[Congressional Record (Bound Edition), Volume 148 (2002), Part 10]
[House]
[Pages 13347-13356]
[From the U.S. Government Publishing Office, www.gpo.gov]




     APPOINTMENT OF CONFEREES ON H.R. 3763, CORPORATE AND AUDITING 
      ACCOUNTABILITY, RESPONSIBILITY, AND TRANSPARENCY ACT OF 2002

  Mr. OXLEY. Mr. Speaker, I ask unanimous consent to take from the 
Speaker's table the bill (H.R. 3763) to protect investors by improving 
the accuracy and reliability of corporate disclosures made pursuant to 
the securities laws, and for other purposes, with a Senate amendment 
thereto, disagree to the Senate amendment, and agree to the conference 
asked by the Senate.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Ohio?
  There was no objection.


               Motion to Instruct Offered by Mr. Conyers

  Mr. CONYERS. Mr. Speaker, I offer a motion to instruct conferees.
  The Clerk read as follows:

       Mr. CONYERS moves that the managers on the part of hte 
     House at the conference on the disagreeting votes of the two 
     Houses on the Senate amendments to the bill H.R. 3763 be 
     instructed to recede from disagreement with the provisions 
     contained in the proposed section 1520 of Chapter 73 of Title 
     18 of the United States Code added by section 802, and the 
     provisions contained in sections 804, 805, and 806 of the 
     engrossed Senate amendment.

  The SPEAKER pro tempore. Under the rule, the gentleman from Michigan 
(Mr. Conyers) and the gentleman from Ohio (Mr. Oxley) each will be 
recognized for 30 minutes.
  The Chair recognizes the gentleman from Michigan (Mr. Conyers).
  Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume.
  This motion to instruct conferees would be to ask the acceptance of 
four antifraud measures contained in the Senate measure that were not 
included in yesterday's suspension bill. These provisions relate to 
document retention, statute of limitations, whistleblower protection, 
and sentencing enhancement. All of these were contained in the same 
measure in the other body that enjoyed a 97 to 0 vote last week.
  First, we would ensure that auditors maintain their audit review and 
other work papers for a period of 5 years after the conclusion of an 
audit review. This will make sure that evidence of potential accounting 
fraud is retained for future investigation. In addition, the motion 
would give defrauded investors more time to seek relief. Under current 
law, defrauded investors have a year from the date on which the alleged 
violation was discovered or 3 years after the date on which the alleged 
violation occurred; but because these types of wrongs are often 
successfully concealed for years, the other body increased the time 
period to 2 years after the date on which the alleged violation was 
discovered or 5 years after the date on which the alleged violation 
occurred.

                              {time}  1715

  And this motion to instruct carries that provision.
  In addition, we protect corporate whistleblowers. In the other body 
that measure was contained in the Grassley amendment, which extended 
whistleblower protections to corporate employees, thereby protecting 
them from retaliation in cases of fraud and other acts of corporate 
misconduct. Those like Sharon Watkins should be afforded the same 
protections as government whistleblowers.
  The last provision in the motion to instruct would provide for strong 
sentencing enhancements. In the other body the bill included the Leahy-
Hatch sentencing enhancements when a securities fraud endangers the 
solvency of a corporation and for egregious obstruction of justice 
cases where countless documents are shredded or destroyed.
  Now, the Enron scandal broke in November 2001. Since then, our stock 
market and the economy as well have been devastated by a wave of 
scandals: Arthur Andersen, Global Crossing, Xerox, MCI, Merck, Quest 
and others. Tens of billions of hard-earned pension and retirement 
dollars have evaporated while those at the top of the corporate ladder 
have cashed out their options.
  During this period of time, no person, not a single individual, has 
faced a single indictment from the Department of Justice. My 
instructions will give the Department the tools that they need to 
protect our investors and bring some of these people who have escaped, 
so far, to justice.
  It is my hope that we will get the support that is needed to instruct 
our conferees in this fashion.
  Mr. Speaker, I reserve the balance of my time.
  Mr. OXLEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, having just seen this document, the motion to instruct, 
I would have to say to my friend, the gentleman from Michigan, that 
most of the issues that he talks about in his motion I have a great 
deal of empathy for. Certainly the issue over document destruction, of 
whistleblower protections, and the like, are all part and parcel of 
what ultimately I think this legislation needs to look at.
  I have some concerns, as the gentleman might expect, regarding the 
language of the extension of the statute of limitations in regard to 
lawsuits. As the gentleman knows, back in 1995, Congress, on a 
bipartisan basis, passed the Securities Litigation Reform Act. That was 
vetoed by then-President Clinton and was the only veto ultimately 
overridden. So, in fact, the House and the Senate spoke very loudly in 
1995 on that issue.
  It is also true that Chairman Greenspan, when asked in the Senate 
yesterday, when he testified as to whether he saw any need to change 
the existing

[[Page 13348]]

statute in regard to securities litigation reform, answered in the 
negative. So we are, on this side, somewhat perplexed that the minority 
would choose this particular issue, which was ultimately not part of 
the legislation that came out of the Committee on Financial Services, 
the committee of major jurisdiction, so I have some concerns about that 
part.
  On the other hand, it seems to me those are the kinds of issues that 
we need to work towards and to complete in a conference.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CONYERS. Mr. Speaker, I am pleased to yield such time as he may 
consume to the gentleman from New York (Mr. LaFalce), the distinguished 
ranking member of the Committee on Financial Services.
  Mr. LaFALCE. Mr. Speaker, I thank the distinguished ranking member of 
the Committee on the Judiciary, the gentleman from Michigan, for 
yielding me this time.
  I think the best thing that this House could have done would have 
been to accept the Senate-passed bill as is. Pass it today and send it 
today to the President for his signature. I cannot think of anything 
else that would have restored as much integrity to our publicly traded 
markets, as much confidence on the part not just of the American public 
but the world in the integrity of those markets of that single act.
  I would still like to hear President Bush call for passage by the 
House of Representatives of the bill that passed the Senate 97 to 0. 
Now, my colleagues like to talk about bipartisanship. Ninety-seven to 0 
is unanimous with respect to every single Senator from both parties 
that was voting. They were able to forge a consensus. If they can forge 
a consensus 97 to 0, and if the President really wants to sign a bill 
before the end of July, as he said, that is the approach we should 
take.
  Now, unfortunately, the House Republican leadership does not want to 
take that approach. However, there are alternatives. We could take up 
the Senate bill and offer one or two amendments to it. If there are 
four or five or six amendments, my colleagues could offer those four, 
five, or six amendments to the Senate bill and send it back to them. 
And that would be a very expeditious way of proceeding.
  What I am fearful of is that this conference that my colleagues want 
to go to could be two things: Number one, long and drawn-out; and, 
number two, an opportunity to dilute behind the scenes and closed doors 
the strong provisions of the Senate bill. And we are not going to let 
that happen.
  I want to put everyone on notice right now that on every single issue 
where we differ from the Senate I intend to have total transparency. 
There will be a revelation to the world of every single issue and 
difference and every single vote within conference. There will be total 
transparency so that they can understand what we are trying to do to 
protect the American investor and what others might be trying to do.
  Now, with respect to the motion of the gentleman from Michigan, what 
he is trying to do is say that at the very least there are certain 
provisions within the Senate-passed bill that the House should recede 
to. It is basically the Sarbanes-Leahy bill, and the ranking member of 
the House Committee on the Judiciary has focused in on the Leahy 
provisions, particularly section 802, dealing with the criminal 
penalties for the altering of documents; section 805, mandating a 
review of the Federal sentencing guidelines; section 806, creating a 
private cause of action for whistleblowers if they are in any way 
discriminated against, a civil cause of action; and very, very 
importantly, a statute of limitations, because the statute of 
limitations issue that we are talking about was not dealt with by this 
Congress. The statements that we did were erroneous.
  We need to deal with that because, unfortunately, by the time we 
discovered the wrongdoing that took place in the Enron case, in the 
Global Crossing case, in the WorldCom case, et cetera, the private 
cause of action may have seen the statute of limitations expire. So we 
need more time. That is an essential and important provision.
  There is no reason whatsoever for opposing that. There is no reason 
whatsoever for opposing any of those provisions. And because of that, 
the distinguished gentleman from Michigan has said let us instruct the 
conferees to recede to the Senate on those issues.
  If my colleagues oppose this motion to instruct, that means that they 
oppose those particular provisions within the Senate bill. Let there be 
no mistake about that. So the issues will be quite clear when we do go 
to a vote on this motion to instruct.
  Mr. OXLEY. Mr. Speaker, I yield 3 minutes to the gentleman from 
Michigan (Mr. Rogers).
  Mr. ROGERS of Michigan. Mr. Speaker, I want to commend the chairman 
on his work in gaining corporate responsibility. I would not stand here 
today if I did not believe at the end of our session here before recess 
that we would not have a bill on the President's desk.
  Just in the last few weeks, the Dow Jones Industrial saw about a 10 
percent decline. Yesterday, just yesterday alone, $152 billion of 
wealth disappeared; $2.6 trillion just this year alone. Those are big 
numbers.
  Now, we heard from my good friends in the minority about process and 
what goes where and about a very long drawn-out process. But let me say 
this: The other day I had a woman at a coffee shop who came in, an 
elderly woman, and she could not get three words into her story before 
she started to shake and tears started running down her face because 
she was just informed that they would not be able to retire in 12 
months. Too much of their 401(k), too much of their retirement, was 
gone.
  Now, let me tell my colleagues what they understand, my colleagues. 
They do not care whose name is on the bill. They do not care what 
process is used to get to the bill. They want trust, they want 
accountability, and they want somebody to pay the price for stealing. 
They understand that whether someone wears an Armani suit or a cheap 
ski mask, if they steal money, they ought to go to jail. They want us 
to understand that they are counting on us in Congress, not 
Republicans, not Democrats, not a name on a bill, but all of us to 
stand up together and say we are going to reinvigorate the trust and 
confidence in our American markets.
  I think today that will happen. I am very, very pleased at what this 
chairman has done and what he has committed to do, and with that, I 
intend to enter into a colloquy with the chairman.
  The gentleman from Ohio is going to be the chairman of the conference 
committee that will hear this matter in conference; is that not true?
  Mr. OXLEY. Mr. Speaker, will the gentleman yield?
  Mr. ROGERS of Michigan. I yield to the gentleman from Ohio.
  Mr. OXLEY. Mr. Speaker, the gentleman is correct.
  Mr. ROGERS of Michigan. Reclaiming my time, Mr. Speaker, the 
gentleman has made a commitment, and today a very public commitment, 
that by the end of next week, before this House recesses, the President 
will have on his desk to sign into law a bill that upholds the 
principles that the gentleman has fought so hard for these last few 
months on corporate responsibility; is that correct?

                              {time}  1730

  Mr. OXLEY. Mr. Speaker, if the gentleman will continue to yield, I 
want to assure the gentleman from Michigan (Mr. Rogers) that is exactly 
what our goal is. The President has tasked this Congress to get a bill 
to his desk before the August break. The Speaker has done the same. I 
am committed, and I think all of us are committed, to getting that job 
done.
  Mr. ROGERS of Michigan. Mr. Speaker, reclaiming my time, we have 
heard from the gentleman who has given his commitment. Do not talk 
about months; do not talk about weeks. Do not let one more tear fall on 
the statement of a 401(k) plan. Let us work together and get this done 
for the people of America. It is too important.

[[Page 13349]]

  Mr. CONYERS. Mr. Speaker, I yield 2 minutes to the gentleman from New 
York (Mr. LaFalce).
  Mr. LaFALCE. Mr. Speaker, I am delighted that the gentleman wants to 
work together. That is what we want to do. We want to instruct the 
conferees to accept these specific four provisions of the Senate-passed 
bill. If the gentleman wants to work with us, let us vote for this 
motion to instruct the conferees, unless the gentleman opposes those 
four provisions. If he opposes those four provisions, or portions of 
them, the gentleman should come to the floor and tell us what he 
opposes about them. I do not think that we could be any more 
cooperative than that.
  Mr. OXLEY. Mr. Speaker, I yield 1 minute to the gentleman from 
Florida (Mr. Foley).
  Mr. FOLEY. Mr. Speaker, we talk about important bills, and this is 
one of them. I support the gentleman from Ohio (Mr. Oxley), who has 
worked very hard on this issue. I also want to see this issue resolved 
by next week.
  The Democrats talk about the Sarbanes bill as if it is the end-all, 
be-all bill on this floor. While I was on the Senate floor watching the 
debate, they resisted Senator McCain's efforts to include language 
relative to options. They did a procedural effort to stop calculating 
options in the corporate environment. So it is not perfect.
  But I have been given assurances by the gentleman from Ohio (Mr. 
Oxley), the chairman of the Committee on Financial Services, that he is 
going to go into the room and see that we have a final working product 
with Senator Sarbanes, who I have a great deal of respect for on this 
issue; and I believe that is going to be accomplished.
  The gentleman from Michigan (Mr. Rogers) enunciated some of the 
concerns that I have as well: stabilizing the markets, ensuring 
integrity, bringing relief.
  I will not be supporting the motion to instruct. I am going to work 
with our chairman, and I hope that we will deliver a product. But I can 
assure the House that we will be back on Wednesday and Thursday if it 
is not delivered to the floor for a vote.
  Mr. CONYERS. Mr. Speaker, I yield 2 minutes to the gentleman from New 
York (Mr. LaFalce).
  Mr. LaFALCE. Mr. Speaker, I have great regard for the gentleman from 
Florida (Mr. Foley), and even higher regard because of the letter which 
he sent out saying, let us send something to the President's desk 
before we recess, and if need be, the Senate-passed bill. I thank the 
gentleman very much for that.
  With respect to the issue of the expensing of stock options, I would 
love to have FASB promulgate a requirement that stock options be 
expensed. I have called for that since 1994 when FASB recommended that. 
But unfortunately, there was so much pressure within Congress to do 
that that FASB withdrew it as a mandate and merely said do it 
voluntarily. Only two companies in the world did it.
  At the very least, the Senate bill does say to FASB reconsider that 
issue and if they think it should be mandated, mandate it. The House 
bill is absolutely silent on that. So if Members want the ranking 
member from Michigan to alter his motion to instruct the conferees to 
get them to accept that provision of the Senate bill, I will do what is 
within my power to get him to so amend that amendment.
  The House bill is silent on the issue of expensing. We on this side 
of the aisle want FASB to reconsider it and not just recommend it, but 
require it, as Warren Buffitt says we should do, as Alan Greenspan says 
we should do, as Coca-Cola said they will do, as BankOne said they will 
do, and as the Republicans have repeatedly said, let us not do.
  Mr. OXLEY. Mr. Speaker, I yield 2 minutes to the gentleman from 
California (Mr. Cox), a valuable member of our committee.
  Mr. COX. Mr. Speaker, I have read carefully the very brief motion to 
instruct conferees and the underlying provisions of the Senate-passed 
bill that the House would recede were we to adopt this. I am surprised 
that the motion to instruct focuses on the criminal provisions of the 
House and the Senate bills respectively because it is well known that 
the House-passed bill that we adopted here earlier this week by a vote 
of 391 to 28 is much tougher than the Senate bill.
  The specific provision concerning shredding of documents that this 
motion to instruct would have us adopt, we would recede to the Senate 
position, drop any disagreement with the Senate position, would have us 
adopting a 10-year maximum sentence for shredding documents. But just a 
few days ago by a vote of 391 to 28, virtually every Member sitting on 
the floor right now voted for a maximum sentence of 20 years.
  I cannot understand why, if we want to be tough on corporate fraud, 
if we want to be tough on corporate wrong-doers, we would focus on this 
portion of the disagreement between the House and Senate bill and 
substitute the far-weaker provisions of the Senate bill.
  The Senate bill provisions that we are asked to accept in this motion 
to instruct also include obstruction of justice penalties. The maximum 
penalty for obstruction of justice in the House-passed bill earlier 
this week is 20 years, significantly lengthening the provisions under 
existing law. What the Senate bill does on this point is ask the United 
States Sentencing Commission to review the sentencing guidelines and do 
what they think is necessary to deter offenders.
  Adopting the far weaker provisions of the Senate bill in this 
respect, where we know that the criminal provisions enacted by this 
House are much tougher, makes no sense at all; and I regretfully must 
oppose this motion to instruct conferees.
  Mr. CONYERS. Mr. Speaker, I yield 3 minutes to myself.
  Mr. Speaker, I must say to the gentleman from California (Mr. Cox) 
the conference is on the Sarbanes bill and the Oxley bill. This motion 
to instruct in no way changes anything in either of the two bills, and 
it merely adds some items in the unanimously reported Sarbanes bill.
  Mr. COX. Mr. Speaker, will the gentleman yield?
  Mr. CONYERS. I yield to the gentleman from California.
  Mr. COX. Mr. Speaker, as a conferee, I certainly would urge, and I 
believe it is the general intent of all of the conferees in the House 
to urge, as the House position in this conference when it comes to 
criminal changes, criminal law changes, to urge the House-passed bill 
be included in the conference report.
  Were we to adopt this motion to instruct, we would undermine that 
position of the House. We would be required to take the much weaker 
Senate provisions.
  Mr. CONYERS. Mr. Speaker, all we want to do is add these four 
recommendations to the two bills. We are not diluting anything. There 
is no dilution in here. I just want the gentleman to understand what is 
going to conference and what it is we are giving instructions on.
  Mr. COX. Mr. Speaker, if the gentleman will continue to yield, the 
dilution is moving from the House position of 20 years maximum sentence 
for shredding of documents and for obstruction of justice to 10 years.
  Mr. CONYERS. Mr. Speaker, reclaiming my time, no, what we are dealing 
with is document retention. We deal with audit review, statute of 
limitations, whistleblower protection, and sentencing enhancement. If 
the gentleman from California (Mr. Cox) is confused on this, there may 
be some other Members that are not clear on this.
  We are talking about document retention, statute of limitations, 
whistleblower protection, and sentencing enhancement only. We are not 
reducing any time for shredding or anything else.
  Mr. OXLEY. Mr. Speaker, I yield 3 minutes to the gentleman from 
California (Mr. Thomas).
  Mr. THOMAS. Mr. Speaker, I apologize for attempting to create a 
partisan approach to dealing with a very real problem.
  I think all of us are intending to make a good bill better. But one 
of the things we have to be cautious about is

[[Page 13350]]

in examining the Senate bill which has been brought over is to be 
reminded that article I, section 7 of the Constitution says, ``All 
bills for raising revenue shall originate in the House of 
Representatives.''
  Referring back to the opening of the 102nd Congress in which the 
Congressional Record reflected, and I will have this made a part of the 
Record at the appropriate time, ``jurisdictional concepts related to 
clause 5(b) of rule XXI.''
  This is an attempt to create a systematic approach: ``In order to 
provide guidance concerning the referral of bills to assist committees 
in staying within their appropriate jurisdictions under rule X, to 
assist committees without jurisdiction overtax or revenue measures, it 
should be emphasized that the constitutional prerogative of the House 
to originate revenue measures will continue to be viewed broadly to 
include any meaningful revenue proposal that the Senate may attempt to 
originate.''
  I would tell the gentleman in reviewing the Sarbanes bill, especially 
in terms of the scope of the board under section 108 on page 61 and the 
requirement that the fees be raised necessary to meet the needs of the 
board, when we take those two provisions along with several others, 
there is no narrowly defined board which would produce narrowly defined 
fees which could meet the test of fees.
  When we have a broadly based, loosely determined jurisdiction of a 
board and a commitment that mandatory fees cover all of those 
activities, we begin to slip into the area Speaker Foley rightly 
referred to as broadly to include any revenue proposals.
  The constitutional and institutional prerogative of the House I would 
hope everyone would want to maintain. We do not want to delay producing 
this product, given the commitment of the chairman on a very tight time 
line. We just want to make note of the fact that we believe there is a 
possibility of this violation. As this bill goes to committee, I 
understand that the Committee on Ways and Means will be conferees. We 
will work with everyone to make sure that the fees that are called fees 
in the Senate truly are fees that do not violate the revenue provision 
and/or we will work together to produce a product which the House 
participates in, protecting our constitutional prerogative to generate 
revenue. The goal is not to stop progress, but to make sure that it is 
done correctly.
  Mr. CONYERS. Mr. Speaker, I yield 2 minutes to the gentleman from New 
York (Mr. LaFalce).
  Mr. LaFALCE. Mr. Speaker, I heard this morning that the gentleman 
from California (Mr. Thomas), the chairman of the Committee on Ways and 
Means, had contemplating issuing what is known as a ``blue slip.'' That 
is a document that would have precluded the House from going to 
conference with the Senate on the Senate-passed bill on the grounds 
that it had violated a constitutional prerogative. I disagree with his 
interpretation, but I am pleased he realized if he did proceed on the 
course that he outlined this morning, the issuance of his blue slip 
would have caused thousands of pink slips across America.

                              {time}  1745

  However, my primary concern now that he has not exercised what he 
intended to is what will happen when we go to conference because the 
chairman of the conference committee has publicly said within the past 
several days that what we need is a cooling-off period, a cooling-off 
period. Rather than expeditious action, he has publicly called for, it 
has been printed in the paper, a cooling-off period. We need action. We 
need action before we recess. We are not cool right now. We are hot. We 
want action while we are hot because that is when we can get a tough 
law on the books. We do not need time to cool off. We need to pass a 
tough bill and send it to President Bush and he will sign whatever we 
send to his desk and we know that.
  Let us make it good and tough.
  Mr. THOMAS. Mr. Speaker, will the gentleman yield?
  Mr. LaFALCE. On your time.
  Mr. THOMAS. He has not dropped the gavel, so I assume there is still 
time on your time.
  The SPEAKER pro tempore (Mr. Dan Miller of Florida). Does the 
gentleman from New York yield back the time?
  Mr. LaFALCE. Yes, to the gentleman from Michigan.
  Mr. THOMAS. So the gentleman voluntarily removes the time.
  Mr. LaFALCE. I would be pleased to answer any questions on your time.
  Mr. OXLEY. Mr. Speaker, I am pleased to yield 1 minute to the 
gentleman from California (Mr. Thomas).
  Mr. THOMAS. Mr. Speaker, I was not interested in yielding to ask the 
gentleman a question but merely to clarify that the gentleman is adept 
at putting words in people's mouths. I did not say that I was going to 
blue-slip it. At no time did I say I was going to blue-slip it. The 
determination was whether or not it was blue-slippable, and those are 
two entirely different things, in an attempt to create an appearance 
that we were slowing the process down. All I wanted to do was make sure 
that constitutionally and institutionally we did it correctly. I would 
assume that would be in the interest of all Members of the House, in 
fact, anyone who raised their hands and swore to uphold the 
Constitution.
  I thank the gentleman for yielding the time.
  Mr. CONYERS. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from Washington (Mr. Inslee).
  Mr. INSLEE. Mr. Speaker, I think one thing that we all know about all 
Americans of whatever party today is that they do not want weak tea, 
they want strong medicine to deal with this economic crisis. They do 
not want passivity. They want action. The majority party is giving them 
nothing but delay and inaction. Did the majority party just pass a 97-0 
vote in the Senate? No. Will they accept this substantive amendment to 
give instructions to the committee? No.
  But let me tell you what the majority party leadership did 5 days 
ago. I read about this in the newspaper today. The leadership of the 
Committee on Energy and Commerce in the midst of this economic crisis 
had time to send a letter to the Public Broadcasting System to complain 
about the introduction of a new Muppet character. It was not the 
gentleman from Ohio (Mr. Oxley), of course, but the chair of another 
committee. These majority party Members did not think it was right to 
have a new Muppet that had HIV. They thought that was a problem they 
had to deal with.
  Well, America wants an answer to this question. If the majority party 
can stand up to Sesame Street, why will you not stand up to Wall 
Street? If you will deal with the Cookie Monster, why will you not deal 
effectively with the moral monsters who are stealing America's 
retirement accounts? That is what America wants to know. It is not 
enough simply to say you are going to increase jail time, and I will 
tell you why not. When we were dealing with the terrorist threat to our 
air system, did we think our job was done by just saying everybody that 
blows up an airplane gets 50 years instead of 25 years? Did we consider 
our job done when we did that? No. We developed a security system to 
check to make sure terrorists do not get into our airplanes, and now we 
need a security system to make sure fiscal terrorists are not taking 
over the boardroom.
  You need to join with us and stop messing around with Sesame Street 
and start taking on Wall Street to save people's retirement incomes.
  Mr. OXLEY. Mr. Speaker, may I inquire of the time remaining on both 
sides?
  The SPEAKER pro tempore. The gentleman from Ohio (Mr. Oxley) has 
18\1/2\ minutes and the gentleman from Michigan (Mr. Conyers) has 9\1/
2\ minutes.
  Mr. OXLEY. Mr. Speaker, I yield 1 minute to the gentleman from 
Delaware (Mr. Castle), a valuable member of the Committee on Financial 
Services.
  Mr. CASTLE. Mr. Speaker, I rise a little bit perplexed about the 
motion to instruct conferees in that it appears to me that the 
Republican-passed legislation calls for stricter penalties from a group 
which is asking for stronger

[[Page 13351]]

measures which does not seem quite right.
  But that is not really what I want to speak to right now. What I want 
to speak to is the fact that the Senate, in my judgment, has adopted a 
very good piece of legislation, at least as I know it, the Sarbanes 
legislation. But there are some questions about that that I certainly 
have and that I think conferees would have. The House has also passed, 
in my judgment, a very good piece of legislation, frankly not that 
dissimilar from the Sarbanes legislation, and it also has provisions in 
it that I think should be looked at. I believe that the right way to do 
this is to go to conference, not to instruct the conferees as to what 
to do. Let them make their decisions on the timetable as outlined by 
the chairman of the Committee on Financial Services here before us 
tonight to look at some of the House issues as well as some of the 
Senate issues. The real-time disclosure, in my judgment, is a real 
issue. The FAIR account to return money to investors which the 
gentleman from Louisiana (Mr. Baker) got done, I think, is very 
significant. This whole issue of the criminal penalties we are talking 
about right now is very significant. I believe that we can do this.
  I believe we can adopt good legislation with good committee review, 
with good staff review, something I agree with that has been said on 
the other side, the President will sign this, and when he does, I 
believe we will have legislation which the investors in America can 
look to and say, this will help us make our decisions about the future 
of corporate America.
  Mr. CONYERS. Mr. Speaker, the manager on the other side has twice as 
much time remaining as I do.
  Mr. OXLEY. Is that a good thing or a bad thing?
  Mr. Speaker, I am pleased to yield 2\1/2\ minutes to the gentlewoman 
from New York (Mrs. Kelly).
  Mrs. KELLY. Mr. Speaker, this morning I asked Chairman Greenspan a 
question which is directly relevant to this motion to instruct. My 
question was:
  ``Do you think that increasing the ability for individuals to sue 
corporations for inaccuracies in their statements is a proper goal for 
this kind of legislation?''
  I am quoting now from Mr. Greenspan's response. He said:

       I think not. I don't see that has any particular economic 
     advantage. The issue is a technical one and a complex one and 
     should be really under the aegis of the Securities and 
     Exchange Commission. And they should be taking the actions 
     which are required to redress inaccuracies, mistakes, 
     malfeasance and the like. I don't think you gain anything by 
     increasing the ability to sue the company. Because remember 
     that it is shareholders suing other shareholders. That is 
     what it is.

  Republicans are committed to strengthening this legislation in 
conference by including real-time disclosures, adding a provision to 
ensure that investors and not trial lawyers are the beneficiaries of 
funds recovered from corporate malfeasance and adding tougher penalties 
to corporate fraud.
  If the Senate had not dragged its feet, this bill would have been 
done months ago. But for whatever cynical reasons they have, the Senate 
chose to play politics with this issue. And for the same cynical 
reasons, the Democratic leadership is threatening to drag out any 
conference for 2 months.
  Mr. Speaker, I ask my colleagues on both sides of this aisle to join 
us in voting against this motion to instruct and for a stronger 
corporate accountability law.
  Mr. CONYERS. Mr. Speaker, the manager on the other side still has 
twice as much time left as we do.
  Mr. OXLEY. Then we will continue to plod on.
  Mr. Speaker, I am pleased to yield 3 minutes to the gentleman from 
Louisiana (Mr. Baker), the distinguished chairman of the Subcommittee 
on Capital Markets.
  Mr. BAKER. I thank the gentleman for yielding me this time.
  Mr. Speaker, this is a very important matter that the House must 
consider this evening and I do appreciate the recommendations the 
gentleman has made in his motion to instruct. All of those issues will 
certainly be the subject of conversation during the course of this 
important conference.
  I am surprised that the motion to instruct did not include the 
specific directions to adopt the provisions contained in the Senate-
passed bill, the Sarbanes bill, since it has been viewed by so many as 
being the answer to the problem. But as is always the case, no 
legislative product is the perfect answer for all issues. I 
respectfully suggest that the Sarbanes bill is no different. There is 
work to do.
  For example, the Sarbanes bill does not make provision with regard to 
real-time material fact disclosure. What does that mean? That means if 
the corporate manager knows it and it is something that affects 
shareholder value and he does not report it until the 90-day quarterly 
earnings statement, you have terrific volatility in the markets and 
prices go up and down. We unfortunately are seeing that to great 
extreme today. That is why companies all too often file what they call 
pro forma returns. They get something out early that is not really a 
total disclosure, but it is something to help defuse the volatility of 
the quarterly earnings report.
  Real-time material disclosure says if you know it, you got to tell 
it. If you know it and you do not tell it, that is a criminal penalty. 
If you did not know it but should have, that is a civil penalty. We 
want to talk about what real-time material fact disclosure means. That 
will be the subject of the conference, because that is in the House-
passed bill. But what has not been in either bill, and unfortunately I 
did not see in the motion to instruct, is to do something to actually 
help the defrauded investor. It troubles me to get home in the evening, 
turn on the TV and see some millionaire in Mississippi with an $18 
million mansion who has run a corporation into the ground and we cannot 
get the house because he built it with shareholder-defrauded funds. We 
want to include a fair fund that says within the SEC all fines, all 
penalties, everything that is disgorged, that means taken back from the 
guys who have gotten ill-gotten gains, put it into an account and then 
let the SEC be bound to distribute 90 percent or more of it to the 
defrauded investor. With all due respect, we are not into a transfer of 
wealth. We do not want to take corporate wealth and give it to trial 
lawyer wealth by simply creating new causes of action while the 
shareholder sits on the sidelines and watches assets be spent in the 
courts while the fellow is down in the Caribbean enjoying a $150-
million-a-year lifestyle. We need to fix that, and we are going to.
  In summary, the gentleman from California (Mr. Cox) talked about the 
fact that the House-passed criminal penalties for inappropriate conduct 
are twice what are now suggested by the motion to instruct. If you want 
to be tough on criminals, if you want to get the money back and you 
want to give information to investors, please defeat this motion to 
instruct.
  Mr. CONYERS. Mr. Speaker, the other side now has 12 minutes remaining 
and I have 9. I would recommend that they continue to carry on the 
debate.
  Mr. OXLEY. Mr. Speaker, I think the gentleman from Michigan has 
several speakers available in the bullpen. We are prepared to listen to 
their dulcet tones.
  The SPEAKER pro tempore. Does the gentleman from Michigan wish to 
yield time? Who wishes to yield time?
  Mr. OXLEY. Mr. Speaker, we have no further speakers at this time. I 
would ask the gentleman if he is prepared to yield back the balance of 
his time and we could proceed to a vote.
  Mr. CONYERS. Mr. Speaker, I am very pleased to yield 4 minutes to the 
gentleman from Michigan (Mr. Dingell), the dean of the House.
  Mr. DINGELL. Mr. Speaker, I have heard the name Alan Greenspan 
mentioned on several occasions in connection with this. This is what 
Alan had to say yesterday:
  ``Even a small increase in the likelihood of large, possibly criminal 
penalties for egregious misbehavior of CEOs can have profoundly 
important effects on all aspects of corporate governance because the 
fulcrum of governance is the chief executive officer.''

[[Page 13352]]

  What he is saying there is, put them in jail, they will understand. 
The problem here is that the bill that the House has passed has nothing 
on criminal penalties but the bill passed yesterday does. The motion to 
instruct takes care of that problem.
  I think we ought to adopt the Senate bill because the Senate bill is 
a good bill. The House bill is nothing. It is pablum. On the 30th of 
June, the New York Times warned that there is a staggering rush of 
corporate debacles and that they are raising a disturbing question: Can 
capitalism survive the capitalists themselves? It should be noted the 
market has fallen, it should be noted the dollar is weaker, all of 
which, experts say, is related to the behavior of Global Crossing, 
Enron, Adelphia, WorldCom and others. We need strong medicine, not a 
placebo.
  The Washington Post has pointed out that a distinguished member of 
this body is punting because apparently my friends on the other side 
are not real anxious to pass strong bills and strong legislation like 
the Senate. The House-passed bill purports to set up a lot of things, 
including a regulatory board, to oversee accountants, but it really 
does not mean anything because it really does not do anything.

                              {time}  1800

  The House-passed bill does not require an outright halt of the 
peddling of lucrative consulting services to audit clients and the 
conflicts that ensue.
  The House-passed bill does nothing about the revolving door between 
auditors and clients.
  The House-passed bill ducks many important issues such as the 
conflicts of interest between Wall Street analysts and credit-rating 
agencies, by relegating them to, guess what? Studies. The bill is 
replete with studies, but there is no strong Federal policy direction 
here.
  Let us look at what the Senate bill does. It improves the timeliness, 
quality, and transparency of financial reporting. It creates an 
independent Public Company Accounting Oversight Board to strengthen the 
regulation of, guess who? The accountants, who certainly need 
regulation, because there has been more misbehavior there than there 
has been outside of a red light district. It would ban consulting 
services that clearly compromise the independence of accountants and 
auditors. It would enhance the accounting standards process and provide 
independent funding for the FASB. It would increase accountability of 
corporate officers and boards of directors. It would require 
objectivity and independence by securities analysts, and it would 
enhance SEC resources and authority. It would increase criminal 
penalties for corporate securities frauds that figured in the recent 
chain of debacles.
  Mr. Speaker, it is time we passed strong legislation to stop the 
misbehavior in the corporate behavior and in the accounting profession 
that is shaking the faith of the American people and that is raising 
real questions about the viability of our securities markets and the 
well-being of capitalism in this country.
  Vote for the motion to instruct and vote for a strong bill. We have 
had enough nonsense in this place.
  On June 30, 2002, the New York Times warned that the ``staggering 
rush of corporate debacles is raising a disturbing question: can 
capitalism survive the capitalists themselves?''
  Confidence in U.S. capitalism has been dealt a severe blow. U.S. 
investors and foreign investors are fleeing stocks in droves.
  From Enron to Global Crossing, Adelphia to WorldCom, and many more 
examples, companies lied about their performance, the watchdogs slept 
or were complicit, and investors and employees paid a dear price.
  To cure this problem, we need strong medicine, not a placebo.
  On April 24, 2002, a Washington Post editorial entitled ``Mr. Oxley 
Punts'' lambasted the House bill for taking ``half-steps and side-
steps.''
  The House-passed bill purports to step up a new regulatory board to 
oversee and discipline accountants, which everybody agrees is needed, 
but the bill includes no details on the board's staffing and budget and 
provides inadequate disciplinary authority.
  The House-passed bill stops short of requiring an outright halt to 
the peddling of lucrative consulting services to audit clients and the 
conflicts that ensue.
  The House-passed bill also says nothing about the revolving door 
between auditors and their clients.
  The House-passed bill ducks many important issues, such as the 
conflicts of interest among Wall Street analysts and credit rating 
agencies, by allegating them to studies. The bill is replete with 
studies rather than the strong Congressional policy direction that is 
called for.
  I therefore urge the House to accept the Sarbanes bill.
  It would: Improve the timeliness, quality, and transparency of 
financial reporting; create an independent Public Company Accounting 
Oversight Board to strengthen regulation of, and where appropriate 
disciplinary actions against, firms that audit public companies; ban 
the consulting services that clearly compromise auditor independence; 
enhance the accounting standards setting process and provide 
independent funding for FASB; increase the accountability of corporate 
officers and boards of directors; require objectivity and independence 
by securities analysts; enhance SEC resources and authority; and 
increase criminal penalities for the corporate and securities frauds 
that figured in the recent chain of debacles.
  This morning's Washington Post reports on the front page for all the 
world to see that ``House Republicans say they will try to delay, and 
likely dilute, some of the proposed changes.''
  Shame on the GOP! And shame on the House if decent Members in this 
body allow such a travesty to occur.

               [From the Washington Post, April 24, 2002]

                            Mr. Oxley Punts

       The House is due to vote today on a package of post-Enron 
     reforms prepared by Rep. Michael Oxley (R-Ohio), chairman of 
     the Financial Services Committee. The bill is a troubling 
     sign of how easily the momentum for reform can be dissipated. 
     Though it purports to deal with many of the audit reforms 
     discussed during dozens of congressional hearings since 
     January, it actually pulls its punches. Democrats will get a 
     chance to offer some better provisions in the House today, 
     but nobody expects them to pass. It will be up to the Senate, 
     if it can ever terminate its interminable debates on energy, 
     to produce a stronger bill.
       The Oxley bill purports to set up a new regulatory board to 
     oversee and discipline auditors, which everybody agrees is 
     needed. But it would not give this body powers of subpoena, 
     which would undermine its authority; and it would allow 
     auditors to fill some of the board's positions, which could 
     undermine its independence. The details of the new board 
     would be left to the Securities and Exchange Commission, 
     which would have to decide among other things how the new 
     body would be funded. Given the SEC's vulnerability to 
     industry lobbying, there is a danger that the result will 
     fall short of what's needed.
       The Oxley bill takes other half-steps and side-steps. It 
     directs the SEC to prohibit auditors from performing certain 
     types of consulting services for their clients, but it stops 
     short of requiring an outright halt to consulting and the 
     conflicts of interest that ensue. The bill says nothing about 
     the revolving door between auditors and their clients--Enron, 
     for example hired several Arthur Andersen auditors--even 
     though auditors who are angling for jobs from their customers 
     are unlikely to show much independence from them. The bill is 
     also silent on the rotation of audit firms. If an auditor 
     knew that, after a few years, a different outside auditor 
     would scrutinize its efforts, this would create a strong 
     incentive to keep the numbers honest.
       The Oxley bill does at least boost the SEC's budget 
     substantially, and it has the right mood music. But given the 
     outrage that Congress has expressed about the Enron scandal, 
     that is a weak effort. Just this week, Enron announced that 
     it had discovered a further $14 billion worth of assets in 
     its balance sheet that don't really exist after all, and it 
     confessed that a ``material portion'' of this overstatement 
     was due to accounting irregularities. This kind of confession 
     further undermines investors' trust in financial disclosures. 
     Congress needs to restore that trust with tough legislation. 
     Perhaps the Senate can deliver if the House won't.
                                  ____

  Mr. OXLEY. Mr. Speaker, I yield myself such time as I may consume.
  I am constantly amazed. The minority party offered a motion to 
instruct that basically tells the House we ought to accept lower 
penalties instead of the higher penalties that this House passed just 
this week. I am frankly stunned at that. I want to make it clear that 
House Republicans support a much stronger bill and reject the kind of 
efforts to weaken this bill that our friends on the other side have 
projected.
  Mr. Speaker, I yield 2 minutes to the gentleman from Ohio (Mr. Ney).

[[Page 13353]]

  Mr. NEY. Mr. Speaker, I rise in opposition to the motion to instruct 
conferees.
  This motion would hinder the House's ability to have a meaningful 
conference with the Senate on H.R. 3763. The Senate does not equate to 
perfection. We have two bodies here, and this is an important issue.
  Mr. Speaker, it is also important that we have a conference on this 
important bill so that we have the ability to negotiate on all the 
issues contained in this bill. It is vital to protecting investors and 
creating the best legislation we can possibly bring to the American 
people.
  For example, there are some provisions in the House-passed version 
that are not in the Senate version that I believe will increase 
investor protections, transparency, and improve disclosure. The 
gentleman from Ohio (Chairman Oxley) and the gentleman from Louisiana 
(Chairman Baker) have done a good job, and a lot of time has been put 
into this.
  But let me just say something in addition to what the gentleman from 
Ohio (Chairman Oxley) just mentioned. I think this is very important 
for anybody who has any doubt. We had a 391 to 28 vote here. Mr. 
Speaker, H.R. 5118, in the Senate, increased the penalties for fraud to 
a maximum of 10 years. The House increases the penalties for mail and 
wire fraud from 5 to 20 years and creates a new securities fraud 
section and carries a maximum penalty of 25; 25 versus 10. I think we 
are a little bit better, obviously.
  The Senate, the maximum penalty for destruction of records and 
documents is 10 years. The House strengthens laws that criminalize 
document shredding and other forms of obstruction of justice and 
provides a maximum of 20 years. The Senate 10, House 0.
  Under the Senate version, the maximum penalty a corporate officer 
would face is a $1 million fine and 10 years in prison. The House, $5 
million and 20 years. One and 10; 5 and 20.
  The last provision I wanted to mention does not change the current 
penalties of a maximum fine of $1 million and 10 years in prison; 
corporations would still only face a maximum fine of $2.5 million. The 
House increases the criminal penalties for those who file false 
statements with the Securities and Exchange Commission to a maximum 
penalty of $5 million and 20 years; 1 and 10 in the Senate, 5 and 20 in 
the House.
  It is so clear, and the rhetoric is unbelievable here tonight. We are 
the strong version. We are the version that is right for the American 
people. Going to a conference does not do anything except help us to 
get these tough penalties to protect the American people and to make 
this a better bill.
  I surely urge that people rise in opposition to this conference 
report.
  Mr. CONYERS. Mr. Speaker, I am pleased to yield 1 minute to the 
distinguished gentleman from California (Mr. Sherman).
  Mr. SHERMAN. Mr. Speaker, passing the Senate bill is but the first 
step. Hopefully, the conferees will go beyond even the Senate bill or 
will take up new legislation in the Committee on Financial Services.
  The Senate bill contains the provisions that reauthorize the SEC and 
contains provisions that talk about expensing stock options. We can no 
longer leave this issue to the Financial Accounting Standards Board 
that acknowledged long ago that it was best to expense stock options 
and then refused to make that mandatory. Nor can we allow the recent 
situation where consumers can compare Coke and Pepsi, but investors 
cannot, because the two similar companies use different methods of 
accounting for stock options.
  Further, in reauthorizing the SEC, we must demand that they actually 
read the filings of the largest 1,000 companies, something that their 
chairman refuses to even consider because he has adopted a ``hear no 
evil, see no evil'' approach.
  Mr. Speaker, we need to go far beyond even the Senate bill.
  Mr. OXLEY. Mr. Speaker, I reserve the balance of my time.
  Mr. CONYERS. Mr. Speaker, I am pleased to yield 1 minute to the 
distinguished gentlewoman from New York (Mrs. Maloney).
  Mrs. MALONEY of New York. Mr. Speaker, I support the motion to go to 
conference because it affirms the supremacy of the Leahy provisions. 
The President asked Congress to get him a bill before the August 
recess. We could easily get him a good bill by the weekend if we took 
up and passed the Sarbanes bill.
  The problems facing corporate America are extremely serious; and I 
think the head of Goldman Sachs, Henry Paulson, put it well when he 
said accounting at Enron ``bore little or no relationship to economic 
reality.''
  The Sarbanes bill will restore the credibility of the accounting 
industry by creating a truly independent accounting oversight board 
that will not be dominated by the industry. The Sarbanes bill will not 
solve all of corporate America's problems overnight, but it will send a 
strong message to investors that Congress did not succumb to special 
interests but, rather, worked very hard at the public interest in 
building in more accountability.
  Mr. Speaker, I urge my colleagues to support the motion to instruct, 
and I hope that we will report back to the floor the Sarbanes bill.
  Mr. OXLEY. Mr. Speaker, I am pleased to yield 2 minutes to the 
gentleman from Louisiana (Mr. Baker).
  Mr. BAKER. Mr. Speaker, I would like to engage the gentleman from 
California (Mr. Cox) on the question of the criminal penalties issue 
which seems to be still in some contention.
  As I understand the Sensenbrenner bill we passed in the House on 
yesterday, there was a provision that required the CEO of a corporation 
to certify the accuracy of financial statements and also to certify the 
accuracy of reports to the Securities and Exchange Commission.
  In both of those cases, it was my understanding that the penalties 
that were adopted in that matter dramatically exceeded the prior 
existing criminal penalties for misrepresentation.
  Is that the gentleman's understanding?
  Mr. COX. Mr. Speaker, will the gentleman yield?
  Mr. BAKER. I yield to the gentleman from California.
  Mr. COX. Mr. Speaker, that is certainly correct.
  Mr. BAKER. It was also my understanding that there were additional 
personal liabilities associated with underperformance or inappropriate 
conduct that either did not exist in prior law or that the penalties 
associated with that conduct were dramatically increased.
  Is the gentleman familiar with those provisions, and is that 
accurate?
  Mr. COX. Mr. Speaker, I am certainly familiar with those provisions, 
and that is accurate as well. The gentleman might also point out that 
not only were the provisions of H.R. 5113 adopted almost unanimously by 
this House just a few days ago, not only are those provisions much 
tougher than existing law, but they are significantly tougher than 
comparable provisions in the Senate legislation.
  Mr. BAKER. Mr. Speaker, may I further inquire of the gentleman, once 
an individual is found to have violated or has committed criminal 
conduct and found guilty, that the consequence of that activity is to 
be banned from holding even a corporate or board position for the 
individual's life?
  Mr. COX. That is correct.
  Mr. BAKER. Can the gentleman tell me how we could go further in 
protecting shareholders and constituents with any additional penalties 
or assessments that would be appropriate in light of the egregious 
examples we have seen in the marketplace?
  Mr. COX. Well, certainly the scope of this legislation on both the 
House and the Senate side gives ample opportunity to do other things, 
to reinforce these criminal law provisions; but the motion to instruct 
that is before us is addressed only to the criminal law provision.
  Mr. BAKER. Mr. Speaker, I appreciate the gentleman's explanation. It 
is clear to me we have taken a very bold step, and I cannot understand 
anyone who would want to reduce these provisions.

[[Page 13354]]

  The SPEAKER pro tempore (Mr. Dan Miller of Florida). The gentleman 
from Ohio (Mr. Oxley) has 8 minutes remaining, and the gentleman from 
Michigan (Mr. Conyers) has 3\1/2\ minutes remaining and the right to 
close.
  Mr. OXLEY. Mr. Speaker, I am pleased to yield 2 minutes to the 
gentleman from California (Mr. Royce), our good friend and a valuable 
member of the Committee on Financial Services.
  Mr. ROYCE. Mr. Speaker, one of the points I was going to make was 
that prior to the passage of our CAARTA bill, during a Committee on 
Financial Services meeting, I asked the SEC chairman if the SEC had all 
of the tools that it needed to return the ill-gotten gains from 
dishonest executives to the shareholders of these companies. His 
response was that it would be helpful if Congress were to include 
language that made it clear that it is Congress's intent that the SEC 
have the power to return these stolen funds to the shareholders.
  Now, the Federal Account for Investor Restitution language, as 
proposed by the gentleman from Louisiana (Mr. Baker), would effectively 
accomplish this task.
  Now, currently, the Securities and Exchange Commission has the power 
to disgorge these funds from corrupt managers. However, the funds 
rarely make it back to the shareholders who deserve them. They are 
currently distributed in an ad hoc fashion. I would say less than 20 
percent are returned to the shareholders today, with the rest going to 
the plaintiffs, attorneys' fees, and to the Treasury's general revenue.
  So this proposal that is offered by the gentleman from Louisiana (Mr. 
Baker) to the conference would ensure that all of these ill-gotten 
gains be returned to the people who deserve them, and that is the 
individual shareholders and pension investors who were bilked out of 
their money through corporate malfeasance. It is another reason why we 
need to move forward with that conference.
  Mr. OXLEY. Mr. Speaker, I am pleased to yield 3 minutes to the 
gentleman from California (Mr. Cox).
  Mr. COX. Mr. Speaker, I want to commend my colleagues on both sides 
of the aisle for the work that we have done in this House over the last 
several weeks to move to the position that we find ourselves in today, 
going to conference with the Senate on this very important legislation. 
The President is urging us to act quickly, and we intend to do so. It 
is our intention on the majority side, and I think it is the intention 
also on the minority side, to get a bill as soon as possible, certainly 
by the end of the next week when we adjourn for our August recess.
  To that end, in the House of Representatives we have enacted not one, 
but two bills addressed to this subject; indeed, three bills, because 
we have included pension reform as well. Several months ago we 
responded to the President's call for 10 major reforms addressed to 
corporate wrongdoing. We waited quite a long time for a response from 
the other body, but now we have it and we are moving quickly.
  It should be the position of this House when we go to conference to 
back the toughest criminal penalties that we can impose as a Nation on 
those who would undermine our markets, on those who would steal from 
investors.

                              {time}  1815

  That is what this House voted to do just a few days ago. H.R. 5118, 
produced by the Committee on the Judiciary, which ought to, in our 
standing committee structure, write criminal laws, that bill passed 391 
to 28; and it should be the position of this House. We all voted for 
it.
  I am very puzzled that we would now have a motion to instruct that 
says, abandon the House position articulated by all of us here on the 
floor, produced in a quality fashion by the ranking member on the 
Committee on the Judiciary, who is here with us on the floor today, and 
by the gentleman from Wisconsin (Chairman Sensenbrenner); abandon those 
positions, those tough positions, and instead insert essentially 
identical positions in the House bill that differ only in that they 
have half the penalty that we approved here earlier this week.
  There is not much to this motion to instruct. It says that ``the 
House should recede from disagreement with section 802, section 804, 
section 805, and section 806 of the Senate bill.''
  Section 802 of the Senate bill concerns criminal penalties for 
shredding documents, and the penalty is very clearly stated in section 
802 of the Senate bill. It is 10 years. The provision in our House-
passed bill, a bill that I think the ranking member on the Committee on 
the Judiciary takes pride in, that I take pride in, I voted for it, I 
supported it here on the floor, that identical provision in the House-
passed bill is 20 years. That should be our position in conference.
  The same with obstruction of justice. The same with all of the things 
covered in this motion to instruct, which are addressed essentially to 
the criminal features only of this otherwise broad legislation.
  I strongly oppose, therefore, this motion to instruct and urge my 
colleagues to do likewise.
  Mr. CONYERS. Mr. Speaker, I am delighted to yield 1 minute to the 
distinguished gentlewoman from Oregon (Ms. Hooley).
  Ms. HOOLEY of Oregon. Mr. Speaker, there has never been a period in 
U.S. history when the economy grew and the stock market shrank at the 
same time. They have always gone hand in hand.
  I think our government must inject a sense of calm into our capital 
markets, and it is going to take more than just cheerleading. It is 
actually going to require Congress to pass legislation that not only 
removes the ability for the greedy to cut corners and defraud 
investors, but make sure they go to prison, just like any other thief. 
I think we are on the right track.
  Four months ago, the gentleman from New York (Mr. LaFalce) offered a 
substitute to the accounting reform bill in the House that sought to do 
many of the things the other body has agreed to do unanimously. Four 
months ago, the proposal of the gentleman from New York (Mr. LaFalce) 
did not get a single vote from our colleagues on the other side. But 
yesterday morning, most Members voted for a bill that would send 
someone to prison for 25 years for securities fraud, and I think that 
is good. I think we are on the right path.
  But the Members know and I know that tougher criminal penalties for 
wrongdoing are not the solutions to the market's deficiencies. So let 
us get serious and let us make it nearly impossible to pass fraudulent 
information along to investors. Let us have more transparencies. Let us 
clean up the mess. Let us get a bill to the President next week and 
restore the trust and confidence of the public in the markets.
  Mr. OXLEY. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, this has been an enlightening debate. Let me just review 
the bidding, if I can. Back when Enron became a household word, and all 
of the scandals that developed, the Committee on Financial Services was 
the first committee last year in December to hold a hearing on the 
Enron scandal.
  Our committee, the committee of jurisdiction, passed strong 
legislation, the CAARTA legislation, Corporate and Auditing 
Accountability, Responsibility, and Transparency Act. It passed in the 
committee with a strong bipartisan vote, dealing with corporate 
scandals, dealing with accounting irregularities, directing our efforts 
at the real problem while preserving the ability of the marketplace to 
work very effectively.
  Then the bill came to the floor. It passed by a large margin, 334 to 
90; 119 Democrats wisely voted for that piece of legislation. We waited 
and we waited and we waited for the other body to act, almost 3 months. 
Finally, when the WorldCom bombshell hit, the Senate finally decided to 
act, and act they did.
  In large measure, the Sarbanes bill and our bill are very, very 
similar. I applaud Senator Sarbanes, Chairman Sarbanes, for his hard 
work and his dedication. We are now in a process

[[Page 13355]]

where we all ought to be, and that is to reconcile the differences 
between the House and Senate. That is what we do here. That is what 
legislators do.
  Those who would say we need to take the Senate bill lock, stock, and 
barrel and not worry about any of the potential problems in that bill, 
I think, denigrate our committee and the legislative process.
  So we are here to say, let us do regular order. Let us get to a 
conference. We can do this. The President said, let us get this done 
before the August recess. The Speaker said, get this done before the 
August recess. We are going to get this done before the August recess; 
and we are going to have a good, bipartisan bill that we can take to 
the President for his signature and send a strong signal to the 
American people and the investing public that the Congress has done 
everything possible to restore confidence to our public markets.
  We should take a great deal of pride on both sides of the aisle for 
the way that we have addressed this issue. I have been proud to work 
with my good friend, the gentleman from New York (Mr. LaFalce), the 
ranking member. We have had our differences of opinion; but at the same 
time, he has been a very strong advocate for doing the kind of reform 
necessary. I salute him in his last few months here in this great body.
  We are on the verge of a very positive approach to the scandals that 
have enveloped corporate America. Let us move on to the conference. Let 
us reject this unwise motion and move to a conference in good order.
  Mr. Speaker, I yield back the balance of my time.
  Mr. CONYERS. Mr. Speaker, I am delighted to yield 1 minute to the 
gentlewoman from California (Ms. Waters), a member of the Committee on 
the Judiciary.
  Ms. WATERS. Mr. Speaker, I thank the gentleman for yielding time to 
me.
  Mr. Speaker, I do not delight in having to reveal that the Chairs of 
both the Committee on Financial Services and the Committee on the 
Judiciary just did not do their job.
  My friend on the other side of the aisle, the gentleman from Ohio 
(Mr. Oxley), is a good chairman; and I suppose if he had had the 
support of his Republican conference perhaps he could have had a 
stronger bill; but the bill that we passed was just too weak.
  The gentleman from New York (Mr. LaFalce) never had an opportunity in 
the Committee on Financial Services to really get his amendments set 
forth in the way that he would like. The gentleman from Wisconsin (Mr. 
Sensenbrenner) did not even take up the bill that the gentleman from 
Michigan (Mr. Conyers) was trying so desperately, begging him to take 
up, so we could have a stronger response to corporate crime.
  Now we have an opportunity to instruct the conferees. The 
Sensenbrenner bill that surfaced yesterday does not do what we need to 
have done. It is not even in conference. As a matter of fact, they 
would want us to believe that it is tougher because they have some 
tougher sentencing, but all of the issues that have been identified 
here in the Conyers motion are what we all need to embrace. Unless we 
do it, we are not sincere about doing something about corporate crime.
  Mr. CONYERS. Mr. Speaker, I yield the balance of my time to our 
distinguished colleague, the gentleman from Massachusetts (Mr. Markey).
  Mr. MARKEY. Mr. Speaker, vote for this motion. If the Republican bill 
were an SEC filing, it almost would be actionable under the antifraud 
provisions of the Federal securities laws. It is a fraud. It 
masquerades as an investor protection bill when, in actuality, it is an 
accountant and corporate wrongdoer protection act.
  What does it not have in it? Well, it does not have an accounting 
board that is controlled by independent auditors. It is all controlled 
by the accounting industry, just as the Securities and Exchange 
Commission is now controlled by the accounting industry.
  It does not separate auditing from consulting when an auditing firm, 
an accounting firm, goes inside to audit a firm.
  It does not separate investment banking from analyst recommendations 
in terms of the compensation which is received by the analyst, a 
conflict of interest that is creating all of the problems.
  What does this motion to recommit say? It says we should extend from 
3 years to 5 years the time that people have to go in and do something 
about fraud, because we are now talking about fraud committed in 1998 
and 1999, and the statute of limitations has run. We must extend it out 
to 5 years. Ordinary investors are only finding out now how valueless 
their investments were.
  In addition, the auditors must keep the work paper for 5 years so 
people can bring action against them, whether it be criminal or civil.
  Vote for this meaningful motion if Members want to protect American 
investors against further fraud in the American marketplace.
  The SPEAKER pro tempore (Mr. Dan Miller of Florida). Without 
objection, the previous question is ordered on the motion to instruct.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to instruct 
offered by the gentleman from Michigan (Mr. Conyers).
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. CONYERS. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  The vote was taken by electronic device, and there were--yeas 207, 
nays 218, not voting 9, as follows:

                             [Roll No. 313]

                               YEAS--207

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barcia
     Barrett
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blumenauer
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (IN)
     Carson (OK)
     Clay
     Clayton
     Clement
     Clyburn
     Condit
     Conyers
     Costello
     Coyne
     Cramer
     Crowley
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Dooley
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank
     Frost
     Gephardt
     Gonzalez
     Gordon
     Green (TX)
     Gutierrez
     Hall (OH)
     Harman
     Hastings (FL)
     Hill
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Kucinich
     LaFalce
     Lampson
     Langevin
     Larsen (WA)
     Larson (CT)
     Leach
     Lee
     Levin
     Lewis (GA)
     Lofgren
     Lowey
     Lucas (KY)
     Luther
     Lynch
     Maloney (CT)
     Maloney (NY)
     Markey
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Mink
     Mollohan
     Moore
     Moran (VA)
     Morella
     Murtha
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Phelps
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Ross
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Schiff
     Scott
     Serrano
     Sherman
     Shows
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Stenholm
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watson (CA)
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Wilson (NM)
     Woolsey
     Wu
     Wynn

                               NAYS--218

     Aderholt
     Akin
     Armey
     Bachus
     Baker
     Ballenger
     Barr
     Bartlett
     Barton
     Bass
     Bereuter
     Biggert
     Bilirakis
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boozman
     Brady (TX)
     Brown (SC)

[[Page 13356]]


     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Castle
     Chabot
     Chambliss
     Coble
     Collins
     Combest
     Cooksey
     Cox
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ferguson
     Flake
     Fletcher
     Foley
     Forbes
     Fossella
     Frelinghuysen
     Gallegly
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goss
     Graham
     Granger
     Graves
     Green (WI)
     Greenwood
     Grucci
     Gutknecht
     Hall (TX)
     Hansen
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hilleary
     Hobson
     Hoekstra
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Istook
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     Kerns
     King (NY)
     Kingston
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Latham
     LaTourette
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (OK)
     Manzullo
     McCrery
     McInnis
     McKeon
     Mica
     Miller, Dan
     Miller, Gary
     Miller, Jeff
     Moran (KS)
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reynolds
     Riley
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schaffer
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Stump
     Sullivan
     Sununu
     Sweeney
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Toomey
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins (OK)
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--9

     Blagojevich
     Bonior
     Ganske
     Lantos
     Lipinski
     Mascara
     McHugh
     Nadler
     Traficant

                              {time}  1849

  Messrs. McINNIS, SIMMONS and BASS changed their vote from ``yea'' to 
``nay.''
  Mrs. TAUSCHER, Ms. HOOLEY of Oregon and Ms. WATERS changed their vote 
from ``nay'' to ``yea.''
  So the motion to instruct was rejected.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  The SPEAKER pro tempore (Mr. Dan Miller of Florida). Without 
objection, the Chair appoints the following conferees:
  From the Committee on Financial Services, for consideration of the 
House bill and the Senate amendments, and modifications committed to 
conference: Messrs. Oxley, Baker, Royce, Ney, Mrs. Kelly, Messrs. Cox, 
LaFalce, Frank, Kanjorski and Ms. Waters.
  Provided that Mr. Shows is appointed in lieu of Ms. Waters for 
consideration of section 11 of the House bill and section 305 of the 
Senate amendment, and modifications committed to conference.
  From the Committee on Education and the Workforce, for consideration 
of sections 306 and 904 of the Senate amendment, and modifications 
committed to conference: Messrs. Boehner, Johnson of Texas and George 
Miller of California.
  From the Committee on Energy and Commerce, for consideration of 
sections 108 and 109 of the Senate amendment, and modifications 
committed to conference: Messrs. Tauzin, Greenwood and Dingell.
  From the Committee on the Judiciary, for consideration of section 105 
and titles 8 and 9 of the Senate amendment, and modifications committed 
to conference: Messrs. Sensenbrenner, Smith of Texas and Conyers.
  From the Committee on Ways and Means, for consideration of section 
109 of the Senate amendment, and modifications committed to conference: 
Messrs. Thomas, McCrery and Rangel.
  There was no objection.

                          ____________________