extend his remarks.)

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, I yield 5 minutes to the gentleman from Kentucky (Mr. Lucas).

Mr. SHERMAN

Mr. SHERMAN. Madam Speaker, I yield 6 minutes to the gentleman from New Jersey (Mr. Andrews). (Mr. ANDREWS asked and was given permission to revise and extend his remarks.)

Mr. SHERMAN. Mr. Speaker, I thank the gentleman for yielding time. Until September 11, we knew what the dangers were, but we chose to ignore them. We knew Saddam was developing nuclear weapons and had biological weapons. We knew that al Qaeda had killed hundreds at our embassies in east Africa. We knew of these dangers, and we did not act. On September 11, the dangers did not change. America changed. We now look seriously at these threats, and we know that our victory in the Cold War does not immunize us from future danger. Saddam Hussein has killed hundreds of thousands. He has gassed his own people. He has risked his own life many times, all in an effort to expand his power. If he had nuclear weapons, he could smuggle one into the United States--after all a nuclear weapon is about the size of a person--hide it in an apartment building in some American city, and prove to us that he had it hidden there. Saddam could then blackmail America into inaction, as he invaded Kuwait, Saudi Arabia, et cetera. We would then never be able to quench Saddam's lust for additional power, and his imitators would be spawned as they, too, would seek nuclear weapons in an effort to become regional viceroys. There are two approaches for dealing with this threat. One, associated often with the Vice President, is to invade now, no matter what. This approach has a legalistic version that says we must invade Iraq unless it immediately complies with all U.N. resolutions, including the resolutions that say Iraq should stop oppressing its own people. I do not think Saddam Hussein is going to morph into Mother Theresa; and if that is what it would take to prevent an invasion, we might as well invade now. The other approach is not to focus on every U.N. resolution, but instead to demand robust inspections to make sure Saddam does not develop weapons of mass destruction. Neither of these approaches is perfect, but I would point out that the invade-now approach has a number of flaws, including the fact that even if we achieve regime change today, 10 years from now we may be faced with another hostile regime in Baghdad, a Ba'thist regime or Ayatollah-led regime. War is not the perfect answer and I must admit that inspections are not perfect either. I would have preferred a resolution similar to one I put forward in the International Relations Committee that garnered the support of the vast majority of Democrats on that Committee. That resolution would authorize the use of force only if Saddam interferes with a robust inspections program, only if, for example, he continues to try to lock the inspectors out of his presidential palaces. We will not get the opportunity to vote for such a resolution, but we got the next best thing. Last night the President said he wanted to disarm Iraq without war, if possible. He said he would propose to the United Nations a resolution demanding a robust program of inspections, and effectively promised the world that if we got those inspections, we would not invade. So this is where we stand today. Only one question is before us now. Will this resolution, when it comes to final passage, pass with 325 votes or 375 votes? That is important to the world because if America looks divided, Saddam may ``call our bluff.'' In 1991, the resolution authorizing the use of force just barely squeaked by each House. Saddam was misled. Saddam defied us and refused to withdraw from Kuwait, and war became necessary. France, Russia, and China will take America more seriously if we look unified. And that is why I call on all my colleages, because all of us desperately want to avoid war, to vote for this resolution, because if we look unified, Saddam is more likely to capitulate on the issue of inspectors. We cannot expect foreign tyrants to understand our political system; and in the next month, they will hear the most violent and loud political clashes on pharmaceutical costs and Social Security. Let us help Saddam understand the resolve of America. Let us pass this resolution by an overwhelming margin.

Mr. SHERMAN. Mr. Speaker, I yield 4 minutes to the distinguished gentleman from Texas (Mr. Stenholm), the ranking member of the Committee on Agriculture. (Mr. STENHOLM asked and was given permission to revise and extend his remarks.)

Mr. SHERMAN. Mr. Speaker, I yield 5 minutes to the gentleman from Massachusetts (Mr. Lynch).

Mr. SHERMAN. Mr. Speaker, I yield 6 minutes to the gentleman from Missouri (Mr. Skelton), the ranking member of the Committee on Armed Services.

Mr. SHERMAN. Mr. Speaker, I yield 6 minutes to the gentleman from South Carolina (Mr. Spratt), 6 minutes of the time set aside for those who will ultimately vote for final passage to a man who has offered this House a very thoughtful amendment in the nature of a substitute, the ranking Democrat on the Committee on the Budget, a senior member of the Committee on Armed Services. (Mr. SPRATT asked and was given permission to revise and extend his remarks.)

Mr. SHERMAN. Mr. Speaker, it is my pleasure to yield 5 minutes to the gentleman from Texas (Mr. Ortiz), a member of the Committee on Armed Services. (Mr. ORTIZ asked and was given permission to revise and extend his remarks.)

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, last night the President somewhat vaguely announced the right policy for this country: to invade Iraq only if unrestricted inspections are not available. This gives us a chance to disarm Iraq without war; but if war becomes necessary, at least the fact that we struggled to avoid it will minimize foreign opposition. Unfortunately, the Resolution before us is far more vague than the President's speech. It allows for an invasion even if Saddam completely capitulates on the issue of inspections. Unfortunately, the Rule does not make in order a resolution limited to the President's rhetoric. So if we want to authorize force if inspections are not allowed, the Rule requires us to give the President a blank check. On a completely different issue, I would like to point out that during the 1980s we did provide dual-use material to Iraq that could have been used to wage conventional war, but there is no evidence that we knowingly provided material to Iraq that could be used to conduct biological or chemical warfare.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, last week, we commemorated the 42d anniversary of the Independence of the Republic of Cyprus. In 1960, Cyrus claimed sovereignty over its territory following 80 years of British colonial rule, and since that time, it has been a close friend of the United States. Cyprus now stands as the leading candidate country for membership in the European Union (EU). On September 30th 2002, the EU's Enlargement Commissioner stated that Cyprus complies with all political and economic conditions required for membership. The Government-controlled areas of Cyprus enjoy an atmosphere of economic prosperity and political freedom, allowing its people to enjoy one of the highest standards of living in the world. Unfortunately, the northern portions of the island have been occupied by Turkish troops for more than 28 years, and an illegitimate government was set up there to rule an illegitimate state that only Turkey has recognized. As many as 35,000 Turkish troops remain to keep this government viable. The United States must maintain pressure on the Turkish side to end its illegal occupation of Cyprus and allow the people of that island to resolve the problem without outside interference. Too often, Turkey seeks to use its occupation as a veto over the legitimate aspirations of the Cyprus government, including its bid to join the EU. EU accession will have immeasurable benefits for the people of Cyprus, both Greek and Turkish, and will serve as a catalyst for peaceful resolution of the conflict. Unfortunately, not everyone believes that the accession of Cyprus to the EU is a good idea. In fact, Turkey and its illegitimate child, the Turkish Republic of Northern Cyprus, have opposed Cyprus' membership in the EU on the grounds that this would allow Cyprus in turn to veto Turkey's EU membership bid. It is my belief that the reunification of Cyprus would serve the interests of all parties. The EU has rightfully stated that a resolution to the division of Cyprus is by no means a precondition to its accession to the EU, and I am proud that the United States has taken the same position. Mr. Speaker, I urge my colleagues to commemorate the 42d anniversary of the Independence of Cyprus and to work for the peaceful resolution of the division of the island and its successful accession to the EU.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, I thank the gentleman from Illinois for yielding me this time, and I thank the House of Representatives and particularly the Committee on Government Reform for moving this bill to the House floor in record time. We are here to honor a man who epitomized the spirit, the unity, and the joy of life, of living in southern California, a man who was the best reason to buy a transistor radio, perhaps the best reason to live in southern California, and perhaps the best reason to be an NBA fan. We knew how much he meant to us, but we did not fully know until he died last August 5. He had broadcast 3,338 consecutive games between November 1965 and December 2001. Not only did he broadcast those consecutive games, but his total number of games called reached 3,362. In addition to broadcasting those Lakers games, he also broadcast NCAA basketball and football games, NFL football games, UNLV basketball, and the first Ali-Frazier fight. He won two Emmy awards, three Golden Mike awards, two National Sportscaster of the Year awards, seven California Sportscaster of the Year awards, and a star on Hollywood Boulevard's Walk of Fame. He was also inducted into the basketball Hall of Fame and the American sportscasters Hall of Fame. No one in this country I think influenced the poetry of basketball to the extent of Chick Hearn. He invented or popularized the terms we all are familiar with: slam dunk, air ball, finger roll, give and go, and one other phrase that I will use at the conclusion of my remarks. Francis Dayle Hearn was born in Buda, Illinois, on November 27, 1916. He was a talented athlete, but a car accident ended his semi-pro basketball career in the 1930s. While playing in Aurora, Illinois, his affable response to a practical joker's placing of a dead chicken in his locker won him the nickname Chick, the name that we all in Los Angeles came to know him by. He served in the Army in the South Pacific during World War II and after the war became a sportscaster in Aurora and Peoria, Illinois. In 1956 he moved to Los Angeles to cover college football and basketball for CBS radio and NBC television. He joined the Lakers in their first season in Los Angeles and became the voice of basketball for southern California. Chick is survived by his wife, Marge, a granddaughter and a great granddaughter. Chick and Marge were residents for many decades in the San Fernando Valley and have lived in Encino for well over 20 years. This bill will rename their local post office the ``Francis Dayle `Chick' Hearn Post Office.'' Mr. Speaker, this legislation, of course, enjoys the support of not only the Lakers organization, but the entire California delegation. I talked to Marge earlier today and she asked me, What are the chances that this bill will pass this House today? And I said, Marge, ``it's in the refrigerator. The door's closed, the light's out, the eggs are cooling, the butter's getting hard, and the Jello's jiggling.''

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, passing the Senate bill is but the first step. Hopefully, the conferees will go beyond even the Senate bill or will take up new legislation in the Committee on Financial Services. The Senate bill contains the provisions that reauthorize the SEC and contains provisions that talk about expensing stock options. We can no longer leave this issue to the Financial Accounting Standards Board that acknowledged long ago that it was best to expense stock options and then refused to make that mandatory. Nor can we allow the recent situation where consumers can compare Coke and Pepsi, but investors cannot, because the two similar companies use different methods of accounting for stock options. Further, in reauthorizing the SEC, we must demand that they actually read the filings of the largest 1,000 companies, something that their chairman refuses to even consider because he has adopted a ``hear no evil, see no evil'' approach. Mr. Speaker, we need to go far beyond even the Senate bill.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, this has been a week of disappointment. In the effort to combat corporate crime, we heard from the President something that was more of a pep talk than a policy pronouncement. He called upon us to reenact all the laws and regulations we already have and to say this time we really mean it. Let us face it. The biggest reason for crime is that under certain circumstances crime pays, and the biggest reason why circumstances arise in which people conclude that crime pays is inadequate law enforcement. That is true with grand theft auto. It is true with corporate grand theft. And unfortunately the other party for the last 6 years has been working to undermine the enforcement at the SEC. As David Ruder, a former Republican head of the SEC, said in 1995, the Republican Congress is dealing with the SEC as though it were the enemy instead of the policeman on the beat. Earlier this year, the President put forward a budget to this Congress which cut the SEC budget in real terms, allowed no increase for inflation, and cut the enforcement budget. This spring, I proposed to the Committee on Financial Services an increase in the authorization of the SEC of $120 million to focus enforcement on the financial statements filed by the thousand largest companies in America. Every Republican on our committee voted no, every Democrat voted yes, the amendment went down. It is time for us, if we are serious about dealing with securities crime, to fund the SEC. But it is time for us to do more as well. The bill passed by the Senate, the other body, is a good first step, but I hope in conference, or perhaps in a second bill, that we go beyond that. There are a whole host of ideas that we ought to include. We ought to explore the idea of having our thousand largest companies audited every 6 months instead of every year. We have been auditing every 12 months since the 1933 act. Certainly the speed by which decisions are made, the speed at which stocks are bought and sold, is far more than twice as fast as it was in 1933. And if WorldCom is going to try to misstate its income for five quarters, it is better that they are caught after two quarters than after four quarters, assuming the audit is competent. And I will get to that in a second. In addition, the Federal Government ought to certify some stock analysts as being genuinely independent. And to be independent, under this standard, it is not enough that the particular analyst does not get direct cash from the issuer, but rather that the employer of the analyst do no underwriting, consulting or in any other way receive money from the very companies that are being analyzed. Now, some may accept a lower standard, and they are welcome to, but to be certified as independent, I would expect an analyst to be loyal to his or her employer. And, therefore, it would be good to have analysts who are employed by those who are not getting money from the very companies that are being analyzed. Mr. Speaker, the Chair of the Committee on Energy and Commerce, the gentleman from Louisiana (Mr. Tauzin), was on the morning shows this past Sunday indicating that Arthur Andersen had a peculiar problem that has led to a great overrepresentation of Arthur Andersen among the problem audits. He indicated that the structure of that firm was such so that the engagement partner, the salesman partner, had total power, and the technical review partners were not necessarily even consulted before the audit was concluded. I had put forward to our committee back in April a requirement that accounting firms dealing with publicly traded companies avoid that Arthur Andersen structure and use a structure that almost all of them have always used, and that is that the technical review partners who are insulated from the client make the final determination. Unfortunately, even while the Republican Chair of the Committee on Energy and Commerce is saying this is the problem, the Republicans on our committee are voting against a solution. It is time that we go beyond rhetoric and adopt legislation. We have a long way to go in restoring confidence to our capital markets.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, so much corporate malfeasance, so little time, so much to do. I join with the earlier speaker in saying that we should work together on a bipartisan basis, and indeed this House did pass a bill in April, but it passed a bill in which virtually every Democratic amendment was rejected out of hand, rejected on a partisan vote. So we do not have a bill that requires the SEC to actually read the financial statements of the largest companies and make sure that they are not misleading or obtuse. We do not have a requirement that audit firms have malpractice insurance or that they require their technical review partners to sign off on their audits. What we have is a bill that is bipartisan in form only. Working together is not just working with the other body. It is working with both sides of the aisle. Let me also take this opportunity to commend the Financial Accounting Standards Board whose slow and ineffectual action makes the House and the Senate look effective by comparison.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, first let me say what an honor it has been under the gentleman from New York's (Mr. LaFalce) leadership over the last 4 years on the Democratic side of the Committee on Financial Services. Second, let me express some disappointment in the President's speech yesterday. In his preview of his speech that was picked up by AP and other news stories, he said that he was planning to create a ban on huge loans to corporate executives; but when he actually delivered the speech, he simply called upon the corporations not to make such loans, which is like calling on a pack of wolves to become vegetarians. It was indeed a disappointing speech, but what was more disappointing was the President's belief based on his own experience at Harken that the SEC is engaged typically in reviewing the materials filed with them and then, when they need to be restated, demanding that restatement. The fact is that the Chair of the SEC has refused to provide our committee with even a cost estimate of what it would take to engage in the very kinds of activities only as to the top thousand corporations in America that the President states in his press conference that he believes that the SEC is already engaged in. In answering questions about Harken, the President said he thought the SEC was engaged in these activities. The fact is the SEC did not read Enron's financial statement for 4 years in a row. So we need an SEC that rises to the President's image of what they do, and in order to do that we might need a chairman who actually wants to achieve that objective.

Mr. SHERMAN

Mr. SHERMAN. Madam Speaker, I want to join the last speaker in his analysis, showing that the fees paid by individual investors is more than enough to provide for beefed-up SEC enforcement. But what the other party does is they use those fees collected from individual investors as a profit center to then fund tax cuts for the wealthiest 1 percent of Americans, and when we suggest that the fees paid by individual investors should be used to protect those investors, we are told that takes money away from the war against terrorism. Shame. We ought to be collecting adequate revenues to keep our country safe from terrorism, and the fees paid by individual investors are more than enough to provide every penny this bill authorizes and, frankly, more. I come to the floor to bring to the Congress' attention one section of this bill, section 3, that says it is the sense of Congress that the SEC should conduct an annual review of the annual financial statements of the 500 largest issuers. Why is this provision necessary? The SEC has two approaches to reviewing financial statements. If one is a small company trying for the first time to raise 10 or $20 million, then they file their red herring, their first draft. The SEC reviews it carefully; they issue a comment letter. If there is anything confusing, misleading or incomplete, they have to bring their filing up to specifications and only then do they go to the public; but if they are one of the biggest and richest companies in America, if they are already a publicly traded corporation, if they are raising or responsible on the market for 60 or 80 or $100 billion in capitalization, if they are Enron, then the SEC just does not read what they file, as they did not read Enron's financial statements for 1997, 1998, 1999. They did not read those statements until the collapse. What would have happened if they read those statements? They would have seen a number of footnotes in the financial statements that are utter gobbledy gook. I know to the average layperson all of the footnotes are gobbledy gook, but these were incomprehensible to an analyst, the CPAs. If the SEC had bothered to read these footnotes, they would have demanded clarification. Instead, they did not read them at all. The SEC, however, at least its chairman, is hostile, believe it or not, to the idea of reading the financial statements of the 500 largest companies. That is because there is an element at the SEC that believes that investors need to be protected from Joe Inventor who is trying to raise 5 or $10 million, but that we do not need any protection from Kenneth Lay because, after all, those in the tallest buildings of the biggest companies are inherently so honest that the SEC does not need to review what they file. This approach to the SEC's work is wrong, and that is why I am glad that this section is in the bill; but when I asked the SEC to tell us what it would cost so that the appropriators could provide the resources, the response of Chairman Pitt was to say that he was going to refuse to provide that information because he disagreed with the proposal. Now the proposal will be included in legislation passed by the House. The Congress will adopt language saying that it is our sense that the SEC do this work. The SEC will then probably continue to refuse to tell Congress what it would cost to actually read the most important documents filed with the SEC, to comment on them and to demand clarification. I would like to enter into the Record the letter sent to me on May 21 by Chairman Pitt, in which he refuses to provide information as to what it would cost to read the financial statements of the 500 or 1,000 largest companies, and I would hope that this provision will remain in the bill in conference and that Congress will not allow an SEC chairman to refuse to provide us with even an estimate of what it would cost to do something that we in the House are about to declare ought to be done, but that instead we have an SEC that takes its responsibility to protect those who invest in the biggest companies, takes that responsibility as seriously as they do their responsibility to protect those who invest in the smallest. The letter referred to follows: U.S. Securities and Exchange Commission, Washington, DC, May 21, 2002. Hon. Brad Sherman, Committee on Financial Services, House of Representatives, Longworth House Office Building, Washington, DC. Dear Congressman Sherman: During my testimony before the House Financial Services Committee on March 20, 2002, you requested that I submit for the record an estimate of the increase in reviews. You asked that a cost estimate be provided for annual reviews at three levels of effort covering the top 500, 1000 and 2000 firms. As I noted during the hearings, it is impractical for Congress to attempt to provide the Commission with sufficient resources to do a comprehensive review of the top 500, 1000 or 2000 companies. Apart from the enormous cost of such a process, there is ultimately no assurance that the additional expenditures would ensure the quality of audits or financial reporting. As I noted in my testimony, the Administration's request for fiscal year 2002 supplemental funding includes $20 million to finance 100 new positions for the Commission. Our plan would be to allocate 30 positions to the Division of Corporation Finance to expand, improve and expedite our review of periodic filings. Our Division of Corporation Finance has undertaken to monitor the annual reports submitted by all Fortune 500 companies that file periodic reports with the Commission in 2002. This new initiative, which we announced in December, significantly expands the Division's review of financial and non-financial disclosures made by public companies. The additional funds would allow the Division to perform full reviews of more public companies' annual filings. Thank you for your support of the Commission's programs. Should you have additional questions, I would be pleased to be of assistance. Your truly, Harvey L. Pitt.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, I rise today with my colleague, Representative Bob Filner, to mourn the passing and recognize the contributions to the legal profession and the community of Superior Court Judge Carlos Cazares. The oldest of 11 children who came from a hard-working Mexican family, Judge Cazares distinguished himself as a trailblazer serving in the Army during the Korean War and later attending college at night through the GI Bill, earning an accounting degree. He subsequently earned a law degree, becoming one of the first Mexican-American lawyers in San Diego County. In 1972, then-Governor Ronald Reagan appointed him to a Municipal Court judgeship. Five years later, Gov. Jerry Brown elevated him to the San Diego Superior Court, an event witnessed by his parents, Carlos and Norberta Cazares. In addition to his accomplishments on the bench, Judge Cazares was instrumental in ensuring that people have the highest quality of care and respect, both personally and professionally. For example, he helped establish the San Ysidro Health Clinic and was a member of the Knights of Columbus and a lay minister at St. Rose of Lima Catholic Church, ministering to the sick at hospitals. He was a dedicated son, father, grandfather, brother and uncle. Mr. Speaker, Judge Carlos Cazares was a hard-working community leader. It is our great pleasure to recognize his selfless commitment to the betterment of our community and our fellow citizens. We urge our colleagues to join in honoring his achievements. He has truly served our society with relentless dedication, and his community contributions distinguish him as an example for us all.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, I represent Malibu, California, and surrounding towns that are even better off. We pay the estate tax, and I am proud that my district would send me here to oppose this rule and to oppose this bill. America is under attack. Patriotism is not watching fireworks, it is sacrificing for your country. Our men and women in uniform are doing that, and it would seem to me that if we are going to ask for sacrifice, it should include asking the wealthiest one-half of 1 percent of Americans to pay taxes, as they have even under Ronald Reagan. The generations that fought World War I and fought World War II were patriotic enough to pay this tax, and yet we are told our generation lacks that patriotism. I am here to say that is not true. But speaking of patriotism, what about these corporations that flee our shores, that tap into our markets and will not pay our taxes, that are Enroning the people of America and incorporating in the Cayman Islands? Vote against this rule, because it will not allow our colleague, the gentleman from North Dakota (Mr. Pomeroy), to include in his substitute provisions that would impose tax on those companies that are fleeing our shores. One of my colleagues from California stood in this well and said that the estate tax should be repealed because Karl Marx was in favor of an estate tax. What an interesting argument. Mr. Speaker, they, the Republicans, are getting ready. They are waiting for next year, because they will be down here on this floor pointing out that Karl Marx was in favor of social insurance and said so in his writings, and they will tell you that we must repeal Social Security to prove we are not Marxists. And they will have an additional argument. They will tell us we cannot afford Social Security because, after all, we just reduced our revenues by over $1 trillion over a 10- year period by repealing the estate tax. Vote against the rule and against the bill.