[Congressional Record Volume 149, Number 89 (Tuesday, June 17, 2003)]
[House]
[Pages H5421-H5424]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ACCOUNTANT, COMPLIANCE, AND ENFORCEMENT STAFFING ACT OF 2003
Mr. BAKER. Madam Speaker, I move to suspend the rules and pass the
bill (H.R. 658) to provide for the protection of investors, increase
confidence in the capital markets system, and fully implement the
Sarbanes-Oxley Act of 2003 by streamlining the hiring process for
certain employment positions in the Securities and Exchange Commission,
as amended.
The Clerk read as follows:
H.R. 658
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Accountant, Compliance, and
Enforcement Staffing Act of 2003''.
SEC. 2. APPOINTMENT OF ACCOUNTANTS, ECONOMISTS, AND EXAMINERS
BY THE SECURITIES AND EXCHANGE COMMISSION.
(a) In General.--Subchapter I of chapter 31 of title 5,
United States Code, is amended by adding at the end the
following:
``Sec. 3114. Appointment of accountants, economists, and
examiners by the Securities and Exchange Commission
``(a) Applicability.--This section applies with respect to
any position of accountant, economist, and securities
compliance examiner at the Commission that is in the
competitive service.
``(b) Appointment Authority.--
``(1) In general.--The Commission may appoint candidates to
any position described in subsection (a)--
``(A) in accordance with the statutes, rules, and
regulations governing appointments in the excepted service;
and
``(B) notwithstanding any statutes, rules, and regulations
governing appointments in the competitive service.
``(2) Rule of construction.--The appointment of a candidate
to a position under authority of this subsection shall not be
considered to cause such position to be converted from the
competitive service to the excepted service.
``(c) Reports.--No later than 90 days after the end of
fiscal year 2003 (for fiscal year 2003) and 90 days after the
end of fiscal year 2005 (for fiscal years 2004 and 2005), the
Commission shall submit a report with respect to its exercise
of the authority granted by subsection (b) during such fiscal
years to the Committee on Government Reform and the Committee
on Financial Services of the House of Representatives and the
Committee on Governmental Affairs and the Committee on
Banking, Housing, and Urban Affairs of the Senate. Such
reports shall describe the changes in the hiring process
authorized by such subsection, including relevant information
related to--
``(1) the quality of candidates;
``(2) the procedures used by the Commission to select
candidates through the streamlined hiring process;
``(3) the numbers, types, and grades of employees hired
under the authority;
``(4) any benefits or shortcomings associated with the use
of the authority;
``(5) the effect of the exercise of the authority on the
hiring of veterans and other demographic groups; and
``(6) the way in which managers were trained in the
administration of the streamlined hiring system.
``(d) Commission Defined.--For purposes of this section,
the term `Commission' means the Securities and Exchange
Commission.''.
(b) Clerical Amendment.--The table of sections for chapter
31 of title 5, United States Code, is amended by inserting
after the item relating to section 3113 the following:
``3114. Appointment of accountants, economists, and examiners by the
Securities and Exchange Commission.''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Louisiana (Mr. Baker) and the gentleman from Massachusetts (Mr. Frank)
each will control 20 minutes.
The Chair recognizes the gentleman from Louisiana (Mr. Baker).
General Leave
Mr. BAKER. Madam Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks and include extraneous material on this legislation.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Louisiana?
There was no objection.
Mr. BAKER. Madam Speaker, I yield myself such time as I may consume.
It is not long ago that the revolutions of corporate misgovernance
became apparent to not only those within the corporate world, but to
investors around the country. The resulting consequences led many hard-
working families who had planned on retirements to reconsider those
plans, as the value of the 401(k)s and pensions and savings plans
eroded, literally overnight.
In addition to those concerns, it was revealed to the American people
that there were corporate executives who
[[Page H5422]]
had abused their privileges as the leader of an important national
corporation and taken resources inappropriately, illegally, and used
them for their own personal gain.
In light of these revelations, the SEC came to this Congress and
first asked for additional funding to enhance their regulatory and
enforcement capabilities, and this Congress responded. Unfortunately,
because of the rules in which the Securities and Exchange Commission is
constrained, the ability to utilize that $300 million was greatly
inhibited.
{time} 1230
In fact, there is a provision within the securities and exchange
civil service law which provides for expedited hiring of legal counsel.
This particular provision is very narrow in scope but has been utilized
successfully over the years to enable the SEC to acquire those legal
services as it deems necessary. This provision is known as the excepted
service. It is the purpose of this resolution to expand the scope of
the excepted service to enable the SEC to further respond to identified
problems in the area of accountancy, examination and economics.
If passed, this resolution would enable the Commission to move in an
expedited manner to hire the needed accountants, examiners and
economists in order to fulfill the mission described for them by this
Congress. It solves these problems in a proficient and expedited manner
and is important that the SEC have these authorities as stipulated to
restore confidence to the investing public.
This is achieved without, I am aware, any opposition to the manner in
which the bill is currently constructed. In fact, the union that
represents the affected class of employees has now endorsed the
legislation in its current form. I am not aware of any pending
objection. I am aware of broad-based support, bipartisan support, and
the legislation was reported out of committee without objection.
Madam Speaker, I reserve the balance of my time.
Mr. FRANK of Massachusetts. Madam Speaker, I yield myself such time
as I may consume.
I am glad to join in urging support for this bill. I want to
recognize the good work done by the gentleman from Pennsylvania (Mr.
Kanjorski) who is the ranking Democrat on this subcommittee, who could
not be here with us today, but he spent a lot of time on it, and we
have a very useful compromise.
Essentially, we had this situation where we all agreed there was a
need to expand the Securities and Exchange Commission. We responded
more slowly than it would have liked, but we responded by increasing
the budget to the Securities and Exchange Commission.
Essentially, what happened is the legislation passed last year to
improve the regulation of the corporate sector authorized increased
spending for the SEC. The Congress was slow in living up to that
promise, but finally, by early this year, we did it, but then the
question was having voted on the additional money, in their case
overwhelmingly for staff, how quickly could we hire people because
under the normal rules the Federal Government is not expeditious in
hiring people, and that is reasonable. There is often not an emergency,
and we want to make sure we do it right.
In this case, we wanted to see that hiring was done more quickly.
There was an original proposal that came that would have allowed people
to be hired very quickly and, once hired, to remain in a somewhat
separate status from other employees.
I want to acknowledge the very responsive attitude of the union that
represents employees at the SEC, the National Treasury Employees Union.
I met and talked with them, as did the gentleman from Pennsylvania whom
I have mentioned, and we found them to be, not surprisingly, as they
usually are, in a very cooperative mood, and they understood that there
were two important issues. One was to enhance the ability of the SEC to
hire people quickly so we could put the regulatory structure in place,
but also to make sure that employees hired had the protections that any
employee is entitled to have against political abuse, against arbitrary
mistreatment, et cetera.
So what this legislation embodies is a very sensible compromise. The
SEC will be given under this bill the ability to hire quickly. It will
be able to hire without some of the normal rules that would slow them
down, but once the people are hired, they will then have all the rights
and all of the protections that any other employee would have had. It
meets the need and sometimes what we do in government is kind of overdo
or underdo.
The need here was to hire quickly. There was not the need, we felt,
to totally revamp the employee procedures of the SEC. This bill is
carefully tailored to do exactly what was needed and no more. It allows
the SEC to hire quickly, to take full advantage of the additional
funds. My understanding is that over 500 people will be hired under
this, accountants and economists and others, but once they are hired,
they will not be different than the other employees. We will not have
this problem of two classes of employees, some with this set of rights,
some with that set of rights. They will be fully integrated into the
SEC's workforce.
It is a workforce which does very good work, which has been
overstressed because we gave them a lot more to do and did not
immediately give them the resources. This is a case where taking the
appropriation bill, together with this bill, we will have given the
SEC, whose new chairman, I must say Mr. Donaldson seems to be
performing admirably, and I think we are all encouraged that he has
done so well, and I think that contributes to the enthusiasm with which
we support this legislation. There is a great deal of confidence that
he will use this authority in a very appropriate way.
What we have done now is to structure things so the SEC will be able
to take full advantage of the appropriation. They will be able to hire
the people and the investing public and the American economy will get
the protection they deserve.
Madam Speaker, I reserve the balance of my time.
Mr. BAKER. Madam Speaker, I yield myself such time as I may consume,
for the purpose of just complimenting the gentleman on his statement
and expressing my appreciation to him for the courtesies extended
during the formulation of this legislation.
At the outset, there were modest differences. I think we were able to
reach compromise, and I think not only for the SEC function but for
taxpayers, shareholders as well, and I appreciate the courtesies
extended.
Madam Speaker, I yield 3 minutes to the gentlewoman from New York
(Mrs. Kelly).
Mrs. KELLY. Madam Speaker, I rise in strong support of H.R. 658, the
Accountant, Compliance and Enforcement Staffing Act of 2003. This
legislation will help streamline the hiring process at the SEC, and it
will allow the Commission to employ additional, much-needed securities
industry accountants, compliance examiners and economists in an
expedited manner. Believe me, they need it.
As we work to improve investor confidence, I think it is very
important that we work to strengthen the SEC and send a clear message
to the American people that we are not going to tolerate corporate
misconduct.
Last year, Congress increased the funding for the SEC by more than
$270 million. It was a 62 percent increase. We did that because we want
to help America understand that we are not going to tolerate corporate
misconduct. This monumental increase will help the SEC to enhance their
overall operations which are crucial to implementing and enforcing new
corporate governance requirements under the Sarbanes-Oxley bill, but
the Commission is still severely hamstrung by current hiring practices.
Now the need for this legislation is more urgent than ever.
With the hiring of accountant positions lagging far behind other
professionals in the SEC, it is imperative that Congress give the
Commission direct hiring authority for these critical positions. What
we must do is enable the agency to fill them in a timely manner, the
quicker the better, and that is what this legislation does.
I commend the gentleman from Louisiana (Mr. Baker) for introducing
this important legislation and the gentleman from Ohio (Mr. Oxley) for
moving it through the committee and
[[Page H5423]]
working with the House leadership to get it on the floor. They have
continued to work tirelessly on these issue and they are to be
commended.
Mr. Speaker, I urge my colleagues to support this legislation and
help the SEC protect America's investors and restore integrity in the
market.
Mr. FRANK of Massachusetts. Madam Speaker, I reserve the balance of
my time.
Mr. BAKER. Madam Speaker, I yield 2 minutes to the gentlewoman from
Florida (Ms. Ginny Brown-Waite).
Ms. GINNY BROWN-WAITE of Florida. Madam Speaker, I rise today in
support of H.R. 658, the Accountant, Compliance and Enforcement
Staffing Act of 2003. This very critical legislation will allow the
Securities and Exchange Commission to hire much-needed accountants,
compliance examiners and economists outside of the bureaucratic and
burdensome civil service hiring guidelines.
In fiscal year 2003, we increased the Securities and Exchange
Commission's budget by 63 percent, largely to allow for an additional
800 professional staff members. On top of that, last year's
supplemental appropriation bill provided $25 million to the SEC for the
purpose of hiring 125 new accountants, examiners and economists. This
increased funding was provided because the SEC desperately needs these
professionals to enforce the Sarbanes-Oxley corporate accountability
reforms, corporate accountability standards that were established by
this body and standards that are very vital importance for investor
protection. Yet, because of the bureaucratic civil service hiring
guidelines, these positions have not yet been filled.
H.R. 658 does not set new precedent. Indeed, all FBI employees, as
well as health care professionals at the Department of Defense, are
exempt from civil service hiring standards. This is good, common sense
legislation that will significantly help the Securities and Exchange
Commission protect investors.
I commend the gentleman from Louisiana (Mr. Baker) for crafting this
important and very timely bipartisan bill, and I urge my colleagues to
join me in support.
Mrs. KELLY. Madam Speaker, I ask unanimous consent that I be
permitted to control the remainder of the time for consideration of
H.R. 658.
The SPEAKER pro tempore (Mrs. Biggert). Is there objection to the
request of the gentlewoman from New York?
There was no objection.
Mr. OXLEY. Madam Speaker, this no-cost, commonsense legislation will
help the Securities and Exchange Commission carry out its critical
mission of protecting investors and promoting capital formation and
economic growth.
With the passage of last year's corporate accountability legislation
and a substantial budgetary increase, this year the understaffed SEC
must hire over 800 new professionals--accountants, securities
compliance examiners, and economists--in order to fulfill its
regulatory obligations.
In a troubling development, the Commission has had an extraordinarily
difficult time hiring these accountants and other professionals
responsible for monitoring compliance with the securities laws. Under
current bureaucratic rules, it takes the Commission up to 6 months to
hire a single accountant, examiner, or economist. Attorneys are
classified as ``excepted service'' employees and thus fall outside
these burdensome hiring requirements.
Quite simply, this legislation will make it easier for the SEC to
hire these professionals in an expeditious manner. That is good news
for investors, and will help restore public confidence in the markets.
It is strongly supported by both the union and management at the
Commission.
I want to commend Chairman Baker for crafting an excellent bipartisan
bill and urge all my colleagues to join me in support. I yield back.
Madam Speaker, I also want to thank the gentleman from Virginia (Mr.
Davis), the chairman of the Committee on Government Reform, for his
cooperation and assistance in moving this important measure forward. I
am placing in the Record an exchange of correspondence regarding our
committees' jurisdiction on this matter.
House of Representatives,
Committee on Government Reform,
Washington, DC, June 16, 2003.
Hon. Michael G. Oxley,
Chairman, Committee on Financial Services, House of
Representatives, Washington, DC.
Dear Mr. Oxley: Thank you for working with me in developing
H.R. 658, ``Accountant, Compliance, and Enforcement Staffing
Act of 2003.'' As you know, the Committee on Government
Reform reported the bill, H.R. 1836, the Civil Service and
National Security Personnel Improvement Act. Included in that
Act was Title III, Subtitle A, Securities and Exchange
Commission. It is my understanding that you intend to move
H.R. 658 to the floor through the suspension process with an
amendment that will be substantially the same as Title III,
Subtitle A of H.R. 1836, as reported.
In the interests of moving this important legislation
forward, I am supporting your request to move H.R. 658
through the suspension process with an amendment in the
jurisdiction of the Committee on Government Reform. The
Committee does hold an interest in preserving its future
jurisdiction with respect to issues raised in the amendment,
and its jurisdictional prerogatives should the provisions of
this bill or any Senate amendments thereto be considered in a
conference with the Senate. Therefore, I respectfully request
your support for the appointment of an appropriate number of
Members from our respective Committees should such a
conference arise.
Finally, I would ask that you include a copy of our
exchange of letters on this matter in the Congressional
Record during floor consideration. Thank you for your
assistance and cooperation in this matter.
Sincerely,
Tom Davis,
Chairman.
____
House of Representatives,
Committee on Financial Services,
Washington, DC, June 16, 2003.
Hon. Tom Davis,
Chairman, Committee on Government Reform, Rayburn House
Office Building, Washington, DC.
Dear Chairman Davis: Thank you for your recent letter
regarding your Committee's jurisdictional interest in H.R.
658, the Accountant, Compliance, and Enforcement Staffing Act
of 2003. I appreciate all of your efforts to ensure that the
Securities and Exchange Commission has the resources it needs
to effectively carry out its responsibilities under the
Sarbanes-Oxley Act.
Your understanding regarding the amendment to H.R. 658 to
be considered under suspension of the rules is correct, and
the text of the amendment will be substantially similar to
title III, subtitle A of H.R. 1836, as reported.
I acknowledge your committee's jurisdictional interest in
this legislation and appreciate your cooperation in allowing
speedy consideration of the bill and amendment. I agree that
your decision to forego further action on the bill will not
prejudice the Committee on the Government Reform with respect
to its jurisdictional prerogatives on this or similar
legislation. I will support your request for an appropriate
number of conferees should there be a House-Senate conference
on this or similar legislation.
Finally, I will include a copy of your letter and this
response in the Congressional Record when the legislation is
considered by the House.
Thank you again for your assistance.
Sincerely,
Michael G. Oxley,
Chairman.
Mr. KANJORSKI. Madam Speaker, I rise to support H.R. 658, the
Accountant, Compliance and Enforcement Staffing Act of 2003. Investor
protection is one of my top priorities for my work on the House
Financial Services Committee, and H.R. 658 will improve investor
protection by allowing the Securities and Exchange Commission to
accelerate the hiring process for hundreds of accountants, economists,
and compliance examiners. As a result, I support this bill.
During the last year, Democrats led the efforts in Congress to
significantly augment the resources available to the Securities and
Exchange Commission, including increasing its annual budget by more
than $270 million. We increased this funding to help the Commission to
effectively implement the Sarbanes-Oxley Act, which we enacted in 2002
in response to a series of large-scale corporate scandals at companies
like Enron, WorldCom, Tyco, Global Crossing, Adelphia, and Rite Aid.
The increased appropriations provided to the Commission have
permitted the hiring of hundreds of new professionals to police the
securities industry. The SEC estimates that the additional resources
provided by the fiscal 2003 budget will result in the hiring of 200
lawyers, 250 accountants, 300 examiners, 10 economists, and some other
specialists. This increase in the Commission's labor force comes on top
of the additional 125 professionals that we allowed the agency to hire
as a result of the fiscal 2002 supplemental appropriation law.
Unfortunately, as it has worked in implement the Sarbanes-Oxley Act
and restore investor confidence in our capital markets, the Commission
has encountered some difficulties in identifying and expeditiously
hiring the best workers for many of these new positions. H.R. 658 seeks
to address this problem by streamlining the hiring process at the
Commission for a number of specialized professions. The Commission,
like all other government agencies, already has similar authority for
recruiting and hiring attorneys.
The legislative language contained in this bill resulted from
negotiations between the
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Commission's management and the National Treasury Employees Union's
leaders. As a result, this legislation will accelerate the hiring of
mission-critical workers at the Commission, it will protect the rights
of these employees, and it will advance investor protection. I support
each of these worthwhile goals, and congratulate the Commission and the
National Treasury Employees Union for their good work. Their joint
efforts help to demonstrate the effectiveness of labor-management
cooperation in the federal workplace.
I am also pleased that the legislation we are considering today,
unlike the introduced bill, will require the Commission to conduct two
studies about the implementation of this special hiring authority. The
inclusion of this study provision, which I requested, will provide the
Congress with information on the use of the authority, including its
impact on the hiring of veterans, minorities, and other demographic
groups, that will be needed to evaluate the effects of this change in
the law. It is my expectation that the Commission will use the
expansion of its professional ranks as an opportunity to aggressively
seek qualified veterans and minorities to serve at the Commission.
Although I support this bill, I differ with my colleagues on the
other side of the aisle on one remaining issue: the length of time that
the Commission should have this special hiring power. As currently
drafted, H.R 658 would provide the SEC with the permanent authority to
bypass civil service rules in order to accelerate the hiring process
for accountants, economists, and compliance examiners. I believe that
this special authority, requested by the Commission in a time of
urgency, should sunset so that the Congress can evaluate the
effectiveness of the program at an appropriate time. Because H.R 658
will make extraordinary changes in the normal hiring process and
because this power has the potential to be abused, the prudent course
of action would have been for the Congress to sunset the law on a date
certain and determine at that time whether to continue it. In short,
the Congress should jealously guard the special powers that it grants
government agencies.
Accordingly, during the consideration of H.R 658 by the Financial
Services Committee and the Government Reform Committee, I sought to
make a good bill even better by offering an amendment to sunset the
expedited hiring authority at the end of fiscal 2008. This amendment
would have provided the Commission with sufficient time to meet its
short-term staffing needs and preserved the ability of Congress to
reevaluate this special power on a date certain. Although we did not
include a sunset in this bill, H.R 658 is still pragmatic and desirable
legislation.
In closing, Madam Speaker, H.R 658 will streamline the hiring process
for hundreds of new professionals at the Commission, it will safeguard
the civil service rights of these workers, and it will enhance investor
protection. Notwithstanding my one reservation concerning a sunset,
which I hope my colleagues in the Senate will fix during their
consideration of this bill, I support H.R 658 and urge its adoption by
the full House.
Mr. FRANK of Massachusetts. Madam Speaker, if the gentlewoman has no
further requests for time, I congratulate the gentlewoman on being
given the right to control nothing, and I yield back the balance of my
time.
Mrs. KELLY. Madam Speaker, we have no further requests for time, and
we yield back the balance of our time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Louisiana (Mr. Baker) that the House suspend the rules
and pass the bill, H.R. 658, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of
those present have voted in the affirmative.
Mrs. KELLY. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
____________________