Lamar Smith

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, I support the Bankruptcy Conference Report. I know there has been deliberation about the effect of section 330 of the bill on anti-abortion protests. But I believe section 330 will have little practical effect. And the rest of this bill will an overwhelmingly positive impact on the bankruptcy system. Section 330 does not penalize any lawful behavior. It will apply only if a person violates the law, a court enters an award against that person, the person later files a non-chapter 13 bankruptcy and seeks to discharge a debt based on their unlawful activity, and the creditor pursues the matter. It does not apply only to abortion-related protests, but also to unlawful protests aimed at the providers of any lawful good or service. The compromise reached in conference on this issue also contains very stringent requirements that should prevent any innocent protesters from being included in these provisions. Moreover, this bill will curb bankruptcy abuse and protect consumers. It will also address the loophole in current law that allows debtors in certain states with unlimited homestead exemptions to shield an almost unlimited value of their homes from their creditors. In order to game the system, some debtors move to a state with an unlimited homestead exemption just before they file for bankruptcy in order to take advantage of that state's more generous homestead protections. H.R. 333 closes this loophole by requiring a debtor to reside in a state for at least two years before that debtor can claim the state's homestead exemption. In addition, a debtor must own the homestead for at least forty months before they can claim the state's homestead exemption protections. H.R. 333 will stop corporate thieves from hiding their homestead assets from those whom they have defrauded. It will cap a debtor's homestead exemption at $125,000 if the debtor was convicted of a felony, if the debtor violated a securities law, or if they engaged in any criminal act, intentional tort, or reckless misconduct that caused serious physical injury or death to another individual. Homeownership strengthens the fabric of our society. It's the American dream--and over 70% of Americans are living it. Owning a house gives individuals and families a place to call home, where they can arise their children and become active participants in their neighborhoods and communities. Since 1867, federal lawmakers have recognized the role of the states in determining appropriate homestead exemptions. States are in a much better position to determine an appropriate exemption--they can more closely examine the factors that differ from state to state, such as property values, real estate inflation, and even demographics. The balance between states' rights and the federal government is important. Any abuses of the homestead exemption can and should be addressed by the individual states themselves. In Texas, the homestead exemption is embedded in the state constitution to prevent the sale of one's home to repay debts, except in three specific cases: when there is a debt for the purchase of a home, a debt to finance the improvements to the home, or a debt for property taxes or federal income and estate taxes. The homestead exemption provisions were among the most contentious in the conference and I am pleased we were able to reach a compromise on this issue. The compromise we reached will prevent `bad actors' from abusing the homestead exemption without punishing those who legitimately belong in bankruptcy. The overwhelming majority of people who declare bankruptcy do so because they have no other choice. Bankruptcy law is intended to give debtors a fresh start, not to punish them. Less than one percent of bankruptcy debtors abuse the bankruptcy press. This bill will address those `bad actors' while retaining the goal of giving sincere debtors a fresh start. I strongly support this conference report and I urge my colleagues to support it, as well.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, the President has stated about the creation of a Homeland Security Department: ``[we] face an urgent need, and we must move quickly, this year, before the end of the congressional session.'' We fulfill that request today by passing H.R. 5710, the Homeland Security Act. This bipartisan legislation accomplishes many goals. The Gilmore Commission stated in 2000 that the national strategy against terrorism must address intelligence, deterrence, prevention, preemption, crisis management, and consequence management. This bill does just that. H.R. 5710 includes the provisions of H.R. 3482, the Cyber Security Enhancement Act, legislation I introduced that passed the House overwhelmingly in July. These provisions strengthen the penalties against those who commit cyber crimes. They also establish the Office of Science and Technology within the National Institute of Justice, which guarantees the ability of NIJ to continue managing the important work of that office. H.R. 5710 also includes legislation I cosponsored to require information sharing among Federal, state, and local law enforcement agencies. The Department of Homeland Security will have a strong law enforcement role, but this role is distinct from that of the Department of Justice, which remains the principal law enforcement agency of the United States. The role of the Department of Justice is further enhanced by the transfer to it the Bureau of Alcohol, Tobacco and Firearms and the law enforcement training functions of the Federal Law Enforcement Training Center. The Homeland Security bill will improve our nation's immigration system by restructuring the INS. The INS has proven time after time that in its current form it is unable to handle the implementation of our nation's immigration laws. Among other improvements, the INS will be split into two agencies--one to handle services and one to handle enforcement. This will greatly improve the effectiveness and efficiency of our immigration system. Defending against terrorists who can strike almost any time anywhere requires a change in how we approach the problem. The Department of Homeland Security will have a clear focus and clear mission to protect Americans from terrorists whether inside or outside our borders. I urge my colleagues to support final passage.

Mr. SMITH of Texas

Mr. SMITH of Texas. I thank the gentleman from Michigan for yielding me this time. Mr. Speaker, I support the Senate amendment to H.R. 3394, the Cyber Security Research and Development Act. Earlier this year, a federally funded research center operated by Carnegie Mellon University reported that breaches in security of computer systems more than doubled from 2000 to 2001. More than 52,000 incidents were reported in 2001, up from 22,000 in 2000. Last spring the Committee on the Judiciary's Subcommittee on Crime, Terrorism and Homeland Security that I chair held a series of hearings on cyber crime. We heard testimony from local, State and Federal officials and also from the private sector. A common observation emerged: The demand for highly trained and skilled personnel to investigate computer crimes is tremendous. This problem is compounded by the rapid advances in technology which make continued training an absolute necessity. We must have training both for a new generation of cyber warriors whose most important weapon is not a gun but a laptop and for private sector companies that must protect their Internet presence. This bill seeks to expand what many States and cities are already doing, investing in cyber security training activities. In my hometown, the University of Texas at San Antonio has established the Center for Information Assurance and Security, known as CIAS. The CIAS will be the hub of a city initiative to research, develop and address computer protection mechanisms to prevent and detect intrusions on computer networks. With funding provided in this bill, UTSA and dozens of other universities will be able to train the next generation of cyber warriors, cyber defenders and ``white hat netizens.'' This legislation supports the work at UTSA and other universities for students who want to pursue computer security studies. While the benefits of the digital age are obvious, the Internet also has fostered an environment where hackers retrieve private data for amusement, individuals distribute software illegally, and viruses circulate with the sole purpose of debilitating computers. A well- trained and highly skilled force of cyber protectors is urgently needed in America today. Mr. Speaker, I urge my colleagues to support this legislation.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, today I introduced a resolution to recognize the 90th birthday of former First Lady, Lady Bird Johnson. Lady Bird Johnson has made many contributions to this country. One of the most visible is her dedication to the preservation of the environment, especially her efforts to beautify our Nation's highways with a legacy of wildflowers. In 1982, Mrs. Johnson founded the National Wildflower Research Center, which later was renamed the Lady Bird Johnson Wildflower Center, in Austin, Texas. The center is dedicated to the conservation and restoration of native plants in natural and planned landscapes. My congressional district includes the Hill Country of Texas, which encompasses Stonewall, Texas, the home of Mrs. Johnson. Each year with spring's arrival, the Hill Country's fields, hillsides and riverbanks shed their drab winter austerity for the vibrant hues of wildflowers. Lady Bird Johnson was the recipient of the nation's highest civilian award, the Medal of Freedom and, in 1988, President Ronald Reagan awarded her the Congressional Gold Medal. I commend Lady Bird Johnson's efforts to preserve the landscape of this country and we send her best wishes on her 90th birthday.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, the House has acted on the new Department of Homeland Security legislation; the Senate has not. This bipartisan legislation will enable our government to coordinate its intelligence efforts and strengthen its defenses against terrorism. Also, H.R. 3482,, the Cybercrime Enhancement Act that I introduced, has been included as an amendment to the Senate homeland security legislation. H.R. 3482 passed the House by a vote of 385-3 and the Senate by unanimous consent. Cyber terrorists do not have to sneak into our borders, they only have to hit a computer key to attack our homeland. We must improve our nation's cvber-security and strengthen our criminal laws to prevent, deter and respond to cyber attacks that could disable the economy or endanger lives. It is urgent that the Senate act on the Homeland Security legislation.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, I have introduced legislation to help private parties seek justice against the Federal Government. The Private Party Judicial Fairness Act allows for pre-judgment interest to accrue in cases where it is now prohibited. Interest will be paid from the date the action is filed in the United States Court of Federal Claims. Upon receipt of a judgment against the United States, this legislation will allow private parties to receive the proper proceeds. It also will create an incentive for the government to process these suits at a reasonable pace. Under current law, a narrow group of suits against the United States are ineligible for pre-judgment interest. The lack of pre-judgment interest available in these cases encourages government lawyers to delay the ultimate resolution of the cases. Some of these cases have been pending before the Court for ten or more years. And even if the private parties win their cases and are awarded judgments, it is usually far less than what they deserve. It is time to aid this small class of claimants and create an incentive for the prompt administration of justice.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, I thank the gentleman from Wisconsin for yielding me this time and for that nice introduction. Mr. Speaker, soon each Member of Congress will vote on a historic resolution to authorize the President to use military force against Saddam Hussein. This is not a declaration of war, and war is not inevitable. Saddam Hussein may yet yield to international pressure and reveal his weapons of mass destruction and destroy them, or the Iraqi people might still install a new regime. No President wants to send our sons and daughters into combat, but a President should be able to take action he deems necessary to respond to terrorist threats and protect American lives. I know that given all the facts, President Bush will make the right decision. Saddam Hussein is a dangerous man with dangerous weapons, weapons of mass destruction. His regime has stockpiled large amounts of chemical and biological weapons and is attempting to acquire nuclear weapons, has repeatedly violated United Nations Security Council resolutions, has repeatedly fired missiles at U.S. aircraft, has aided known terrorist organizations, and has openly praised the attacks of September 11, 2001, which killed 3,000 people. Mr. Speaker, hoping that Saddam Hussein will not use his weapons or wishing that his threat to world peace will go away is not a responsible policy and certainly not a guarantee of success. Hope is not a strategy. Mr. Speaker, evil must be confronted and condemned. Either it will destroy itself or it must be neutralized. Avoiding the task only makes the future more dangerous and difficult. We should always pray for peace, but if the use of force becomes necessary, we must pray for victory.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, for the past century 3M has been a leader of innovative products. The company's achievements in technology, medicine and safety, have improved lives around the world. In 1925, a young researcher by the name of Dick Drew, acting on his own initiative, developed the Scotch Tape Product line. In 1937, the first traffic sign of 3M Scotchlite Reflective Sheeting went up in Minneapolis. In addition, the first electrical tape with vinyl plastic backing was introduced and Scotch Magnetic Tape (which was later designed to use in the first recording of television pictures) was introduced. Other innovative ideas include Scotch Magic Transparent Tape, Tartan Track (the first synthetic running track), and the introduction of Dry Silver technology. As the decades went by, the success of 3M only increased with the discovery of medical x-ray film, fire barrier sealant, and the introduction of the 3M Pollution Prevention Pays. In 1985, the first successful optical disk for information storage, video, and audio reproduction was implemented. A few years later, 3M Fibrlok Fiber Optics Splices reduced splicing time drastically. And the first commercial automatic book check-out systems for libraries, known as the 3M Self-Check Automated Library System, was introduced. In closing, I commend the employees at 3M's Austin, Texas, facility, which is in the new 21st Congressional District. Their work has contributed much to America's technological innovations and to Austin's economy.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, this legislation is good policy. It has the potential to protect and save lives, the lives of the most innocent among us. H.R. 5422 is divided into three titles: Sanctions and offenses, investigation and prosecution, and public outreach. This legislation ensures that our Nation's laws protect our children from those that would prey on them. Title I, ``Sanctions and Offenses,'' strengthens the penalties against kidnapping by providing for a 20-year mandatory minimum sentence of imprisonment for non-family abductions of a child under the age of 18. The section includes Representative George Gekas' bill, H.R. 4679, that requires lifetime supervision for sex offenders. Also included is Representative Mark Green's bill, H.R. 2146, that requires mandatory life imprisonment for second time offenders. Chairman Jim Sensenbrenner's bill, H.R. 4477, strengthens the laws related to travel to foreign countries for sex with minors, and is a part of this legislation. In addition, this title directs the U.S. Sentencing Commission to increase offense levels for crimes of kidnapping, expands the crime of sexual abuse murder, and adds child abuse that results in murder as a predicate for first degree murder. Title II, ``Effective Investigation and Prosecution,'' includes Representative Nancy Johnson's bill, H.R. 1877, which adds for new wiretap predicates that relate to sexual exploitation crimes against children. It also provides that child abductions and felony sex offenses can be prosecuted without limitation of time and provides a rebuttable presumption that child rapists and kidnappers should not get pre-trial release. Title III, ``Public Outreach,'' establishes a national AMBER Alert program based on Representative Jennifer Dunn's and Representative Martin Frost's bill to expand the child abduction communications warning network throughout the United States. The AMBER program is a voluntary partnership between law-enforcement agencies and broadcasters to activate an urgent alert bulletin in serious child-abduction cases. This title also increases support for the National Center for Missing and Exploited Children by doubling its authorization to $20 million. Further, the title authorizes COPS funding for local law enforcement agencies to establish sex offender apprehension programs within their states. Mr. Speaker, the recent wave of high profile child abductions illustrates the tremendous need for legislation in this area. These criminals breach the security of our homes to kidnap, molest, rape, and kill our children. Immediate action is necessary. I urge my colleagues to support this legislation.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, I urge my colleagues to support permanent repeal of the marriage tax penalty. The unfair marriage tax adversely affects more than 21 million married couples. It forces couples to pay more in income taxes than they would pay if filing individually. It is a tax on marriage and a tax on starting families. If anything, we ought to give newly married working couples a tax break. Several months ago this House voted to permanently repeal the marriage tax. The House has acted; the Senate has not. In my Texas district, over 65,000 married couples would benefit from the permanent repeal of the marriage tax penalty. The tax code is unfair and ought to be changed. It is time to say ``I do'' to relief from the marriage tax penalty.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, the cost of malpractice insurance has steadily risen, which has caused many insurers to drop coverage or raise premiums. Doctors and others have been forced to abandon patients, particularly in high-risk specialties such as emergency medicine and obstetrics and gynecology. H.R. 4600, the HEALTH Act, will cap noneconomic damages at $250,000, and limit the contingency fees lawyers can charge. This will reduce the number of medical malpractice claims and make medical malpractice insurance affordable again. Patients will receive better and less expensive health care. By improving the medical malpractice system, the HEALTH Act will enhance the quality of care for all patients. I urge my colleagues to support this legislation.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, I thank the chairman of the Committee on the Judiciary for yielding me this time. This legislation contains several bills originated by the Subcommittee on Crime, Terrorism and Homeland Security. The Juvenile Offender Accountability Act, the Law Enforcement Tribute Act, and the Body Armor Act will help make America safer. Additionally, this legislation increases penalties for threatening Federal judges and other Federal officials, and for threatening witnesses, victims and informants. An immigration provision I sponsored benefits the high-tech sector. It allows high-tech workers with H1-B visas who apply for an extension beyond their normal 6 years to extend their stay in the U.S. while their application is pending. This legislation provides for three additional judgeships in Texas, two permanent district judges in the western district and one temporary district judge in the eastern district. Mr. Speaker, I urge my colleagues to support this conference report. Mr. Speaker, Section 11030 A of the conference report will permit H- 1B aliens who have labor certification applications caught in lengthy agency backlogs to extend their status beyond the 6th year limitation or, if they have already exceeded such limitation, to have a new H-1B petition approved so they can apply for an H-1B visa to return from abroad or otherwise re-obtain H-1B status. Either a labor certification application or a petition must be filed at least 365 days prior to the end of the 6th year in order for the alien to be eligible under this section. The slight modification to existing law made by this section is necessary to avoid the disruption of important projects caused by the sudden loss of valued employees. This corrects a problem created in the American Competitiveness in the 21st Century Act (Pub. L. 106-313)(AC21). The provision, as it was orginially written, allowed for extensions of H-1B status beyond the usual 6 years, but required that a labor certification be filed more than 365 days before the end of the 6th year and that an immigrant petition, the next step in the long line to permanent residency, be filed before the end of the 6 year as well. When it passed AC 21, Congress intended to protect foreign nationals and the companies who sponsor them from the inequities of government bureaucracy inefficiency. This specific provision was put in place to recognize the lengthy delays at INS in adjusticalting petitions, rather than DOL. But since that time, DOL has slowed down its own processing, and the provision as it was orginially written has become useless for many otherwise qualified applicants. This correction allows for those in H-1B status to get extensions beyond the six years when a labor certification was filed before the end of the fifth year, without regard to the ability to file an immigrant petition within the next year. The conferees intends that those who are about the exceed their six years in H-1B status should not be subject to the additional requirement of having to file the immigrant petition by the end of the sixth year, which is simply impossible when DOL has not finished its part in the process. This recognizes that these individuals are already well-valued by their companies, have significant ties to the U.S. and whose employers have to prove that they are not taking jobs from U.S. workers. It also is meant to permit those who have exceeded their six year limitation to return to H-1B status. The conferees intend for this provision to allow those who already exceeded the 6-year limitation to have a new H-1B petition approved and obtain a visa to return from abroad or otherwise re-obtain H-1B status. In addition, the compromise reached with the Senate on Title IV of Division B of this legislation relating to the Violence Against Women Office (VAWO) gives the Attorney General discretion about where to place the VAWO in the organizational structure and chain of command of the Department of Justice as did the version contained in the House passed bill. This compromise does not contain language found in section 402(b)(1) of the Senate bill which stated that the VAWO ``shall not be part of any division or component of the Department of Justice.'' The conference report permits the Attorney General the flexibility to manage the Department's responsibilities in the area of violence against women.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, I thank the gentleman for yielding me this time. Mr. Speaker, pension security is close to the heart of every working American. Workers save for years with the hopes that after they retire they will be able to live without financial worries, spending more time with their family and friends. Five months ago the House passed a pension reform bill with significant bipartisan support. This legislation gives workers the freedom to diversify their retirement savings, it expands worker access to investment advice, empowers workers to hold company insiders accountable for abuses, and gives workers added protections. The House has acted on pension reform; the Senate has not. Yet Americans continue to worry about their retirement security. Mr. Speaker, Americans deserve a secure retirement. They expect it, and they have earned it. I also want to add that I think the majority whip a few minutes ago on the House floor, the gentleman from Texas (Mr. DeLay), made an excellent point. He reminded us that while the House has acted, the Senate has not. Under our system, unless we have a work product from the House and a work product from the Senate that can go to a conference committee, we are not going to have pension reform. As much as we might criticize what the House has done, it is too late to do anything about it. Pension reform passed with bipartisan support in the House. The only action left now is once the House has acted, under our system, the Senate now needs to act, and we need to get that work product. The House has acted; the Senate has not. The other point, Mr. Speaker, there has been a lot of sentiment expressed tonight about the great need for pension reform and pension security. I think we all agree with that, but we need to focus not on what is wrong with the work product of one body, but we need to focus on the solution. And once again, the only way we are going to get to that solution is if we have a work product from the House and we have a work product from the Senate. Unfortunately, the House has acted; but the Senate has not. Until we get to the point where we can get to the conference committee and resolve our differences and do what is right for American workers and the American people, and for those who deserve to have a secure retirement, we are not going to get to that solution. Once again, the House has acted and the Senate has not. Until we come up with a solution to that dilemma, which is going to be a conference report after the House and the Senate have acted, we are not going to do what is right for the American people. Mr. Speaker, once again, the House has acted; the Senate has not. We have to resolve that before we can do what is right.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, I thank the gentleman from Virginia for yielding me this time. I think it is appropriate to point out that the acting Speaker pro tempore now is the gentleman from New Hampshire (Mr. Bass), the State where Mary Baker Eddy was born. Mr. Speaker, I support House Concurrent Resolution 458, recognizing and commending Mary Baker Eddy's life and achievements and the opening of the Mary Baker Eddy Library for the Betterment of Humanity. Mary Baker Eddy was a notable 19th century public figure and role model in the early stages of the women's rights movement. Historians often compare her to other 19th century reformers, like Elizabeth Cady Stanton and Susan B. Anthony, women who took leadership roles at a time when women infrequently did so. Mary Baker Eddy was an author, a successful businesswoman, a publisher and editor of monthly and weekly magazines, the president and founder of a teaching college, and the founder and leader of a worldwide church, the First Church of Christ, Scientist, which today has congregations in 139 countries. Remarkably, at age 87, Mary Baker Eddy founded an international daily newspaper, the Christian Science Monitor, which has won seven Pulitzer Prizes. The Mary Baker Eddy Library in Boston, which opens on September 29, will make available to the public one of the largest collections of primary-source material by and about American women. The library will provide opportunities to explore the ideas and life of this 19th century pioneer and will showcase her previously unpublished writings. Mr. Speaker, I urge all Members of the House to support this resolution.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, today the House passed a resolution urging Congress to eliminate the death tax. The death tax is the wrong tax on the wrong people at the wrong time. It punishes those who save and invest. It prevents parents from helping their children; and it forces many farmers, ranchers and small business owners to sell off a lifetime of hard work. The House of Representatives has done its job. Last year we voted to repeal the death tax, but the Senate has not acted on similar legislation. Repealing and reducing taxes leaves more money in working families' pockets. When they spend it or invest it or start a business, new jobs are created and the economy is benefited. Like a weed in a garden, the death tax is not useful, does harm, and needs to be eliminated.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, I thank my friend from Ohio for yielding me time. Mr. Speaker, this conference report goes a long way in achieving two necessary goals. First, it helps us determine who those are who have abused the public trust, in general, and employees' trust and stockholders' trust, in particular. Second, this conference report makes sure that an appropriate level of punishment is available. In considering this conference report, though, we should remember that the proportion of corporate executives who are culpable is a very, very small fraction of the whole. The vast majority of executives are law-abiding who have contributed much to the prosperity of America. Finally, Mr. Speaker, I want to single out a business leader, Andy Grove, chairman of the board of Intel, for his constructive suggestions on how to increase corporate responsibility. Mr. Speaker, I have been happy to have been a part of the conference that produced this conference report. Mr. Speaker, I include in the Record two articles, one written by Andy Grove and one about him. [From the Washington Post, July 17, 2002] Stigmatizing Business (By Andrew S. Grove) I grew up in Communist Hungary. Even though I graduated from high school with excellent grades, I had no chance of being admitted to college because I was labeled a ``class alien.'' What earned me this classification was the mere fact that my father had been a businessman. It's hard to describe the feelings of an 18-year-old as he grasps the nature of a social stigma directed at him. But never did I think that, nearly 50 years later and in a different country, I would feel some of the same emotions and face a similar stigma. Over the past few weeks, in reaction to a series of corporate scandals, the pendulum of public feeling has swung from celebrating business executives as the architects of economic growth to condemning them as a group of untrustworthy, venal individuals. I have been with Intel since its inception 34 years ago. During that time we have become the world's largest chip manufacturer and have grown to employ 50,000 workers in the United States, whose average pay is around $70,000 a year. Thousands of our employees have bought houses and put their children through college using money from stock options. A thousand dollars invested in the company when it went public in 1971 would be worth about $1 million today, so we have made many investors rich as well. I am proud of what our company has achieved. I should also feel energized to deal with the challenges of today, since we are in one of the deepest technology recessions ever. Instead, I'm having a hard time keeping my mind on our business. I feel hunted, suspect--a ``class alien'' again. I know I'm not alone in feeling this way. Other honest, hard-working and capable business leaders feel similarly demoralized by a political climate that has declared open season on corporate executives and has let the faults, however, egregious, of a few, taint the public perception of all. This just at a time when their combined energy and concentration are what's needed to reinvigorate our economy. Moreover, I wonder if the reflexive reaction of focusing all energies on punishing executives will address the problems that have emerged over the past year. Today's situation reminds me of an equally serious attack on American business, one that required an equally serious response. In the 1980s American manufacturers in industries ranging from automobiles to semiconductors to photocopiers were threatened by a flood of high-quality Japanese goods produced at lower cost. Competing with these products exposed the inherent weakness in the quality of our own products. It was a serious threat. At first, American manufacturers responded by inspecting their products more rigorously, putting ever-increasing pressure on their quality assurance organizations. I know this firsthand because this is what we did at Intel. Eventually, however, we and other manufacturers realized that if the products were of inherently poor quality, no amount of inspection would turn them into high-quality goods. After much struggle--hand-wringing, finger-pointing, rationalizing and attempts at damage control--we finally concluded that the entire system of designing and manufacturing goods, as well as monitoring the production process, had to be changed. Quality could only be fixed by addressing the entire cycle, from design to shipment to the customer. This rebuilding from top to bottom led the resurgence of U.S. manufacturing. Corporate misdeeds, like poor quality, are a result of a systemic problem, and a systemic problem requires a systemic solution. I believe the solutions that are needed all fit under the banner of ``separation of powers.'' Let's start with the position of chairman of the board of directors. I think it is universally agreed that the principal function of the board is to supervise and, if need be, replace the CEO. Yet, in most American corporations, the board chairman is the CEO. This poses a built-in conflict. Reform should start with separating these two functions. (At various times in Intel's history we have combined the functions, but no longer.) Furthermore, stock exchanges should require that boards of directors be predominantly made up of independent members having no financial relationship with the company. Separation of the offices of chairman and CEO, and a board with something like a two-thirds majority of independent directors, should be a condition for listing on stock exchanges. In addition, auditors should provide only one service: auditing. Many auditing firms rely on auxiliary services to make money, but if the major stock exchanges made auditing by ``pure'' firms a condition for listing, auditing would go from being a loss leader for these companies to a profitable undertaking. Would this drive the cost of auditing up? Beyond a doubt. That's a cost of reform. Taking the principle a step further, financial analysts should be independent of the investment banks that do business with corporations, a condition that could and should be required and monitored by the Securities and Exchange Commission. The point is this: The chairman, board of directors, CEO, CFO, accountants and analysts could each stop a debacle from developing. A systemic approach to ensuring the separation of powers would put them in a position where they would be free and motivated to take action. I am not against prosecuting individuals responsible for financial chicanery and other bad behavior. In fact, this must be done. But tarring and feathering CEOs and CFOs as a class will not solve the underlying problem. Restructuring and strengthening the entire system of checks and balances of the institutions that make up and monitor the U.S. capital markets would serve us far better. Reworking design, engineering and manufacturing processes to meet the quality challenge from the Japanese in the 1980s took five to 10 years. It was motivated by tremendous losses in market share and employment. Similarly, the tremendous loss of market value from the recent scandals provides a strong motivation for reform. But let us not kid ourselves. Effective reform will take years of painstaking reconstruction. Our society faces huge problems. Many of our citizens have no access to health care; some of our essential infrastructure is deteriorating; the war on terror and our domestic security require additional resources. Attacking these problems requires a vital economy. Shouldn't we take time to think through how we can address the very real problems in our corporations without demonizing and demoralizing the managers whose entrepreneurial energy is needed to drive our economy? The writer is chairman of Intel Corp. [From the Wall Street Journal, July 22, 2002] The Beltway Bubble Since President Bush unleashed the political furies on the private sector with his speech on July 9, stocks on the Dow have fallen by about 13.5%, including another 4.6% on Friday. This can only mean that investors are demanding more regulation, more punitive laws and more anti-business rhetoric, right? Believe it or not, that's what some people with allegedly above-average IQs are writing. The truth is closer to the opposite, with investors now discounting not just for market risk but for a new and dangerous element of political and regulatory risk. With Congress in a stampede, and Mr. Bush abdicating veto oversight, the law of unintended consequences is in the saddle riding events. Consider the fine print now contained in legislation sponsored by Joe Biden and Orrin Hatch that whooped through the Senate last week. Time magazine made Intel Chairman Andrew Grove its man of the year in 1997. But Senator Bush, with his vast corporate experience, is now insisting on language that would likely drive Mr. Grove and independent chairmen like him out of the business. Here's the problem: The Biden-Hatch bill would require that CEOs, chief financial officers and board chairmen all certify, under threat of criminal sanction, the accuracy of company financial statements. This makes sense for CEOs and CFOs, who are actively managing the business. And for companies that combine the CEO and chairman positions this is also logical. But some companies prefer to divide the CEO and chairman posts, with the CEO running the business but the chairman playing the role of counselor or independent intermediary with the board of director. It's one way of helping the board supervise the CEO, which is supposed to be a main goal of the latest corporate ``reforms.'' Yet the Biden legislation would all but end this often useful division of responsibility. Very few non-CEO chairmen in their right mind are going to risk jail by certifying results they are not actively managing. Mr. Grove, for example, gave up his CEO duties at Intel in 1998 at age 61, but he retains the chairman title that allows him to set the agenda for board meetings and consult with CEO Craig Barrett. ``It's a very healthy thing,'' Mr. Grove tells us. ``The power of setting the agenda is incredible. I basically control what we are going to talk about at board meetings, not Craig.'' Other companies that have non-CEO chairmen include Cisco and Microsoft, where Bill Gates gave up his chief executive role to Steve Ballmer but is obviously still a valuable contributor to the company. Whatever else investors are clamoring for, we doubt it's a high technology sector without the skills and institutional memory of Andy Grove and Bill Gates. By the way, the Biden-Hatch bill contains other troubling provisions that someone at the White House should inspect. In its language demanding that CEOs certify their financial results, it uses words like ``appropriateness'' and ``recklessly'' that are vague and legally undefined. This will only invite prosecutorial abuse, not to mention a trial- lawyer field day, which may in fact be why those words have quietly made their way into the Senate-passed bill. (Senator Hatch, were you paying attention?) If Congress is going to put CEOs in prison for a decade or more, doesn't it have an obligation to make sure that what they get sent away for is some specific and actual crime? The Biden language shows how in Washington's current mood the zeal to punish business is trampling common sense. Any House Member who raises any doubt about the wisdom of anything in the Senate bill gets a media pounding as a lackey of business. Obviously something is going to pass this year. But it would help the economy, as well as corporate governance, if the politicians burst their own bubble of righteousness and first thought carefully about the real-world consequences of what they're doing.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Chairman, I thank the gentleman for yielding me time. Mr. Chairman, I oppose this amendment. I support the separation of the Office of National Preparedness from the Federal Emergency Management Agency, FEMA. This was recommended by the Committee on the Judiciary in its views on H.R. 5005. Mr. Chairman, FEMA has an important role to play when a natural disaster occurs. Its core mission is to provide assistance to States and local officials. In sharp contrast to FEMA's natural disaster mission, the stated function of the Offices of National Preparedness, ONP, currently within FEMA, is to respond to terrorist attacks. This office is similar to the Department of Justice's Offices of Domestic Preparedness, and yet both programs train State and local first responders for such events. Merging the Office of National Preparedness with the Office of Domestic Preparedness will ensure the Federal coordination of State and local first responders. It ensures that they both receive law enforcement crisis management training and consequence management training. As James Witt, the former director of FEMA stated, ``FEMA has become a model agency by focusing on its prime mission: Responding to disasters and trying to reduce their impact in the future.'' Mr. Chairman, this mission is inconsistent with the purpose of ONP, which is described by Bruce Baughman, director of ONP at FEMA, in a January 30, 2002 letter, is to oversee ``consequence management and the impacts as a result of a Weapons of Mass Destruction--terrorist incident.'' Thus, ONP should be kept with the other training programs under the Under Secretary of the Border and Transportation Security and outside of FEMA. Mr. Chairman, I have a dear colleague letter which I will include in the Record. Washington, DC, July 25, 2002. Oppose the Young (AK) Amendment To Move the Office of National Preparedness Back to FEMA Dear Colleague: In the event of a terrorist attack, it is essential that there be a single office within the federal government to coordinate state and local first responders. This office must assure coordination in training, equipment selection, acquisition, and use by first responders in both crisis management and consequence management. Crisis management is a primarily law-enforcement function, it involves intelligence, surveillance, tactical operations, negotiations, forensics, and criminal investigations, arrest, evidence collection and prosecutions. First responders include law enforcement, fire fighters and other emergency responders, who must be trained together to assure a coordinated response. FEMA, however, has stated that it will NOT provide training and equipment needs to first responders for law enforcement's crisis management functions. But a terrorist attack is a Federal crime and a crisis event. Such an event requires a law enforcement response different from a response to a natural disaster. In sharp contrast to FEMA's natural disaster mission, the reason for the creation of FEMA's Office of National Preparedness (ONP) was to coordinate consequence management and limit the impact as a result of a weapons of mass destruction (WMD) incident. ONP's mission fits more appropriately with the other first responder programs. The Select Committee's bill merging the Office of National Preparedness with the Office of Domestic Preparedness reporting to the Under Secretary of Border and Transportation Security in essential to assuring the required federal coordination of state and local first responders, and assuring that they receive both law enforcement/crisis management training and consequence management training. Mr. Young will offer an amendment to return the Office of National Preparedness to FEMA. Such a move would effectively gut any hope for a coordinated federal effort in this vital mission. Lack of coordination will cost lives. The attached article from last week's New York Times vividly highlights this point and points out that the lack of a coordinated response by state and local law enforcement and firefighters likely caused additional avoidable casualties on September 11. We must make sure that any future terrorist threats are addressed with a coordinated response, managed by a single office in the new Department of Homeland Security. Moreover, such an office must be housed within the Under Secretary line of authority which has the needed law enforcement components, expertise and resources to assure that the crisis management component is given its proper emphasis. That is accomplished by the Select Committee's bill. As former FEMA Director James Lee Witt stated ``A Department of Homeland Security that has a focused mission and does not include a patchwork of unrelated programs will have a much greater chance at success. A successful Department of Homeland Security will ensure that horrible events, such as the WTC attacks, continue to be extremely rare occurrences and much less common than the hundreds of floods, tornados, and hurricanes that affect our nation each year.'' Many believe that the Office of National Preparedness has already distracted FEMA from its primary mission and created a imbalanced focus for an agency which generally responds to natural disasters. For a future terrorist attack we need a single office for a coordinated response. ONP should not go back to FEMA. Oppose the Young amendment. Sincerely, F. James Sensenbrenner, Jr., Chairman, Committee on the Judiciary. John Conyers, Jr., Ranking Member, Committee on the Judiciary. Lamar Smith, Chairman, Subcommittee on Crime Terrorism and Homeland Security. Henry J. Hyde, Chairman, Committee on International Relations. Saxby Chambliss, Chairman, Subcommittee on Terrorism and Homeland Security of the House Intelligence Committee. Robert C. Scott, Ranking Member, Subcommittee on Crime Terrorism and Homeland Security. Mr. Chairman, this dear colleague letter was sent out a few days ago in opposition to the Young amendment to move the Office of National Preparedness back to FEMA. I would like to read the signatures on this letter, Mr. James Sensenbrenner, Chairman, Committee on the Judiciary; John Conyers, Ranking Member, Committee on the Judiciary; it is signed by me, Chairman, Subcommittee on Crime, Terrorism and Homeland Security; Henry Hyde, Chairman, Committee on International Relations; Saxby Chambliss, Chairman, Subcommittee on Terrorism and Homeland Security of the House Intelligence Committee; and Robert C. Scott, Ranking Member, Subcommittee on Crime, Terrorism and Homeland Security. H.R. 5005, the Homeland Security Act as reported by the Select Committee, has put FEMA in the Emergency Response division under the Department of Homeland Security (DHS) and placed FEMA's Office of National Prepareness (ONP) in the Border Security division with the other offices that train first responders. This structure is essential to ensure that the Department maintains its focus on prevention of terrorist acts. Critically, the Border Security Division will assume responsibility over several different offices that administer training to all state and local responders, including offices, fire fighters, and other emergency responders. These offices were previously housed at the Department of Justice and FEMA. Their new location in DHS will provide an integrated program, with the requisite expertise, to lead a comprehensive and coordinated effort to train our first responders, including law enforcement and consequence management training for a terrorist threat or attack. Federal law enforcement authorities notify first responders of threats and the first responders must have crisis management training and equipment to respond appropriately. For instance, they must be trained in detection and disruption skills, which are law enforcement skills. They will need fundamental law enforcement training to detect or collect evidence that will help prevent a future or halt an ongoing attack. All first responders need these skills--including fire fighters and other emergency providers. Such skills will save lives. Such skills will help first responders prevent secondary attacks. This is why the Office of National Preparedness (ONP) must be placed in the Border Security Division with the Office of Domestic Prepareness, and the National Domestic Prepareness Office training programs. Together, these programs will ensure a coodinated effort to provide first responders with the necessary law enforcement training as well as consequence management training. This structure will create ``one-stop shopping'' that provides all the necessary training and assistance to state and local responders. ``One-stop shopping'' will not exist if ONP is placed back into FEMA because as Director Allbaugh stated in a March 13, 2002 letter to the Judiciary Committee, FEMA will not provide law enforcement training. Separating ONP from FEMA will not create duplication and fragmentation of federal assistance programs. In fact, it will eliminate such redundancy. Placing ONP back into FEMA will guarantee an inconsistent uncoordinated program where some first responders receive only consequence or clean up training and other responders will receive both crisis and consequence training. Furthermore, placing ONP with the other training programs outside of FEMA will in no way harm its relationship with the U.S. Fire Administration (USFA). USFA assists ONP to organize training, planning and exercises for emergency responders. It will continue to do so regardless of ONP's location. Currently, the USFA assists the Department of Justice in their training, planning and exercises for emergency responders and no one has suggested that the USFA should be moved over to Justice. ONP does not belong in FEMA. I urge my colleagues to oppose the Young Amendment.

Mr. SMITH of Texas. Mr. Chairman, I rise in support of this amendment. The Federal Law Enforcement Training Center-FLETC, which was established in 1970, is an interagency law enforcement training program that trains Federal, State, local, private entities and foreign law enforcement. In Fiscal Year 2003, FLETC trained over 54,000 law enforcement students. Those students were from law enforcement offices within the Department of Agriculture, Commerce, HHS, Interior, Justice, Treasury, Defense, the Capitol Police, and others. The Judiciary Committee and the Select Committee, in their wisdom, decided that the Department of the Treasury, which will lose both the Customs Service and the Secret Service, should no longer be responsible for FLETC. This means the Department of Treasury will only have two remaining law enforcement offices--BATF and IRS Investigators. Treasury will lose the bulk of their law enforcement and will have one of the smallest law enforcement contingents of any Department. It was decided that FLETC go to the Department of Justice because its mission is consistent with the mission of the Department of Justice. The primary mission of the Department of Justice is law enforcement; specifically it is directed ``to enforce the nation's laws, combat terrorism, protect public safety, help prevent and control crime, provide just punishment for criminals, and ensure the fair and impartial administration of justice.'' FLETC's mission is ``to serve as the Federal government's leader for and provider of world-class law enforcement training.'' It makes sense that a bureau with such a mission be included as part of a Department with the same mission and that is the flagship law enforcement in the Federal Government. The primary mission of the Treasury Department is to support the American economy and manage the finances of the United States Government. It does not make sense, in light of the transfer of almost all of the law enforcement bureaus out of the Department of Treasury in this Homeland Security legislation, that we would continue to require that the centralized training for Federal law enforcement be located at the Department of Treasury. The Department of Justice is not a stranger to the operations of FLETC. In fact, DOJ is one of five voting members of the FLETC Board of Directors that establishes training policy, programs and standards. Additionally, the administration has been aware of this proposal for weeks and has not objected. They understand that this is not intended to diminish FLETC's role, but rather enhance it and expand it in a Department that will pay attention to it, provide for it, and nurture it. I can assure the gentleman from Georgia that our intention in transferring the Federal Law Enforcement Training Center to the Department of Justice is to ensure that law enforcement is coordinated and centralized in the part of the government responsible for law enforcement. I can also assure the gentleman from Georgia that it is our intention to see that FLETC continue its current operations at its current location and continue to carryout their current training agreements. We expect that this transfer would have a minimal impact on the day-to-day operations and training activities of FLETC and, at the same time, maximize the effectiveness of our training system for federal law enforcement personnel. I thank the gentleman for bringing this matter to our attention with this amendment and look forward to working with him to ensure that the high quality of training of federal law enforcement agents continues at FLETC.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Chairman, I thank my friend from Georgia for yielding, and I also want to suggest to him that his concerns may be unjustified or unfounded, simply because, even if the training center were moved to another agency or another Department, that does not mean it is going to leave the State of Georgia. So I do not think the gentleman needs to necessarily be concerned about losing that training center, even if it were to be transferred to another agency.

Mr. SMITH of Texas. Mr. Speaker, I make a point of order against the language beginning with ``Provided'' on page 74, line 15, through the word ``law'' on line 25. These provisos, which affect federal criminal rules of evidence and criminal laws, constitute legislation on an appropriations bill in violation of clause 2(b) of rule XXI of the House of Representatives.

Mr. SMITH of Texas. Mr. Chairman, if the gentleman will continue to yield, we can continue the debate later, as the gentleman from Oklahoma suggested. But when we have the Department of Justice and the Select Committee on Homeland Security wanting to transfer it, let us have that debate another time; but let us not dismiss the equities of that argument.

Mr. SMITH of Texas. Mr. Chairman, will the gentleman yield?

Mr. SMITH of Texas. Mr. Chairman, reclaiming my time, I thank the gentleman from Oklahoma for his reassurance.

Mr. SMITH of Texas. I yield to the gentleman from Oklahoma.

Mr. SMITH of Texas. Mr. Chairman, I move to strike the last word. Mr. Chairman, I would like to engage in a colloquy with the gentleman from Oklahoma, the chairman of the subcommittee, about a provision in the underlying bill. First of all, I wish to express my concern about a provision in the underlying bill that prevents the transfer of the Federal Law Enforcement Training Center from the Treasury Department to another Department of the executive branch. I know, for example, that the Department of Justice and the Select Committee on Homeland Security would at least like to have the option of perhaps transferring that Federal Law Enforcement Training Center out of the Treasury Department. Mr. Chairman, could the gentleman give me some reassurance that that proposed transfer, if in fact it occurs and is a part of the recommendation of the select committee, will not be blocked by the underlying language in the bill?