[Congressional Record Volume 148, Number 97 (Wednesday, July 17, 2002)]
[House]
[Pages H4838-H4847]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
APPOINTMENT OF CONFEREES ON H.R. 3763, CORPORATE AND AUDITING
ACCOUNTABILITY, RESPONSIBILITY, AND TRANSPARENCY ACT OF 2002
Mr. OXLEY. Mr. Speaker, I ask unanimous consent to take from the
Speaker's table the bill (H.R. 3763) to protect investors by improving
the accuracy and reliability of corporate disclosures made pursuant to
the securities laws, and for other purposes, with a Senate amendment
thereto, disagree to the Senate amendment, and agree to the conference
asked by the Senate.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Ohio?
There was no objection.
Motion to Instruct Offered by Mr. Conyers
Mr. CONYERS. Mr. Speaker, I offer a motion to instruct conferees.
The Clerk read as follows:
Mr. CONYERS moves that the managers on the part of hte
House at the conference on the disagreeting votes of the two
Houses on the Senate amendments to the bill H.R. 3763 be
instructed to recede from disagreement with the provisions
contained in the proposed section 1520 of Chapter 73 of Title
18 of the United States Code added by section 802, and the
provisions contained in sections 804, 805, and 806 of the
engrossed Senate amendment.
The SPEAKER pro tempore. Under the rule, the gentleman from Michigan
(Mr. Conyers) and the gentleman from Ohio (Mr. Oxley) each will be
recognized for 30 minutes.
The Chair recognizes the gentleman from Michigan (Mr. Conyers).
Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume.
This motion to instruct conferees would be to ask the acceptance of
four antifraud measures contained in the Senate measure that were not
included in yesterday's suspension bill. These provisions relate to
document retention, statute of limitations, whistleblower protection,
and sentencing enhancement. All of these were contained in the same
measure in the other body that enjoyed a 97 to 0 vote last week.
First, we would ensure that auditors maintain their audit review and
other work papers for a period of 5 years after the conclusion of an
audit review. This will make sure that evidence of potential accounting
fraud is retained for future investigation. In addition, the motion
would give defrauded investors more time to seek relief. Under current
law, defrauded investors have a year from the date on which the alleged
violation was discovered or 3 years after the date on which the alleged
violation occurred; but because these types of wrongs are often
successfully concealed for years, the other body increased the time
period to 2 years after the date on which the alleged violation was
discovered or 5 years after the date on which the alleged violation
occurred.
{time} 1715
And this motion to instruct carries that provision.
In addition, we protect corporate whistleblowers. In the other body
that measure was contained in the Grassley amendment, which extended
whistleblower protections to corporate employees, thereby protecting
them from retaliation in cases of fraud and other acts of corporate
misconduct. Those like Sharon Watkins should be afforded the same
protections as government whistleblowers.
The last provision in the motion to instruct would provide for strong
sentencing enhancements. In the other body the bill included the Leahy-
Hatch sentencing enhancements when a securities fraud endangers the
solvency of a corporation and for egregious obstruction of justice
cases where countless documents are shredded or destroyed.
Now, the Enron scandal broke in November 2001. Since then, our stock
market and the economy as well have been devastated by a wave of
scandals: Arthur Andersen, Global Crossing, Xerox, MCI, Merck, Quest
and others. Tens of billions of hard-earned pension and retirement
dollars have evaporated while those at the top of the corporate ladder
have cashed out their options.
During this period of time, no person, not a single individual, has
faced a single indictment from the Department of Justice. My
instructions will give the Department the tools that they need to
protect our investors and bring some of these people who have escaped,
so far, to justice.
It is my hope that we will get the support that is needed to instruct
our conferees in this fashion.
Mr. Speaker, I reserve the balance of my time.
Mr. OXLEY. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, having just seen this document, the motion to instruct,
I would have to say to my friend, the gentleman from Michigan, that
most of the issues that he talks about in his motion I have a great
deal of empathy for. Certainly the issue over document destruction, of
whistleblower protections, and the like, are all part and parcel of
what ultimately I think this legislation needs to look at.
I have some concerns, as the gentleman might expect, regarding the
language of the extension of the statute of limitations in regard to
lawsuits. As the gentleman knows, back in
[[Page H4839]]
1995, Congress, on a bipartisan basis, passed the Securities Litigation
Reform Act. That was vetoed by then-President Clinton and was the only
veto ultimately overridden. So, in fact, the House and the Senate spoke
very loudly in 1995 on that issue.
It is also true that Chairman Greenspan, when asked in the Senate
yesterday, when he testified as to whether he saw any need to change
the existing statute in regard to securities litigation reform,
answered in the negative. So we are, on this side, somewhat perplexed
that the minority would choose this particular issue, which was
ultimately not part of the legislation that came out of the Committee
on Financial Services, the committee of major jurisdiction, so I have
some concerns about that part.
On the other hand, it seems to me those are the kinds of issues that
we need to work towards and to complete in a conference.
Mr. Speaker, I reserve the balance of my time.
Mr. CONYERS. Mr. Speaker, I am pleased to yield such time as he may
consume to the gentleman from New York (Mr. LaFalce), the distinguished
ranking member of the Committee on Financial Services.
Mr. LaFALCE. Mr. Speaker, I thank the distinguished ranking member of
the Committee on the Judiciary, the gentleman from Michigan, for
yielding me this time.
I think the best thing that this House could have done would have
been to accept the Senate-passed bill as is. Pass it today and send it
today to the President for his signature. I cannot think of anything
else that would have restored as much integrity to our publicly traded
markets, as much confidence on the part not just of the American public
but the world in the integrity of those markets of that single act.
I would still like to hear President Bush call for passage by the
House of Representatives of the bill that passed the Senate 97 to 0.
Now, my colleagues like to talk about bipartisanship. Ninety-seven to 0
is unanimous with respect to every single Senator from both parties
that was voting. They were able to forge a consensus. If they can forge
a consensus 97 to 0, and if the President really wants to sign a bill
before the end of July, as he said, that is the approach we should
take.
Now, unfortunately, the House Republican leadership does not want to
take that approach. However, there are alternatives. We could take up
the Senate bill and offer one or two amendments to it. If there are
four or five or six amendments, my colleagues could offer those four,
five, or six amendments to the Senate bill and send it back to them.
And that would be a very expeditious way of proceeding.
What I am fearful of is that this conference that my colleagues want
to go to could be two things: Number one, long and drawn-out; and,
number two, an opportunity to dilute behind the scenes and closed doors
the strong provisions of the Senate bill. And we are not going to let
that happen.
I want to put everyone on notice right now that on every single issue
where we differ from the Senate I intend to have total transparency.
There will be a revelation to the world of every single issue and
difference and every single vote within conference. There will be total
transparency so that they can understand what we are trying to do to
protect the American investor and what others might be trying to do.
Now, with respect to the motion of the gentleman from Michigan, what
he is trying to do is say that at the very least there are certain
provisions within the Senate-passed bill that the House should recede
to. It is basically the Sarbanes-Leahy bill, and the ranking member of
the House Committee on the Judiciary has focused in on the Leahy
provisions, particularly section 802, dealing with the criminal
penalties for the altering of documents; section 805, mandating a
review of the Federal sentencing guidelines; section 806, creating a
private cause of action for whistleblowers if they are in any way
discriminated against, a civil cause of action; and very, very
importantly, a statute of limitations, because the statute of
limitations issue that we are talking about was not dealt with by this
Congress. The statements that we did were erroneous.
We need to deal with that because, unfortunately, by the time we
discovered the wrongdoing that took place in the Enron case, in the
Global Crossing case, in the WorldCom case, et cetera, the private
cause of action may have seen the statute of limitations expire. So we
need more time. That is an essential and important provision.
There is no reason whatsoever for opposing that. There is no reason
whatsoever for opposing any of those provisions. And because of that,
the distinguished gentleman from Michigan has said let us instruct the
conferees to recede to the Senate on those issues.
If my colleagues oppose this motion to instruct, that means that they
oppose those particular provisions within the Senate bill. Let there be
no mistake about that. So the issues will be quite clear when we do go
to a vote on this motion to instruct.
Mr. OXLEY. Mr. Speaker, I yield 3 minutes to the gentleman from
Michigan (Mr. Rogers).
Mr. ROGERS of Michigan. Mr. Speaker, I want to commend the chairman
on his work in gaining corporate responsibility. I would not stand here
today if I did not believe at the end of our session here before recess
that we would not have a bill on the President's desk.
Just in the last few weeks, the Dow Jones Industrial saw about a 10
percent decline. Yesterday, just yesterday alone, $152 billion of
wealth disappeared; $2.6 trillion just this year alone. Those are big
numbers.
Now, we heard from my good friends in the minority about process and
what goes where and about a very long drawn-out process. But let me say
this: The other day I had a woman at a coffee who came in, an elderly
woman, and she could not get three words into her story before she
started to shake and tears started running down her face because she
was just informed that they would not be able to retire in 12 months.
Too much of their 401(k), too much of their retirement, was gone.
Now, let me tell my colleagues what they understand, my colleagues.
They do not care whose name is on the bill. They do not care what
process is used to get to the bill. They want trust, they want
accountability, and they want somebody to pay the price for stealing.
They understand that whether someone wears an Armani suit or a cheap
ski mask, if they steal money, they ought to go to jail. They want us
to understand that they are counting on us in Congress, not
Republicans, not Democrats, not a name on a bill, but all of us to
stand up together and say we are going to reinvigorate the trust and
confidence in our American markets.
I think today that will happen. I am very, very pleased at what this
chairman has done and what he has committed to do, and with that, I
intend to enter into a colloquy with the chairman.
The gentleman from Ohio is going to be the chairman of the conference
committee that will hear this matter in conference; is that not true?
Mr. OXLEY. Mr. Speaker, will the gentleman yield?
Mr. ROGERS of Michigan. I yield to the gentleman from Ohio.
Mr. OXLEY. Mr. Speaker, the gentleman is correct.
Mr. ROGERS of Michigan. Reclaiming my time, Mr. Speaker, the
gentleman has made a commitment, and today a very public commitment,
that by the end of next week, before this House recesses, the President
will have on his desk to sign into law a bill that upholds the
principles that the gentleman has fought so hard for these last few
months on corporate responsibility; is that correct?
{time} 1730
Mr. OXLEY. Mr. Speaker, if the gentleman will continue to yield, I
want to assure the gentleman from Michigan (Mr. Rogers) that is exactly
what our goal is. The President has tasked this Congress to get a bill
to his desk before the August break. The Speaker has done the same. I
am committed, and I think all of us are committed, to getting that job
done.
Mr. ROGERS of Michigan. Mr. Speaker, reclaiming my time, we have
heard from the gentleman who has given his commitment. Do not talk
about months; do not talk about weeks. Do not let one more tear fall on
the statement of a 401(k) plan. Let us work together and get this done
for the people of America. It is too important.
[[Page H4840]]
Mr. CONYERS. Mr. Speaker, I yield 2 minutes to the gentleman from New
York (Mr. LaFalce).
Mr. LaFALCE. Mr. Speaker, I am delighted that the gentleman wants to
work together. That is what we want to do. We want to instruct the
conferees to accept these specific four provisions of the Senate-passed
bill. If the gentleman wants to work with us, let us vote for this
motion to instruct the conferees, unless the gentleman opposes those
four provisions. If he opposes those four provisions, or portions of
them, the gentleman should come to the floor and tell us what he
opposes about them. I do not think that we could be any more
cooperative than that.
Mr. OXLEY. Mr. Speaker, I yield 1 minute to the gentleman from
Florida (Mr. Foley).
Mr. FOLEY. Mr. Speaker, we talk about important bills, and this is
one of them. I support the gentleman from Ohio (Mr. Oxley), who has
worked very hard on this issue. I also want to see this issue resolved
by next week.
The Democrats talk about the Sarbanes bill as if it is the end-all,
be-all bill on this floor. While I was on the Senate floor watching the
debate, they resisted Senator McCain's efforts to include language
relative to options. They did a procedural effort to stop calculating
options in the corporate environment. So it is not perfect.
But I have been given assurances by the gentleman from Ohio (Mr.
Oxley), the chairman of the Committee on Financial Services, that he is
going to go into the room and see that we have a final working product
with Senator Sarbanes, who I have a great deal of respect for on this
issue; and I believe that is going to be accomplished.
The gentleman from Michigan (Mr. Rogers) enunciated some of the
concerns that I have as well: stabilizing the markets, ensuring
integrity, bringing relief.
I will not be supporting the motion to instruct. I am going to work
with our chairman, and I hope that we will deliver a product. But I can
assure the House that we will be back on Wednesday and Thursday if it
is not delivered to the floor for a vote.
Mr. CONYERS. Mr. Speaker, I yield 2 minutes to the gentleman from New
York (Mr. LaFalce).
Mr. LaFALCE. Mr. Speaker, I have great regard for the gentleman from
Florida (Mr. Foley), and even higher regard because of the letter which
he sent out saying, let us send something to the President's desk
before we recess, and if need be, the Senate-passed bill. I thank the
gentleman very much for that.
With respect to the issue of the expensing of stock options, I would
love to have FASB promulgate a requirement that stock options be
expensed. I have called for that since 1994 when FASB recommended that.
But unfortunately, there was so much pressure within Congress to do
that that FASB withdrew it as a mandate and merely said do it
voluntarily. Only two companies in the world did it.
At the very least, the Senate bill does say to FASB reconsider that
issue and if they think it should be mandated, mandate it. The House
bill is absolutely silent on that. So if Members want the ranking
member from Michigan to alter his motion to instruct the conferees to
get them to accept that provision of the Senate bill, I will do what is
within my power to get him to so amend that amendment.
The House bill is silent on the issue of expensing. We on this side
of the aisle want FASB to reconsider it and not just recommend it, but
require it, as Warren Buffitt says we should do, as Alan Greenspan says
we should do, as Coca-Cola said they will do, as BankOne said they will
do, and as the Republicans have repeatedly said, let us not do.
Mr. OXLEY. Mr. Speaker, I yield 2 minutes to the gentleman from
California (Mr. Cox), a valuable member of our committee.
Mr. COX. Mr. Speaker, I have read carefully the very brief motion to
instruct conferees and the underlying provisions of the Senate-passed
bill that the House would recede were we to adopt this. I am surprised
that the motion to instruct focuses on the criminal provisions of the
House and the Senate bills respectively because it is well known that
the House-passed bill that we adopted here earlier this week by a vote
of 391 to 28 is much tougher than the Senate bill.
The specific provision concerning shredding of documents that this
motion to instruct would have us adopt, we would recede to the Senate
position, drop any disagreement with the Senate position, would have us
adopting a 10-year maximum sentence for shredding documents. But just a
few days ago by a vote of 391 to 28, virtually every Member sitting on
the floor right now voted for a maximum sentence of 20 years.
I cannot understand why, if we want to be tough on corporate fraud,
if we want to be tough on corporate wrong-doers, we would focus on this
portion of the disagreement between the House and Senate bill and
substitute the far-weaker provisions of the Senate bill.
The Senate bill provisions that we are asked to accept in this motion
to instruct also include obstruction of justice penalties. The maximum
penalty for obstruction of justice in the House-passed bill earlier
this week is 20 years, significantly lengthening the provisions under
existing law. What the Senate bill does on this point is ask the United
States Sentencing Commission to review the sentencing guidelines and do
what they think is necessary to deter offenders.
Adopting the far weaker provisions of the Senate bill in this
respect, where we know that the criminal provisions enacted by this
House are much tougher, makes no sense at all; and I regretfully must
oppose this motion to instruct conferees.
Mr. CONYERS. Mr. Speaker, I yield 3 minutes to myself.
Mr. Speaker, I must say to the gentleman from California (Mr. Cox)
the conference is on the Sarbanes bill and the Oxley bill. This motion
to instruct in no way changes anything in either of the two bills, and
it merely adds some items in the unanimously reported Sarbanes bill.
Mr. COX. Mr. Speaker, will the gentleman yield?
Mr. CONYERS. I yield to the gentleman from California.
Mr. COX. Mr. Speaker, as a conferee, I certainly would urge, and I
believe it is the general intent of all of the conferees in the House
to urge, as the House position in this conference when it comes to
criminal changes, criminal law changes, to urge the House-passed bill
be included in the conference report.
Were we to adopt this motion to instruct, we would undermine that
position of the House. We would be required to take the much weaker
Senate provisions.
Mr. CONYERS. Mr. Speaker, all we want to do is add these four
recommendations to the two bills. We are not diluting anything. There
is no dilution in here. I just want the gentleman to understand what is
going to conference and what it is we are giving instructions on.
Mr. COX. Mr. Speaker, if the gentleman will continue to yield, the
dilution is moving from the House position of 20 years maximum sentence
for shredding of documents and for obstruction of justice to 10 years.
Mr. CONYERS. Mr. Speaker, reclaiming my time, no, what we are dealing
with is document retention. We deal with audit review, statute of
limitations, whistleblower protection, and sentencing enhancement. If
the gentleman from California (Mr. Cox) is confused on this, there may
be some other Members that are not clear on this.
We are talking about document retention, statute of limitations,
whistleblower protection, and sentencing enhancement only. We are not
reducing any time for shredding or anything else.
Mr. OXLEY. Mr. Speaker, I yield 3 minutes to the gentleman from
California (Mr. Thomas).
Mr. THOMAS. Mr. Speaker, I apologize for attempting to create a
partisan approach to dealing with a very real problem.
I think all of us are intending to make a good bill better. But one
of the things we have to be cautious about is in examining the Senate
bill which has been brought over is to be reminded that article I,
section 7 of the Constitution says, ``All bills for raising revenue
shall originate in the House of Representatives.''
Referring back to the opening of the 102nd Congress in which the
Congressional Record reflected, and I will
[[Page H4841]]
have this made a part of the Record at the appropriate time,
``jurisdictional concepts related to clause 5(b) of rule XXI.''
This is an attempt to create a systematic approach: ``In order to
provide guidance concerning the referral of bills to assist committees
in staying within their appropriate jurisdictions under rule X, to
assist committees without jurisdiction overtax or revenue measures, it
should be emphasized that the constitutional prerogative of the House
to originate revenue measures will continue to be viewed broadly to
include any meaningful revenue proposal that the Senate may attempt to
originate.''
I would tell the gentleman in reviewing the Sarbanes bill, especially
in terms of the scope of the board under section 108 on page 61 and the
requirement that the fees be raised necessary to meet the needs of the
board, when we take those two provisions along with several others,
there is no narrowly defined board which would produce narrowly defined
fees which could meet the test of fees.
When we have a broadly based, loosely determined jurisdiction of a
board and a commitment that mandatory fees cover all of those
activities, we begin to slip into the area Speaker Foley rightly
referred to as broadly to include any revenue proposals.
The constitutional and institutional prerogative of the House I would
hope everyone would want to maintain. We do not want to delay producing
this product, given the commitment of the chairman on a very tight time
line. We just want to make note of the fact that we believe there is a
possibility of this violation. As this bill goes to committee, I
understand that the Committee on Ways and Means will be conferees. We
will work with everyone to make sure that the fees that are called fees
in the Senate truly are fees that do not violate the revenue provision
and/or we will work together to produce a product which the House
participates in, protecting our constitutional prerogative to generate
revenue. The goal is not to stop progress, but to make sure that it is
done correctly.
Mr. CONYERS. Mr. Speaker, I yield 2 minutes to the gentleman from New
York (Mr. LaFalce).
Mr. LaFALCE. Mr. Speaker, I heard this morning that the gentleman
from California (Mr. Thomas), the chairman of the Committee on Ways and
Means, had contemplating issuing what is known as a ``blue slip.'' That
is a document that would have precluded the House from going to
conference with the Senate on the Senate-passed bill on the grounds
that it had violated a constitutional prerogative. I disagree with his
interpretation, but I am pleased he realized if he did proceed on the
course that he outlined this morning, the issuance of his blue slip
would have caused thousands of pink slips across America.
{time} 1745
However, my primary concern now that he has not exercised what he
intended to is what will happen when we go to conference because the
chairman of the conference committee has publicly said within the past
several days that what we need is a cooling-off period, a cooling-off
period. Rather than expeditious action, he has publicly called for, it
has been printed in the paper, a cooling-off period. We need action. We
need action before we recess. We are not cool right now. We are hot. We
want action while we are hot because that is when we can get a tough
law on the books. We do not need time to cool off. We need to pass a
tough bill and send it to President Bush and he will sign whatever we
send to his desk and we know that.
Let us make it good and tough.
Mr. THOMAS. Mr. Speaker, will the gentleman yield?
Mr. LaFALCE. On your time.
Mr. THOMAS. He has not dropped the gavel, so I assume there is still
time on your time.
The SPEAKER pro tempore (Mr. Dan Miller of Florida). Does the
gentleman from New York yield back the time?
Mr. LaFALCE. Yes, to the gentleman from Michigan.
Mr. THOMAS. So the gentleman voluntarily removes the time.
Mr. LaFALCE. I would be pleased to answer any questions on your time.
Mr. OXLEY. Mr. Speaker, I am pleased to yield 1 minute to the
gentleman from California (Mr. Thomas).
Mr. THOMAS. Mr. Speaker, I was not interested in yielding to ask the
gentleman a question but merely to clarify that the gentleman is adept
at putting words in people's mouths. I did not say that I was going to
blue-slip it. At no time did I say I was going to blue-slip it. The
determination was whether or not it was blue-slippable, and those are
two entirely different things, in an attempt to create an appearance
that we were slowing the process down. All I wanted to do was make sure
that constitutionally and institutionally we did it correctly. I would
assume that would be in the interest of all Members of the House, in
fact, anyone who raised their hands and swore to uphold the
Constitution.
I thank the gentleman for yielding the time.
Mr. CONYERS. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Washington (Mr. Inslee).
(Mr. INSLEE asked and was given permission to revise and extend his
remarks.)
Mr. INSLEE. Mr. Speaker, I think one thing that we all know about all
Americans of whatever party today is that they do not want weak tea,
they want strong medicine to deal with this economic crisis. They do
not want passivity. They want action. The majority party is giving them
nothing but delay and inaction. Did the majority party just pass a 97-0
vote in the Senate? No. Will they accept this substantive amendment to
give instructions to the committee? No.
But let me tell you what the majority party leadership did 5 days
ago. I read about this in the newspaper today. The leadership of the
Committee on Energy and Commerce in the midst of this economic crisis
had time to send a letter to the Public Broadcasting System to complain
about the introduction of a new Muppet character. It was not the
gentleman from Ohio (Mr. Oxley), of course, but the chair of another
committee. These majority party Members did not think it was right to
have a new Muppet that had HIV. They thought that was a problem they
had to deal with.
Well, America wants an answer to this question. If the majority party
can stand up to Sesame Street, why will you not stand up to Wall
Street? If you will deal with the Cookie Monster, why will you not deal
effectively with the moral monsters who are stealing America's
retirement accounts? That is what America wants to know. It is not
enough simply to say you are going to increase jail time, and I will
tell you why not. When we were dealing with the terrorist threat to our
air system, did we think our job was done by just saying everybody that
blows up an airplane gets 50 years instead of 25 years? Did we consider
our job done when we did that? No. We developed a security system to
check to make sure terrorists do not get into our airplanes, and now we
need a security system to make sure fiscal terrorists are not taking
over the boardroom.
You need to join with us and stop messing around with Sesame Street
and start taking on Wall Street to save people's retirement incomes.
Mr. OXLEY. Mr. Speaker, may I inquire of the time remaining on both
sides?
The SPEAKER pro tempore. The gentleman from Ohio (Mr. Oxley) has
18\1/2\ minutes and the gentleman from Michigan (Mr. Conyers) has 9\1/
2\ minutes.
Mr. OXLEY. Mr. Speaker, I yield 1 minute to the gentleman from
Delaware (Mr. Castle), a valuable member of the Committee on Financial
Services.
Mr. CASTLE. Mr. Speaker, I rise a little bit perplexed about the
motion to instruct conferees in that it appears to me that the
Republican-passed legislation calls for stricter penalties from a group
which is asking for stronger measures which does not seem quite right.
But that is not really what I want to speak to right now. What I want
to speak to is the fact that the Senate, in my judgment, has adopted a
very good piece of legislation, at least as I know it, the Sarbanes
legislation. But there are some questions about that that I certainly
have and that I think conferees would have. The House has also passed,
in my judgment, a very good piece of legislation, frankly not that
[[Page H4842]]
dissimilar from the Sarbanes legislation, and it also has provisions in
it that I think should be looked at. I believe that the right way to do
this is to go to conference, not to instruct the conferees as to what
to do. Let them make their decisions on the timetable as outlined by
the chairman of the Committee on Financial Services here before us
tonight to look at some of the House issues as well as some of the
Senate issues. The real-time disclosure, in my judgment, is a real
issue. The FAIR account to return money to investors which the
gentleman from Louisiana (Mr. Baker) got done, I think, is very
significant. This whole issue of the criminal penalties we are talking
about right now is very significant. I believe that we can do this.
I believe we can adopt good legislation with good committee review,
with good staff review, something I agree with that has been said on
the other side, the President will sign this, and when he does, I
believe we will have legislation which the investors in America can
look to and say, this will help us make our decisions about the future
of corporate America.
Mr. CONYERS. Mr. Speaker, the manager on the other side has twice as
much time remaining as I do.
Mr. OXLEY. Is that a good thing or a bad thing?
Mr. Speaker, I am pleased to yield 2\1/2\ minutes to the gentlewoman
from New York (Mrs. Kelly).
Mrs. KELLY. Mr. Speaker, this morning I asked Chairman Greenspan a
question which is directly relevant to this motion to instruct. My
question was:
``Do you think that increasing the ability for individuals to sue
corporations for inaccuracies in their statements is a proper goal for
this kind of legislation?''
I am quoting now from Mr. Greenspan's response. He said:
I think not. I don't see that has any particular economic
advantage. The issue is a technical one and a complex one and
should be really under the aegis of the Securities and
Exchange Commission. And they should be taking the actions
which are required to redress inaccuracies, mistakes,
malfeasance and the like. I don't think you gain anything by
increasing the ability to sue the company. Because remember
that it is shareholders suing other shareholders. That is
what it is.
Republicans are committed to strengthening this legislation in
conference by including real-time disclosures, adding a provision to
ensure that investors and not trial lawyers are the beneficiaries of
funds recovered from corporate malfeasance and adding tougher penalties
to corporate fraud.
If the Senate had not dragged its feet, this bill would have been
done months ago. But for whatever cynical reasons they have, the Senate
chose to play politics with this issue. And for the same cynical
reasons, the Democratic leadership is threatening to drag out any
conference for 2 months.
Mr. Speaker, I ask my colleagues on both sides of this aisle to join
us in voting against this motion to instruct and for a stronger
corporate accountability law.
Mr. CONYERS. Mr. Speaker, the manager on the other side still has
twice as much time left as we do.
Mr. OXLEY. Then we will continue to plod on.
Mr. Speaker, I am pleased to yield 3 minutes to the gentleman from
Louisiana (Mr. Baker), the distinguished chairman of the Subcommittee
on Capital Markets.
Mr. BAKER. I thank the gentleman for yielding me this time.
Mr. Speaker, this is a very important matter that the House must
consider this evening and I do appreciate the recommendations the
gentleman has made in his motion to instruct. All of those issues will
certainly be the subject of conversation during the course of this
important conference.
I am surprised that the motion to instruct did not include the
specific directions to adopt the provisions contained in the Senate-
passed bill, the Sarbanes bill, since it has been viewed by so many as
being the answer to the problem. But as is always the case, no
legislative product is the perfect answer for all issues. I
respectfully suggest that the Sarbanes bill is no different. There is
work to do.
For example, the Sarbanes bill does not make provision with regard to
real-time material fact disclosure. What does that mean? That means if
the corporate manager knows it and it is something that affects
shareholder value and he does not report it until the 90-day quarterly
earnings statement, you have terrific volatility in the markets and
prices go up and down. We unfortunately are seeing that to great
extreme today. That is why companies all too often file what they call
pro forma returns. They get something out early that is not really a
total disclosure, but it is something to help defuse the volatility of
the quarterly earnings report.
Real-time material disclosure says if you know it, you got to tell
it. If you know it and you do not tell it, that is a criminal penalty.
If you did not know it but should have, that is a civil penalty. We
want to talk about what real-time material fact disclosure means. That
will be the subject of the conference, because that is in the House-
passed bill. But what has not been in either bill, and unfortunately I
did not see in the motion to instruct, is to do something to actually
help the defrauded investor. It troubles me to get home in the evening,
turn on the TV and see some millionaire in Mississippi with an $18
million mansion who has run a corporation into the ground and we cannot
get the house because he built it with shareholder-defrauded funds. We
want to include a fair fund that says within the SEC all fines, all
penalties, everything that is disgorged, that means taken back from the
guys who have gotten ill-gotten gains, put it into an account and then
let the SEC be bound to distribute 90 percent or more of it to the
defrauded investor. With all due respect, we are not into a transfer of
wealth. We do not want to take corporate wealth and give it to trial
lawyer wealth by simply creating new causes of action while the
shareholder sits on the sidelines and watches assets be spent in the
courts while the fellow is down in the Caribbean enjoying a $150-
million-a-year lifestyle. We need to fix that, and we are going to.
In summary, the gentleman from California (Mr. Cox) talked about the
fact that the House-passed criminal penalties for inappropriate conduct
are twice what are now suggested by the motion to instruct. If you want
to be tough on criminals, if you want to get the money back and you
want to give information to investors, please defeat this motion to
instruct.
Mr. CONYERS. Mr. Speaker, the other side now has 12 minutes remaining
and I have 9. I would recommend that they continue to carry on the
debate.
Mr. OXLEY. Mr. Speaker, I think the gentleman from Michigan has
several speakers available in the bullpen. We are prepared to listen to
their dulcet tones.
The SPEAKER pro tempore. Does the gentleman from Michigan wish to
yield time? Who wishes to yield time?
Mr. OXLEY. Mr. Speaker, we have no further speakers at this time. I
would ask the gentleman if he is prepared to yield back the balance of
his time and we could proceed to a vote.
Mr. CONYERS. Mr. Speaker, I am very pleased to yield 4 minutes to the
gentleman from Michigan (Mr. Dingell), the dean of the House.
(Mr. DINGELL asked and was given permission to revise and extend his
remarks.)
Mr. DINGELL. Mr. Speaker, I have heard the name Alan Greenspan
mentioned on several occasions in connection with this. This is what
Alan had to say yesterday:
``Even a small increase in the likelihood of large, possibly criminal
penalties for egregious misbehavior of CEOs can have profoundly
important effects on all aspects of corporate governance because the
fulcrum of governance is the chief executive officer.''
What he is saying there is, put them in jail, they will understand.
The problem here is that the bill that the House has passed has nothing
on criminal penalties but the bill passed yesterday does. The motion to
instruct takes care of that problem.
I think we ought to adopt the Senate bill because the Senate bill is
a good bill. The House bill is nothing. It is pablum. On the 30th of
June, the New York Times warned that there is a staggering rush of
corporate debacles and that they are raising a disturbing question: Can
capitalism survive the capitalists themselves? It should be noted the
market has fallen, it should be noted the dollar is weaker, all of
which, experts say, is related to the behavior of Global Crossing,
Enron,
[[Page H4843]]
Adelphia, WorldCom and others. We need strong medicine, not a placebo.
The Washington Post has pointed out that a distinguished member of
this body is punting because apparently my friends on the other side
are not real anxious to pass strong bills and strong legislation like
the Senate. The House-passed bill purports to set up a lot of things,
including a regulatory board, to oversee accountants, but it really
does not mean anything because it really does not do anything.
{time} 1800
The House-passed bill does not require an outright halt of the
peddling of lucrative consulting services to audit clients and the
conflicts that ensue.
The House-passed bill does nothing about the revolving door between
auditors and clients.
The House-passed bill ducks many important issues such as the
conflicts of interest between Wall Street analysts and credit-rating
agencies, by relegating them to, guess what? Studies. The bill is
replete with studies, but there is no strong Federal policy direction
here.
Let us look at what the Senate bill does. It improves the timeliness,
quality, and transparency of financial reporting. It creates an
independent Public Company Accounting Oversight Board to strengthen the
regulation of, guess who? The accountants, who certainly need
regulation, because there has been more misbehavior there than there
has been outside of a red light district. It would ban consulting
services that clearly compromise the independence of accountants and
auditors. It would enhance the accounting standards process and provide
independent funding for the FASB. It would increase accountability of
corporate officers and boards of directors. It would require
objectivity and independence by securities analysts, and it would
enhance SEC resources and authority. It would increase criminal
penalties for corporate securities frauds that figured in the recent
chain of debacles.
Mr. Speaker, it is time we passed strong legislation to stop the
misbehavior in the corporate behavior and in the accounting profession
that is shaking the faith of the American people and that is raising
real questions about the viability of our securities markets and the
well-being of capitalism in this country.
Vote for the motion to instruct and vote for a strong bill. We have
had enough nonsense in this place.
On June 30, 2002, the New York Times warned that the ``staggering
rush of corporate debacles is raising a disturbing question: can
capitalism survive the capitalists themselves?''
Confidence in U.S. capitalism has been dealt a severe blow. U.S.
investors and foreign investors are fleeing stocks in droves.
From Enron to Global Crossing, Adelphia to WorldCom, and many more
examples, companies lied about their performance, the watchdogs slept
or were complicit, and investors and employees paid a dear price.
To cure this problem, we need strong medicine, not a placebo.
On April 24, 2002, a Washington Post editorial entitled ``Mr. Oxley
Punts'' lambasted the House bill for taking ``half-steps and side-
steps.''
The House-passed bill purports to step up a new regulatory board to
oversee and discipline accountants, which everybody agrees is needed,
but the bill includes no details on the board's staffing and budget and
provides inadequate disciplinary authority.
The House-passed bill stops short of requiring an outright halt to
the peddling of lucrative consulting services to audit clients and the
conflicts that ensue.
The House-passed bill also says nothing about the revolving door
between auditors and their clients.
The House-passed bill ducks many important issues, such as the
conflicts of interest among Wall Street analysts and credit rating
agencies, by allegating them to studies. The bill is replete with
studies rather than the strong Congressional policy direction that is
called for.
I therefore urge the House to accept the Sarbanes bill.
It would: Improve the timeliness, quality, and transparency of
financial reporting; create an independent Public Company Accounting
Oversight Board to strengthen regulation of, and where appropriate
disciplinary actions against, firms that audit public companies; ban
the consulting services that clearly compromise auditor independence;
enhance the accounting standards setting process and provide
independent funding for FASB; increase the accountability of corporate
officers and boards of directors; require objectivity and independence
by securities analysts; enhance SEC resources and authority; and
increase criminal penalities for the corporate and securities frauds
that figured in the recent chain of debacles.
This morning's Washington Post reports on the front page for all the
world to see that ``House Republicans say they will try to delay, and
likely dilute, some of the proposed changes.''
Shame on the GOP! And shame on the House if decent Members in this
body allow such a travesty to occur.
[From the Washington Post, April 24, 2002]
Mr. Oxley Punts
The House is due to vote today on a package of post-Enron
reforms prepared by Rep. Michael Oxley (R-Ohio), chairman of
the Financial Services Committee. The bill is a troubling
sign of how easily the momentum for reform can be dissipated.
Though it purports to deal with many of the audit reforms
discussed during dozens of congressional hearings since
January, it actually pulls its punches. Democrats will get a
chance to offer some better provisions in the House today,
but nobody expects them to pass. It will be up to the Senate,
if it can ever terminate its interminable debates on energy,
to produce a stronger bill.
The Oxley bill purports to set up a new regulatory board to
oversee and discipline auditors, which everybody agrees is
needed. But it would not give this body powers of subpoena,
which would undermine its authority; and it would allow
auditors to fill some of the board's positions, which could
undermine its independence. The details of the new board
would be left to the Securities and Exchange Commission,
which would have to decide among other things how the new
body would be funded. Given the SEC's vulnerability to
industry lobbying, there is a danger that the result will
fall short of what's needed.
The Oxley bill takes other half-steps and side-steps. It
directs the SEC to prohibit auditors from performing certain
types of consulting services for their clients, but it stops
short of requiring an outright halt to consulting and the
conflicts of interest that ensue. The bill says nothing about
the revolving door between auditors and their clients--Enron,
for example hired several Arthur Andersen auditors--even
though auditors who are angling for jobs from their customers
are unlikely to show much independence from them. The bill is
also silent on the rotation of audit firms. If an auditor
knew that, after a few years, a different outside auditor
would scrutinize its efforts, this would create a strong
incentive to keep the numbers honest.
The Oxley bill does at least boost the SEC's budget
substantially, and it has the right mood music. But given the
outrage that Congress has expressed about the Enron scandal,
that is a weak effort. Just this week, Enron announced that
it had discovered a further $14 billion worth of assets in
its balance sheet that don't really exist after all, and it
confessed that a ``material portion'' of this overstatement
was due to accounting irregularities. This kind of confession
further undermines investors' trust in financial disclosures.
Congress needs to restore that trust with tough legislation.
Perhaps the Senate can deliver if the House won't.
____
Mr. OXLEY. Mr. Speaker, I yield myself such time as I may consume.
I am constantly amazed. The minority party offered a motion to
instruct that basically tells the House we ought to accept lower
penalties instead of the higher penalties that this House passed just
this week. I am frankly stunned at that. I want to make it clear that
House Republicans support a much stronger bill and reject the kind of
efforts to weaken this bill that our friends on the other side have
projected.
Mr. Speaker, I yield 2 minutes to the gentleman from Ohio (Mr. Ney).
Mr. NEY. Mr. Speaker, I rise in opposition to the motion to instruct
conferees.
This motion would hinder the House's ability to have a meaningful
conference with the Senate on H.R. 3763. The Senate does not equate to
perfection. We have two bodies here, and this is an important issue.
Mr. Speaker, it is also important that we have a conference on this
important bill so that we have the ability to negotiate on all the
issues contained in this bill. It is vital to protecting investors and
creating the best legislation we can possibly bring to the American
people.
For example, there are some provisions in the House-passed version
that are not in the Senate version that I believe will increase
investor protections, transparency, and improve disclosure. The
gentleman from Ohio (Chairman Oxley) and the gentleman from Louisiana
(Chairman Baker) have done a good job, and a lot of time has been put
into this.
[[Page H4844]]
But let me just say something in addition to what the gentleman from
Ohio (Chairman Oxley) just mentioned. I think this is very important
for anybody who has any doubt. We had a 391 to 28 vote here. Mr.
Speaker, H.R. 5118, in the Senate, increased the penalties for fraud to
a maximum of 10 years. The House increases the penalties for mail and
wire fraud from 5 to 20 years and creates a new securities fraud
section and carries a maximum penalty of 25; 25 versus 10. I think we
are a little bit better, obviously.
The Senate, the maximum penalty for destruction of records and
documents is 10 years. The House strengthens laws that criminalize
document shredding and other forms of obstruction of justice and
provides a maximum of 20 years. The Senate 10, House 0.
Under the Senate version, the maximum penalty a corporate officer
would face is a $1 million fine and 10 years in prison. The House, $5
million and 20 years. One and 10; 5 and 20.
The last provision I wanted to mention does not change the current
penalties of a maximum fine of $1 million and 10 years in prison;
corporations would still only face a maximum fine of $2.5 million. The
House increases the criminal penalties for those who file false
statements with the Securities and Exchange Commission to a maximum
penalty of $5 million and 20 years; 1 and 10 in the Senate, 5 and 20 in
the House.
It is so clear, and the rhetoric is unbelievable here tonight. We are
the strong version. We are the version that is right for the American
people. Going to a conference does not do anything except help us to
get these tough penalties to protect the American people and to make
this a better bill.
I surely urge that people rise in opposition to this conference
report.
Mr. CONYERS. Mr. Speaker, I am pleased to yield 1 minute to the
distinguished gentleman from California (Mr. Sherman).
Mr. SHERMAN. Mr. Speaker, passing the Senate bill is but the first
step. Hopefully, the conferees will go beyond even the Senate bill or
will take up new legislation in the Committee on Financial Services.
The Senate bill contains the provisions that reauthorize the SEC and
contains provisions that talk about expensing stock options. We can no
longer leave this issue to the Financial Accounting Standards Board
that acknowledged long ago that it was best to expense stock options
and then refused to make that mandatory. Nor can we allow the recent
situation where consumers can compare Coke and Pepsi, but investors
cannot, because the two similar companies use different methods of
accounting for stock options.
Further, in reauthorizing the SEC, we must demand that they actually
read the filings of the largest 1,000 companies, something that their
chairman refuses to even consider because he has adopted a ``hear no
evil, see no evil'' approach.
Mr. Speaker, we need to go far beyond even the Senate bill.
Mr. OXLEY. Mr. Speaker, I reserve the balance of my time.
Mr. CONYERS. Mr. Speaker, I am pleased to yield 1 minute to the
distinguished gentlewoman from New York (Mrs. Maloney).
Mrs. MALONEY of New York. Mr. Speaker, I support the motion to go to
conference because it affirms the supremacy of the Leahy provisions.
The President asked Congress to get him a bill before the August
recess. We could easily get him a good bill by the weekend if we took
up and passed the Sarbanes bill.
The problems facing corporate America are extremely serious; and I
think the head of Goldman Sachs, Henry Paulson, put it well when he
said accounting at Enron ``bore little or no relationship to economic
reality.''
The Sarbanes bill will restore the credibility of the accounting
industry by creating a truly independent accounting oversight board
that will not be dominated by the industry. The Sarbanes bill will not
solve all of corporate America's problems overnight, but it will send a
strong message to investors that Congress did not succumb to special
interests but, rather, worked very hard at the public interest in
building in more accountability.
Mr. Speaker, I urge my colleagues to support the motion to instruct,
and I hope that we will report back to the floor the Sarbanes bill.
Mr. OXLEY. Mr. Speaker, I am pleased to yield 2 minutes to the
gentleman from Louisiana (Mr. Baker).
Mr. BAKER. Mr. Speaker, I would like to engage the gentleman from
California (Mr. Cox) on the question of the criminal penalties issue
which seems to be still in some contention.
As I understand the Sensenbrenner bill we passed in the House on
yesterday, there was a provision that required the CEO of a corporation
to certify the accuracy of financial statements and also to certify the
accuracy of reports to the Securities and Exchange Commission.
In both of those cases, it was my understanding that the penalties
that were adopted in that matter dramatically exceeded the prior
existing criminal penalties for misrepresentation.
Is that the gentleman's understanding?
Mr. COX. Mr. Speaker, will the gentleman yield?
Mr. BAKER. I yield to the gentleman from California.
Mr. COX. Mr. Speaker, that is certainly correct.
Mr. BAKER. It was also my understanding that there were additional
personal liabilities associated with underperformance or inappropriate
conduct that either did not exist in prior law or that the penalties
associated with that conduct were dramatically increased.
Is the gentleman familiar with those provisions, and is that
accurate?
Mr. COX. Mr. Speaker, I am certainly familiar with those provisions,
and that is accurate as well. The gentleman might also point out that
not only were the provisions of H.R. 5113 adopted almost unanimously by
this House just a few days ago, not only are those provisions much
tougher than existing law, but they are significantly tougher than
comparable provisions in the Senate legislation.
Mr. BAKER. Mr. Speaker, may I further inquire of the gentleman, once
an individual is found to have violated or has committed criminal
conduct and found guilty, that the consequence of that activity is to
be banned from holding even a corporate or board position for the
individual's life?
Mr. COX. That is correct.
Mr. BAKER. Can the gentleman tell me how we could go further in
protecting shareholders and constituents with any additional penalties
or assessments that would be appropriate in light of the egregious
examples we have seen in the marketplace?
Mr. COX. Well, certainly the scope of this legislation on both the
House and the Senate side gives ample opportunity to do other things,
to reinforce these criminal law provisions; but the motion to instruct
that is before us is addressed only to the criminal law provision.
Mr. BAKER. Mr. Speaker, I appreciate the gentleman's explanation. It
is clear to me we have taken a very bold step, and I cannot understand
anyone who would want to reduce these provisions.
The SPEAKER pro tempore (Mr. Dan Miller of Florida). The gentleman
from Ohio (Mr. Oxley) has 8 minutes remaining, and the gentleman from
Michigan (Mr. Conyers) has 3\1/2\ minutes remaining and the right to
close.
Mr. OXLEY. Mr. Speaker, I am pleased to yield 2 minutes to the
gentleman from California (Mr. Royce), our good friend and a valuable
member of the Committee on Financial Services.
Mr. ROYCE. Mr. Speaker, one of the points I was going to make was
that prior to the passage of our CAARTA bill, during a Committee on
Financial Services meeting, I asked the SEC chairman if the SEC had all
of the tools that it needed to return the ill-gotten gains from
dishonest executives to the shareholders of these companies. His
response was that it would be helpful if Congress were to include
language that made it clear that it is Congress's intent that the SEC
have the power to return these stolen funds to the shareholders.
Now, the Federal Account for Investor Restitution language, as
proposed by the gentleman from Louisiana (Mr. Baker), would effectively
accomplish this task.
Now, currently, the Securities and Exchange Commission has the power
to disgorge these funds from corrupt managers. However, the funds
rarely make
[[Page H4845]]
it back to the shareholders who deserve them. They are currently
distributed in an ad hoc fashion. I would say less than 20 percent are
returned to the shareholders today, with the rest going to the
plaintiffs, attorneys' fees, and to the Treasury's general revenue.
So this proposal that is offered by the gentleman from Louisiana (Mr.
Baker) to the conference would ensure that all of these ill-gotten
gains be returned to the people who deserve them, and that is the
individual shareholders and pension investors who were bilked out of
their money through corporate malfeasance. It is another reason why we
need to move forward with that conference.
Mr. OXLEY. Mr. Speaker, I am pleased to yield 3 minutes to the
gentleman from California (Mr. Cox).
Mr. COX. Mr. Speaker, I want to commend my colleagues on both sides
of the aisle for the work that we have done in this House over the last
several weeks to move to the position that we find ourselves in today,
going to conference with the Senate on this very important legislation.
The President is urging us to act quickly, and we intend to do so. It
is our intention on the majority side, and I think it is the intention
also on the minority side, to get a bill as soon as possible, certainly
by the end of the next week when we adjourn for our August recess.
To that end, in the House of Representatives we have enacted not one,
but two bills addressed to this subject; indeed, three bills, because
we have included pension reform as well. Several months ago we
responded to the President's call for 10 major reforms addressed to
corporate wrongdoing. We waited quite a long time for a response from
the other body, but now we have it and we are moving quickly.
It should be the position of this House when we go to conference to
back the toughest criminal penalties that we can impose as a Nation on
those who would undermine our markets, on those who would steal from
investors.
{time} 1815
That is what this House voted to do just a few days ago. H.R. 5118,
produced by the Committee on the Judiciary, which ought to, in our
standing committee structure, write criminal laws, that bill passed 391
to 28; and it should be the position of this House. We all voted for
it.
I am very puzzled that we would now have a motion to instruct that
says, abandon the House position articulated by all of us here on the
floor, produced in a quality fashion by the ranking member on the
Committee on the Judiciary, who is here with us on the floor today, and
by the gentleman from Wisconsin (Chairman Sensenbrenner); abandon those
positions, those tough positions, and instead insert essentially
identical positions in the House bill that differ only in that they
have half the penalty that we approved here earlier this week.
There is not much to this motion to instruct. It says that ``the
House should recede from disagreement with section 802, section 804,
section 805, and section 806 of the Senate bill.''
Section 802 of the Senate bill concerns criminal penalties for
shredding documents, and the penalty is very clearly stated in section
802 of the Senate bill. It is 10 years. The provision in our House-
passed bill, a bill that I think the ranking member on the Committee on
the Judiciary takes pride in, that I take pride in, I voted for it, I
supported it here on the floor, that identical provision in the House-
passed bill is 20 years. That should be our position in conference.
The same with obstruction of justice. The same with all of the things
covered in this motion to instruct, which are addressed essentially to
the criminal features only of this otherwise broad legislation.
I strongly oppose, therefore, this motion to instruct and urge my
colleagues to do likewise.
Mr. CONYERS. Mr. Speaker, I am delighted to yield 1 minute to the
distinguished gentlewoman from Oregon (Ms. Hooley).
Ms. HOOLEY of Oregon. Mr. Speaker, there has never been a period in
U.S. history when the economy grew and the stock market shrank at the
same time. They have always gone hand in hand.
I think our government must inject a sense of calm into our capital
markets, and it is going to take more than just cheerleading. It is
actually going to require Congress to pass legislation that not only
removes the ability for the greedy to cut corners and defraud
investors, but make sure they go to prison, just like any other thief.
I think we are on the right track.
Four months ago, the gentleman from New York (Mr. LaFalce) offered a
substitute to the accounting reform bill in the House that sought to do
many of the things the other body has agreed to do unanimously. Four
months ago, the proposal of the gentleman from New York (Mr. LaFalce)
did not get a single vote from our colleagues on the other side. But
yesterday morning, most Members voted for a bill that would send
someone to prison for 25 years for securities fraud, and I think that
is good. I think we are on the right path.
But the Members know and I know that tougher criminal penalties for
wrongdoing are not the solutions to the market's deficiencies. So let
us get serious and let us make it nearly impossible to pass fraudulent
information along to investors. Let us have more transparencies. Let us
clean up the mess. Let us get a bill to the President next week and
restore the trust and confidence of the public in the markets.
Mr. OXLEY. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, this has been an enlightening debate. Let me just review
the bidding, if I can. Back when Enron became a household word, and all
of the scandals that developed, the Committee on Financial Services was
the first committee last year in December to hold a hearing on the
Enron scandal.
Our committee, the committee of jurisdiction, passed strong
legislation, the CAARTA legislation, Corporate and Auditing
Accountability, Responsibility, and Transparency Act. It passed in the
committee with a strong bipartisan vote, dealing with corporate
scandals, dealing with accounting irregularities, directing our efforts
at the real problem while preserving the ability of the marketplace to
work very effectively.
Then the bill came to the floor. It passed by a large margin, 334 to
90; 119 Democrats wisely voted for that piece of legislation. We waited
and we waited and we waited for the other body to act, almost 3 months.
Finally, when the WorldCom bombshell hit, the Senate finally decided to
act, and act they did.
In large measure, the Sarbanes bill and our bill are very, very
similar. I applaud Senator Sarbanes, Chairman Sarbanes, for his hard
work and his dedication. We are now in a process where we all ought to
be, and that is to reconcile the differences between the House and
Senate. That is what we do here. That is what legislators do.
Those who would say we need to take the Senate bill lock, stock, and
barrel and not worry about any of the potential problems in that bill,
I think, denigrate our committee and the legislative process.
So we are here to say, let us do regular order. Let us get to a
conference. We can do this. The President said, let us get this done
before the August recess. The Speaker said, get this done before the
August recess. We are going to get this done before the August recess;
and we are going to have a good, bipartisan bill that we can take to
the President for his signature and send a strong signal to the
American people and the investing public that the Congress has done
everything possible to restore confidence to our public markets.
We should take a great deal of pride on both sides of the aisle for
the way that we have addressed this issue. I have been proud to work
with my good friend, the gentleman from New York (Mr. LaFalce), the
ranking member. We have had our differences of opinion; but at the same
time, he has been a very strong advocate for doing the kind of reform
necessary. I salute him in his last few months here in this great body.
We are on the verge of a very positive approach to the scandals that
have enveloped corporate America. Let us move on to the conference. Let
us reject this unwise motion and move to a conference in good order.
Mr. Speaker, I yield back the balance of my time.
[[Page H4846]]
Mr. CONYERS. Mr. Speaker, I am delighted to yield 1 minute to the
gentlewoman from California (Ms. Waters), a member of the Committee on
the Judiciary.
Ms. WATERS. Mr. Speaker, I thank the gentleman for yielding time to
me.
Mr. Speaker, I do not delight in having to reveal that the Chairs of
both the Committee on Financial Services and the Committee on the
Judiciary just did not do their job.
My friend on the other side of the aisle, the gentleman from Ohio
(Mr. Oxley), is a good chairman; and I suppose if he had had the
support of his Republican conference perhaps he could have had a
stronger bill; but the bill that we passed was just too week.
The gentleman from New York (Mr. LaFalce) never had an opportunity in
the Committee on Financial Services to really get his amendments set
forth in the way that he would like. The gentleman from Wisconsin (Mr.
Sensenbrenner) did not even take up the bill that the gentleman from
Michigan (Mr. Conyers) was trying so desperately, begging him to take
up, so we could have a stronger response to corporate crime.
Now we have an opportunity to instruct the conferees. The
Sensenbrenner bill that surfaced yesterday does not do what we need to
have done. It is not even in conference. As a matter of fact, they
would want us to believe that it is tougher because they have some
tougher sentencing, but all of the issues that have been identified
here in the Conyers motion are what we all need to embrace. Unless we
do it, we are not sincere about doing something about corporate crime.
Mr. CONYERS. Mr. Speaker, I yield the balance of my time to our
distinguished colleague, the gentleman from Massachusetts (Mr. Markey).
Mr. MARKEY. Mr. Speaker, vote for this motion. If the Republican bill
were an SEC filing, it almost would be actionable under the antifraud
provisions of the Federal securities laws. It is a fraud. It
masquerades as an investor protection bill when, in actuality, it is an
accountant and corporate wrongdoer protection act.
What does it not have in it? Well, it does not have an accounting
board that is controlled by independent auditors. It is all controlled
by the accounting industry, just as the Securities and Exchange
Commission is now controlled by the accounting industry.
It does not separate auditing from consulting when an auditing firm,
an accounting firm, goes inside to audit a firm.
It does not separate investment banking from analyst recommendations
in terms of the compensation which is received by the analyst, a
conflict of interest that is creating all of the problems.
What does this motion to recommit say? It says we should extend from
3 years to 5 years the time that people have to go in and do something
about fraud, because we are now talking about fraud committed in 1998
and 1999, and the statute of limitations has run. We must extend it out
to 5 years. Ordinary investors are only finding out now how valueless
their investments were.
In addition, the auditors must keep the work paper for 5 years so
people can bring action against them, whether it be criminal or civil.
Vote for this meaningful motion if Members want to protect American
investors against further fraud in the American marketplace.
The SPEAKER pro tempore (Mr. Dan Miller of Florida). Without
objection, the previous question is ordered on the motion to instruct.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to instruct
offered by the gentleman from Michigan (Mr. Conyers).
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mr. CONYERS. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
The vote was taken by electronic device, and there were--yeas 207,
nays 218, not voting 9, as follows:
[Roll No. 313]
YEAS--207
Abercrombie
Ackerman
Allen
Andrews
Baca
Baird
Baldacci
Baldwin
Barcia
Barrett
Becerra
Bentsen
Berkley
Berman
Berry
Bishop
Blumenauer
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brown (FL)
Brown (OH)
Capps
Capuano
Cardin
Carson (IN)
Carson (OK)
Clay
Clayton
Clement
Clyburn
Condit
Conyers
Costello
Coyne
Cramer
Crowley
Cummings
Davis (CA)
Davis (FL)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Doggett
Dooley
Doyle
Edwards
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank
Frost
Gephardt
Gonzalez
Gordon
Green (TX)
Gutierrez
Hall (OH)
Harman
Hastings (FL)
Hill
Hilliard
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kind (WI)
Kleczka
Kucinich
LaFalce
Lampson
Langevin
Larsen (WA)
Larson (CT)
Leach
Lee
Levin
Lewis (GA)
Lofgren
Lowey
Lucas (KY)
Luther
Lynch
Maloney (CT)
Maloney (NY)
Markey
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McDermott
McGovern
McIntyre
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Millender-McDonald
Miller, George
Mink
Mollohan
Moore
Moran (VA)
Morella
Murtha
Napolitano
Neal
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Peterson (MN)
Phelps
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Rivers
Rodriguez
Roemer
Ross
Rothman
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Schakowsky
Schiff
Scott
Serrano
Sherman
Shows
Skelton
Slaughter
Smith (WA)
Snyder
Solis
Spratt
Stark
Stenholm
Strickland
Stupak
Tanner
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Thurman
Tierney
Towns
Turner
Udall (CO)
Udall (NM)
Velazquez
Visclosky
Waters
Watson (CA)
Watt (NC)
Waxman
Weiner
Wexler
Wilson (NM)
Woolsey
Wu
Wynn
NAYS--218
Aderholt
Akin
Armey
Bachus
Baker
Ballenger
Barr
Bartlett
Barton
Bass
Bereuter
Biggert
Bilirakis
Blunt
Boehlert
Boehner
Bonilla
Bono
Boozman
Brady (TX)
Brown (SC)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Cannon
Cantor
Capito
Castle
Chabot
Chambliss
Coble
Collins
Combest
Cooksey
Cox
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis, Jo Ann
Davis, Tom
Deal
DeLay
DeMint
Diaz-Balart
Doolittle
Dreier
Duncan
Dunn
Ehlers
Ehrlich
Emerson
English
Everett
Ferguson
Flake
Fletcher
Foley
Forbes
Fossella
Frelinghuysen
Gallegly
Gekas
Gibbons
Gilchrest
Gillmor
Gilman
Goode
Goodlatte
Goss
Graham
Granger
Graves
Green (WI)
Greenwood
Grucci
Gutknecht
Hall (TX)
Hansen
Hart
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hilleary
Hobson
Hoekstra
Horn
Hostettler
Houghton
Hulshof
Hunter
Hyde
Isakson
Issa
Istook
Jenkins
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
Kerns
King (NY)
Kingston
Kirk
Knollenberg
Kolbe
LaHood
Latham
LaTourette
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (OK)
Manzullo
McCrery
McInnis
McKeon
Mica
Miller, Dan
Miller, Gary
Miller, Jeff
Moran (KS)
Myrick
Nethercutt
Ney
Northup
Norwood
Nussle
Osborne
Ose
Otter
Oxley
Paul
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Portman
Pryce (OH)
Putnam
Quinn
Radanovich
Ramstad
Regula
Rehberg
Reynolds
Riley
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryan (WI)
Ryun (KS)
Saxton
Schaffer
Schrock
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Skeen
Smith (MI)
Smith (NJ)
Smith (TX)
Souder
Stearns
Stump
Sullivan
Sununu
Sweeney
Tancredo
Tauzin
Taylor (NC)
Terry
Thomas
Thornberry
Thune
Tiahrt
Tiberi
Toomey
Upton
Vitter
Walden
Walsh
Wamp
Watkins (OK)
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson (SC)
Wolf
Young (AK)
Young (FL)
[[Page H4847]]
NOT VOTING--9
Blagojevich
Bonior
Ganske
Lantos
Lipinski
Mascara
McHugh
Nadler
Traficant
{time} 1849
Messrs. McINNIS, SIMMONS and BASS changed their vote from ``yea'' to
``nay.''
Mrs. TAUSCHER, Ms. HOOLEY of Oregon and Ms. WATERS changed their vote
from ``nay'' to ``yea.''
So the motion to instruct was rejected.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
The SPEAKER pro tempore (Mr. Dan Miller of Florida). Without
objection, the Chair appoints the following conferees:
From the Committee on Financial Services, for consideration of the
House bill and the Senate amendments, and modifications committed to
conference: Messrs. Oxley, Baker, Royce, Ney, Mrs. Kelly, Messrs. Cox,
LaFalce, Frank, Kanjorski and Ms. Waters.
Provided that Mr. Shows is appointed in lieu of Ms. Waters for
consideration of section 11 of the House bill and section 305 of the
Senate amendment, and modifications committed to conference.
From the Committee on Education and the Workforce, for consideration
of sections 306 and 904 of the Senate amendment, and modifications
committed to conference: Messrs. Boehner, Johnson of Texas and George
Miller of California.
From the Committee on Energy and Commerce, for consideration of
sections 108 and 109 of the Senate amendment, and modifications
committed to conference: Messrs. Tauzin, Greenwood and Dingell.
From the Committee on the Judiciary, for consideration of section 105
and titles 8 and 9 of the Senate amendment, and modifications committed
to conference: Messrs. Sensenbrenner, Smith of Texas and Conyers.
From the Committee on Ways and Means, for consideration of section
109 of the Senate amendment, and modifications committed to conference:
Messrs. Thomas, McCrery and Rangel.
There was no objection.
____________________