[Congressional Record Volume 148, Number 93 (Thursday, July 11, 2002)]
[Senate]
[Pages S6656-S6657]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEAHY:

[[Page S6656]]

  S. 2723. A bill to provide transitional housing assistance for 
victims of domestic violence; to the Committee on Banking, Housing, and 
Urban Affairs.
  Mr. LEAHY. Madam President, I am pleased to introduce the 
Transitional Housing Assistance for Victims of Domestic Violence Act of 
2002 to provide grants for transitional housing and related services to 
people fleeing domestic violence situations.
  I witnessed the devastating effects of domestic violence early in my 
career as the Vermont State's Attorney for Chittenden County. Today, a 
growing number of homeless individuals are women and children fleeing 
domestic violence. More than half the cities surveyed by the U.S. 
Conference of Mayors in 2000 cited domestic violence as a primary cause 
of homelessness. Shelters offer short-term assistance, but are 
overcrowded and unable to provide the support needed. Transitional 
housing allows women to bridge the gap between leaving a domestic 
violence situation and becoming fully self-sufficient.
  A transitional housing grant program was last authorized for only one 
year as part of the reauthorization of the Violence Against Women Act 
in 2000. This program would have been administered through the 
Department of Health and Human Services and provided $25 million in 
FY2001. Unfortunately, funds were never appropriated for the program, 
and the authorization has now expired.
  The grant program established in the bill I am introducing today 
would be administered through the Department of Justice, in 
consultation with the Departments of Health and Human Services and 
Housing and Urban Development. This program would have the benefit of a 
wide range of expertise in the three departments, and has enormous 
potential to improve people's lives.
  This new grant program will make a big impact, in many areas of the 
country, availability of affordable housing is at an all-time low. 
There are many dedicated people working to provide victims of domestic 
violence with resources, such as Rose Pulliam of the Vermont Network 
Against Domestic Violence and Sexual Assault, but they can not work 
alone. We should all be concerned with providing victims of domestic 
violence a safe place to gain the skills and stability needed to make 
the transition to independence. This is an important component of 
reducing and preventing crimes that take place in domestic situations, 
ranging from assault and child abuse to homicide, and helping the 
victims of these crimes. I urge the Senate to take prompt action on 
this legislation.
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      By Mrs. FEINSTEIN (for herself, Mr. Fitzgerald, Mr. Harkin, Mr. 
        Lugar, Ms. Cantwell, Mr. Wyden, Mr. Corzine, Mr. Leahy, Mrs. 
        Boxer, Mr. Durbin, and Mr. Nelson of Nebraska):
  S. 2724. A bill to provide regulatory oversight over energy trading 
markets and metals trading markets, and for other purposes; to the 
Committee on Agriculture, Nutrition, and Forestry.
  Mrs. FEINSTEIN. Madam President, I am very pleased to introduce this 
bill today along the Senator Harkin and Senator Lugar, chairman and 
ranking member of the Senate Agriculture Committee. Our bill is already 
co-sponsored by Senators Fitzgerald, Cantwell, Wyden, Corzine, Leahy, 
Durbin, and Boxer.
  The Senate Agriculture Committee held a hearing on this bill 
yesterday and I understand it is the intentions of the chairman and 
ranking member to try and have a bill that can be marked up before the 
recess.
  The bill closes the loophole that was created when Congress passed 
the Commodity Futures Modernization Act in 2000 which exempted on-line 
energy and metals trading from regulatory oversight.
  The bill is supported by: The New York Mercantile Exchange, The 
Pacific Exchange, Aquila Energy Corporation, Cambridge Energy Research 
Associates, Mid-America Energy Holding Company, Pacific Gas and 
Electric, Southern California Edison, Calpine, The Apache Corporation, 
The American Public Gas Association, The American Public Power 
Association, The Texas Independent Producers and Royalty Association, 
The California Municipal Utilities Association, The Consumers Union, 
The Consumer Federation of America, The Derivatives Study Center, The 
National Rural Electric Cooperative Association U.S. PIRG, The 
Transmission Access Policy Study Group, The Sierra Club, and all four 
FERC Commissioners.
  This bill could not be more timely in light of what we have learned 
about the energy sector in the past couple of months and the operations 
of these energy companies: 1. CMS Energy admitted that 80 percent of 
its trades were round trip or wash trades and were made simply to 
increase volume; 2. Reliant admitted to $6.4 billion in wash trades 
from 1999-2001 which the company characterized as energy swaps; 3. Duke 
confessed to $2 billion in wash trades and stated that $650 million of 
these trades were executed on the Inter-Continental Exchange, ICE, and 
electronic trading facility exempt from CFTC oversight because of the 
Commodity Futures Modernization Act.
  But electronic exchanges like ICE have no responsibility for trades 
or wash trades executed on its exchange and does not even have any 
responsibility for checking that a transaction has been executed. Thus, 
a company that wanted to manipulate prices or game the market would not 
have to even execute a single trade.
  In the past year, 12 of the largest energy companies in the U.S. have 
lost about $188 billion of capital, accounting for 71 percent of the 
market value. The credit ratings of several of those energy companies 
have been severely downgraded; some are at junk bond or near-junk bond 
status.
  In May, 2000, a severe energy crisis began in California. Electricity 
that had typically sold for about $30 a Megawatt hour all of a sudden 
started selling for 10 times that. This led to the bankruptcy of 
California's largest utility and the near-bankruptcy of California's 
second largest utility. It also resulted in overcharges of billions of 
dollars to California ratepayers and taxpayers.
  In November, California encountered a natural gas crisis. Natural gas 
is the main cost component of electricity. At one point gas was selling 
for $12 per decatherm in San Juan New Mexico and $59 in Southern 
California when the cost to transport it was less than one dollar.

  Just about the time Congress passed the Commodity Futures 
Modernization Act exempting electronic energy trading exchanges from 
oversight, the crisis began spreading to the other western states. For 
more than six months Oregon, Washington, and the other Western States 
experienced the same price spikes as California.
  The entire crisis lasted for more than a year while energy companies 
like Reliant, Enron, Duke, Williams, and AES enjoyed record revenues 
and profits. Obviously we are all a bit wiser today about energy 
markets and about wash trades in particular.
  Wash trades or round trip trades involve two or more companies 
plotting together to execute offsetting trades. These trades would be 
illegal if they were done on NYMEX, the Chicago Merc, or the Pacific 
Exchange and those exchanges would have the responsibility to report 
it.
  However, there is no such reporting or enforcement requirement on 
electronic exchanges because as I said before, the CFMA created a big 
loophole. This legislation would ensure that wash trades are subject to 
full CFTC oversight no matter where they are done.
  And of course there is Enron which controlled a large share of the 
energy market while they engaged in activities that were downright 
illegal. Many of these activities could have been prevented or at least 
stopped if regulators simply had the proper authority and the will.
  Let me recap what happened with the Commodity Futures Modernization 
Act. In November, 1999, the SEC, the Federal Reserve, the CFTC and the 
Department of Treasury produced a study titled Over the Counter 
Derivative Markets and the Commodity Exchange Act, A Report of the 
President's Working Group on Financial Markets.
  It was signed by Federal Reserve Chairman Alan Greenspan, Secretary 
of Treasury Larry Summers, SEC Chairman Arthur Levitt and CFTC Chairman 
Bill Rainer.
  The report said that the case had not been made that energy or other 
tangible commodities should be exempted

[[Page S6657]]

form CFTC oversight. The report found that because of the immaturity of 
the energy market, the lack of liquidity in the market and finite 
supplies, in energy markets, energy markets were more susceptible to 
manipulation than the deep and liquid financial markets.
  Recent history has certainly borne that to be correct; these 
commodities are more subject to manipulation!
  On June 21, 2000 shortly after the President's Working Group issued 
its report, the Banking Committee and Agriculture Committee held a 
hearing on the Report and the Commodity Futures Modernization Act.
  Let me read from that committee report:

       The Commission has reservations about the bill's exclusions 
     of Over the Counter (OTC) derivatives from the Commodities 
     Exchange Act. On this point he bill diverges from the 
     recommendations of the President's Working Group, which 
     limited the proposed exclusions to financial derivatives. The 
     Commission believes the distinction drawn by the Working 
     Group between financial (non-tangible) and non-financial 
     transactions was a sound one and respectfully urges the 
     Committees to give weight to that distinction.

  And the Senate Agriculture Committee marked up the Commodity Futures 
Modernization Act consistent with what was in the President's Working 
Group Report.
  That version of the bill however, was not reflected in the final 
provision that passed Congress as part of a much bigger bill at the end 
of the 106th Congress.
  I urge my colleagues in Congress to pass this legislation and fix 
this problem as soon as possible.

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