[Congressional Record Volume 163, Number 75 (Tuesday, May 2, 2017)]
[Senate]
[Pages S2668-S2671]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                           Montana Ag Summit

  Mr. DAINES. Mr. President, I have some good news from Montana. A week 
ago yesterday, the U.S. Senate voted to confirm former Georgia Governor 
Sonny Perdue to be our next Secretary of Agriculture. When we met prior 
to his confirmation hearing, Secretary Perdue and I discussed Montana 
ag and the need to expand agricultural access to foreign markets. I 
know he will prioritize the ag industry during his time in office, and 
I am pleased to share that I will be hosting the Secretary in Montana 
for the Montana Ag Summit that is going to be held in Great Falls at 
the end of this month.
  Back in March, during the Secretary's confirmation hearing, I 
extended an invitation to join us in Montana's Golden Triangle as we 
discuss the issue of strengthening international relationships for 
Montana's agriculture. The Golden Triangle is where my great-great-
grandmother homesteaded as she moved from Minnesota--a Norwegian 
immigrant--to Montana.
  At the Ag Summit, we will showcase the technological advancements 
that are changing the way we produce crops and livestock, promote the 
next generation of ag producers, and discuss the challenges ag 
producers face as a result of our Federal policies and regulations. The 
Montana Ag Summit will bring together leaders from across the 
agricultural industry to hear from our keynote speakers, which include 
Secretary Perdue and my colleague and friend and the chairman of the 
U.S. Senate Ag Committee, Senator Pat Roberts from Kansas. Nothing 
takes the place of hearing directly from Montanans and seeing our great 
State with your own eyes.
  I have been a strong advocate for Montana ag since coming to 
Washington, DC, and it is a privilege to serve as Montana's only 
representative on the U.S. Senate Ag Committee. Whenever I get the 
chance, I talk about Montana's ag industry and advocate for regulation 
reform and for additional opportunities for our ag producers to compete 
on a level playing field.
  Another critical issue for farmers and ranchers in Montana and around 
the Nation is opening up more market opportunities for the ag industry. 
In fact, earlier this past month, 38 of my colleagues and I wrote to 
President Trump asking him to prioritize reopening China's markets to 
U.S. beef in his discussions with Chinese President Xi Jinping. China 
is Montana's third leading trade partner after Canada and South Korea.

  It is important to remember that 95 percent of the world's consumers 
live outside of the United States. While the Chinese ban on U.S. beef 
imports was lifted last fall, more needs to be done to actually see 
U.S. beef on the shelves of Chinese grocery stores. You see, China is 
the second largest beef import market in the world.
  I can say it was an honor to personally present some of Miles City's 
famous and finest beef to Chinese Premier Li Keqiang from Fred Wacker's 
ranch out of Miles City. I will get Montana beef in China if I have to 
take it over myself.
  Montana's No. 1 industry and economic driver is agriculture. With 
over 27,000 farms in the State, Montana ag is nearly $5 billion strong. 
By the way, Montana is now the leading pulse crop producer in the 
Nation.
  Last week, President Trump unveiled his tax reform plan, which, among 
many proposals, includes a full repeal of the death tax--a full, 
permanent repeal of the death tax. This is a tax that directly impacts 
many Montana farm and ranch families. In fact, I heard a story from a 
Montana rancher a couple of weeks ago of his having the sudden, 
unexpected passing of his mother and his father. It is a 
multigenerational ranch operation in Montana that had a huge tax 
liability--in the millions of dollars--that it had to pay to the IRS 
because of the death tax.
  I have been calling for a repeal of the death tax since I first came 
to Washington, DC--one of the most immoral taxes on the books--because 
I understand how these taxes can cause family farms and family ranches 
to break up and to be sold off.
  The bottom line is this. You cannot feed a nation without farmers and

[[Page S2669]]

ranchers, and you cannot have opportunity economies without actual 
opportunities to meet the needs of not only our State, of not only our 
Nation but of the world.
  As the U.S. Congress and the Trump administration continue to work 
together, I am excited to see that ag is a priority. I look forward to 
working with my colleagues in the U.S. Senate, as well as in the Trump 
administration, to advance policies and solutions to the barriers that 
our Nation's ag producers face, and I really look forward to the 
upcoming Montana Ag Summit in Great Falls later this month.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Hoeven). The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. MENENDEZ. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MENENDEZ. Mr. President, I rise today to speak in opposition to 
the confirmation of Jay Clayton as Chair of the U.S. Securities and 
Exchange Commission.
  Just 100 days into the Trump administration, the truth is becoming 
crystal clear to the American people: There is no ``America first'' 
policy, and there certainly is no ``middle class first'' policy. There 
is just one policy, and that is a ``Wall Street first'' policy. It is a 
policy designed to steer even more wealth and more power to those who 
are plenty wealthy and plenty powerful, a policy built on the misguided 
view that our economy does better when banks do as they please, when 
CEOs receive runaway pay, and when bigger profits never translate into 
bigger paychecks for workers. That is why we have seen no Executive 
orders designed to hold big banks accountable, no Executive orders 
designed to protect borrowers from abusive student loan companies, no 
Executive orders helping more workers save for retirement. Instead, we 
see the administration rolling back protections for consumers and 
students and seniors, actively exploring how to put taxpayers back on 
the hook for Wall Street's recklessness, and ordering oversight 
agencies to, quite simply, conduct less oversight.
  There is no greater example of the Trump administration's ``Wall 
Street first'' policy than its decision to nominate Jay Clayton as the 
Chair of the Securities and Exchange Commission.
  The SEC is our Federal Government's cop on the Wall Street beat. And 
let's remember why we have a Securities and Exchange Commission and why 
it needs to be the cop on the beat. In 1929, the stock market crashed, 
and our Nation was sent into a deep and devastating depression. That is 
why President Franklin Roosevelt signed financial reforms into law 
aimed at curbing rampant speculation and risky behavior on Wall Street, 
and the creation of the Securities and Exchange Commission was one of 
those reforms.
  The SEC was designed to enact safeguards and promote fairness in our 
markets, to protect investors and prosecute fraud, and to ensure that 
our businesses have access to capital so they can grow and create jobs. 
When we have a watchdog ensuring that everyone plays by the rules, risk 
is more distributed, markets are more stable, and capital is more 
available.
  The American people know all too well what happens when we take our 
eyes off of Wall Street. Not even a decade has passed since the worst 
financial collapse in 80 years put taxpayers on the line for billions 
of dollars--billions of dollars--in bailouts.
  In the years leading up to the crash, our regulators, including the 
SEC, turned a blind eye to excessive risk-taking and corporate 
misconduct. We needed a cop on the beat, but instead we had a regulator 
asleep at the switch. As a result, we suffered a crisis that cost 8.5 
million Americans their jobs and 10 million Americans their homes--8.5 
million Americans their jobs and 10 million Americans their homes--a 
crisis that destroyed $19 trillion in household wealth and left small 
businesses devastated nationwide, a crisis that sank local and State 
governments into a sea of red ink. And, of course, it left us with the 
great recession. It took us years to dig this economy out of that 
ditch. Now, after all we have been through, is it really time to go 
easier on Wall Street?
  Since the financial crisis, the SEC has been instrumental in 
reshaping the rules of the road and holding corporation wrongdoers 
accountable. Now, less than a decade since that devastating crisis, 
this administration wants to give the keys to the castle to one of Wall 
Street's most loyal guardians.
  We need someone at the helm willing to root out bad behavior in our 
financial sector, but Mr. Clayton is not that someone. He is no expert 
in enforcing the law. Indeed, Mr. Clayton has made a career out of 
fighting the SEC and other financial regulators on behalf of Wall 
Street's biggest institutions. His resume is built around defending 
Wall Street's most notorious offenders from ever being held 
accountable.
  Let me again remind my colleagues that the SEC was not created to be 
Wall Street's support group in Washington. Investors and the American 
public at large deserve an SEC Chair who will fight to hold firms 
accountable, who will prosecute misconduct and wrongdoing, and who will 
improve investor protections. Mr. Clayton has not met that burden.
  There are three reasons why I am concerned that an SEC led by Mr. 
Clayton would be an SEC that bends the rules for corporations and 
ignores the needs of hard-working Americans.
  First is Mr. Clayton's singular focus on corporate bottom lines. When 
asked to lay out his vision for the agency, Mr. Clayton offered no path 
to preventing another financial crisis. He provided no commitment to 
strengthening the agency's enforcement abilities, and he callously 
overlooked investor protections. Mr. Clayton failed to give an iota of 
support to anything other than boosting corporate bottom lines. He 
spoke exclusively about reducing compliance and registration costs for 
companies, and that is all fine, but not at the expense of critical 
investor protections and of healthy, stable, and fair markets for the 
economy at large.
  Let's remember why this is important. Without strong protections and 
disclosures, we will sacrifice investor confidence. And when we 
sacrifice investor confidence, less capital will flow through our 
markets. When less capital flows through markets, businesses will 
struggle to grow and to innovate. In other words, a stable and fair 
financial sector is vital to our economy as a whole.
  My second concern involves Mr. Clayton's potential conflicts of 
interest. Mr. Clayton has spent his entire career representing big 
players on Wall Street before, during, and after the crisis. His work 
has undoubtedly produced many conflicts of interest. As a result, Mr. 
Clayton will be forced to sit out of numerous important decisions 
integral to the role of the SEC Chair. This is a problem because the 
SEC currently has just two Commissioners. The absence of Mr. Clayton 
could very well undermine the agency's ability to prosecute wrongdoing 
on Wall Street.
  Finally, I was alarmed by Mr. Clayton's refusal to answer any 
questions of substance during his confirmation hearing.
  When asked if he would implement congressionally mandated rules, like 
the provision I wrote into Dodd-Frank requiring corporations to 
disclose how much money CEOs make in comparison to their employees, Mr. 
Clayton gave no straight answer.
  When asked if he would fairly consider the 1.2 million comments--the 
greatest number of comments ever received on any SEC rulemaking process 
by the SEC--urging that companies disclose their political spending, 
Mr. Clayton gave no straight answer.
  Finally, when asked if he would restore the subpoena power of the SEC 
attorneys so that they can initiate investigations, Mr. Clayton showed 
his true colors. When it comes to enforcement at the SEC, he said we 
had to be ``mindful that even the commencement of an investigation can 
have significant adverse impacts'' on public companies. So instead of 
explaining his vision as SEC's Chair and the SEC's role as a cop on the 
beat, he said the agency should consider a company's bottom line before 
investigating potential wrongdoing. This, to me, is in essence what 
defines this nominee's approach and this administration's approach: 
Wall Street profits that prevail over Main Street protections, no 
matter the risks

[[Page S2670]]

posed to the American people. It is precisely this kind of thinking 
that made our system too vulnerable to a financial crisis of epic 
proportions.
  Given Mr. Clayton's inability and refusal to answer basic questions 
about important issues--like whether he would restore the authority of 
the Securities and Exchange Enforcement Division or implement the CEO-
to-worker pay ratio rule mandated by Congress or require disclosure of 
corporate political spending--1.2 million citizen comments, the 
greatest in the history of the SEC--or ensure that retail investors 
receive advice that is in their best interests--I can't help but 
conclude that Mr. Clayton appears best suited to continue representing 
Wall Street rather than to working on behalf of the American people.
  The President's nomination of Mr. Clayton is a bow to Wall Street and 
a cold shoulder to hard-working, middle-class families. I will not be 
voting for his confirmation.
  Mr. President, I yield the floor.
  Mr. REED. Mr. President, I rise in opposition to the nomination of 
Jay Clayton to be Chairman of the Securities and Exchange Commission, 
SEC.
  Mr. Clayton has achieved great personal success as a corporate 
attorney, where for years he represented some of our Nation's largest 
financial institutions, such as Bear Stearns, Lehman Brothers, and 
Goldman Sachs. Personal success is not the same as being willing to 
safeguard the interests of all who participate in and rely on our 
capital markets, especially working-class Americans, as I believe a 
good SEC Chairman must. Based on Mr. Clayton's testimony and his 
answers to my questions and those of my colleagues on the Banking 
Committee, I am unable to support his confirmation.
  As more and more working-class Americans know, pensions are becoming 
rarer, and more American families, assuming they even have extra money 
to spare from their paychecks, must invest in securities to save for 
retirement or send their kids to college. The integrity and efficiency 
of our capital markets then are not only of great importance to the 
megabanks and tycoon investors, but also to working-class Americans.
  It is therefore in all of our interests to have strong and vigilant 
Federal financial regulators who can help ensure we avoid another 
financial crisis. While the megabanks have bounced back after staring 
into the abyss, the last financial crisis, which began in the Bush 
administration, had devastating consequences on working-class 
Americans, too many of whom lost their jobs, their nest eggs, and their 
homes. While the Dow Jones Industrial Average has recovered, the 
impacts are still felt by too many in Rhode Island and throughout the 
country.
  While it is vitally important to help small businesses raise capital 
and grow their companies by actually creating jobs here in the United 
States, it is also equally essential that we have a strong cop on the 
beat that upholds and improves the integrity of our capital markets.
  Initially, I was encouraged to read in Mr. Clayton's testimony before 
the Senate Banking Committee that ``there is zero room for bad actors 
in our capital markets'' and that ``I am 100 percent committed to 
rooting out any fraud and shady practices in our financial system.''
  During his confirmation hearing, I asked Mr. Clayton if he would 
support my bipartisan legislation with Senator Grassley that would 
deter fraud by increasing the statutory limits on civil monetary 
penalties. Our legislation responds to former SEC Chair Mary Shapiro's 
statement that ``the Commission's statutory authority to obtain civil 
monetary penalties with appropriate deterrent effect is limited in many 
circumstances.'' In his response to me, Mr. Clayton said, ``I am very 
willing to take a look at the issue and work with you on it and give 
you my views after I've been better educated on it.'' I accepted this 
response for the time being and wrote to Mr. Clayton after the hearing 
to ask for his thoughts on this matter now that he had time to study 
the issue.
  He responded: ``As a general matter, I believe that the effective 
empowerment and functioning of the SEC Enforcement Division are 
fundamental to the fair and efficient functioning of our markets and 
the protection of investors. Under existing law, the Commission has the 
authority to seek civil monetary penalties in a number of 
circumstances. I would not want the Division or Commission to be 
unnecessarily or inappropriately constrained in pursuing civil monetary 
penalties, which can serve an important deterrent effect in appropriate 
circumstances. If confirmed as Chair, I will work with my fellow 
Commissioners and the Enforcement Division staff to enforce the law as 
it is written, including with respect to civil monetary penalties. I 
also would be willing to engage with Congress regarding any changes to 
the SEC's statutory authority to seek monetary penalties that Congress 
deems appropriate.''
  I am glad Mr. Clayton agrees that penalties can serve as deterrents, 
and I appreciate the fact that Mr. Clayton would not want the SEC to be 
``unnecessarily or inappropriately constrained in pursuing civil 
monetary penalties.'' Indeed, what appears to be constraining the SEC 
in part is exactly what former Chair Schapiro said, that penalty limits 
are not high enough to serve as effective deterrents. Given this, I do 
not understand Mr. Clayton's hesitation in clearly supporting my 
bipartisan legislation with Senator Grassley. This does not sound like 
a 100 percent commitment to ``rooting out any fraud and shady practices 
in our financial system.''
  This is just one example, but based on a review of his record and his 
responses to the committee's questions, I am not confident Mr. Clayton 
will vigorously work to protect all investors, in the same way as he 
throughout his career has defended the interests of his corporate and 
megabank clients, particularly when those interests may come into 
conflict, as we know they will. In my opinion, there should be no 
question of an SEC chairman's willingness to stand up and fight for 
working-class Americans and mom-and-pop investors.
  Indeed, as Senator Brown, the ranking member of the Senate Banking 
Committee, has stated himself, ``it's not the first time we've seen a 
nominee like Mr. Clayton. I was concerned about Mary Jo White's 
conflicts and corporate law background. She was conflicted in dozens of 
high-profile cases, and then a month after stepping down as Chair, she 
returned to her old law firm. As a lawyer might say--that's bad 
precedent.''
  What we need is a strong SEC Chair that will vigorously protect and 
defend the interests of all American investors. I hope he proves me 
wrong, but based on the record before me, I am not convinced Mr. 
Clayton is up to this task, and therefore, I cannot vote to confirm 
him.
  Mr. VAN HOLLEN. Mr. President, I oppose the confirmation of Jay 
Clayton to be a member of the Securities and Exchange Commission.
  When the stock market crashed in 1929, public confidence in the 
markets plummeted as well. Investors large and small lost their life's 
savings. Congress responded with laws to help rebuild public faith in 
the markets. Thus in the wake of the Great Depression, Congress created 
the Securities and Exchange Commission to protect investors and 
maintain fair, orderly, and efficient markets.
  Congress designed the SEC to see that investors and the markets have 
reliable information and clear rules for honest dealing. The SEC's job 
is to make sure that brokers, dealers, and exchanges put investors' 
interests first. The SEC ensures that companies offering securities for 
investment tell the public the truth about their businesses, the 
securities they are selling, and the risks involved.
  Congress took pains to create the SEC to have some distance from Wall 
Street. The law provides that no Commissioner can engage in any 
business or employment other than serving as Commissioner. The law 
prohibits any Commissioner from participating in any stock transactions 
of a type that the Commission regulates.
  Mr. Clayton has extensive experience working in capital markets. He 
has represented a long list of financial firms. His numerous conflicts 
may make him captive to the industry that President Trump nominated him 
to police. One of his better-known clients is Goldman Sachs. The 
Department of Justice found that Goldman Sachs falsely assured 
investors that sound

[[Page S2671]]

mortgages backed securities that Goldman sold, when Goldman knew that 
these securities were full of mortgages that were likely to fail.
  During his confirmation hearing, I asked Mr. Clayton about Goldman 
Sachs' $5 billion settlement with the Department of Justice. I asked 
Mr. Clayton if he felt that Goldman Sachs had been engaged in shady 
practices, but Mr. Clayton said only that he felt the case stood on its 
own. I cannot comprehend why Mr. Clayton demurred on this topic. We 
should all be able to agree that if a firm pays $5 billion in a 
settlement, it was engaged in shady practices, to say the least.
  Duriing Mr. Clayton's confirmation hearing, he said that he is ``100 
percent committed to rooting out any fraud and shady practices in our 
financial system.'' If he is confirmed, I hope he stands by that 
pledge.
  The SEC, investors, and the American people need an independent 
voice. They need a politically independent voice, as well as a voice 
that can be independent enough to make tough enforcement decisions 
about the financial firms it regulates. I have serious doubts that Mr. 
Clayton can be that voice; thus I oppose his nomination.
  The PRESIDING OFFICER. The Senator from Virginia.