[Congressional Record Volume 147, Number 36 (Monday, March 19, 2001)]
[Senate]
[Pages S2469-S2470]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           BANKRUPTCY REFORM

  Mr. GRASSLEY. Mr. President, I have a few clarifying comments 
regarding the bankruptcy reform bill which the Senate passed last week, 
During the debate on the small business provisions in S. 420, Senator 
Kerry erroneously characterized how the National Bankruptcy Review 
Commission voted on the small business changes that were contained in 
the bill. Senator Kerry maintained that the provisions were 
controversial and passed by a narrow 5-4 vote. This was not true. In 
fact, the National Bankruptcy Review Commission voted for these 
provisions by a vote of 8-1.
  I also want to clarify another point in the bankruptcy legislation. 
Senator Schumer offered an amendment in committee and then on the floor 
that changed a provision in the bill that prohibited corporate entities 
in Chapter 11 from discharging fraud debts in bankruptcy. I opposed 
this amendment since I think that corporations should not be able to 
commit fraud and get away with it by filing for bankruptcy.

[[Page S2470]]

Nevertheless, to accommodate Senator Schumer, I reached this compromise 
which prohibits corporations from discharging fraud debts owed to 
Government entities or to plaintiffs under the False Claims Act. I want 
to make clear for the Record that I oppose letting corporations defraud 
private businesses and individuals, and then discharging those debts in 
bankruptcy. Hopefully, I will revisit this issue in the near future to 
make sure that corporate scam artists can't use bankruptcy as a safe 
haven.
  I also want to take this opportunity to thank a number of staff 
members that were especially helpful in getting this important bill 
passed: Rene Augustine, Makan Delrahim, and Sharon Prost of Senator 
Hatch's staff; Ed Haden and Brad Harris of Senator Session's staff; Ed 
Pagano and Bruce Cohen of Senator Leahy's staff; Jim Greene and Kristin 
Cabral of Senator Biden's staff; Jennifer Leach of Senator Torricelli's 
staff; and Rita Lari Jochum and Kolan Davis of my staff. I also want to 
acknowledge my former staffer John McMickle who worked on this bill for 
several years. In addition, I want to thank Laura Ayoud in the Office 
of Senate Legislative Counsel. This bill would not have passed if it 
were not for the hard work and tremendous efforts of all these staff 
members.
  Mr. President, I ask unanimous consent to print in the Record three 
letters from former Bankruptcy Review Commissioners.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


                                              Stephen H. Case,

                                      New York, NY, March 7, 2001.
     To: Senator Grassley

     Re: National Bankruptcy Commission--Small Business
       1. I understand Senator Kerry today said on the Senate 
     floor Bankruptcy Review Commission approved its small 
     business provisions by a 5-4 vote.
       2. I was the NBRC's Senior Advisor on that project.
       3. I was present when the full Commission voted. I remember 
     it very distinctly, because I had just broken by jaw and I 
     had to participate with my mouth wired.
       4. The vote was 8 to 1.
       I hope the record can be corrected on this point.
     S.H. Case.
                                  ____



                                              Adams and Reese,

                                        Mobile, AL, March 8, 2001.
     Senator Charles Grassley,
     U.S. Senate, Washington, DC.

     Re: Amendment by Senator Kerry of Massachusetts to Strike the 
         Small Business Provisions in the Bankruptcy Reform 
         Legislation
       Dear Senator Grassley: Senator Kerry of Massachusetts has 
     offered an amendment to strike entirely the provisions 
     relating to small businesses in the bankruptcy legislation 
     currently pending on the Senate floor.
       When offering this amendment, Senator Kerry misstated the 
     position of the National Bankruptcy Review Commission, of 
     which I was a member.
       The small business provisions, which are very similar to 
     the provisions in the current legislation, were strongly 
     endorsed by the National Bankruptcy Review Commission. In 
     fact, the vote in support of these provisions was 8 to 1 by 
     the Commission. The adoption of these small business 
     provisions are vitally important to the future wellbeing of 
     the bankruptcy system.
       I urge you to table the Kerry amendment.
           Sincerely,
     Jeffery J. Hartley.
                                  ____

                                                    March 8, 2001.
     Senator Charles Grassley.

     Re: BRA 2001--Small Business Provisions

       Pleased be advised that the National Bankruptcy Review 
     Commission, of which I was a member, voted 8 to 1 in favor of 
     the Commission's recommendation to enact the Small Business 
     Provisions. There was very little dissent among the 
     Commissioners; the vote was not 5 to 4, as has been reported. 
     There was solid support for the recommendation and for the 
     proposals.
           Thank you,
                                                 James I. Shepard,
     Bankruptcy Tax Consultant.

                          ____________________