[Congressional Record Volume 148, Number 22 (Tuesday, March 5, 2002)]
[Senate]
[Pages S1537-S1542]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Ms. COLLINS:
  S. 1985. A bill to allow Federal securities enforcement actions to be 
predicated on State securities enforcement actions, to prevent 
migration of rogue securities brokers between and among financial 
services industries, and for other purposes; to the Committee on 
Banking, Housing, and Urban Affairs.
  Ms. COLLINS. Mr. President, today I am introducing the Microcap Fraud 
Prevention Act of 2001. This bill will close loopholes in the 
enforcement of our securities laws and furnish Federal authorities with 
the tools they need to combat growing fraud in the microcap securities 
market. While the Enron debacle has focused attention on the need for 
tougher and fuller financial disclosure standards to protect small 
investors, microcap fraud costs investors an estimated $6 billion every 
year.
  I first introduced this bill in the 106th Congress after extensive 
examination by the Senate's Permanent Subcommittee on Investigations, 
which I chaired. I am pleased that the North American Securities 
Administrators Association, which is made up of our Nation's State 
securities regulators, has once again sent me a letter of strong 
support and has made passage of legislation such as this one of its top 
legislative priorities.
  Today's securities markets are much different than they were even a 
decade ago. Many more people own securities than ever before. The rise 
of the Internet has allowed investors greater access to market 
information and investment advice. Unfortunately, not all of this 
information and advice has been sound, or even honest.
  These problems are exacerbated in the microcap market. Microcap 
stocks are those of smaller, thinly capitalized companies. Because the 
individual share prices may be higher than a certain threshold, 
however, they may avoid regulation as ``penny stocks.'' Because 
investors typically know little of these companies, their share prices 
are easier to manipulate due to the small amount of total capital. They 
are often less regulated than the securities of larger companies and, 
therefore, they can pose difficult challenges for law enforcement and 
unique opportunities for dishonest brokers.
  It is this combination of a microcap company's low capitalization, 
making its share price more easily manipulable, and obscurity, along 
with high-pressure sales tactics, that make microcap stocks so 
appealing to the more dishonest elements in our securities markets.
  Frequently, salesmen will call customers, pitching these 
investments with high pressure sales tactics. More sophisticated scams 
involve a practice known as the ``pump and dump'' where a securities 
firm that has purchased a large block of a microcap company's stock 
will market it aggressively and quickly to investors. As a result of 
the surge in demand, the share's price will rise sharply but 
temporarily, despite the unchanged fundamentals underlying the stock's 
price.

  After a short time, investors will realize that the company's 
performance does not merit its new share price. The stock's share price 
will then plummet, but the firm will by then have unloaded its shares, 
leaving investors holding the bag. In other cases, however, dishonest 
brokers and firms simply fail to execute sales orders or otherwise 
commit garden variety theft masquerading as securities transactions, 
such as churning or making unsuitable recommendations.
  States prosecute these criminals activities with some success and 
often obtain orders prohibiting further securities activities by bad 
actors within their jurisdiction. Because such an order ends at a 
State's borders, however, the defendants can simply pick up, move to a 
new State, and begin their schemes anew. In contrast, a Federal order 
would have effect nationwide. Because Federal law enforcement resources 
are limited, however, there is only so much it can do, and many smaller 
time criminals can continue to operate below the federal government's 
radar screen. My bill would institute several reforms to address these 
problems.
  First, it would allow the SEC to take enforcement actions against 
brokers and firms on the basis of those already concluded by state 
agencies. Although States may base their actions on Federal actions, 
the reverse is not true. As a result, the SEC must duplicate the 
State's efforts to provide nationwide protection to investors. By 
allowing the SEC to base disciplinary actions on those concluded by 
states, the State's disciplinary actions can be given effect 
nationwide, when appropriate, without the SEC's having to commit 
significant amounts of additional resources.
  Second, the bill would allow the SEC to keep those who commit any 
type of financial fraud from participating in the microcap market. 
Currently, the SEC can ban those who commit securities violations. But 
the SEC should have the poser to discipline those who commit other 
types of financial services offenses as well.
  Third, this bill would broaden provisions designed to prevent fraud 
in the penny stock market. Under current law, the SEC can suspend or 
bar those who commit fraud in this market. However, brokers so barred 
can turn around and commit the same types of offenses in the microcap 
market because their individual share prices might exceed $5 per share, 
even though the total capitalization amount is small enough to lend 
itself to easy manipulation. The penny stock market ban needs to be 
expanded to the microcap market as well.
  Fourth, the statutory officer and director bar would be expanded to 
cover all publicly traded companies. Currently, this bar only applies 
to companies that report to the SEC, leaving open the possibility that 
those who have been barred from serving in these companies could serve 
in others that are exempt from reporting. Companies involved in 
microcap schemes are frequently traded over the counter and are not 
covered by the bar. Under my bill, this bar would extend to all 
publicly traded companies.
  Finally, the bill would allow the SEC to enforce its own orders and 
court injunctions against repeat offenders directly rather than waiting 
for the Justice Department to initiate contempt proceedings. Instead 
the SEC would be able to seek immediate civil penalties for repeat 
violations without the delay that can occur from the initiation of 
contempt proceedings.
  These are common sense, measured steps that can make a real 
difference in the level of protection that we provide to investors, 
many of whom are new to our capital markets. I would urge the Senate to 
consider and pass the

[[Page S1538]]

Microcap Fraud Prevention Act quickly. Mr. President, I ask unanimous 
consent that the letter of support from the NASAA be printed in the 
Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                        NASAA,

                                Washington, DC, November 15, 2001.
     Hon. Susan M. Collins,
     U.S. Senate,
     Washington, DC.
       Dear Senator Collins: On behalf of the membership of North 
     American Securities Administrators Association, Inc. (NASAA), 
     I commend you for recognizing and confronting the problem of 
     fraud in the microcap securities market. We appreciate your 
     efforts to protect the investing public from frauds in low-
     priced securities, and for your plans to introduce 
     legislation to enhance enforcement efforts in this area.
       As you know, several years ago, state securities 
     administrators recognized the problem of fraud in the 
     microcap market. Since then the states have led enforcement 
     efforts and filed numerous actions against microcap firms. 
     There are systematic problems in this area, but they can be 
     addressed effectively if state and federal regulators and 
     policymakers work together on meaningful solutions.
       NASAA wholeheartedly supports the intent of The Microcap 
     Fraud Prevention Act of 2001. It would be an important step 
     in combating abuses in the microcap market and maintaining 
     continued public confidence in our markets.
       We applaud your leadership in the fight against microcap 
     fraud, and I pledge the support of NASAA's membership to 
     continue to work with you to secure passage of this important 
     legislation.
           Sincerely,

                                               Joseph P. Borg,

                                      Alabama Securities Director,
                                                  NASAA President.
                                 ______
                                 
      By Mr. BINGAMAN (for himself and Mr. Roberts):
  S. 1986. A bill to amend the Intermodal Surface Transportation 
Efficiency Act of 1991 to identify a route that passes through the 
States of Texas, New Mexico, Oklahoma, and Kansas as a high priority 
corridor on the National Highway System; to the Committee on 
Environment and Public Works.
  Mr. BINGAMAN. Mr. President, I rise today to introduce legislation 
that will enhance the future economic vitality of communities in Otero, 
Lincoln, Torrance, Guadalupe, and Quay Counties. By improving the 
transportation infrastructure, I believe this legislation will help 
attract good jobs to South, Central, and Eastern New Mexico.
  The bill we are introducing today designates U.S. Highway 54 from the 
border with Mexico at El Paso, TX, through New Mexico, and Oklahoma to 
Wichita, KS, as the Southwest Passage Initiative for the Regional and 
Interstate Transportation, or the Southwest Passage, corridor. Congress 
has already included Highway 54 as part of the National Highway System. 
The bill designates the Southwest Passage as a High Priority Corridor 
on the National Highway System.
  I am honored to have my good friend and colleague, Senator Roberts, 
as a cosponsor of the bill. Our goal with this designation is to 
promote the development of this 700-mile route into a full four-lane 
divided highway. About half of the SPIRIT corridor is in New Mexico and 
another 200 miles of it are in Kansas.
  I continue to believe strongly in the importance of highway 
infrastructure for economic development in my state. Even in this age 
of the new economy and high-speed digital communications, roads 
continue to link our communities together and to carry the commercial 
goods and products our citizens need. Safe and efficient highways are 
especially important to citizens in the rural parts of New Mexico.
  It is well known that regions with four-lane highways more readily 
attract out-of-state visitors and new jobs. Truck drivers and the 
traveling public prefer the safety of a four-lane divided highway.
  In New Mexico, US 54 is a fairly level route, bypassing New Mexico's 
major mountain ranges. The route also traverses some of New Mexico's 
most dramatic scenery, including one of the State's popular designated 
Scenic Byways. The Mesalands Scenic Byway is located in Guadalupe, San 
Miguel and Quay Counties, incorporating the beautiful tablelands known 
as El Llano Estacado. The SPIRIT corridor also passes through 
Alamogordo, home of the New Mexico Museum of Space History, and gateway 
to the stunning White Sands National Monument.
  The route of the Southwest Passage starts at Juarez, Chihuahua, 
Mexico, home of one the largest concentrations of manufacturing in the 
border region. As a result of increased trade under NAFTA, commercial 
border traffic is already increasing at the border crossings in El 
Paso, TX, and Santa Teresa, NM. In New Mexico, truck traffic from the 
border has risen to over 1000 per day and is expected to triple in the 
next twenty years. The SPIRIT corridor is perfectly situated to serve 
international trade and promote economic development along its entire 
route. The route provides direct connections to four major Interstate 
Highways: I-10, I-35, I-40, and I-70. SPIRIT is also the shortest route 
between Chicago and El Paso, shaving 137 miles off the major 
alternative.
  Though much of US 54 is currently only two lanes, traffic has been 
rising dramatically along the entire route since NAFTA was implemented. 
In New Mexico, total daily traffic levels are nearing 10,000 and are 
projected to rise to 30,000, with trucks making up 35 percent of the 
total. In Oklahoma, traffic levels are up to 6,500 per day, 40 percent 
of which are commercial trucks. These traffic statistics clearly 
reflect the SPIRIT corridor's attraction to commercial and passenger 
drivers.
  New Mexicans recognize the importance of efficient roads to economic 
development and safety. I have long supported my State's efforts to 
complete the four-lane upgrade of US 54. The State Highway and 
Transportation Department now rates the project a high priority for New 
Mexico. The four-lane upgrade of the first 56-mile segment from the 
Texas border to Alamogordo is underway and will be completed in the 
next year. Two more sections in New Mexico remain to be upgraded: 163 
miles from Tularosa, north through Carrizozo, Corona, and Vaughn to 
Santa Rosa and 50 miles from Tucumcari to the Texas border near Nara 
Vista in Quay County. The cost to four-lane these two segments is 
estimated at $329 million and $85 million, respectively. I am committed 
to working to help secure the funding required to complete New Mexico's 
four-lane upgrade as soon as possible. I am pleased the other States 
are also moving quickly to four-lane their portion of the route. I hope 
designating SPIRIT as a High Priority Corridor on the National Highway 
System will help spur the completion of this project.
  Once the SPIRIT corridor is designated, New Mexico will have four 
high-priority corridors on the National Highway System. The other three 
are the Ports-to-Plains corridor, the Camino Real Corridor, and the 
East West Transamerica Corridor. These four trade corridors, as well as 
our close proximity to the border, strongly underscore the vital role 
New Mexico plays in our Nation's international transportation network.
  The SPIRIT project has broad grassroots support. Most of the cities, 
counties, and chambers of commerce all the way from Wichita to El Paso 
have passed resolutions of support for the four-lane upgrade of US 54 
along the entire corridor.
  I do believe the four-lane upgrade of Highway 54 is vital to the 
continued economic development for all of the communities along the 
SPIRIT corridor in New Mexico.
  I again thank Senator Roberts for cosponsoring the bill, and I hope 
all Senators will join us in support of this important legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1986

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SOUTHWEST PASSAGE INITIATIVE FOR REGIONAL AND 
                   INTERSTATE TRANSPORTATION.

       Section 1105(c) of the Intermodal Surface Transportation 
     Efficiency Act of 1991 (105 Stat. 2032) is amended by adding 
     at the end the following:
       ``(45) The corridor extending from the point on the border 
     between the United States and Mexico in the State of Texas at 
     which United States Route 54 begins, along United States 
     Route 54 through the States of Texas, New Mexico, Oklahoma, 
     and Kansas, and ending in Wichita, Kansas, to be known as the 
     `Southwest Passage Initiative for Regional and Interstate 
     Transportation Corridor' or `SPIRIT Corridor'.''.

[[Page S1539]]

                                 ______
                                 
      By Mr. SMITH of New Hampshire (for himself, Mr. Feingold, and Mr. 
        McCain):
  S. 1987. A bill to provide for reform of the Corps of Engineers, and 
for other purposes; to the Committee on Environmental and Public Works.
  Mr. SMITH of New Hampshire. Mr. President, together with my friend 
from Arizona, Mr. McCain, and my friend from Wisconsin, Mr. Feingold, I 
am introducing the Corps of Engineers Modernization and Improvement Act 
of 2002. ``Corps Reform'', as it is frequently billed, has been the 
subject of much heated debate over the last two years. In fact, the 
Water Resources Development Act of 2000 included a provision on 
independent peer review, requested by Senator Feingold.
  Since that time, it has become clear to me that we need to 
aggressively address a broad range of issue endemic in the Corps. That 
is why I am before you today, introducing this bill. The Corps has been 
the subject of ``the Fleecing of America'' too many times. My primary 
goal is to ensure that Federal taxpayer dollars are spent wisely, on 
sound investments that are in the national interest. Our bill achieves 
this goal by addressing the mammoth backlog of projects that plagues 
the Corps; changing the cost-benefit ratio that a project must meet in 
order to be economically justified; updating of the Principles and 
Guidelines; instituting independent review of certain projects; 
amending some of the cost-share requirements; and limiting the waivers 
of non-Federal cost-shares often granted to communities.
  It has been projected that there is currently a construction backlog 
of well over $40 billion in authorized projects, with annual 
appropriations for the construction account of the civil works mission 
averaging around $1.8 billion. As such, the majority of the projects in 
the backlog will never see a Federal dime. While a great number of 
these projects are meritorious and deserve funding, others are not in 
the Corps mission, are no longer economically justified, or violate 
non-Federal cost-share requirements.
  Our bill would require the Corps to provide a list of projects in the 
backlog, categorizing each project as ``active,'' ``deferred,'' 
``inactive.'' There would be a deauthorization mechanism, more 
stringent than current law, for projects that have never received 
construction funds, for projects that have been suspended, and for 
those that don't pass economic muster.
  In addition, there are projects ``on the books'' that are more than 
25 years old, which have never received construction funds. These 
projects should be deauthorized immediately. The Environment and Public 
Works Committee can authorize a restudy if any of these projects are 
thought to have modern benefits and meet the requisite standards.
  Currently, projects are only required to meet a 1:1 cost-benefit 
ratio. I find this appalling. No one would invest in the stock market 
at such a return. According to the Taxpayers for Common Sense, 36 
percent of the 310 major projects authorized since 1986 have been 
authorized with a benefit-to-cost ratio of less than 1.5. Construction 
of these projects would cost more than $7 billion. Especially in these 
times of war and deficit spending, taxpayers cannot afford, nor should 
be asked to fund such projects. My bill would require that projects 
return benefits that are one and a half times the project costs, a vast 
improvement over current practice.
  My friends, do not fear deauthorization. It is a cleansing process, 
getting the inactive projects off the books will only serve to better 
the chances of completed funding for those projects that remain.
  I would also like to highlight the independent review provision in my 
bill. WRDA 2000 required the National Academy of Sciences to issue a 
report making recommendations on the effectiveness of independent peer 
review. Many will ask, why not wait until the Academy's report is 
issued before addressing this issue in legislation. I would like to 
explain to my colleagues, if the Academy makes recommendations that 
differ from what I have included in this bill, I am open to making 
refinements as this bill moves through the legislative process. But I 
wanted to include a provision on independent review to highlight the 
importance of the issue, as well as my belief that such review will 
help restore integrity to the Corps and its study processes.
  Let me say a word about cost-shares. I think it is important that a 
non-Federal sponsor partner with the Federal Government in the 
advancement of Corps of Engineers projects. The landmark WRDA 1986 
established most of the modern cost-share formulas. But some of these 
cost share arrangements could be stronger. For example, the benefits 
realized by beach replenishment projects are highly localized. The non-
Federal interests should thus be responsible for a larger portion of 
the replenishment costs. I also believe that there should be a 
financial incentive, in the form of a better cost share, for non-
structural flood damage reduction projects. This only seems logical 
from a financial sense, as well as an environmental standpoint. And as 
for the costs associated with the Inland Waterways system, IWS, there 
should be a distinction between those segments of the System that carry 
most of the traffic and those that are underutilized. Approximately 30 
percent of the Operations and Maintenance funds are devoted to segments 
of the IWS that realize a mere 3 percent of the traffic. My bill 
attempts to address this issue by reformulating how O&M costs are paid.
  I say to my friends, my intention here is not to beat up on the Corps 
of Engineers. As the ranking Republican on the Senate Environment and 
Public Works Committee, I have a great deal of respect for the Chief of 
Engineers and the Assistant Secretary of the Army for Civil Works. This 
bill should not be interpreted as a statement on their effectiveness. I 
merely want to implement mechanisms to make the Agency more fiscally 
responsible. The taxpayers deserve our attention to this matter.
  I realize that many of my distinguished colleagues will oppose our 
efforts to improve and modernize the Corps of Engineers. I daresay, 
part of the problem is that any meaningful reform of the Corps will 
require a reform of the practices of Congress, as well. If your project 
is meritorious, if it has local support and adheres to cost-sharing 
requirements and cost-benefit ratio, if your project is in the Corps 
mission, you need not worry. This bill is about clearing the way for 
projects that warrant the taxpayers' investment.
  As for where we go from here, the Senate Environment and Public Works 
Committee will hold a hearing on the issue of Corps Reform in the 
upcoming months. I expect this bill to be part of the debate of the 
hearing.
  Average Americans toil all day long, and some, all night, trying to 
make meager ends meet. How can I look these Americans in the eye and 
say, your tax dollars pay to maintain a waterway that sees two barges a 
year or to replenish the sand on a beach where the median home price is 
$1.5 million? Taxpayers' hard-earned money should not be devoted to 
pouring sand on the beaches of the wealthy. Taxpayer dollars should be 
spent more wisely than to maintain deadbeat waterways. Particularly 
during this time of belt-cinching, we should show more fiscal 
restraint!
  I would like to quote another Mr. Smith, that is, Mr. Smith of Maine, 
who served on the House Committee of Ways and Means in the days before 
this country was embroiled in Civil War. Mr. Smith, in a Report of the 
Ways and Means Committee dated February 10, 1836 wisely counseled: 
``Heedless and useless or unavailable expenditure of the public 
treasury are alike to be avoided in all legislation.'' He further 
noted: ``Every Government . . . is susceptible of acquiring habits of 
lavish expenditure and extravagance in its operations.'' Every 
Government ``requires constant watching to preserve its own purity.'' 
Well, folks, I am here to say, our government's practices are not pure. 
But there is something that we can do about it.
  Corps Reform. It's going to be an uphill battle, but it's a start. I 
challenge, not just my fiscally conservative friends, but all my 
colleagues, to put aside their parochial interests for the general good 
of the taxpayers' hard-earned money.
  As we move forward, please understand that I am open to suggestions 
as to how to improve upon the ideas embodied in this bill. I want to 
work together with my colleagues to make

[[Page S1540]]

this bill as meaningful, responsive, and responsible as possible.
  Please join me in advancing this fiscally responsible legislation.
  Our bill is supported by taxpayer advocacy groups such as the 
Taxpayers for Common Sense, National Taxpayers Union, Citizens Against 
Government Waste, as well as environmental groups, for example, 
National Wildlife Federation and Environmental Defense. I have some 
letters of support and ask unanimous consent that they be printed in 
the Record.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                        Environmental Defense,

                                                    March 5, 2002.
     Senator Bob Smith,
     Ranking Member, Senate Committee on Environment and Public 
         Works, U.S. Senate, Washington, DC.
       Dear Senator Smith: Environmental Defense strongly supports 
     the Corps of Engineers Modernization and Improvement Act of 
     2002 and applauds your efforts to restore trust in the Corps' 
     planning process and to focus scarce federal funds on 
     economically and environmentally sound civil works projects.
       The Corps has an important role to play in the management 
     of the nation's water resources, including the restoration of 
     ecosystems like the Everglades, Coastal Louisiana, and the 
     Columbia, Snake, Mississippi and Missouri rivers. 
     Unfortunately, scarce federal funds are frequently wasted on 
     projects with few economic benefits and high environmental 
     costs.
       We believe the Corps of Engineers Modernization and 
     Improvement Act of 2002 will move to accelerate the 
     construction of nationally critical projects by prioritizing 
     and shrinking the Corps' $52 million backlog, subjecting 
     questionable projects to greater review, and by asking cost-
     sharing partners to share a larger portion of project costs. 
     Too many Corps projects have failed to generate predicted 
     benefits--including many segments of the inland waterway 
     system--and too many projects with questionable economic 
     benefits continue to be constructed.
       We are aware that powerful special interests will oppose 
     these changes to bring basic fiscal sense to federal funding 
     for water projects. It takes an exceptional degree of 
     principal and courage to take on these interests. We are 
     confident, however, that your leadership on this issue can 
     make a big difference.
       We applaud your efforts to restore trust in the Corps' 
     planning process and to focus scarce federal funds on 
     economically and environmentally sound projects.
           Sincerely,
     Scott Faber,
       Water Resources Specialist.
     Timothy Searchinger,
       Senior Attorney.
                                  ____

                                                    March 5, 2002.
     Senator Robert Smith,
     Ranking Member, Environment and Public Works Committee, 
         Dirksen Senate Office Building, Washington, DC.

     Senator Russell Feingold,
     Hart Senate Office Building,
     Washington, DC.

     Senator John McCain,
     Russell Senate Office Building,
     Washington, DC.

       Dear Senators Smith, Feingold, and McCain: Taxpayers for 
     Common Sense commends you for introducing the Corps of 
     Engineers Modernization and Improvement Act of 2002.
       This legislation could stop more than $15 billion of 
     wasteful spending at the U.S. Army Corps of Engineers by 
     deauthorizing wasteful and outdated projects, limiting the 
     Corps to only building projects within its mission, requiring 
     greater accountability in its project planning process, and 
     increasing the non-Federal contributions to project costs. 
     With the return of budget deficits the timing and need for 
     this legislation could not be greater.
       As early as 1836, Members of Congress started raising 
     questions about cost overruns and mismanagement by the Corps 
     in constructing water projects. Back then, Congressman 
     Francis O. Smith from Maine, Chairman of the House Ways and 
     Means Committee, rebuked the Corps for a host of problems in 
     constructing 25 wasteful projects in the committee report on 
     the Harbors and Rivers Act.
       More than 160 years later, Taxpayers for Common Sense and 
     National Wildlife Federation published a report criticizing 
     the Corps for pursuing 25 other projects that would waste 
     more than $6 billion of federal taxpayer money.
       A steady stream of Congressional authorizations of new 
     projects over the last two decades has swelled the Corps' 
     construction backlog to $52 billion. However, despite a 50% 
     increase in the Crops' construction backlog over the last six 
     years, it would still take the agency more than 25 years to 
     construct all of those projects at current funding levels 
     assuming no new projects were authorized.
       The reluctance of many Members of Congress to criticize 
     wasteful spending has created this enormous backlog, leading 
     to a situation where everyone loses because no projects are 
     getting built. A Taxpayers for Common Sense analysis of the 
     backlog found that the typical Corps project was only 24% 
     completed, based upon the median rate of completion. 
     Legitimate projects, like operation and maintenance of 
     high-volume waterways, are suffering at the hands of 
     ``mission creep'' projects like the $311 million Grand 
     Prairie Irrigation project in east Arkansas, a project 
     that even the farmers who the Corps identified as the 
     beneficiaries oppose.
       Unfortunately, the Corps has not taken measures to 
     alleviate these problems. Instead, last week at Senate Budget 
     Committee hearings, Assistant Secretary of the Army Mike 
     Parker and Lt. Gen. Robert Flowers half-heartedly defended 
     President Bush's FY03 budget request while testifying that 
     the way to reduce the backlog was to give the Corps a raise 
     this year from $4 billion to $6.4 billion, a 60% increase 
     over the President's request.
       The Corps has become embroiled in several scandals over the 
     manipulated and shoddy evaluation of project studies. In the 
     most infamous case, the Army Inspector General reprimanded 
     three senior Corps officials for ``cooking the books'' to 
     bias a study of lock expansions on the Upper Mississippi and 
     Illinois Rivers so that the results favored a $1.2 billion 
     project alternative. In the last two years, five other major 
     Corps projects have been found through independent economic 
     analyses to be unjustified: the $360 million Delaware River 
     deepening project, the $188 million Columbia River deepening 
     project, the $127 million Dallas Floodway Extension project, 
     the $108 million Oregon Inlet Jetties project, and the $40 
     million Chesapeake and Delaware Canal deepening project.
       Clearly, the Corps is incapable of producing objective 
     analyses of projects. This is why the independent peer review 
     provisions of your bill are so critical. Taxpayers deserve 
     better accountability for how their hard earned tax dollars 
     are being spent.
       The Corps doesn't need a raise, it just needs a good dose 
     of common sense. Like all taxpayers faced with a tight 
     budget, the Corps must be forced to prioritize and focus on 
     the projects it does best within its mission.
       With pursuit of the reforms in this bill, you will be 
     building upon a notable legacy left by President Reagan in 
     1986. That year, Congress agreed to his landmark cost sharing 
     rules that required local beneficiaries to pay a share of 
     each project. Not only will you be following in Reagan's 
     footsteps, but you are charting a new course for the further 
     of water resources development in America. On behalf of 
     taxpayers, thank you for your leadership on this important 
     matter.
           Sincerely,
                                                     Joe Theissen,
                                               Executive Director.

  Mr. FEINGOLD. Mr. President, I rise today to join the Senator from 
New Hampshire, Mr. Smith, in introducing the Corps of Engineers 
Modernization and Improvement Act of 2002. I am very pleased to be 
working with him on this issue, and admire his dedication to fiscal 
responsibility as embodied in this measure.
  As the Senator from New Hampshire, Mr. Smith, and I introduce this 
bill, we realize that Corps Reform is a work in progress. Reforming the 
Corps of Engineers will be a difficult task for Congress. It involves 
restoring credibility and accountability to a Federal agency rocked by 
scandals and constrained by endlessly growing authorizations and a 
gloomy Federal fiscal picture, and yet an agency that Wisconsin, and 
many other States across the country, have come to rely upon. From the 
Great Lakes to the mighty Mississippi, the Corps is involved in 
providing aids to navigation, environmental remediation, water control 
and a variety of other services to my state. My office has strong 
working relationships with the Detroit, Rock Island, and St. Paul 
District Offices that service Wisconsin, and I want the fiscal and 
management cloud over the Corps to dissipate so that the Corps can 
continue to contribute to our environment and our economy.
  This legislation evolved from my experience in seeking to offer an 
amendment to the Water Resources Development Act of 2000 to create 
independent review of Army Corps of Engineers' projects. In response to 
my initiative, the bill's managers, which included the Senator from New 
Hampshire, Mr. Smith, and the then Chairman, the Senator from Montana, 
Mr. Baucus, adopted an amendment as part of their Manager's Package 
which should help get the Authorizing Committee, the Environment and 
Public Works Committee, the additional information it needs to develop 
and refine legislation on this issue through a study by the National 
Academy of Sciences, NAS, on peer review.
  Earlier this Congress, I introduced the Corps of Engineers Reform Act 
of 2001, S. 646. The measure the Senator from New Hampshire and I 
introduce

[[Page S1541]]

today includes many provisions that were included in my original bill, 
and codifies the idea of independent review of the Corps about which we 
agreed in the 2000 Water Resources bill. It also provides a mechanism 
to speed up completion of construction for good Corps projects with 
large public benefits by deauthorizing low priority and economically 
wasteful projects. The bill put forward bold concepts. It streamlines 
the existing automatic deauthorization process. Under the bill a 
project authorized for construction but never started is deauthorized 
if it is denied appropriations funds towards completion of construction 
for five straight years. In addition, a project that has begun 
construction but denied appropriations funds towards completion for 
three straight years. The bill also preserves Congressional prerogative 
over setting the Corps' construction priorities by allowing Congress a 
chance to reauthorize any of these projects before they are 
automatically deauthorized. This process will be transparently to all 
interests, because the bill requires the Corps to make an annual list 
of projects in the construction backlog available to Congress and the 
public at large via the Internet. The bill also allows a point of order 
to be raised in the Senate against projects included in legislation for 
which the Corps has not completed necessary studies determining that a 
project is economically justified and in the federal interest.
  The Senator from New Hampshire and I came to a meeting of the minds 
on the issue of independent review of Corps projects. But the bill we 
introduce today is much more than that. It is a comprehensive revision 
of the project review and authorization procedures at the U.S. Army 
Corps of Engineers. Our joint goal is to have the Corps to increase 
transparency and accountability, to ensure fiscal responsibility, and 
to allow greater stakeholder involvement in their projects. We are 
committed to that goal, and to seeing Corps Reform enacted as part of 
this year's Water Resources bill.
  I also look forward, to the upcoming hearing process, and stand ready 
to work with the Senator from New Hampshire in merging the bill we 
introduce today with S. 646, my bill from earlier this Congress. My 
bill, S. 646, which is sponsored in the other body by my colleague from 
Wisconsin, Representative Kind, includes a number of important concepts 
that are central to environmental protection and that should be part of 
Corps Reform.
  The Corps is required to mitigate the environmental impacts of its 
projects in a variety of ways, including by avoiding damaging wetlands 
in the first place and either holding other lands or constructing 
wetlands elsewhere when it cannot avoid destroying them. The Corps 
requires private developers to meet this standard when they construct 
projects as a condition of receiving a federal permit, and I think the 
federal government should live up to the same standards. Too often, the 
Corps does not complete required mitigation and enhances environmental 
risks. I feel very strongly that mitigation must be completed, that the 
true costs of mitigation should be accounted for in Corps projects, and 
that the public should be able to track the progress of mitigation 
projects. In addition, the concurrent mitigation requirements of S. 646 
would actually reduce the total mitigation costs by ensuring the 
purchase of mitigation lands as soon as possible. I look forward to 
exploring these ideas with the Senator from New Hampshire as we work to 
produce a final product.
  I feel that this bill is an important step down the road to a 
reformed Corps of Engineers. This bill establishes a framework to catch 
mistakes by Corps planners, deter any potential bad behavior by Corps 
officials to justify questionable projects, end old unjustified 
projects, and provide planners desperately needed support against the 
never ending pressure of project boosters. Those boosters, include 
Congressional interests, which is why I believe that this body needs to 
champion reform--to end the perception that Corps projects are all pork 
and no substance.
  I wish it were the case, that I could argue that the changes we are 
proposing today were not needed, but unfortunately, I see that there is 
need for this bill. I want to make sure that future Corps projects no 
longer fail to produce predicted benefits, stop costing the taxpayers 
more than the Corps estimated, do not have unanticipated environmental 
impacts, and are built in an environmentally compatible way. This bill 
will help the Corps do a better job which is what the taxpayers and the 
environment deserve.
                                 ______
                                 
      By Ms. LANDRIEU:
  S. 1988. A bill to authorize the American Battle Monuments Commission 
to establish in the State of Louisiana a memorial to honor the Buffalo 
Soldiers; to the Committee on Energy and Natural Resources.
  Ms. LANDRIEU. Mr. President, one hundred and thirty five years ago, 
before the term Homeland Security was even coined, a group of men 
devoted themselves to securing the frontiers of this Nation. They 
protected Americans in their homes; they deterred hostile invaders, and 
they secured the blessings of liberty to the people of this land. Even 
more remarkable, they secured these blessings for others, while they 
could not fully enjoy them themselves.
  I am referring to the Buffalo Soldiers. These brave men instituted a 
tradition of professional military service for African Americans that 
stretches one hundred and thirty five years to our triumphs occurring 
this very day. African Americans military service is as old as our 
Nation. There were black soldiers during the revolution, a unit of free 
black men played a pivotal rule in the Battle of New Orleans, and the 
exploits of African Americans during the Civil War have been captured 
in novels and on film. However, it was not until the Army 
Reorganization Act of 1866 that soldiering and service to country 
became a realistic option for African Americans seeking to improve 
their quality of life. In so doing, they raised the bar of freedom, and 
revealed the injustice of preventing the defenders of democracy from 
fully participating in it.
  The city of New Orleans, and the State of Louisiana have a rich 
history, and have, over the years given more than their fair share of 
sons in service to their Nation. Much of this history is commemorated 
around the city. Yet these great sons of New Orleans remain 
unacknowledged in their home. For in Louisiana's great military 
tradition, surely one of its greatest military contributions were the 
9th Cavalry Regiment and the 25th Infantry Regiment.
  These two forces, recruited and organized in New Orleans, represent 
half of all the units of buffalo soldiers. The 9th Cavalry alone 
constituted 10 percent of all the American cavalry. Their list of 
adversaries reads like a who's who of the Old West, Geronimo, Sitting 
Bull, Poncho Villa. In movies, when settlers encounter Apaches, the 
cavalry always comes to the rescue. Yet how many times were the cavalry 
that rode over the horizon African Americans? Of course, the reality is 
that the Buffalo Soldiers comprised some of our Nations most capable 
and loyal troops. Despite suffering the worst deprivations known to any 
American soldiers of the period, their desertion rates were the lowest 
in the Army. The 9th Cavalry was awarded 15 Congressional Medals of 
Honor, including two to native Louisianians First Sergeant Moses 
Williams and Sergeant Emmanuel Stance.
  For these reasons, I am offering legislation that would authorize the 
creation of a suitable memorial in New Orleans for these gallant 
soldiers. There is an excellent statue to the Buffalo Soldiers at Fort 
Leavenworth Kansas. It commemorates the 10th Cavalry Regiment stationed 
there. However, I believe that these men deserve to be recognized in 
their home city. Furthermore, it should be in a location where 
thousands of visitors will have the opportunity to come to appreciate 
the legacy of the Buffalo Soldiers. I believe that the city of New 
Orleans is the perfect location.
  This Nation has sadly found the need to say thank you to its 
servicemen and women after the fact on more than one occasion. 
Unfortunately, this is another. We are fortunate to have living 
memories of the 9th and 10th Cavalry Regiments today. The regiments 
were not disbanded until the conclusion of World War Two, where they 
served with distinction. We should take this opportunity to honor these 
veterans, and in so doing, honor the principles of liberty, freedom, 
and democracy for which they fought and sacrificed. They have given so 
much to their Nation, we

[[Page S1542]]

owe them this public expression of gratitude.

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