[Congressional Record Volume 156, Number 132 (Tuesday, September 28, 2010)]
[House]
[Pages H7164-H7168]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ORGANIZED RETAIL THEFT INVESTIGATION AND PROSECUTION ACT OF 2010
Mr. SCOTT of Virginia. Mr. Speaker, I move to suspend the rules and
pass the bill (H.R. 5932) to establish the Organized Retail Theft
Investigation and Prosecution Unit in the Department of Justice, and
for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 5932
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 ``Organized Retail Theft
Investigation and Prosecution Act of 2010''.
SEC. 2. ORGANIZED RETAIL THEFT INVESTIGATION AND PROSECUTION
UNIT.
(a) Establishment.--Not later than 180 days after the date
of enactment of this Act, the Attorney General shall
establish the Organized Retail Theft Investigation and
Prosecution Unit (hereinafter in this Act referred to as the
``ORTIP Unit'').
(b) Composition.--The ORTIP Unit shall include
representatives from the Federal Bureau of Investigation,
United States Immigration and Customs Enforcement, the United
States Secret Service, the United States Postal Inspection
Service, prosecutors, and any other personnel necessary to
carry out the duties of the ORTIP Unit.
(c) Duties.--The duties of the ORTIP Unit are as follows:
(1) To investigate and prosecute those instances of
organized retail theft over which the Department of Justice
has jurisdiction.
(2) To assist State and local law enforcement agencies in
investigating and prosecuting organized retail theft.
(3) To consult with key stakeholders, including retailers
and online marketplaces, to obtain information about
instances of and trends in organized retail theft.
SEC. 3. DEFINITION.
In this Act, the term ``organized retail theft'' means--
(1) the obtaining of retail merchandise by illegal means
for the purpose of reselling or otherwise placing such
merchandise back into the stream of commerce; or
(2) aiding or abetting the commission of or conspiring to
commit any of the acts described in paragraph (1).
SEC. 4. REPORT.
Not later than 1 year after the date of enactment of this
Act, the Attorney General shall submit a report containing
recommendations on how retailers, online businesses, and law
enforcement agencies can help prevent and combat organized
retail theft to the Chairs and Ranking Members of the
Committee on the Judiciary of the House of Representatives
and of the Committee on the Judiciary of the Senate. The
Attorney General shall make the report available to the
public on the web site of the Department of Justice.
SEC. 5. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Attorney
General to carry out this Act, $5,000,000 for each of fiscal
years 2011 through 2015.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Virginia (Mr. Scott) and the gentleman from Texas (Mr. Smith) each will
control 20 minutes.
The Chair recognizes the gentleman from Virginia.
General Leave
Mr. SCOTT of Virginia. Mr. Speaker, I ask unanimous consent that all
Members have 5 legislative days to revise and extend their remarks and
include extraneous material on the legislation under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Virginia?
There was no objection.
{time} 2050
Mr. SCOTT of Virginia. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, H.R. 5932 directs the Attorney General to establish an
Organized Retail Theft Investigation and Prosecution Unit to combat the
growing problem of organized retail crime.
Theft from retail establishments has been a problem as long as stores
have existed. The problem has gradually grown beyond simple isolated
cases of shoplifting and burglary into something far more complex.
It wasn't until the 1980s that organized retail theft was recognized
as a phenomenon, and the problem has continued to grow in volume,
sophistication and scope. Today, sophisticated, multilevel criminal
organizations steal large amounts of high volume products, focusing on
small and easily resalable items, and then they resell the goods
through a variety means, including flea markets, smaller stores, and,
increasingly the Internet. Sales of stolen items over the Internet have
evolved to the point where there has been a new crime phenomenon
referred to as ``E-fencing.''
With organized retail theft reaching an estimated $30 billion to $42
billion, it impacts everyone from the Big Box retailers to the small
independent stores. This type of crime obviously has a direct impact on
stores from which the items are stolen. They have fewer items in their
inventory to sell and their profits suffer. To make up for it, they
must pass along the burden to consumers in the form of higher prices.
Consumer safety is also at risk when retail crime organizations steal
consumable products, especially over-the-counter drug items and infant
formula, two popular items for organized theft rings. In many cases,
after merchandise has been stolen, the products are not stored
properly, which can render the products ineffective or even dangerous.
Retailers spend lots of time and resources trying to prevent such
thefts and trying to catch the thieves, but it is becoming increasingly
difficult to do so. Last year, the Judiciary Committee Subcommittee on
Crime held a hearing about the role of the Federal law enforcement in
combating this kind of crime. I was encouraged to see that agencies
such as the FBI; Immigration and Customs Enforcement, ICE; the Secret
Service; and postal inspectors all play a role in investigating
organized retail theft.
Through this hearing we learned that there is a definite need for
Federal law enforcement agencies in this area because local enforcement
agencies face unique challenges in combating organized retail theft. In
particular, organized retail theft rings often operate in multiple
jurisdictions, making it impossible for any one State or local law
enforcement agency to investigate them and prosecute them effectively.
In addition, the Internet has made it
[[Page H7165]]
easier for such sellers to access a national, even international
market, for buyers of stolen goods. Finally, the proceeds of these
crimes are often laundered with tremendous sophistication.
Because of these challenges and the threat this type of crime poses
to our businesses, I believe we must have a better coordinated and much
more concentrated Federal effort. H.R. 5932 accordingly directs the
Attorney General to establish an Organized Retail Theft Investigation
and Prosecution Unit comprised of Federal prosecutors and investigators
from the FBI, ICE, the Secret Service, and the Postal Inspection
Service. This unit will investigate and prosecute instances of
organized retail theft under Federal jurisdiction as well as assist
State and local law enforcement agencies in their efforts against these
crimes.
I want to thank the retail and online community for their support of
this bill, and I commend their efforts to find ways to work together on
this effort. We have also received letters in support of the bill from
a number of major business groups, including the Coalition Against
Retail Crime, the Food Marketing Institute, the National Association of
Chain Drugstores, the Entertainment Merchants Association, the Retail
Industry Leaders Association, and the National Retail Federation. EBay
has also expressed support for the bill.
I am pleased this bill has strong bipartisan support, and I would
like to thank the committee chairman, the gentleman from Michigan, Mr.
Conyers, the ranking member, the gentleman from Texas, Mr. Smith, and
my colleague from Virginia, Mr. Goodlatte, for cosponsoring this
important legislation and for their consistent commitment to this
issue. I urge my colleagues to support H.R. 5932.
Coalition Against
Organized Retail Crime
Hon. Robert Scott,
House Judiciary Committee, House of Representatives,
Washington, DC.
Dear Congressman Scott: On behalf of the Coalition Against
Organized Retail Crime (CAORC) and our membership, we urge
you to support and pass H.R. 5932 the ``Organized Retail
Theft Investigation and Prosecution Act of 2010.'' This
bipartisan legislation, introduced by Representatives
Conyers, Smith, Scott and Goodlatte, is an important first
step in addressing this serious issue.
The CAORC, formed in 2001, is comprised of major retailers,
grocers, product manufacturers and trade associations
committed to bringing attention to the harmful effects and
public safety risks associated with organized retail crime.
As you know, sophisticated and methodical organized retail
crime rings operate across state and local jurisdictions.
These crime rings often use organized retail crime to fund
other violent activities and utilize traditional money
laundering techniques to conceal their profits. It is time
the Department of Justice have the resources it needs to
effectively investigate and prosecute these criminals.
Retailers spend millions of dollars on robust a security
and loss prevention effort, that protects their goods and
ensures consumer safety. They are continually upgrading and
adapting these programs to limit retail crime. Nevertheless,
this criminal activity continues to grow despite our best
efforts.
We thank you for your consideration of H.R. 5932 and urge
its passage. We look forward to seeing this legislation
become law and working with you in the future to continue to
work on this crime epidemic.
Sincerely,
John G. Emling,
Senior Vice President, Government Affairs, Retail Industry
Leaders Association.
____
Food Marketing Institute,
Arlington, VA, September 20, 2010.
Hon. Bobby Scott,
House of Representatives,
Washington, DC.
Dear Representative Scott: The Food Marketing Institute
(FMI), on behalf of the nation's grocery industry, wishes to
express the industry's strong support for a bill (H.R. 5932)
entitled the ``Organized Retail Crime Theft Investigation and
Prosecution Act of 2010.'' This bi-partisan initiative,
sponsored by Representatives Bobby Scott (D-VA), John Conyers
(D-MI), Lamar Smith (R-TX) and Bob Goodlatte (R-VA), will
likely be scheduled for consideration and a vote on the floor
of the House on Thursday, September 23, 2010.
If enacted into law, H.R. 5932 will establish a special
unit within the U.S. Department of Justice (DOJ) to
investigate and prosecute instances of organized retail theft
(ORT) over which DOJ has jurisdiction as well as provide
assistance to State and local law enforcement agencies in
their efforts against what is clearly a very serious criminal
problem in our country.
The grocery industry is routinely victimized by
sophisticated theft rings that are responsible for stealing
millions of dollars worth of merchandise from our members'
stores annually. FMI firmly believes a more formal federal
response as called for in H.R. 5932 is needed because ORT
translates into as much as $30 billion in losses each year to
the retail community nationwide. Not only do consumers pay
higher prices as retailers attempt to recover losses
resulting from ORT, but state revenues are also adversely
impacted by approximately $1.6 billion in lost sales tax
revenue attributable to ORT activity.
Most disturbing is the fact that our customers are often
placed at great risk when these criminal enterprises steal
certain FDA regulated products, such as infant formula, over-
the-counter medications and diabetic supplies, and then
resell them in flea markets, pawn shops, swap meets,
questionable store front operations and more frequently in
recent years via internet auction sites. ORT rings have been
known to tamper with the contents of the product and to
change labels and expiration dates thereby endangering the
health and safety of unknowing consumers, especially infants
and the elderly.
In closing, FMI endorses H.R. 5932 and we urge you to vote
in favor of this very important initiative.
Sincerely,
Leslie G. Sarasin,
President and Chief Executive Officer.
____
Entertainment
Merchants Association,
Encino, CA, September 22, 2010.
Re: Organized Retail Theft Investigation and Prosecution Act
of 2010 (H.R. 5932).
Hon. Robert C. Scott,
Chairman, Subcommittee on Crime, Terrorism, and Homeland
Security, Committee on the Judiciary, House of
Representatives, Washington, DC.
Dear Mr. Chairman: I am writing on behalf of the
Entertainment Merchants Association (EMA) and the
approximately 40,000 retail locations operated by our members
throughout the United States to express support for the
Organized Retail Theft Investigation and Prosecution Act of
2010 (H.R. 5932). We commend you for introducing this
important measure.
Unfortunately, the relatively small size and high
desirability of DVDs and video games make them popular
targets for organized retail crime perpetrators. Based on the
``shrink'' experience of our members, EMA estimates the loss
to retailers in 2008 from DVD shrink (both internal and
external sources) to be $449 million and from video game
shrink to be $197 million. (Not all of these losses are
attributable to organized retail crime, of course.) The
losses are even more harmful in light of the 13% decline in
DVD sales and 11% decline in video game software sales in
2009. The growth of organized retail crime undoubtedly
contributes to these declines in sales.
EMA believes that federal organized retail crime
legislation can help stem the shrink of DVD and video games.
Specifically, EMA advocates, in part, that federal law should
specifically criminalize organized retail crime, prevent
criminal gangs from using online marketplaces as fencing
bazaars, crack down on counterfeit devices that are used to
facilitate organized retail crime, and provide additional
resources to investigate and prosecute organized retail
crime. (We believe this can and should be done without either
unduly impairing the ability of video and video game
retailers to participate in the used DVD and video game
market or undermining the First Sale provision of the
Copyright Act (permitting the resale, rental, or other
alienation of a lawfully made copy of a copyrighted work
without authorization from the copyright holder), which
promotes vigorous retail competition and the wide
dissemination of popular works.)
H.R. 5932 would establish an Organized Retail Theft
Investigation and Prosecution Unit (ORTIP Unit) in the
Department of Justice that would be staffed with
investigators, prosecutors and others. The ORTIP Unit would
be responsible for investigating and prosecuting instances of
organized retail theft, over which the Department of Justice
has jurisdiction, assisting State and local law enforcement
agencies in investigating and prosecuting organized retail
theft. and consulting with and advising victims of organized
retail theft. The bill would define ``organized retail
theft'' as obtaining retail merchandise by illegal means for
the purpose of reselling or otherwise placing such
merchandise back into the stream of commerce, aiding or
abetting the commission of such acts, or conspiring to commit
such acts. H.R. 5932 would also require the Attorney General
to submit a report containing recommendations on how
retailers, online businesses, and law enforcement agencies
can help prevent and combat organized retail theft. Finally,
it authorizes $5 million per year for fiscal years 2011
through 2015 to fund the ORTIP Unit.
EMA believes that the Organized Retail Theft Investigation
and Prosecution Act of 2010 will enhance the federal
government's focus and provide beneficial coordination
[[Page H7166]]
among all levels of government on organized retail crime. We,
therefore, urge its adoption.
About Entertainment Merchants Association
The Entertainment Merchants Association (EMA) is the not-
for-profit international trade association dedicated to
advancing the interests of the $34 billion home entertainment
industry. EMA-member companies operate approximately 35,000
retail outlets in the U.S. and 45,000 around the world that
sell and/or rent DVDs, computer and console video games, and
digitally distributed versions of these products. Membership
comprises the full spectrum of retailers (from single-store
specialists to multi-line mass merchants, and both brick and
mortar and online stores), distributors, the home video
divisions of major and independent motion picture studios,
video game publishers, and other related businesses that
constitute and support the home entertainment industry. EMA
was established in April 2006 through the merger of the Video
Software Dealers Association (VSDA) and the Interactive
Entertainment Merchants Association (IEMA).
If you have any questions or need further information, you
may contact me.
Thank you for the opportunity to express our support for
this much-needed bill.
Sincerely,
Sean Devlin Bersell,
Vice President, Public Affairs.
____
National Association
of Chain Drug Stores,
Alexandria, VA, September 21, 2010.
Hon. Bobby Scott,
House of Representatives, Longworth House Office Building,
Washington, DC.
Hon. Lamar Smith,
House of Representatives, Rayburn House Office Building,
Washington, DC.
Dear Representatives Scott and Smith: The National
Association of Chain Drug Stores (NACDS) is writing to thank
you for your extraordinary leadership in the fight against
organized retail crime (ORC) by introducing and advancing
H.R. 5932, the Organized Retail Theft Investigation and
Prosecution Act of 2010. This bipartisan legislation is a
strong first step to stem the growing problem of organized
retail crime by creating a specific task force within the
U.S. Department of Justice to investigate and prosecute
instances involving ORC.
NACDS represents traditional drug stores, supermarkets, and
mass merchants with pharmacies. Its more than 170 chain
member companies include regional chains with a minimum of
four stores to national companies. NACDS members also include
more than 1,000 suppliers of pharmacy and front-end products,
and nearly 90 international members representing 29
countries. Chains operate more than 39,000 pharmacies, and
employ a total of more than 2.5 million employees, including
118,000 pharmacists. They fill more than 2.5 billion
prescriptions yearly, and have annual sales of over $750
billion. For more information about NACDS, visit
www.NACDS.org.
As you know, organized retail crime is responsible for over
$30 billion in losses annually, resulting in increased costs
for merchants, higher prices for consumers, and lost tax
revenue for state and local governments. In addition to
increased costs faced by retailers to cover losses and
investment in additional security measures, consumers are
placed at risk when package tampering occurs on consumer
health care products, such as infant formula and OTC
medications. These stolen products are repackaged and
relabeled to falsely extend a product's expiration date or to
hide the fact that the item has been stolen.
NACDS has long advocated for federal legislation that
treats theft committed by organized, professional crime rings
as a federal felony--especially since much of the stolen
product is transported across state lines. Therefore, as
Congress continues to examine this issue, we would strongly
urge you to consider enacting legislation, such as H.R. 1173,
the Organized Retail Crime Act of 2009, which would give
federal law enforcement officials the authority to pursue and
prosecute individuals who engage in such criminal activities,
and H.R. 1166, the E-fencing Enforcement Act of 2009, which
would combat the growing problem of the use of online
marketplaces by criminals to redistribute stolen merchandise,
including those obtained through organized retail crime.
We commend you again for introducing and advancing strong
bipartisan legislation that will assist retailers and law
enforcement combat the serious problem of organized retail
crime, and we look forward to working with you to enact this
important legislation.
Sincerely,
Steven C. Anderson,
President and Chief Executive Officer.
____
Retail Industry
Leaders Association,
Arlington, VA.
House of Representatives,
Washington, DC.
Dear Congressman Scott: On behalf of the Coalition Against
Organized Retail Crime (CAORC) and our membership, we would
urge you to vote in favor of H.R. 5932 the ``Organized Retail
Theft Investigation and Prosecution Act of 2010'' when it
comes before the full body later this week.
RILA is a trade association of the largest and most
successful companies in the retail industry. Its member
companies include more than 200 retailers, product
manufacturers, and service suppliers, which together account
for more than $1.5 trillion in annual sales. RILA members
operate more than 100,000 stores, manufacturing facilities
and distribution centers, have facilities in all 50 states,
and provide millions of jobs domestically and worldwide.
This bipartisan legislation, introduced by Representatives
Conyers, Smith, Scott and Goodlatte, would create a unit
inside the Department of Justice dedicated to investigating
and prosecuting organized retail crime (ORC) and assisting
state and local law enforcement and prosecuting agencies.
As the U.S Immigration and Customs Enforcement has
indicated, ``ORC rings are very sophisticated,
compartmentalized and operate similar to criminal
organizations involved in drug trafficking or human
smuggling. Furthermore, transnational criminal syndicates
such as Eastern European street gangs and organized crime
elements have become increasingly involved, and utilize
traditional money laundering techniques to conceal their
profits.'' Furthermore, estimates conclude this crime costs
retailers tens of billions of dollars per year and deprives
states of hundreds of millions of dollars in lost sales tax
revenue.
Retailers spend millions of dollars on robust a security
and loss prevention effort, that protects their goods and
ensures consumer safety. They are continually upgrading and
adapting these programs to limit retail crime. Nevertheless,
this criminal activity continues to grow despite their best
efforts.
Once again, we ask you to support H.R. 5932.
Sincerely,
John G. Emling,
Senior Vice President, Government Affairs.
____
National Retail Federation,
Washington, DC, September 22, 2010.
Re: Support the ``Organized Retail Theft Investigation and
Prosecution Act of 2010'' (H.R. 5932).
Hon. Nancy Pelosi,
Speaker of the House, House of Representatives, The Capitol,
Washington, DC.
Dear Speaker Pelosi: On behalf of the National Retail
Federation (NRF), I am writing to you today to urge your
support for the ``Organized Retail Theft Investigation and
Prosecution Act of 2010'' (H.R. 5932) when it comes up for a
vote on the suspension calendar this week. We believe this
bill is one of the keys to protecting both retailers and
consumers against the massive economic costs and very real
public health and safety risks posed by organized retail
crime. Establishing a team of law enforcement professionals
dedicated to fighting these crimes and working in close
consultation with retailers shows the importance of this
issue to industry, consumers and law enforcement, and serves
as an important deterrent to perpetrators.
Retailers lose between $15 and $30 billion to organized
retail crime (ORC) each year, according to the FBI and retail
loss prevention experts. In addition, 89 percent of retailers
reported that they were victims of organized retail crime in
the past year, according to an annual NRF survey released
earlier this year.
ORC rings typically target everyday consumer products that
are in high demand and easy to steal, such as infant formula,
razor blades, batteries, analgesics, cosmetics and gift
cards. More expensive products such as DVDs, CDs, video
games, designer clothing and electronics are also highly
prized. Once stolen, the goods are resold at pawn shops, flea
markets, swap meets and on the Internet. These thefts force
retailers to increase prices to cover the losses, and also
threaten public health when crime rings tamper with items
such as infant formula or medication by extending expiration
dates or repackaging and relabeling the items.
This bill will be an important tool in the fight against
ORC. It would accomplish this through several key steps.
First, it would create an Organized Retail Theft
Investigation and Prosecution Unit (ORTIP Unit) in the
Department of Justice staffed with investigators, prosecutors
and other personnel charged with investigating and
prosecuting instances of ORC over which the Department of
Justice has jurisdiction. Second, it would define ``organized
retail theft'' as obtaining retail merchandise by illegal
means for the purpose of reselling or otherwise placing such
merchandise back into the stream of commerce, aiding or
abetting the commission of such acts, or conspiring to commit
such acts. Third, it requires the Attorney General to submit
a report containing recommendations on how retailers, online
businesses and law enforcement agencies can help prevent and
combat organized retail crime. Finally, it authorizes $5
million per year for fiscal years 2011 through 2015 to fund
the ORTIP Unit.
As the world's largest retail trade association and the
voice of retail worldwide, NRF's global membership includes
retailers of all sizes, formats and channels of distribution
as well as chain restaurants and industry partners from the
United States and more than 45 countries abroad. In the
United States, NRF represents the breadth and diversity of an
industry with more than 1.6 million American companies that
employ nearly 25 million workers and generated 2009 sales of
$2.3 trillion.
We thank Representatives Bobby Scott (D-VA), John Conyers
(D-MI), Lamar Smith (R-
[[Page H7167]]
TX) and Bob Goodlatte (R-VA) for their leadership on this
important issue. We urge all members of Congress to support
their efforts and vote in favor of H.R. 5932.
Sincerely,
Steve Pfister,
Senior Vice President,
Government Relations.
I reserve the balance of my time.
Mr. SMITH of Texas. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, H.R. 5932, the Organized Retail Theft Investigation and
Prosecution Act of 2010, is an important step in combating a crime that
costs retailers and taxpayers billions of dollars every year. I am
pleased to join my Judiciary Committee colleagues Chairman Conyers,
Chairman Scott, and Congressman Goodlatte as an original sponsor of
this legislation.
Organized retail theft involves the theft of large quantities of
merchandise from retail stores. Unlike shoplifters, these thieves steal
the merchandise with the intention of selling it back into the
marketplace.
In the past, the majority of these stolen goods were resold at swap
meets, flea markets, or pawn shops. Today, the most popular venue for
selling stolen goods is the Internet. Web sites such as eBay,
Craigslist, and Amazon are being exploited by organized retail thieves
to sell their stolen goods with relative ease and anonymity. This
dynamic makes it increasingly more difficult for retailers and law
enforcement agents to identify and apprehend these thieves.
According to FBI estimates, organized retail theft rings cost
businesses more than $30 billion in losses annually. A recent survey
conducted by the National Retail Federation found that nearly 90
percent of the retailers surveyed have been victimized by organized
retail theft, an 11 percent increase from 2007. The survey also found
that roughly 6 out of 10 retailers have seen an increase in organized
retail theft in just the last 12 months.
In 2003, the FBI established an Organized Retail Crime Initiative to
identify and dismantle large multijurisdictional organized retail crime
rings. This initiative included the formation of a National Retail
Federation FBI intelligence network. The network is intended to
establish an effective means of sharing organized retail crime
information and intelligence to discuss trends as they relate to
specific sectors and regions of the retail market, and to identify and
target the more sophisticated criminal enterprises.
Earlier this year, the National Retail Federation partnered with eBay
to develop greater information sharing between eBay and participating
retailers. This partnership is a significant step forward in the fight
against organized retail theft. Bringing these two industries together
will hopefully increase the likelihood of linking thefts from retail
stores to goods offered for sale on eBay's Web site.
H.R. 5932 builds upon these efforts by increasing the Federal
resources dedicated to organized retail theft investigation. The bill
requires the Attorney General to establish an Organized Retail Theft
Investigation and Prosecution Unit within the Department of Justice.
This unit will include representatives from the FBI, ICE, the U.S.
Secret Service and postal inspectors, as well as prosecutors.
The unit will investigate and prosecute large-scale organized retail
thefts and provide assistance to State and local law enforcement
agencies. The unit will also work in consultation with retailers and
online marketplaces to gather information about and identify trends in
organized retail thefts.
H.R. 5932 instructs the Attorney General to prepare a report to
Congress on how retailers and law enforcement agencies can best combat
OCR. The bill authorizes $5 million a year over 5 years to operate the
unit.
This legislation is supported by the National Retail Federation, the
Retail Industry Leaders Association, the Coalition Against Organized
Retail Crime, the Food Marketing Institute, the National Association of
Chain Drugstores, eBay, and the Entertainment Merchants Association.
I would like to thank my colleagues again, Chairman Conyers, Chairman
Scott, and Congressman Goodlatte for their dedication to this issue and
for working together to draft this bipartisan legislation. I urge my
colleagues to support this bill.
Mr. Speaker, I hope the individual I just mentioned, the gentleman
from Virginia, Mr. Goodlatte, is on his way to the floor, and I hope he
will be able to speak on this bill shortly. So I reserve the balance of
my time.
Mr. SCOTT of Virginia. Mr. Speaker, I have no further requests for
time, and I reserve the balance of my time.
Mr. SMITH of Texas. Mr. Speaker, I appreciate the indulgence of the
gentleman from Virginia (Mr. Scott), but since our expected speaker is
not yet on the floor and I am not entirely certain of the time of his
arrival, although I am stalling slightly, I will yield back the balance
of my time.
Mr. SCOTT of Virginia. As has been said, Mr. Speaker, I have no
further requests for time. I would like to thank the gentleman from
Texas for his strong support.
Mr. Speaker, I yield such time as he may consume to my colleague, the
gentleman from Virginia (Mr. Goodlatte).
{time} 2100
Mr. GOODLATTE. Mr. Speaker, I rise in support of H.R. 5932, the
Organized Retail Theft Investigation and Prosecution Act of 2010. This
legislation is an important step in combating a growing threat to
retailers and consumers.
I am pleased to join my Judiciary Committee colleagues Chairman
Conyers, Ranking Member Smith and Chairman Scott as an original sponsor
of this legislation, and I thank the gentleman for true bipartisanship
in allowing me to catch my breath in order to be able to give these
remarks.
Organized retail theft is a huge and growing problem in the United
States. According to FBI estimates, organized retail theft rings cost
businesses more than $30 billion in losses annually. Organized retail
theft groups target anything from everyday household commodities to
health products to baby formula that can be easily sold through flea
markets, swap meets, shady storefront operations, and through online
marketplaces.
Thieves often travel from retail store to retail store, stealing
relatively small amounts of goods from each store but cumulatively
stealing significant amounts of goods. Once stolen, these products are
sold back to fencing operations, which can dilute, alter, repackage the
goods, and then resell them, sometimes back to the same stores from
which the products were originally stolen. These goods are also sold at
flea markets, pawn shops and increasingly on the Internet.
When a product does not travel through the authorized channels of
distribution, there is an increased potential that the product has been
altered, diluted, reproduced, and/or repackaged. These so-called
``diverted products'' pose significant health risks to the public,
especially the diverted medications and food products. Diverted
products also cause considerable financial losses for legitimate
manufacturers and retailers. Ultimately, the consumers bear the brunt
of these losses as retail establishments are forced to raise prices to
cover the additional costs of security and theft prevention measures.
Even more troubling is where the money is going. We have seen
evidence that organized retail theft is increasingly being used to fund
international organized crime and other nefarious activities. At the
State level, organized retail theft crimes are normally prosecuted
under State shoplifting statutes as mere misdemeanors. As a result, the
thieves who participate in organized retail crime rings typically
receive the same punishment as common shoplifters. The thieves who are
convicted usually see very limited jail time or are placed on
probation.
I believe that the punishment does not fit the crime in these
situations. Mere slaps on the wrists of these criminals have
practically no deterrent effect. In addition, the low-level criminals
who are actually stealing these goods from the shelves are easily
replaced by the criminal organization's higher level coordinators.
During my 8 years of working on ways to combat organized retail
theft, I found that the Federal law enforcement community believed it
had adequate Federal laws to prosecute organized retail theft crimes,
but that poor communication, lack of coordination among State and local
law enforcement and lack of resources were major impediments to
effective enforcement.
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In order to improve the communications and intelligence-sharing
between industry and law enforcement, I offered an amendment to the
Department of Justice's reauthorization bill back in 2005, which
created a Federal definition of organized retail theft crimes and
directed the FBI to contribute to the construction of a national
database housed in the private sector where retail establishments, as
well as Federal, State and local law enforcement, could compile
evidence on specific organized retail theft crimes to aid
investigations and prosecutions. This database, which has now become
the current LERPnet, has helped to put the pieces together to show the
organized and multi-state nature of these crimes as well as to provide
important evidence for prosecutions.
I am also pleased to report that the private sector is working
together to address this problem. Earlier this year, the National
Retail Federation partnered with eBay to develop greater information
sharing between eBay and participating retailers. This partnership will
hopefully increase the likelihood that more organized retail theft will
be detected and prosecuted. H.R. 5932 will build upon the successes of
these efforts to provide additional resources to the FBI to investigate
organized retail theft.
The bill funds and requires the Attorney General to establish an
organized retail theft investigation and prosecution unit within the
Department of Justice. This unit will include representatives from the
FBI, ICE, U.S. Secret Service, and postal inspectors, as well as
prosecutors. The unit will investigate and prosecute large-scale
organized retail thefts and will provide assistance to State and local
law enforcement agencies. The unit will also work in consultation with
retailers and online marketplaces to gather information about and
identify trends in organized retail thefts.
In addition, H.R. 5932 instructs the Attorney General to prepare a
report to Congress on how retailers and law enforcement agencies can
best combat organized retail theft. This legislation is supported by
the National Retail Federation, the Retail Industry Leaders
Association, the Coalition Against Organized Retail Crime, the Food
Marketing Institute, the National Association of Chain Drug Stores,
eBay, and the Entertainment Merchants Association.
Again, I wish to thank my colleagues Chairman Conyers, Ranking Member
Smith and Chairman Scott for their dedication to this issue and for
working with me to draft this bipartisan legislation. I urge my
colleagues to support the bill.
Mr. SMITH of Texas. Mr. Speaker, I yield back the balance of my time.
Mr. SCOTT of Virginia. Mr. Speaker, I would urge my colleagues to
support H.R. 5932, and I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Virginia (Mr. Scott) that the House suspend the rules
and pass the bill, H.R. 5932, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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