[Congressional Record Volume 148, Number 110 (Wednesday, September 4, 2002)]
[Senate]
[Pages S8148-S8149]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        CORPORATE RESPONSIBILITY

  Mr. DORGAN. Mr. President, I wish to comment on one additional 
matter. I intend to hold some hearings in the Commerce subcommittee 
that I chair, on the issue of corporate responsibility.
  We recently passed legislation dealing with corporate responsibility 
in the Senate. It was subsequently signed by the President. I supported 
that legislation, but I thought that it could be improved in some 
areas.
  During Senate debate, I tried to offer an amendment dealing with the 
issue of bankruptcy, that called for recovery of profits by top 
executives of companies that went bankrupt. The amendment was blocked 
by my colleague, the Senator from Texas, who kept me from offering it 
over several days. I was not able to offer that amendment on the bill, 
but I am going to continue to push it.
  My point is this: As corporations go bankrupt and as those CEOs take 
increasing amounts of money out of corporations in bonus payments and 
incentive payments prior to bankruptcy, I think there ought to be a 
mechanism for disgorgement or recapture of that money for the benefit 
of other investors who lost their shirts and the employees who lost 
their jobs. I believe this idea would have had wide support in the 
Senate, but I could not get it done because it was blocked by the 
Senator from Texas.
  Well, the Financial Times has done a study and written an article to 
which I want to call attention. It is titled ``The Survivors Who Left 
All the Way to the Bank.'' The Financial Times found that in the 25 
largest companies that went bankrupt since January of 2001, there were 
208 top executives who were paid a total of $3.3 billion in salaries, 
bonuses, and incentive payments.

[[Page S8149]]

  Think of that. As these publicly traded companies were going down the 
tubes and into bankruptcy, executives were busy taking out massive 
sums--$933 million from one; $290 million from another; $299 million 
from another, just to give a few examples.
  I would like one good reason anybody has for providing a bonus or 
incentive payment to any executive prior to the company filing 
bankruptcy--just one good reason. But there is not one. That money 
ought to be recaptured. There ought to be what is called a disgorgement 
or recapture or clawback. That money ought to be used to reimburse 
investors who lost their shirts and employees who lost their jobs.
  I am going to hold a hearing about this in my subcommittee. We are 
going to look into situations like that of Enron. We have already had 
some testimony in this regard in my subcommittee, relating to bonuses 
paid at Enron. It turns out that Enron paid $55 million to people at 
the top of the corporation to commit to stay 90 days as employees 
following bankruptcy. Some people got bonuses of $1 million, some of 
half a million dollars. I think that is nuts.
  The investors get ripped by losing their shirts, losing their 
investments, and a few people inside the companies that went into 
bankruptcy walk away with pockets full of gold from the treasuries of 
these corporations. It ought not happen. It is just plain wrong.
  Yet this was not dealt with by the corporate responsibility 
legislation. Why? Because I was blocked from offering my amendment.
  If I had been able to offer my amendment and had gotten a vote on it, 
we would have gotten a mechanism for recapture and disgorgement. We 
would have a law that says that you cannot walk away from a corporation 
you took into bankruptcy with $100 million in your own bank account.
  So there is unfinished business on corporate responsibility. We are 
going to have votes on this issue of bankruptcy and recapture of ill-
gotten gains.
  I am also going to be working on the issue of inversions. I know the 
Presiding Officer cares a lot about that issue, which involves 
corporations deciding they want to renounce their U.S. citizenship. 
Why? Because they want to become citizens of tax havens like Bermuda, 
so they can save on their U.S. tax bill. Shame on them. Inversion, my 
eye.
  We ought not have corporations renouncing their American citizenship 
out of sheer greed. I am going to offer legislation on that issue as 
well.
  So we have some unfinished business on corporate responsibility. 
Nobody ought to think the bill we passed is a cure-all. It addresses 
the problem of corporate irresponsibility in a constructive and 
positive way, but it is incomplete and there are other issues yet to be 
addressed. I, for one, intend to hold hearings and offer amendments on 
this issue. Mr. President, I yield the floor.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The majority whip is recognized.
  Mr. REID. Will the Chair advise the Senator when morning business 
started?
  The PRESIDING OFFICER. Morning business started at 12:07 p.m.
  Mr. REID. Under the control of Senator Kennedy, or his designee, we 
have the first half hour until 12:37 p.m.; is that right?
  The PRESIDING OFFICER. That is correct.
  Mr. REID. Mr. President, I ask unanimous consent that the Senator 
from South Dakota be recognized for 5 minutes, and following that, the 
Senator from Nebraska be recognized for 5 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from South Dakota.

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