[Congressional Record Volume 155, Number 137 (Friday, September 25, 2009)]
[Extensions of Remarks]
[Pages E2375-E2376]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           STUDENT AID AND FISCAL RESPONSIBILITY ACT OF 2009

                                 ______
                                 

                               speech of

                           HON. ALAN GRAYSON

                               of florida

                    in the house of representatives

                     Wednesday, September 16, 2009

       The House in Committee of the Whole House on the State of 
     the Union had under consideration of the bill (H.R. 3221) to 
     amend the Higher Education Act of 1965, and for other 
     purposes:

  Mr. GRAYSON. Madam Chair, the U.S. House of Representatives has 
passed a bill including prohibitions on federal funds and other 
activities with respect to certain organizations. The intent of 
Congress with respect to those provisions is as follows:

       The purpose of this bill is to cleanse federal contracting 
     and grant-making, completely and permanently. The purpose is 
     to put an end to the invidious practice of rewarding those 
     who steal taxpayer money by giving them more taxpayer money. 
     The bill imposes, and is intended to impose, a corporate 
     death penalty on contractors who fall within the scope of its 
     prohibitions. This is remedial legislation. The primary 
     intention is not merely to penalize such organization, since 
     other laws perform that function. Rather, the intention is to 
     protect the Government and the taxpayers from losses in the 
     future, and to deter misconduct on the part of federal fund 
     recipients. The intention of deterrence, in particular, 
     requires that these prohibitions be construed broadly, and 
     enforced strictly.
       By this bill, Congress intends to exercise the full extent 
     of its Constitutional authority, both express and implied. 
     This includes, but is not limited to, Congress's express 
     authority under the Appropriations Clause of the 
     Constitution.
       Notwithstanding the heading on the part of the bill 
     containing these provisions, it is not Congress's intent that 
     these prohibitions apply only to organizations that have been 
     indicted. Rather, Congress intends that the prohibitions 
     apply to all ``covered organizations,'' as defined in the 
     bill.
       With respect to the prohibitions set forth in paragraph 
     (a), Congress intends that these prohibitions be automatic 
     and permanent. In this context, ``automatic'' means not 
     subject to alleviation by administrative action. Regarding 
     such prohibitions, Congress intends to substitute a ``per 
     se'' rule in place of any rule requiring a balancing of 
     factors, or exercise of discretion or judgment, to the full 
     extent permitted for Congress by the U.S. Constitution. 
     ``Permanent'' means lasting for the entire time that the 
     organization remains in existence. If a principal, or 
     principals, of a covered organization form(s) or attempt(s) 
     to form a new organization, then that new organization may be 
     deemed, through administrative action, to be a covered 
     organization. ``Principal'' means an officer, a director, or 
     an owner of at least five percent of the shares of a covered 
     organization.
       It is the intent of Congress that any organization seeking 
     or receiving a federal contract, grant, cooperative 
     agreement, any other form of agreement, federal funds, or 
     promotion by a Federal employee or contractor shall certify, 
     both when seeking and when receiving such a benefit, that the 
     organization is not a covered organization as that term is 
     defined in this bill. Any organization falsely making such a 
     certification shall be deemed a covered organization (and, in 
     fact, already is one), and shall be subject to prosecution 
     under 18 U.S.C. 1001 or any similar provision in the Criminal 
     Code. Any individual making such a false certification on 
     behalf of a covered organization shall be similarly liable. 
     Congress strongly recommends to federal prosecutors that 
     they execute their prosecutorial discretion in a manner 
     that holds such organizations and individuals accountable, 
     to the fullest extent permitted by law.
       Congress intends that all covered organizations be added to 
     the ``Excluded Parties'' list maintained by the Federal 
     Government, with a prescribed duration on that list of 
     ``permanent.'' Whenever the U.S. Department of Justice (DOJ) 
     learns or has reason to believe that an organization is a 
     covered organization, it shall be the duty of DOJ to apprise 
     the debarring officials of all relevant federal agencies of 
     such information. Congress intends that any person or 
     organization shall have standing to request that any 
     debarring official shall identify an organization as a 
     covered organization, and add that organization to the 
     ``Excluded Parties'' list. Congress also intends that the 
     contention that any federal offeror or contractor is a 
     covered organization is a contention that is a valid basis 
     for a bid protest. Such a contention may be asserted at the 
     Government Accountability Office, the U.S. Court of Federal 
     Claims, and any other tribunal with bid protest authority.
       The term ``covered organization'' includes parent 
     companies, subsidiaries and subsidiaries of parent companies 
     of a covered organization. Such affiliation is to be 
     determined by legal ownership of at least 50%.
       The term ``organization'' in paragraph (a) means only a 
     covered organization. The enumerated prohibitions apply to 
     covered organizations only.
       In subparagraph (a)(1), the term ``other form of 
     agreement'' includes, but is not limited to, the execution of 
     contract options, the award of task orders, and any other 
     form of action that establishes or increases the legal rights 
     of any federal contractor or grantee.

[[Page E2376]]

       In subparagraph (a)(2), the term ``[n]o Federal funds in 
     any other form may be provided'' shall mean that all 
     contracts and grants that have been awarded to a covered 
     organization with a remaining duration of more than one year 
     on the date of enactment shall, within that one-year period, 
     be terminated for the convenience of the Government.
       In subparagraph (b)(1) of the prohibitions, Congress 
     recognizes that the denial of liberty or property on the 
     basis of an indictment, without conviction, raises 
     Constitutional due process issues. If it is determined that 
     such denial is unconstitutional, or otherwise contrary to 
     law, then it is the intent of Congress that subparagraph 
     (b)(1) be held void, but that the remainder of the 
     prohibitions remain intact and enforceable.
       In subparagraph (b)(3) of the prohibitions, it is the 
     intent of Congress that this subparagraph be construed 
     expansively. The term ``Federal or State regulatory agency'' 
     shall include any agency authorized by law to issue 
     regulations, whether or not such regulations have been 
     issued. For instance, the term includes, but is not limited 
     to, the U.S. Departments of Defense, Health and Human 
     Services, and Labor. The term ``filed a fraudulent form'' 
     includes, but is not limited to, actions that would establish 
     liability under 18 U.S.C. 1001 or 31 U.S.C. 3729. A 
     conviction or judgment under these laws, or any similar law, 
     is sufficient per se to establish that an organization is a 
     covered organization.
       The term ``filed a fraudulent form'' is derived in part 
     from a report dated July 23, 2009 and issued by the Ranking 
     Member of the Committee on Oversight and Government Reform. 
     Page five of that report discusses allegations, not resulting 
     in a conviction or judgment, that ``ACORN has submitted false 
     filings to the Internal Revenue Service and the Department of 
     Labor.'' The report states that: ``All of these fraudulent 
     acts would constitute a violation of 18 U.S.C. 1001 by 
     presenting false documents to the United States government.'' 
     A fortiori, any acts that actually do (not merely ``would'') 
     constitute such a violation, or a violation of similar 
     provisions such as those appearing in 31 U.S.C. 3729, as 
     determined by a conviction or judgment, shall per se 
     constitute the ``fil[ing] of a fraudulent form'' within the 
     meaning of these prohibitions. As the Ranking Member's report 
     describes, however, the term ``filed a fraudulent form'' 
     extends to all organizations that have filed such a form, 
     whether or not such a filing has resulted in a conviction or 
     judgment. The Ranking Member issued a statement yesterday, 
     which said: ``For far too long, recipients of federal dollars 
     have been given free reign [sic] and some have acted in a 
     reckless and cavalier way and whether it be ACORN or anyone 
     else--abuse and fraud will not be tolerated.'' He added, 
     ``frankly, I don't know how anyone can successfully argue 
     [that] those who actually perpetrate fraud and misuse 
     taxpayer dollars should not be'' subject to these 
     prohibitions.
       The term ``form'' is to be construed broadly. It includes 
     all communications, in any form or format, which include any 
     information required by law. For instance, a request for 
     payment under a cost reimbursement contract that includes a 
     statement of incurred costs is a ``form'' within the meaning 
     of subparagraph (b)(3), because (among other reasons) such a 
     statement is required by law. Whenever the Government finds 
     that such a request is excessive, and reduces it, then this 
     means that the form that was filed was fraudulent, unless the 
     contractor possessed no information whatsoever that did allow 
     or should have allowed the contractor to know that the form 
     was excessive. No proof of specific intent to defraud is 
     required. It is the intent of Congress that the term ``form'' 
     include, but not be limited to, the term ``claim'' under 18 
     U.S.C. 287, the terms ``claim,'' ``record'' and ``statement'' 
     in 31 U.S.C. 3729, and the terms ``statement,'' 
     ``representation'' and ``entry'' under 10 U.S.C. 1001.
       In all administrative or judicial proceedings regarding 
     whether a party has ``filed a fraudulent form,'' in cases 
     based on a conviction or judgment, the inquiry shall be 
     limited to whether there is any evidence in the record on 
     which the finder of fact could have determined that the 
     organization filed a fraudulent form. Under no circumstances 
     shall the burden of proof be anything beyond ``adequate 
     evidence'' in administrative proceedings, or ``support by any 
     evidence in the record'' in judicial proceedings, when such 
     judicial review of such administrative action is allowable at 
     all.
       It is the intent of Congress that administrative action to 
     add an organization to the ``Excluded Parties'' list is 
     ministerial. For that reason, and otherwise, such 
     administrative action is committed to agency discretion under 
     5 U.S.C. 702(a)(1). In all judicial proceedings, it is the 
     intent of Congress that the prohibitions apply to an 
     organization that has been found to be a covered organization 
     unless and until a final judgment has been entered in favor 
     of the organization. Specifically, it is the intent of 
     Congress that in determining whether the organization should 
     be granted interim relief in such proceedings, the greatest 
     weight be the public interest in having the Government issue 
     contracts and grants only to organizations with unquestioned 
     integrity.
       It is the intention of Congress that the term ``covered 
     organization'' apply to all organizations qualifying within 
     the definitions of subparagraphs (b)(1) through (b)(4), 
     without regard to when the acts establishing such 
     qualification occurred. Specifically, it is not the intent of 
     Congress that such acts be limited to acts following 
     enactment of these prohibitions. If, for instance, an 
     organization filed a fraudulent form with any Federal or 
     State regulatory agency in 2006, that organization is a 
     covered organization as of the date of enactment, and subject 
     to all prohibitions from the date of enactment onward.
       Regarding paragraph c, if it shall be ruled or held that 
     this provision, or any other provision in these prohibitions, 
     is a bill of attainder, or constitutionally infirm for any 
     other reason, it is the intent of Congress that these 
     prohibitions nevertheless apply to all covered organizations 
     for which these prohibitions are not a bill of attainder, or 
     constitutionally infirm.
       Regarding paragraph (d) of the prohibitions, the revision 
     of the Federal Acquisition Regulation (FAR) shall include the 
     revisions set forth above, including but not limited to 
     revision of Parts 3, 9, 15 and 33 of the FAR.

                          ____________________