Arlen Specter

Mr. SPECTER

Mr. SPECTER. These letters set forth in some detail, Mr. President, which I will not take the time to read now, but the theme is the same. These are hospitals in great financial distress. These are hospitals which are serving an aging population in northeastern Pennsylvania. Similar circumstances exist in Mercer County. The way to correct this is to make the adjustment which is present in the House bill which can be accomplished by the Senate receding to the House position. As I say, last year on our conference report, we had agreed among the conferees to make the adjustment, and then did not proceed in that way because there was a technical problem with the provision not having been included in either bill. But this year, the leadership of the House of Representatives has included these corrections for these areas, and now I call upon my colleagues on the Appropriations Committee to recede and I call upon my colleagues in the full Senate to approve a conference report which will include these very important corrections for these six counties in Pennsylvania which perform great service. But because of their being surrounded by other hospitals with MSAs, metropolitan statistical areas giving greater reimbursement, they cannot compete with nurses and other medical personnel. I thank the Chair. I yield the floor. Exhibit 1 Points for Conference Committee on Wage Index--Bernard C. Rudegehir, Greater Hazleton Health Alliance With competing institutions located within a 30- to 60- minute drive from our front doors--and able to pay up to $4 per hour more to attract staff--GHHA has experienced an outmigration of clinical staff to those areas. In the last 18 months, 52 employees--including registered nurses, licensed practical nurses, pharmacists, radiology technologists and physical therapists--have resigned. More than half of them cited the opportunity to earn higher wages at other hospitals as the reason for their departure. And though our staff is mobile and may be willing to commute up to an hour for a more lucrative position, our patient base is not. Nearly three-quarters of our inpatient population are Medicare recipients. It is often difficult for them to find reliable transportation to out-of-town healthcare facilities. As of July 1st, our malpractice insurance increased nearly 50 percent. Staff continues to find opportunities elsewhere, driven by higher wages and attractive sign-on bonuses. We have been forced to adjust salaries to stay competitive. That has had a significant impact on our bottom line--a $3.2 million loss in fiscal year 2000. In this new age of domestic security awareness, our hospitals have become even more important fixtures in our communities. In the event of a tragedy or terrorist event (a nuclear power plant is located just miles away), our communities would look to our hospitals, not only as sources of emergency medical care, but as places of refuge, information and comfort. Our elderly patients are the ones who need us most. Many of them toiled in the local coal mines and served our country in foreign wars. Their strong work ethic and love of country has often led to illness and injury that will plague them for the rest of their lives. This is a proud population that we are committed to caring for far into the future.

Mr. SPECTER. In the absence of any other Senator seeking recognition, I suggest the absence of a quorum.

Mr. SPECTER. Mr. President, for a considerable period of time, there have been a number of counties in Pennsylvania that have been suffering from low Medicare reimbursements, which have caused them great disadvantage because their nurses, their medical personnel, are moving to surrounding areas. I refer specifically to Luzerne County, Lackawanna County, Wyoming County, Lycoming County, Mercer County, and Columbia County in northeastern Pennsylvania. Those counties are surrounded by MSAs--metropolitan statistical areas--in Newport, New York, to the north; in Allentown to the southeast; and to the Harrisburg MSA to the southwest. When these counties are so surrounded by--and a similar situation exists in Mercer County, which has higher rates in immediately adjacent areas--there has been a flight of very necessary medical personnel. Last year, in the conference on the appropriations bill covering the Departments of Labor, Health and Human Services, and Education, the conferees were in agreement that there should be relief for these areas in Pennsylvania that were surrounded by areas that had higher MSA ratings. At the last minute, word came from the chairman of the Appropriations Committee that there would be an objection to including language in our conference report because it was not included in either bill--in the House or in the Senate. That does make it subject to a point of order, so we had a discussion. I went to the office of the chairman of the Appropriations Committee, Senator Byrd, and did my best to persuade him to make an exception in this case because of the extraordinary hardship. Senator Byrd, understandably, declined. We then talked about bringing the matter forward in the supplemental appropriations bill. I thought it highly likely that, given the immediate history, we could accomplish this accommodation, this correction, in this appropriations bill. The House of Representatives came forward, and the House leadership on the Ways and Means Committee and the House leadership generally agreed with Congressman Sherwood, who represents these counties in northeastern Pennsylvania in the House of Representatives, and also Congressman Phil English, who represents Mercer County, that these were indeed meritorious--not that there were not other counties that had similar problems, but these counties were meritorious and should have a change in the MSA. When the matter reached the Senate floor and I filed an amendment to have a similar result, there was resistance because, after all, it was in the House bill and it could be taken up in conference. It is custom on a matter that a colloquy was entered into between Senator Byrd and myself, and Senator Byrd said he would give every consideration to it in the conference. It is true that there are other places in the United States that have problems, but I believe none is so pressing as what is occurring in these counties in Pennsylvania, as is evidenced by the fact that the leadership in the House of Representatives--as I say, the Ways and Means Committee chairman and the leadership of the House--agreed to these changes. A week ago today, on July 1, I visited in Wilkes-Barre, PA, at the Gossinger Clinic, with representatives of the hospitals and went over with them the situation that had occurred and asked that they submit memoranda, which showed the extreme plight, which I could then share with my colleagues in the Senate, which I am now doing, and it will be in the Congressional Record for everyone to see. A memorandum prepared by Bernard C. Rudegeair of the Greater Hazleton Health Alliance pointed out the following: With competing institutions located within a 30- to 60- minute drive from our front doors--and able to pay up to $4 per hour more to attract staff--the Greater Hazleton Health Alliance has experienced an outmigration of clinical staff to those areas. In the last 18 months, 52 employees--including registered nurses, licensed practical nurses, pharmacists, radiology technologists and physical therapists--have resigned. Then he goes on to say: Nearly three-quarters of our inpatient population are Medicare recipients. It is often difficult for them to find reliable transportation to out-of-town healthcare facilities. So they are serviced at Greater Hazleton causing these hardships and losses. The senior vice president of operations at Geisinger Wyoming Valley Medical Center, Conrad W. Schintz, wrote on July 3 as follows: There are 10 vacancies in the support departments, such as laboratory and radiology. A significant factor in these vacancies is the higher wages and benefits that are paid in the Philadelphia and New York metropolitan areas that are within a 2.5 hour drive from our hospital. Similar concerns were noted by the Community Medical Health Care System of Scranton, PA, where Dr. C. Richard Hartman, president and CEO, wrote a detailed memorandum, a part of which is as follows: Community Medical Center Healthcare System's exit interviews with employees indicate greater opportunities outside the MSA. The hospital currently has 67 openings, 45 full-time-equivalent positions, and further noted the problems with retaining nurses there. Similar concerns were expressed in a memorandum from Mr. William Roe, vice president of finance for the Moses Taylor Health Care System, pointing out that ``while 30 percent of all hospitals in Pennsylvania had negative total margins for the 3-year period between 1999 to 2001, nine (9) of the thirteen (13) hospitals located in this MSA have had negative total margins.'' Then the memorandum from Mr. Roe goes on to point out the difficulties which have occurred as a result of outmigration of medical personnel. Similar comments were made by Vice President William J. Schoen of Allied Services from Clarks Summit who points out: Pocono and Allentown area hospitals are recruiting [our] workers by offering more generous wage and benefit packages. Of course, that is made possible by the higher reimbursement because the MSA area is different. A similar note was offered by Mr. James E. May, president and chief executive officer of Mercy Health Partners who pointed out: The Scranton/Wilkes-Barre/Hazleton MSA is surrounded by facilities with significantly higher Medicare reimbursements. The balance of his memo, which I will ask be printed in the Record, details further the difficulties which his hospital system faces. The Wyoming Valley Health Care System, in a letter dated July 5 from Dr. William Host and Mr. Michael Scherneck, the president and chief executive officer and the senior vice president and chief financial officer point out the problems in retaining registered nurses because of the lower MSA which the Wyoming Valley Health Care System has. CEO Robert Spinelli from Bloomsburg Hospital wrote to my executive director in Harrisburg, Andrew M. Wallace, dated July 3: The current wage index rates have contributed to three years of deficit income, which has resulted in the inability to recruit qualified staff. The Wayne Memorial Hospital, which is in the Newburgh, NY, area in a letter from director of finance, Michael J. Clifford, dated July 3 made the same point: The increase in Medicare payments that would result from this change in MSA to Newburgh, New York, would mean approximately $450,000 of additional Medicare reimbursement for Wayne Memorial. Tyler Memorial Hospital in Tunkhannock, PA, sent a memorandum expressing the same basic point. A similar letter has been submitted by the Marian Community Hospital by Chief Financial Officer Thomas L. Heron from Carbondale, PA. Mr. President, I ask unanimous consent that these memoranda and letters all be printed in the Record following my statement.

Mr. SPECTER

Mr. SPECTER. Mr. President, during the course of the Fourth of July recess, I traveled through Pennsylvania holding some 16 town meetings, and I found many concerns among my constituents: The issue of prescription drugs; the concern about what is happening with respect to Iraq; the issue of terrorism, which confronts the United States; the concern about what might happen on July 4; concern about the suicide bombers from the Palestinians terrorizing Israel. But high on the list of public concern was what has happened with Enron, WorldCom, and many other companies on the stock exchange, where so many of my constituents in Pennsylvania--like tens of millions of Americans, really, and even more--have had their savings decimated in their retirement accounts of a variety of sorts. The issue that was raised consistently was: What happens next? I think it is very good that the Senate is now considering legislation to deal with the fraudulent conduct that has plagued so many companies in corporate America. There is no doubt that there is a clear-cut conflict of interest for an accounting firm to be both an adviser and an auditor. An adviser has a close relationship with a company--call it cozy, or intimate, or friendly--but that is very different from the function of an auditor, which ought to be at arm's length, scrutinizing what the company has done. That kind of a conflict should certainly be prohibited in the future. If the accounting firms do not have enough understanding of the ethics, then laws have to be enacted, with very tough penalties to follow. When you find companies having so much debt off the books, subsidiary corporations, that is a matter of fraud. Fraud is a misrepresentation of a fact where someone relies to their detriment, and that is a crime. When you have companies putting expenses in, say, a capital account that shows billions of dollars in additional income or assets of the corporation, that too is fraud. A good part of my career has been as an assistant DA and then as district attorney. I believe this kind of white-collar crime is certainly susceptible of deterrence, providing that standards are established and penalties are provided for a breach. It is my hope that from the Senate's current consideration, some very tough legislation will follow. (Mr. DAYTON assumed the Chair.)

Mr. SPECTER

Mr. SPECTER. Mr. President, I thank the Chair for that clarification. I have sought recognition this morning to express my concern that the legislation submitted by the President for homeland security submitted two days ago to the Congress does not meet the critical need for collection and analysis of intelligence information in one place. Each day there are new disclosures of key information, information which was known prior to September 11, 2001. If it had been activated and put together with other information, this might well have prevented the September 11 attack. This morning's Washington Post has as its major story, in the upper right-hand corner, ``NSA Intercepts On Eve of 9/11 Sent a Warning.'' The first sentence reads: The National Security Agency intercepted two messages on the eve of the September 11 attacks on the World Trade Center and the Pentagon warning that something was going to happen the next day. If that information had been put together with other information which was in the files of Federal intelligence agencies but not focused on, there would have been, I think, an emerging picture providing a warning, not just connecting dots, but a picture which was pretty obvious when all of the pieces were put together. The FBI had the now-famous Phoenix report, which had been submitted in July 2001 by the Phoenix office, telling about aeronautical training to people with backgrounds which indicated potential terrorist leanings, aeronautical students with a large picture of Osama bin Laden in their room and a background which would have supported the inference that those students in training might well have been put up to something. If that had been put together with the confession that was obtained by a Pakistani terrorist known as Abdul Hakim Murad in 1996, who had connections with al-Qaida, when he told of plans to attack the CIA headquarters in Washington by plane and to fly into the White House, there might have been a pretty sharp focus, especially if linked to the information which had been developed by the FBI field office in Minneapolis, that there was a man named Zacarias Moussaoui, who had terrorist connections to al-Qaida, and that plans were being developed and that he was actually to be the twentieth hijacker. That information never came to full fruition because of a failure of the Federal Bureau of Investigation to move the matter forward for a warrant under the Foreign Intelligence Surveillance Act. The Judiciary Committee heard testimony from special agent Coleen Rowley about the difficulties of dealing with the FBI, which requires a standard not in accordance with the law, 51 percent, more probable than not where the standard of a warrant does not require that. Had Moussaoui's computer been examined, it would have provided a virtual blueprint for what was about to happen. These are very glaring and fundamental defects in our intelligence system. They have existed for a very long time. We have had a situation where the Director of Central Intelligence, who is supposed to be in charge of all intelligence, does not have key components of the intelligence apparatus under his wing. For example, he does not have access to the National Reconnaissance Office. He does not have unfettered access to the National Security Agency, the National Imagery and Mapping Agency, and certain special Navy units. This is a deficiency which has gone on for a long time. When I chaired the Senate Intelligence Committee during the 104th Congress, I introduced Senate bill 1718. That bill was designed to correct the deficiency that the Director of the Central Intelligence Agency, who nominally and in the public view had access to all of the intelligence information, but, in fact, did not have it. My bill, S. 1718, is only one of many efforts which are currently underway, efforts which are currently under consideration by the White House. However, there is strong opposition by the Department of Defense and opposition by others. I am not characterizing it necessarily as a turf battle. It is a battle which has its origin in the concerns of some in the Department of Defense that the Department of Defense has the responsibility to fight a war and needs access to all of these intelligence matters; that is unique control. The reality is that a structure can be worked out so the Department of Defense is not deprived of access to any of this information in time of war or at any time. However, the Director of Central Intelligence ought to have it in one coordinated place. Now, when you create a Department of Homeland Security, it is obviously very difficult to touch upon matters on the broader picture. That is something that must be done and which must be addressed. When this matter was considered, I raised some of these issues in a meeting which Senators had with the White House Chief of Staff Andrew Card and Homeland Security Advisor, Governor Ridge. Recently, there have been additional meetings at the staff level, working together with the White House staff extensively, one of which was last Friday afternoon. During that meeting, my staff made a specific proposal that on the Department of Homeland Security, there should be a repository in one place to gather all of this information. The suggestion which we submitted was that there should be a national terrorism assessment center, a concept developed by someone who is very experienced in intelligence affairs, Charles Battaglia, who spent years in the CIA, as well as the Navy, and who served as majority staff director for the Intelligence Committee during my tenure as chairman during the 104th Congress. The Battaglia proposal to establish a national terrorism assessment center, in my opinion, goes right to the mark. It would be staffed by analysts who would come from the FBI, the Central Intelligence Agency, the National Security Agency, the Defense Intelligence Agency, the National Imagery and Mapping Agency, the National Reconnaissance Office, and a listing of other Federal agencies, including the State Department's Bureau of Intelligence and Research, which would have access to all of this information. The bill, which was submitted by the President two days ago to establish the Department of Homeland Security, I say respectfully, does not meet this core critical ingredient. For example, referring to intelligence staff, the President's proposal provides at section 201: The Secretary may obtain such material by request. Mr. President, that is hardly the authority that the Secretary of Homeland Defense needs to do his job. If he has to ask somebody in Washington, DC, for something, it is an enormous uncertainty as to whether he will get it. In fact, it is more probable than not that he will not get it. There is a long trail around here to get information from anyone. I have seen that in detail in my time trying to conduct oversight on the FBI or in conducting oversight when I chaired the Intelligence Committee. That information just is not forthcoming. The President's bill further provides that the Secretary may enter into ``cooperative arrangements with other executive agencies to share such material.'' Whether or not there will be such arrangements entered into, and whether the other executive agencies will be agreeable to that, is highly uncertain. The time has long since passed to leave it to the discretion of a large variety of the Federal bureaucrats as to what they will do on intelligence. The time has come for the Congress of the United States in legislation signed by the President to establish central authority in one place, under one roof, to collect all the information which is available. To do any less is dereliction of our duty. That has not been done. The intelligence community has been stumbling along. America stumbled into September 11 because this Congress had not undertaken the approach with the strength to resolve all of these jurisdictional disputes and see to it that this information was under one roof. The Congress of the United States has a fundamental responsibility to provide for the security of the United States. When the Judiciary Committee conducts hearings and finds out that the FBI does not have the procedures in place to know what is in the Phoenix report on a potential terrorist with Osama bin Laden's picture on his wall, when the Judiciary Committee commits oversight and finds out that the FBI Minneapolis office cannot get headquarters to request a warrant under the Foreign Intelligence Surveillance Act because they are applying the wrong standard, when the Intelligence Committee conducts oversight on the Director of Central Intelligence and finds his authority lacking because he does not know what many other intelligence agencies are collecting, and when the National Security Agency has on the eve of September 11 specific warnings and these pieces are not put together, the time has come to act. On this legislation, we ought to move ahead with a national terrorism assessment center. This information, as I noted earlier, was communicated by my staff to the White House staff. We did not have it prepared in time, but we had it this week in draft form. However, the matter is now before the Congress. For the information of my colleagues, I ask unanimous consent that this draft proposal be printed in the Congressional Record. It is by no means a finished product, however it might be of some help as we move ahead with hearings on this very important subject in the Congress.

Mr. SPECTER. I yield the floor.

Mr. SPECTER

Mr. SPECTER. Is it correct that there is now 30 minutes for the Republicans, with an allocation of 15 minutes to my control?

Mr. SPECTER. Mr. President, a parliamentary inquiry.

Mr. SPECTER

Mr. SPECTER. In conclusion--the two most popular words of any speech--I think it is a fair assessment that what was intended was 6 years in total. That was the interpretation, to repeat, which the chairman of the Republican Conference, Senator Santorum, had made by an official interpretation. The rule I am proposing, which will be voted on next Tuesday--I had each member of the Republican caucus served with notice, both having it delivered to their offices yesterday and having a copy served on each one of the desks here so there is a double service of notice--would provide for a 6-year maximum limitation, having provided the leeway for a Member not to serve as ranking, if he chose to follow that course, so as to have the full 6 years as chairman, if and when the Republicans are the majority party. I, again, thank my colleagues. I thank the Senator from New Jersey for his patience, and I yield the floor.

Mr. SPECTER. Mr. President, I have sought recognition to discuss, briefly, a proposed rule for the Republican conference on the issue of seniority for members, chairmanships, and also for ranking members. Effective January 1, 1997, the Republican caucus adopted a rule which provided that there would be a 6-year limit on committee chairmanships and ranking members; chairmanships, of course, if in the majority, ranking members if in the minority. There has since arisen a controversy as to whether that meant 6 years as chairman and an additional 6 years as ranking member or whether that meant 6 years total for chairman and ranking member. Having participated in the conference which produced the rule, I think it is fair to say that the intent was to have a total 6-year limitation, chairman and ranking member combined. Certainly, there is no doubt that in establishing a 6-year limit for every leadership position in the Republican caucus, except for the position of Republican leader--majority leader or minority leader, depending on control of the Senate--aside from Senator Lott's position, it is plain that all the other leadership positions were limited to a total of 6 years, without distinction as to whether it was a majority or minority position. The chairman of the conference, Senator Santorum, came out with an interpretation that the rule did mean total years whether it was chairman or ranking member; not 6 and 6, but a total of 6 years. Yesterday, I circulated a proposed rule which would make it conclusive that a Republican Senator shall be limited to 6 years in the aggregate for service as chairman and ranking member of a committee. For example, if the Senator served 4\1/2\ years as chairman and 1\1/2\ years as ranking, that would constitute the requisite 6-year limit. There has been some consideration as to whether being ranking is really a position of significance. I would submit from my experience in this body that it conclusively is not as good as being chairman, but it is the lead Republican on the committee. For example, on Intelligence, the chairman and the ranking member, or vice chairman, have access to the confidential briefings. On the Judiciary Committee, the chairman and the ranking member have access to the confidential briefings by the Attorney General when something arises where notification is important, or by the FBI Director or by the INS Director or any one of the Federal agencies subject to oversight by the Judiciary Committee. At the committee hearings, it is the chairman and the ranking member who are accorded the right, the privilege, of making opening statements. There is a considerable difference on staff, and the ranking member does have a say, to a significant extent, on the organization and direction of the committee. So I think, as a practical matter, being ranking is very significant. Some of my colleagues have raised the concern that if they served as ranking for a year, for example, they would then not be able to serve as chairman for 6 years--if we Republicans retook the majority--but for only 5 years. So my rule has a subsection which provides that if a person who has seniority to be ranking member elects not to be ranking member, that person may do so; and then that would not count against the 6 years as chairman if and when the Republicans again control of the Senate. So for those who think the position of ranking member is not of significance, or choose not to undertake that position, or prefer not to have that position, which would then be a limitation on their service as chairman, that member can opt not to serve as ranking member. When this rule was proposed, I had grave doubts about it, frankly, having been here for a considerable period of time, and approaching the situation where I would have the seniority. But as the rule was put into effect, obviously, I have observed it. As a part of the rule, I could no longer serve as chairman of the Judiciary Committee. But it seems to me the Republican caucus ought to go back to where we--Madam President, I ask unanimous consent for an additional 1 minute.

Mr. SPECTER

Mr. SPECTER. Mr. President, first, I thank the Senator from Illinois for according me this courtesy.

Mr. SPECTER. Mr. President, I thank my colleague from Illinois. I would very much appreciate an opportunity to speak for 5 minutes, if I might, at some early point.

Mr. SPECTER

Mr. SPECTER. Mr. President, I have sought recognition to comment briefly on the point of order which was sustained as to Amendment No. 3862, which was my amendment. I had been on the floor awaiting the making of such a point of order on germaneness. I wanted to make a very brief comment; that is, that the amendment which I have provided was germane when it was filed, which was pre-cloture. I understand that post-cloture it is not. I voted for cloture notwithstanding the fact that I knew it would render my amendment non-germane because of my view of the importance of passing this bill. I wanted to comment briefly on the amendment because it may yet surface in the conference. Senator McConnell had offered an amendment which would have eliminated punitive damages unless there was a criminal conviction. I supplemented that amendment by putting in a provision that it would be a Federal crime for someone to be malicious and disregard the safety of others, contributing to damages or death in the event of a terrorist attack, and also an additional provision for a private right of action so that in the event the prosecuting attorney did not act, that a private citizen could petition the court on the failure or refusal of the Attorney General to act so that would activate a criminal prosecution and provide a basis for punitive damages but, more importantly, to move to an area where there is real responsibility for somebody who acts maliciously, resulting in the death of another person. Punitive damages doesn't reach real responsibility. Punitive damages, as I amplified earlier today, are seldom granted but, where they are, come out of the pockets of the shareholders. To hold someone liable to go to jail where they are malicious, resulting in someone's death, that is a sanction which means something. That would provide the basis then for a later punitive damage claim. This may be the basis for action in conference. I wanted to take a brief period of time to explain that provision. I thank the Chair and yield the floor.

Mr. SPECTER

Mr. SPECTER. Mr. President, I think it is worthy of note that this was a subject of considerable interest to this Senator during my law school days. I wrote a comment which appears at Yale Law Journal, volume 65, page 209, ``Private Prosecution: A Remedy for Unwarranted District Attorneys' Inaction.'' As this package was put together, I think it offers some guidance for a way where there might be some relief from punitive damages; although, to repeat, I think they have resulted in very little by way of liability, for the reasons I have cited and the authorities I have cited. I believe it is true the punitive damage possibility is a factor on leveraging settlement, but there have been enormous objections to punitive damages, and they have created quite a lot of public furor, as one can see in the $5 billion punitive damage award I discussed earlier. The public thinks it is being paid with real money; whereas, in fact, when we trace them down, the funds are not paid. I think we need a comprehensive analysis. There is none to my knowledge as to what has resulted when punitive damages are sought, where punitive damages are obtained on a verdict, and what happens, how many of them are actually collected. It would be a good deal more difficult to quantify the effect of punitive damages as leverage on settlements, but I think that, too, would be worthy of study. Most importantly, the justice system ought to be able to reach people who are malicious. Wanton disregard for the safety of another constitutes malice and supports a prosecution for murder in the second degree, which can carry a term up to 20 years. This bill carries a penalty up to 15 years because in the Federal system, that is the equivalent of a life sentence. Following the precedent of the Ford- Firestone matter, the 15-year penalty was provided. I know this amendment is subject to being stricken as being non- germane. When the cloture motion was offered this morning, I voted in support of it, and it was agreed to. Sixty-five Senators voted in favor of it; 31 Senators voted against it. Voting in favor of the cloture motion, I was well aware that were it to pass, this amendment would be precluded, but I considered it much more important to get this bill moving to a conference so that we can have the Government standing behind certain insurance policies so we can move ahead with very important commercial transactions in this country which are now being held up. It may be that this format will be useful in the conference committee where I believe the House has stricken punitive damages. This may be an accommodation where punitive damages would still be available, but there would first have to be a criminal conviction. A more important part of the provision would be that those who are malicious and cause death or injury to other people would be held for a very serious criminal sanction. Exhibit 1 The prototype case for the proposition that punitive damages litigation is ``virtually endless'' is In re the Exxon Valdez, the latest iteration of which is found at 270 F.3d 1215, (9th Cir. 2001). In the 2001 decision, the 9th Circuit vacated a previously-decided, largest-in-history, $5 billion punitive damages award, and remanded the case to the District Court to determine a lower award under standards specified in BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996)(substantive due process review of punitive damage awards under the three ``guideposts'' of defendant reprehensibility, ratio analysis, and criminal penalties comparability), and Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424 (2001)(requiring de novo review on appeal). Thus, litigation stemming from a March 1989 accident/oil spill continues into its 11th year--and, essentially, is back to ``square one'' on the issue of punitive damages. See also Pacific Mutual Life Ins. Co. v. Haslip, 499 U.S. 1 (1991)(ten-year litigation stemming from insurance agent's 1981 misappropriation of insurance premium payments). The key cases cited in Exxon Valdez, BMW of North America, Inc. and Cooper Industries, Inc. themselves had lengthy procedural histories--the BMW case running from 1990-1997, and Cooper running from 1995 to the present. See also 2660 Woodley Road Joint Venture v. ITT, 2002 U.S. Dist. LEXIS 439 (D.Del., January 10, 2002)(granting motion for new trial on the issue of the size of punitive damages awarded in a 1997 commercial contract breach case); Dallas v. Goldberg, 2002 U.S. Dist. LEXIS 8829 (SDNY, May 20, 2002)(ruling on the admissibility of evidence in computing the amount of punitive damages in ongoing Sec. 1983 action stemming from a 1994 police incident); Silivanch v. Celebrity Cruise Inc., 2000 U.S. Dist. LEXIS 12155 (August 23, 2000)(a procedural ruling on allocation of punitive damages stemming from a 1994 cruise exposure to ``Legionnaires' Disease''). State court cases are at least as striking. See, e.g., Torres v. Automobile Club of Southern Cal., 937 P.2d 290 (Cal. 1997)(remanding for a new trial on all issues; litigation initially filed in 1986); Moeller, et. al. v. American Guarantee Insurance Co., 707 So. 2d 1062 (Miss. 1996)(final decision in 1996 on case filed in 1982); Abramczyk, et. al. v. City of Southgate, 2000 Mich. App. LEXIS 530 (2000)(reversing award of punitive damages and remanding for new trial; litigation filed in 1996); Dixie Insurance Company v. Mooneyhan, 684 So. 2d 574 (Miss. 1996) (remanding for a new trial on the issue of punitive damages; litigation filed in 1987). To summarize, then, litigation on the issue of punitive damage can--and does--stretch out over a period of years (numerous appellate cases show a pattern of at least 4-6 years and longer, as in the case of Exxon Valdez and Cooper Industries). Recent trends have caused one commentator to state as follows: ``The Supreme Court's . . . decision [in Cooper], with its mandate of de novo appellate review of punitive damages jury verdicts in all cases, may consign state and federal courts to an endless round of institutional second-guessing . . . .'' Cabraser, E.J. Engle v. R.J. Reynolds Tobacco Co.: Lessons in State Class Actions, Punitive Damages, and Jury Decision- Making Unfinished Business: Reaching the Due Process Limits of Puntive Damages in Tobacco Litigation Through Unitary Classwide Adjudication, 36 Wake Forest L. Rev. 979, 986 (2001)(emphasis added). Thus, the ``endless'' nature of punitive damages litigation will--at least according to this commentator (a tobacco litigation plaintiffs' attorney)--only get worse. Exhibit 2 There are several states that through statute or care precedent allow a court to appoint a special prosecutor in the event that the district attorney is unable or unwilling to prosecute a case. The following is a summary of the applicable statute or case law in several states authorizing the replacement of prosecutors. statute New York--NY CLS County Sec. 701 provides that when a district attorney cannot attend in a court in which he or she is required by law to attend or is disqualified from acting in a particular case, the criminal court may appoint another attorney to act as special district attorney ``during the absence, inability or disqualification of the district attorney.'' Pennsylvania--71 P.S. Sec. 732-205 provides that the Attorney General shall have the power to prosecute in any county criminal court upon the request of a district attorney who lacks the resources to conduct an adequate investigation or prosecution or if there is actual or apparent conflict of interest. Also, the Attorney General may petition the court to permit him or her to supersede the district attorney in order to prosecute a criminal action if he or she can prove by a preponderance of the evidence that the district attorney has failed or refused to prosecute and such failure or refusal constitutes an abuse of discretion. Minnesota--Minn. Stat. Sec. 388.12 provides that a judge may appoint an attorney to act as or in the place of the county attorney either before the court or the grand jury. North Dakota--If a judge finds that the state's attorney is absent or unable to attend the state's attorney's duties, or that the state's attorney has refused to perform or neglected to perform any of his duties to institute a civil suit to which the state or county is a party and it is necessary that the state's attorney act, the judge shall (1) request that the district attorney take charge or the prosecution or (2) appoint an attorney to take charge of the prosecution. Tennessee--Tenn. Const. art. VI, Sec. 6 provides that in all cases where the Attorney for any district fails or refuses to attend and prosecute according to law, the Court shall have power to appoint an Attorney pro tempore. case law Florida--Taylor v. Florida, 49 Fla. 69 (1905)--The Supreme Court of Florida held that absent an express legislative statement prohibiting a court from doing so, in the event the state attorney refuses to represent the state, that a court has the inherent power to appoint another attorney. Arkansas--Owen v. State, 263 Ark 493 (1978)--The Supreme Court of Arkansas held that ``[i]t is well settled that the circuit judge had the power to appoint a special prosecuting attorney.'' Various other state courts have embraced the inherent power concept of a court to appoint a special prosecutor in a criminal case. See White v. Polk County, 17 Iowa 413 (1864); Territory v. Harding, 6 Mont. (1887); State v. Henderson, 123 Ohio St. 474 (1931); Hisaw v. State, 13 Okla. Crim. 484 (1917).

Mr. SPECTER. I yield the floor. I suggest the absence of a quorum.

Mr. SPECTER. Mr. President, I would like to note for the record two previous statements I made on this subject, one on September 7, 2000, appearing in the Congressional Record beginning at page S-8188, and also a statement on September 15, 2000, appearing in the Congressional Record on page S-8625. I would note that my statement of September 7, 2000, provides some more detailed facts concerning the Ford-Firestone issue and discusses several other cases involving punitive damages. I note one other consideration, and that is, I am aware that in subscribing to the requirement that there is a criminal prosecution as a basis for an award of punitive damages, that does require proof beyond a reasonable doubt. On punitive damages, there have been varying standards applied, for example, clear and convincing evidence. And while proof beyond a reasonable doubt is obviously more than a preponderance of the evidence, it is my view that where you deal with these horrendous kinds of cases--the Pinto, where there is a calculation regarding the gas tank in the rear of the car, or the Ford- Firestone case--in these kinds of cases where we are really looking to make an example, that the proof will be there for proof beyond a reasonable doubt. Having had some considerable experience prosecuting criminal cases, it has been my view that in most situations the vagaries of burdens of proof--beyond a reasonable doubt, clear and convincing evidence, preponderance of the evidence--really are not the ultimate determinants. But to the extent that proof beyond a reasonable doubt is an additional burden, I think the gain in moving in this direction to impose criminal liability is certainly worth it from the point of view of public policy. Mr. President, I yield the floor and suggest the absence of a quorum.

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

Mr. SPECTER. Mr. President, I call up amendment No. 3862.

Mr. SPECTER. Mr. President, last week I voted against tabling the McConnell amendment which would have conditioned punitive damages for private parties arising out of a terrorist attack to situations where there had been a criminal conviction establishing malicious conduct. Had the McConnell amendment not been tabled, I intended to offer a second-degree amendment which I am now discussing. Since the McConnell amendment was tabled, I am now calling my amendment up as a first- degree amendment. This amendment establishes a crime for anyone acting with willful and malicious disregard for the life or safety of others, and by such action leads to, aggravates, or is a cause of, property damage, personal injury, or death resulting from an act of terrorism. This amendment further provides for a private right of action as follows: Any person may request the Attorney General to initiate a criminal prosecution of the criminal offense I just described. In the event the Attorney General refuses or fails to initiate such a criminal prosecution within 90 days, upon petition by any person, the appropriate U.S. district court shall appoint an Assistant United States Attorney pro tempore to prosecute the criminal offense if the court finds that the Attorney General abused his or her discretion by refusing or failing to prosecute. In considering legislation to provide for Federal Government assumption of some of the losses resulting from terrorist attacks in order to provide insurance coverage, there has been considerable sentiment to curtail punitive damages. Understandably, the bill precludes punitive damages against the Federal Government. In one sense, there is no more reason to preclude punitive damages against private defendants in this situation than in any other. For example, if a building owner chain-locked emergency exits, why should he or she be exempted from punitive damages because people are injured or killed by terrorist attack instead of by fire? Perhaps this is just another chapter in the continuing effort to reduce civil remedies for tortious conduct. There is another sense that everyone should make some concessions in dealing with terrorists. In any event, this situation presents an opportunity to deal in a more meaningful way with malicious conduct causing injury or death. It is my judgment that punitive damages have not been an effective deterrent for malicious conduct. Punitive damages are consistently reversed or reduced. Cases involving automobiles such as the Ford Pinto and the Chevrolet Malibu illustrate the practice of knowingly subjecting consumers to the risk of death or grievous bodily injury because it is cheaper to pay civil damages than to fix the deadly defect. In the case of ``Grimshaw v. Ford Motor Company,'' 119 Cal. App. 3d 757, the driver died and a passenger suffered permanently disfiguring burns on his face and entire body when the Pinto's gas tank exploded in a rear-end collision. When attorneys got into Ford's records, it was disclosed that the gas tank had not been relocated to a safe place because the correction would cost $11 per car while the calculation for damages from civil suits was only $4.50. So it is a dollars and cents calculation. In the celebrated case ``Anderson v. General Motors,'' 1999 WL 1466627, a Chevrolet Malibu fuel tank ruptured in a rear-end collision causing six people to sustain serious burns. The design defect of the gas tank was not corrected because a cost-benefit analysis showed it would have cost General Motors $8.59 to fix the fuel system compared to $2.40 to pay the civil damages. The Pinto case resulted in a punitive damage award in the amount of $125 million, frequently cited as an excessive punitive damage award. Very infrequently is it noted that the trial court later reduced the award to $3.5 million. Similarly, the Malibu verdict of $4.8 billion in punitive damages was reduced by the trial judge, with an appeal slashing it even more. Punitive damage awards have resulted in virtually endless delays. In one of the most celebrated punitive damage cases, ``In re the Exxon Valdez,'' 270 F.3d 1215, started in 1989, the Ninth Circuit vacated some 12 years later the previously decided, largest-in-history $5 billion punitive damage award. I ask unanimous consent that the text of a memorandum be printed in the Record at the conclusion of my presentation. This memorandum details punitive damage awards which were reversed and the lengthy period of time, demonstrating what I am submitting is the ineffectiveness of punitive damages in deterring malicious conduct.

Mr. SPECTER. The principal problem with punitive damages or a principal problem with punitive damages, in addition to the long delays and the fact that the awards are reduced, is that if, at the end of the long litigation process punitive damages are collected, they come from the shareholders of the company. They come from General Motors. They come from Ford, or they come from some major corporation. That is why it has been my view that an effective deterrent would be to hold the individuals liable for their malicious conduct. And malicious conduct, as defined in this bill, is conduct which has a wanton disregard for the life or safety of another person. From my experience as district attorney of Philadelphia, I know that people are very concerned about going to jail, much more concerned than if at the end of a long litigation process there may be the requirement for a corporation to pay punitive damages, especially in the context where we know from records from Ford Motor Company in the Pinto case that they made a calculated decision that it was cheaper to pay the damages. Here you have an official locating a gas tank in the rear end of the car resulting in death, resulting in serious bodily injury again and again, and no deterrence, right back at it again and again. A similar case, ``White v. Ford Motor Company,'' CV-N-95-279-DWH (PHA), involved a 3-year-old child who was run over, backed over by a Ford truck with a defective brake. Here, again, in ``White v. Ford Motor Company,'' the calculation was made that it is cheaper to pay the damages than it is to correct the defect. That case resulted in a verdict of punitive damages of $150 million in a case tried in Reno, NV, and later reduced to $69 million. Years have passed and the matter is still under appeal. The effective way of dealing with this kind of malicious conduct is to provide a criminal penalty. A criminal penalty was provided in a case involving Firestone tires, which were mounted on Ford vehicles which had disclosed numerous problems in 1998 and 1999. Some 88 deaths resulted when these tires gave way, the vehicles rolled over. Eighty- eight people were killed, hundreds were injured, and there was a calculation on the part of Ford and Firestone not to make that disclosure, not to file it with the appropriate Federal officials. An internal Ford memorandum on March 12, 1999, considered whether governmental officials in the United States ought to be notified and a decision was made not to notify Federal officials, so they could keep on selling the Firestone tires on the Ford cars. It is one of the really great tragedies. I had introduced legislation to make that conduct a crime. With some modifications that provision was incorporated in Public Law 106-414 on November 1, 2000, creating a 15-year sentence for officials where they withhold information on defective products from governmental regulators. Mr. President, in offering the amendment which I am currently discussing, the effort is being made to substitute an effective remedy which would hold corporate officials liable for the damages which they cause as a result of malicious conduct. The provisions which were offered by Senator McConnell in the amendment which was tabled last week required that a criminal conviction be established before someone would be liable for punitive damages, and that provision has been carried over to the amendment which I am offering today. I have added to that amendment a provision for a private right of action. It is very difficult on some occasions to persuade the prosecuting attorney to initiate a criminal prosecution. That is a matter which is customarily viewed as discretionary. The prosecutor--and I have had a lot of experience with this myself has many cases he has to try and may choose not to initiate the prosecution. So, in order to activate the provision for punitive damages, where someone is convicted of a crime with the requisite malicious conduct, my amendment provides that any person can ask the Attorney General of the United States to initiate a prosecution. If the Attorney General refuses to initiate the prosecution within 90 days, then the individual may petition the court for leave to be appointed as an Assistant United States Attorney pro tempore. In other words, on a private prosecution there would have to be a showing that the prosecuting attorney had abused his or her discretion in failing or refusing to initiate the prosecution. Such private actions are commonplace in U.S. courts. New York has such a procedure, Minnesota, North Dakota, Florida, Arkansas, Iowa, Montana, Ohio, and Oklahoma. I ask unanimous consent that a memorandum be printed in the Record at the conclusion of my oral presentation which summarizes the specifics of where private prosecutions have been initiated.

Mr. SPECTER. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. SPECTER

Mr. SPECTER. Mr. President, I suggest the absence of a quorum.

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

Mr. SPECTER

Mr. SPECTER. I had not finished answering the question of the Senator from Kansas. I have been sitting here patiently listening to him at some length and again express a little surprise at having the Senator from Nevada take the floor when I step out for a minute and then ask unanimous consent not to have the amendment read, which is customary, but then the Senator always explains it. While I was up at the desk getting a copy of the amendment, the Senator from Kansas took the floor again. I do not think there has been any shortage of time for the Senator from Kansas.

Mr. SPECTER. Madam President, the Senator from Kansas, in his introductory comments, announced what his amendment was not about, and then he proceeded to talk extensively about nuclear transplantation, otherwise referred to as therapeutic cloning, and about embryonic stem cells, and about adult stem cells. But coming back to the core issue on what the Senator from Kansas is offering on nonpatentability, my question is whether the Senator from Kansas is aware of a release by the Patent Office on April 1, 1998, which reads, in pertinent part: The Patent and Trademark Office is required by law to keep all patent applications in confidence until such time as a patent may be granted. However, the existence of a patent application directed to human/non-human chimera has recently been discussed in the news media. It is the position of the PTO that inventions directed to human/non-human chimera could, under certain circumstances, not be patentable because, among other things, they would fail to meet the public policy and morality aspects of the utility requirement. Now, this position by the Patent Office obviously, on its face, renders totally unnecessary the amendment that is being offered. My question to the Senator from Kansas is, Was he aware of this position taken by the Patent Office?