[Congressional Record Volume 148, Number 94 (Friday, July 12, 2002)]
[Senate]
[Pages S6683-S6685]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  PUBLIC COMPANY ACCOUNTING REFORM AND INVESTOR PROTECTION ACT OF 2002

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will now resume consideration of S. 2673, which the clerk will 
report.
  The legislative clerk read as follows:

       A bill (S. 2673) to improve quality and transparency in 
     financial reporting and independent audits and accounting 
     services for public companies, to create a Public Company 
     Accounting Oversight Board, to enhance the standard setting 
     process for accounting practices, to strengthen the 
     independence of firms that audit public companies, to 
     increase corporate responsibility and the usefulness of 
     corporate financial disclosure, to protect the objectivity 
     and independence of securities analysts, to improve 
     Securities and Exchange Commission resources and oversight, 
     and for other purposes.

  Pending:

       Edwards modified amendment No. 4187, to address rules of 
     professional responsibility for attorneys.
       Daschle (for Levin) amendment No. 4269 (to amendment No. 
     4187), to address procedures for banning certain individuals 
     from serving as officers or directors of publicly traded 
     companies, civil money penalties, obtaining financial 
     records, broadened enforcement authority, and forfeiture of 
     bonuses and profits.
       McCain motion to recommit the bill to the Committee on 
     Banking, Housing, and Urban Affairs with instructions to 
     report back forthwith with amendment No. 4270, to require 
     publicly traded companies to record and treat stock options 
     as expenses when granted for purposes of their income 
     statements.
       Reid (for Edwards) amendment No. 4271 (to the instructions 
     of the motion to recommit the bill to the Committee on 
     Banking, Housing, and Urban Affairs), to address rules of 
     professional responsibility for attorneys.
       Reid (for Levin) amendment No. 4272 (to amendment No. 
     4271), to address procedures for banning certain individuals 
     from serving as officers or directors of publicly traded 
     companies, civil money penalties, obtaining financial 
     records, broadened enforcement authority, and forfeiture of 
     bonuses and profits.

  The ACTING PRESIDENT pro tempore. Under the previous order, the time 
until 9:30 a.m. shall be equally divided between the two managers for 
debate only. Who yields time?

[[Page S6684]]

  The Senator from Maryland.
  Mr. SARBANES. Madam President, I understand there will be about 5 
minutes allotted each manager now. Is that correct?
  The ACTING PRESIDENT pro tempore. The Senator is correct.
  Mr. SARBANES. Madam President, very shortly we will be voting on a 
cloture petition with respect to this legislation, S. 2673. I urge my 
colleagues to vote for the cloture motion.
  I know there are a lot of amendments pending, but we have now been on 
this legislation a full week. Even with the voting of cloture today, 
this matter will carry over into next week. There have been a range of 
amendments, some that are pending that are germane under cloture to the 
bill. In other words, they have been drawn in a way and the subject 
matter is focused and limited enough that they remain germane even 
after cloture.
  There are a number of amendments that are relevant to the bill but 
not germane. Once cloture is invoked, they will fall. I know that is a 
matter of some concern to those who are proposing those amendments, but 
I do not know how we can handle this differently and move along towards 
a resolution.
  In addition to those relevant amendments--and I have sympathy there 
because while they may not meet the very narrow definition of 
germaneness, they do touch the subject matter of the legislation--there 
are also amendments that are not even relevant to the bill that are 
sort of--I was going to say floating around, but it would be more 
accurate to say they are sort of present. They touch matters that have 
nothing to do with this legislation.
  I am frank to say to my colleagues, I do not see how we can progress 
and move towards a final vote and resolution on this issue without 
invoking cloture this morning. We tried not to precipitate that early 
on, although I know people were then blocked from getting votes, and I 
regret that. I was concerned, as anyone, to get the votes and give 
people a chance to have their amendments considered. Nevertheless, we 
are now where we are, and I urge my colleagues to vote for cloture.
  We have to move forward on this legislation. This is important 
legislation. I think the committee and my colleagues have fashioned 
legislation which will make a very important contribution toward 
addressing the serious economic challenge now confronting the country 
and this loss of confidence in the workings of our economic system. The 
fact that people cannot have any trust in or reliance on the basic 
financial information upon which they make important economic decisions 
is having a major impact on the workings of the economy and carries 
with it the very real potential of having an even more significant 
impact.
  This is serious business, and the potential for an economic downturn, 
triggered in part by the difficulties we are trying to address in this 
legislation, I think is not insignificant. So I think it is important 
that we move forward and pass this legislation. This is but one step 
along the way, and there are many steps left yet to be done.
  I am hopeful at some point the administration will come to see the 
necessity of putting into place a statutory framework to provide for an 
independent oversight board with respect to the accounting industry, to 
address the conflict that exists on the part of auditors when they are 
the auditor of a company and at the same time are providing certain 
consulting services to the company which carry with them an inherent 
conflict of interest with their responsibilities as an auditor.
  There are extensive provisions in this bill with respect to corporate 
responsibility and accountability with respect to corporate disclosure 
and, of course, with respect to the conflict of interest we have seen 
manifest with respect to stock analysts who are often in the position 
of giving buy recommendations on the stock of a company with which the 
analyst's company is also having investment banking deals which, of 
course, raises the question: Is the recommendation on the stock being 
done in order to gain the investment banking business? So we try to 
provide some, as they call them, Chinese walls between those two sides 
of the company in order to reduce the degree of that conflict.

  Furthermore, this has a very significant authorization of additional 
monies for the SEC in order to be able to meet its responsibilities, 
which I think is very important. The President asked the other day in 
his address for another $100 million. That is not sufficient. We have 
to do better than that so the SEC can do its job.
  So we can move forward, I urge my colleagues to support the cloture 
motion which will be before us for a vote at 9:30.
  I presume I have used my time, and I yield the floor so my colleague, 
the ranking Republican Member, may use his time.
  The ACTING PRESIDENT pro tempore. The Senator from Texas.
  Mr. GRAMM. Madam President, we need to pass a bill. We are going to 
conference with a House bill that is substantially different from this 
bill. I believe that between the two bills, we can find a virtually 
unanimous vote. I think we can write a bill that will satisfy the 
President and both Houses of Congress. I do not think we are making the 
bill better. The amendments that are being offered now are largely 
nongermane. We have gotten into sort of a one-upmanship position, and I 
think we are harming the markets by convincing people that the cure may 
very well be worse than the disease.
  It is very important that we get on with our business and that we 
pass this bill. I intend to vote for it today. I do not think it is the 
bill we need in the end, but it gets us to conference where we can get 
the bill we need in the end. I urge my Republican colleagues to vote 
for it, not because in the end they are for this version but because 
they want to do something. We need to bring this debate to a close. We 
do have some germane amendments. We will be dealing with those, but the 
time has come to get on about our business. Getting on about our 
business means bringing this debate to a close.
  So I urge my colleagues to vote to end the debate. Let us go to 
conference. Let us write this bill. Let us let it be known with 
certainty what our policy is going to be. If we do that, it will help 
restore confidence in the country. So I urge my colleagues to vote for 
cloture and, as we get to the end of the process, for the bill.
  I yield back the remainder of my time.
  The ACTING PRESIDENT pro tempore. The Senator from Michigan.
  Mr. LEVIN. I do not know if the manager has any time.
  Mr. SARBANES. Do I have any time remaining?
  The ACTING PRESIDENT pro tempore. The manager has no time.
  Mr. LEVIN. Madam President, I ask unanimous consent that I be allowed 
to proceed until 9:30 when cloture is invoked.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. LEVIN. Madam President, a number of amendments have been pending 
where we have been unable to get a vote. These are highly relevant 
amendments, including mine which would have given the SEC 
administrative powers to impose civil fines.
  The Republican manager said the amendments were not particularly 
relevant. Well, we had a highly relevant amendment that goes directly 
to the issue of abuses by corporate officers and corporate directors. 
The current fine structure of the SEC does not reach officers and does 
not reach directors, except by going to court. They have no 
administrative authority in the SEC to impose civil fines, the way they 
do with brokers and the way a lot of other agencies that regulate 
business have authority to do. The SEC does not have the power to 
impose administrative fines on directors and on officers of 
corporations. They should have that power administratively.
  We were blocked in getting a vote, and the amendment which is pending 
is going to fall if cloture is invoked. That is the use of the rules. 
But let it be clear what the rules were used to do, which was to 
prevent a strengthening amendment for this bill.

  It is a good bill. I compliment the sponsors of this bill. I 
compliment Senator Sarbanes and his cosponsors that this bill can be 
strengthened; it should be strengthened. One of the strengthening 
amendments was blocked from getting to a vote yesterday and will fall 
if cloture is invoked.
  We also have a question. What about postcloture? There are 48 germane 
or

[[Page S6685]]

arguably germane amendments. The question is whether or not the rules 
are going to be used again to block votes on germane amendments. I will 
object to that happening. I will do everything I can to make sure 
germane amendments, including some that I have filed, are considered 
postcloture.
  I thank the manager for yielding. I yield the floor.


                             Cloture Motion

  The ACTING PRESIDENT pro tempore. Under the previous order, the clerk 
will report the motion to invoke cloture.
  The legislative clerk read as follows:

                             Cloture Motion

       We, the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     do hereby move to bring to a close the debate on Calendar No. 
     442, S. 2673, the Public Company Accounting Reform and 
     Investor Protection Act of 2002:
         Jon Corzine, Deborah Stabenow, Paul Wellstone, Ron Wyden, 
           Daniel Akaka, Barbara Boxer, Charles Schumer, Byron 
           Dorgan, Harry Reid, Paul Sarbanes, Daniel Inouye, John 
           Edwards, Barbara Mikulski, Thomas Carper, Jack Reed, 
           Tim Johnson.

  The ACTING PRESIDENT pro tempore. By unanimous consent, the mandatory 
quorum has been waived.
  The question is, Is it the sense of the Senate that debate on S. 
2673, the Public Company Accounting Reform and Investor Protection Act 
of 2002, shall be brought to a close? The yeas and nays are required 
under the rule. The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. REID. I announce that the Senator from Hawaii (Mr. Inouye), the 
Senator from Massachusetts (Mr. Kerry), and the Senator from Louisiana 
(Ms. Landrieu) are necessarily absent.
  Mr. NICKLES. I announce that the Senator from North Carolina (Mr. 
Helms), the Senator from Ohio (Mr. Volinovich), the Senator from Idaho 
(Mr. Crapo), and the Senator from Virginia (Mr. Warner) are necessarily 
absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The yeas and nays resulted--yeas 91, nays 2, as follows:

                      [Rollcall Vote No. 173 Leg.]

                                YEAS--91

     Akaka
     Allard
     Allen
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Brownback
     Bunning
     Burns
     Byrd
     Campbell
     Cantwell
     Carnahan
     Carper
     Chafee
     Cleland
     Clinton
     Cochran
     Collins
     Conrad
     Corzine
     Craig
     Daschle
     Dayton
     DeWine
     Dodd
     Domenici
     Dorgan
     Durbin
     Edwards
     Ensign
     Enzi
     Feingold
     Feinstein
     Fitzgerald
     Frist
     Graham
     Gramm
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Hollings
     Hutchinson
     Hutchison
     Inhofe
     Jeffords
     Johnson
     Kennedy
     Kohl
     Kyl
     Leahy
     Lieberman
     Lincoln
     Lott
     Lugar
     McConnell
     Mikulski
     Miller
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Nickles
     Reed
     Reid
     Roberts
     Rockefeller
     Santorum
     Sarbanes
     Schumer
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stabenow
     Stevens
     Thomas
     Thompson
     Thurmond
     Torricelli
     Wellstone
     Wyden

                                NAYS--2

      Levin
     McCain
       

                             NOT VOTING--7

     Crapo
     Helms
     Inouye
     Kerry
     Landrieu
     Voinovich
     Warner
  The PRESIDING OFFICER (Mr. Carper). On this vote, the yeas are 91, 
the nays are 2. Three-fifths of the Senators duly chosen and sworn 
having voted in the affirmative, the motion is agreed to.
  The pending motion to recommit is out of order.
  Mr. SARBANES. Mr. President, I move to reconsider the vote.
  Mr. DASCHLE. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. DASCHLE. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BYRD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senate is not in order. The Senate will be in order. The Senate 
is not in order.
  The Senator from West Virginia.
  Mr. BYRD. Mr. President, we can have order in the Senate with 
Senators in their seats. At least they do not need to be cluttering up 
the well. I want to say a few words.
  The PRESIDING OFFICER. The Senate will be in order. The Senator will 
suspend.
  Mr. GRAMM addressed the Chair.
  The PRESIDING OFFICER. The Senator from West Virginia has the floor.
  Mr. BYRD. I have the floor.
  The PRESIDING OFFICER. The Senator from West Virginia.

                          ____________________