[Congressional Record (Bound Edition), Volume 155 (2009), Part 11]
[House]
[Pages 14143-14146]
[From the U.S. Government Publishing Office, www.gpo.gov]




 IMPROVED FINANCIAL AND COMMODITY MARKETS OVERSIGHT AND ACCOUNTABILITY 
                                  ACT

  Mr. LYNCH. Madam Speaker, I move to suspend the rules and pass the 
bill (H.R. 885) to elevate the Inspector General of certain Federal 
entities to an Inspector General appointed pursuant to section 3 of the 
Inspector General Act of 1978, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                                H.R. 885

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Improved 
     Financial and Commodity Markets Oversight and Accountability 
     Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Elevation of certain Inspectors General to appointment pursuant 
              to section 3 of the Inspector General Act of 1978.
Sec. 3. Continuation of provisions relating to personnel.
Sec. 4. Subpoena authority of certain Inspectors General.
Sec. 5. Corrective responses by heads of certain establishments to 
              deficiencies identified by Inspectors General.
Sec. 6. Effective date; transition rule.

     SEC. 2. ELEVATION OF CERTAIN INSPECTORS GENERAL TO 
                   APPOINTMENT PURSUANT TO SECTION 3 OF THE 
                   INSPECTOR GENERAL ACT OF 1978.

       (a) Inclusion in Certain Definitions.--Section 12 of the 
     Inspector General Act of 1978 (5 U.S.C. App.) is amended--
       (1) in paragraph (1), by striking ``or the Federal 
     Cochairpersons of the Commissions established under section 
     15301 of title 40, United States Code;'' and inserting ``the 
     Federal Cochairpersons of the Commissions established under 
     section 15301 of title 40, United States Code; the Chairman 
     of the Board of Governors of the Federal Reserve System; the 
     Chairman of the Commodity Futures Trading Commission; the 
     Chairman of the National Credit Union Administration; the 
     Director of the Pension Benefit Guaranty Corporation; or the 
     Chairman of the Securities and Exchange Commission;''; and
       (2) in paragraph (2), by striking ``or the Commissions 
     established under section 15301 of title 40, United States 
     Code,'' and inserting ``the Commissions established under 
     section 15301 of title 40, United States Code, the Board of 
     Governors of the Federal Reserve System, the Commodity 
     Futures Trading Commission, the National Credit Union 
     Administration, the Pension Benefit Guaranty Corporation, or 
     the Securities and Exchange Commission,''.
       (b) Exclusion From Definition of Designated Federal 
     Entity.--Section 8G(a)(2) of the Inspector General Act of 
     1978 (5 U.S.C. App.) is amended--
       (1) by striking ``the Board of Governors of the Federal 
     Reserve System,'';
       (2) by striking ``the Commodity Futures Trading 
     Commission,'';
       (3) by striking ``the National Credit Union 
     Administration,''; and
       (4) by striking ``the Pension Benefit Guaranty Corporation, 
     the Securities and Exchange Commission,''.

     SEC. 3. CONTINUATION OF PROVISIONS RELATING TO PERSONNEL.

       (a) In General.--The Inspector General Act of 1978 (5 
     U.S.C. App.) is amended by inserting after section 8L the 
     following:

     ``SEC. 8M. SPECIAL PROVISIONS CONCERNING CERTAIN 
                   ESTABLISHMENTS.

       ``(a) Definition.--For purposes of this section, the term 
     `covered establishment' means the Board of Governors of the 
     Federal Reserve System, the Commodity Futures Trading 
     Commission, the National Credit Union Administration, the 
     Pension Benefit Guaranty Corporation, and the Securities and 
     Exchange Commission.
       ``(b) Provisions Relating to All Covered Establishments.--
       ``(1) Provisions relating to inspectors general.--In the 
     case of the Inspector General of a covered establishment, 
     subsections (b) and (c) of section 4 of the Inspector General 
     Reform Act of 2008 (Public Law 110-409) shall apply in the 
     same manner as if such covered establishment were a 
     designated Federal entity under section 8G. An Inspector 
     General who is subject to the preceding sentence shall not be 
     subject to section 3(e).
       ``(2) Provisions relating to other personnel.--
     Notwithstanding paragraphs (7) and (8) of section 6(a), the 
     Inspector General of a covered establishment may select, 
     appoint, and employ such officers and employees as may be 
     necessary for carrying out the functions, powers, and duties 
     of the Office of Inspector General of such establishment and 
     to obtain the temporary or intermittent services of experts 
     or consultants or an organization of experts or consultants, 
     subject to the applicable laws and regulations that govern 
     such selections, appointments, and employment, and the 
     obtaining of such services, within such establishment.
       ``(c) Provision Relating to the Board of Governors of the 
     Federal Reserve System.--The provisions of subsection (a) of 
     section 8D (other than the provisions of subparagraphs (A), 
     (B), (C), and (E) of paragraph (1) of such subsection (a)) 
     shall apply to the Inspector General of the Board of 
     Governors of the Federal Reserve System and the Chairman of 
     the Board of Governors of the Federal Reserve System in the 
     same manner as such provisions apply to the Inspector General 
     of the Department of the Treasury and the Secretary of the 
     Treasury, respectively.''.
       (b) Conforming Amendment.--Paragraph (3) of section 8G(g) 
     of the Inspector General Act of 1978 (5 U.S.C. App.) is 
     repealed.

     SEC. 4. SUBPOENA AUTHORITY OF CERTAIN INSPECTORS GENERAL.

       The Inspector General of the Board of Governors of the 
     Federal Reserve System, the Commodity Futures Trading 
     Commission, the National Credit Union Administration, the 
     Pension Benefit Guaranty Corporation, or the Securities and 
     Exchange Commission, in carrying out the provisions of the 
     Inspector General Act of 1978 (5 U.S.C. App), is authorized 
     to require by subpoena, from any officer or employee of a 
     contractor or grantee of the establishment, any officer or 
     employee of a subcontractor or subgrantee

[[Page 14144]]

     of such a contractor or grantee, or any person or entity 
     regulated by the establishment, any records and testimony 
     necessary in the performance of functions assigned to the 
     Inspector General under such Act. Any such subpoena, in the 
     case of contumacy or refusal to obey, shall be enforceable by 
     order of any appropriate United States district court.

     SEC. 5. CORRECTIVE RESPONSES BY HEADS OF CERTAIN 
                   ESTABLISHMENTS TO DEFICIENCIES IDENTIFIED BY 
                   INSPECTORS GENERAL.

       The Chairman of the Board of Governors of the Federal 
     Reserve System, the Chairman of the Commodity Futures Trading 
     Commission, the Chairman of the National Credit Union 
     Administration, the Director of the Pension Benefit Guaranty 
     Corporation, and the Chairman of the Securities and Exchange 
     Commission shall each--
       (1) take action to address deficiencies identified by a 
     report or investigation of the Inspector General of the 
     establishment concerned; or
       (2) certify to both Houses of Congress that no action is 
     necessary or appropriate in connection with a deficiency 
     described in paragraph (1).

     SEC. 6. EFFECTIVE DATE; TRANSITION RULE.

       (a) Effective Date.--This Act and the amendments made by 
     this Act shall take effect 30 days after the date of the 
     enactment of this Act.
       (b) Transition Rule.--An individual serving as Inspector 
     General of the Board of Governors of the Federal Reserve 
     System, the Commodity Futures Trading Commission, the 
     National Credit Union Administration, the Pension Benefit 
     Guaranty Corporation, or the Securities and Exchange 
     Commission on the effective date of this Act pursuant to an 
     appointment made under section 8G of the Inspector General 
     Act of 1978 (5 U.S.C. App.)--
       (1) may continue so serving until the President makes an 
     appointment under section 3(a) of such Act with respect to 
     the Board of Governors of the Federal Reserve System, the 
     Commodity Futures Trading Commission, the National Credit 
     Union Administration, the Pension Benefit Guaranty 
     Corporation, or the Securities and Exchange Commission, as 
     the case may be, consistent with the amendments made by 
     section 2; and
       (2) shall, while serving under paragraph (1), remain 
     subject to the provisions of section 8G of such Act which, 
     immediately before the effective date of this Act, applied 
     with respect to the Inspector General of the Board of 
     Governors of the Federal Reserve System, the Commodity 
     Futures Trading Commission, the National Credit Union 
     Administration, the Pension Benefit Guaranty Corporation, or 
     the Securities and Exchange Commission, as the case may be, 
     and suffer no reduction in pay.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Massachusetts (Mr. Lynch) and the gentleman from Utah (Mr. Chaffetz) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Massachusetts.


                             General Leave

  Mr. LYNCH. Madam Speaker, I ask that all Members may have 5 
legislative days within which to revise and extend their remarks.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Massachusetts?
  There was no objection.
  Mr. LYNCH. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, I rise in support of H.R. 885, the Improved Financial 
and Commodity Markets Oversight and Accountability Act. This bill, 
introduced by my friend Representative John Larson of Connecticut, 
would enhance the independence of Inspectors General at key financial 
regulatory agencies.
  Right now we have an inconsistent system where some financial 
agencies like the FDIC have an Inspector General appointed by the 
President and confirmed by the Senate, while other large and important 
agencies like the SEC have an Inspector General who is appointed by and 
reports to the head of the agency they are supposed to be 
investigating.
  This bill would create a more consistent and independent structure by 
elevating the Inspectors General at five financial regulatory agencies 
to be Presidentially appointed and Senate confirmed. This will enhance 
their independence from the agencies they are overseeing.
  This committee has worked on Inspector General reform for the past 
several years now, and one of our key findings is that the Inspectors 
General have to be independent from the agency they are supervising if 
they are going to be effective. The situation at some agencies, where 
the head of the agency hires and fires the Inspector General and sets 
the office budget for that Inspector General, does not give these IGs, 
the Inspectors General, the independence they need.

                              {time}  1515

  Making the Inspector General a Presidential appointee confirmed by 
the Senate not only gives them independence from their agency 
management but also gives them more stature to come directly to 
Congress with any problems that they encounter.
  Congresswoman Diane Watson, the chairwoman of the Oversight and 
Government Reform Subcommittee on Government Management, held a hearing 
on this bill where it had the support of the GAO. At the hearing, the 
agency Inspectors General made some suggestions on improving the bill, 
which has been incorporated in an amendment adopted at the committee 
markup. The amendment specifically clarifies that the Inspector General 
and the Inspector General staff retain their existing pay and personnel 
structure. It also clarifies and strengthens the subpoena authority of 
these Inspectors General, and it requires the heads of the agencies to 
report to Congress on actions they have taken in response to Inspector 
General recommendations.
  Inspectors General have the unique responsibility of reporting both 
to the President and to Congress. Congress has to make sure that the 
Inspectors General have the legal authority and tools they need to 
continue their roles as nonpartisan, professional, honest brokers; and 
this bill, I believe, does that.
  I urge all Members to support H.R. 885.
  I reserve the balance of my time.
  Mr. CHAFFETZ. Madam Speaker, I yield myself as much time as I may 
consume.
  As we all noted this year, oversight and accountability are vitally 
important, and the Inspectors General are on the frontline of this 
effort. This bill will enhance the independence and effectiveness of 
the IGs at several critical institutions.
  Currently the IGs at the Commodity Futures Trading Commission, the 
National Credit Union Administration, the Securities and Exchange 
Commission, the Pension Benefit Guaranty Corporation, and the Board of 
Governors of the Federal Reserve System are appointed and can be 
removed by the head of the institution. This structure could limit the 
IG's independence. This bill will make these IGs Presidentially 
appointed and Senate-confirmed, reducing the risk of undue influence by 
the heads of these institutions. Although additional Senate-confirmed 
positions are unnecessary in most cases, it is important that we 
preserve and enhance their independence within these organizations. I 
want to thank our colleagues for working with us to improve this bill 
and making several important changes.
  We now ensure that the positions covered by this bill will not suffer 
a reduction in pay and the individuals will remain on par with 
similarly situated senior individuals at the institution. More 
importantly, we also provide IGs with subpoena authority, an important 
tool for oversight and accountability, as we all know from our work on 
the Oversight Committee. Finally, the bill requires the regulatory 
agencies to take some action on the deficiencies identified by the IGs. 
These agencies cannot simply ignore the findings.
  Madam Speaker, given the enormous role these institutions play in our 
Nation's financial sector, it is important that the IGs have the tools 
and independence to ensure that these institutions operate above 
reproach.
  I urge my colleagues to support this measure.
  I reserve the balance of my time.
  Mr. LYNCH. Madam Speaker, I want to thank the gentleman from Utah for 
his hard work on this bill and his ongoing commitment, and it has been 
that case on much of the legislation that comes before our committee 
for his bipartisanship and willingness to work very hard on these 
issues. I consider it an honor to work with him.
  I would like to submit for the Record an exchange of letters between 
the Honorable Collin Peterson, chairman of the House Committee on 
Agriculture, and the Honorable Edolphus Towns, chairman of our 
Oversight Committee, with respect to their concerns regarding this 
bill.


[[Page 14145]]




                                     Committee on Agriculture,

                                     Washington, DC, June 8, 2009.
     Hon. Edolphus Towns, 
     Chairman, Committee on Oversight and Government Reform, 
         Washington, DC.
       Dear Chairman Towns: I write to you regarding H.R. 885, the 
     Improved Financial and Commodity Markets Oversight and 
     Accountability Act.
       H.R. 885 contains provisions that fall within the 
     jurisdiction of the Committee on Agriculture. I recognize and 
     appreciate your desire to bring this legislation before the 
     House in an expeditious manner and, accordingly, I will not 
     seek a sequential referral of the bill. However, agreeing to 
     waive consideration of this bill should not be construed as 
     the Committee on Agriculture waiving its jurisdiction over 
     H.R. 885.
       Further, the Committee on Agriculture reserves the right to 
     seek the appointment of conferees during any House-Senate 
     conference convened on this legislation on provisions of the 
     bill that are within the Committee's jurisdiction.
       I look forward to working with you as we prepare to pass 
     this important legislation.
           Sincerely,
                                               Collin C. Peterson,
     Chairman.
                                  ____

                                            Committee on Oversight


                                        and Government Reform,

                                     Washington, DC, June 8, 2009.
     Hon. Collin C. Peterson,
     Chairman, Committee on Agriculture,
     House of Representatives, Washington, DC.
       Dear Chairman Peterson: Thank you for your letter regarding 
     the Committee on Agriculture's jurisdictional interest in 
     H.R. 885, the ``Improved Financial and Commodity Markets 
     Oversight and Accountability Act''.
       I appreciate your willingness to expedite this legislation 
     for House floor consideration, and agree that certain 
     provisions of the bill are of jurisdictional interest to the 
     Committee on Agriculture. I acknowledge that by forgoing a 
     sequential referral, your Committee is not relinquishing its 
     jurisdiction and I will fully support your request to be 
     represented in a House-Senate conference on those provisions 
     over which the Committee on Agriculture has jurisdiction in 
     H.R. 885.
       I will submit a copy of your letter and this response as 
     part of the Congressional Record during consideration of the 
     legislation on the House floor. Thank you for your support of 
     H.R. 885 and your cooperation as we work towards enactment of 
     this important legislation.
           Sincerely,
                                                   Edolphus Towns,
                                                         Chairman.

  Madam Speaker, I would now like to yield such time as he may consume 
to the lead sponsor of this measure, a very diligent Member of Congress 
and a part of our leadership team, Mr. Larson of Connecticut.
  Mr. LARSON of Connecticut. I thank the gentleman from Massachusetts 
(Mr. Lynch). Chairman, you have done an outstanding job, along with the 
gentleman from Utah (Mr. Chaffetz), in outlining what this bill does.
  Before I begin, because this has been such a nonpartisan effort in so 
many respects and a commitment, first and foremost, on the part of the 
Oversight Committee to take a bill, whose genesis evolved out of the 
last session, and make it a better bill and perfect it, to those ends, 
along with Mr. Lynch and Mr. Chaffetz, I would especially like to thank 
Chairman Ed Towns. Mr. Towns has done such a great job in marshaling 
this bill forward, along with Diane Watson. 
  I would further like to thank, on their staff, Mike McCarthy, Adam 
Bordes and Bert Hammond of the Oversight and Government Reform 
Committee; Austin Burns of the majority leader's staff; and Barney 
Frank, Mel Watt and Dennis Moore for their ongoing efforts to reform 
the regulation of our markets and financial sectors and for their input 
into this legislation; my good friend Todd Platts, who also assisted in 
this; and Frank LoBiondo, who was a cosponsor of this bill almost 2 
years ago. I especially want to single out for their efforts two 
reform-minded freshmen who have come to Congress, John Boccieri of Ohio 
and Glenn Nye of Virginia, and especially to Amy O'Donnell of my staff 
and Jackie Sheltry.
  We refer to this bill in the short form, just frankly, as providing 
an independent Inspector General for the financial services industries 
that are in such desperate need of this oversight, and I think the 
chairman outlined it well. The genesis of this bill actually took place 
from conducting a public forum back in my district and listening to 
former Republican mayor of South Windsor, Connecticut, John Mitchell, 
and our attorney general of the State of Connecticut, Richard 
Blumenthal. When we were looking at speculation in the market and what 
was happening with the CFTC and oil commodities, when we realized that 
the more and closer we looked at who was regulating these agencies, it 
was somewhat a case of the foxes guarding the henhouse.
  Many have asked when we went home over this break and since the 
financial collapse on Wall Street, people have been astounded in trying 
to answer the question of, how could it be that Bernie Madoff was 
scamming thousands of innocent Americans into giving up their life 
savings? Where were the regulators? Where were the agencies? Where were 
they when speculators were wreaking havoc on the oil markets?
  I can think of no sector where honesty, independence and transparency 
are needed more right now than in our financial and commodity markets, 
yet the regulators of these markets have been allowed to work with no 
oversight of what they are doing and whether they are fulfilling their 
mission to protect the American consumer. That's because the Inspectors 
General, as the chairman outlined, who should be working on behalf of 
average Americans, were working for the heads of the agencies they 
should be overseeing. As I said earlier, this is a classic case of the 
fox watching the henhouse, and it's having a profound impact on the 
work of our regulatory agencies.
  We have done a review, and this is something that we pointed out at 
the committee. The review found that offices of the Inspector General, 
that independent offices where they are appointed by the President and 
approved by the Senate, completed over 117 investigations in 2008 while 
their nonindependent counterparts completed just 12. That's 117 versus 
12. The Inspector General of the Commodity Futures Trading Commission 
released information, showing that despite the recent economic crisis 
and the turbulence in the oil market, his office completed just two 
investigations and updated one from October of last year through March. 
Simply stated, an independent watchdog ensures better performance from 
a government agency.
  I commend the committee because what they've done is provide greater 
accountability and transparency. I also commend United States Senator 
Dodd, who will also be taking this bill up on the Senate side as well. 
Again, I thank everybody on the committee and especially Ed Towns for 
his hard work and dedication to make sure this bill got to the floor.
  Mr. CHAFFETZ. Madam Speaker, I want to also echo my compliments to 
Chairman Towns for his bringing this forward; Ranking Member Issa who 
has a keen interest in this area for his work; and the Chair of the 
subcommittee, Mr. Lynch, who is truly a gentleman and a great person to 
work with.
  I also want to put comments in for the good men and women throughout 
our Federal Government that are working in all of these types of 
functions. I was excited to participate on the Oversight and Government 
Reform Committee because of the tremendous workload that they have. 
There's a great expectation from the American people that we deal with 
their money fairly and honesty, that we make sure that every dollar is 
accounted for; and we've seen too many mishaps where dollars have been 
overspent or overused. Certainly as we look at what is going to be, 
surely, the single-largest tax increase in the history of the United 
States with the so-called cap-and-trade, as the Democrats move this 
bill forward, if it were to pass, literally hundreds of billions of 
dollars taken out of the pockets of Americans all across the country 
that will be spent on who knows what, we have got to make sure that 
every single one of those dollars is accounted for.
  Even though I voted ``no,'' this body passed a $1 trillion stimulus 
package, again, pulling $1 trillion dollars out of our economy, pulling 
$1 trillion out of Americans' pockets, handing it out to somebody else, 
bailouts and the rest of it. We need to make sure that the independent 
auditing, the people who are

[[Page 14146]]

involved in oversight and government reform at every agency across the 
Nation throughout our government are doing their job, paying attention 
and making sure that every dollar is accounted for.
  Having no other speakers, I will yield back the balance of my time.
  Mr. LYNCH. Madam Speaker, in closing, we would like to reiterate our 
strong support for H.R. 885 and its lead sponsor and champion, Mr. 
Larson. Again, we appreciate the great work being done by Ed Towns, the 
full committee Chair; Mr. Issa, its ranking member; and the gentleman 
from Utah, because this will increase the independence of these 
Inspectors General at financial regulatory agencies at a time when we 
need these internal watchdogs to be more effective than ever. We do 
appreciate the work that is being done by our Inspectors General and 
their staff, investigators and researchers. They work very hard for us. 
They do work that is not often appreciated, I think, on behalf of the 
American people; and this will, I think, allow them a greater level of 
independence to do the job that needs to be done. So I urge my 
colleagues to join Mr. Larson and all of us in supporting the passage 
of this measure.
  Mr. MOORE of Kansas. Madam Speaker, I rise today to express my 
support for H.R. 885, the Improved Financial and Commodity Markets 
Oversight and Accountability Act. The bill is sponsored by my friend 
and colleague from Connecticut, Congressman Larson, and I commend his 
leadership on strengthening oversight and accountability to our 
government.
  As I have told him personally, I appreciate the hard work Congressman 
Larson put into crafting H.R. 885, a bill to reform several Offices of 
Inspector General in an effort to bring a greater level of independence 
and transparency to the agencies they oversee. And as the sponsor of 
the bill knows, I initially raised a few concerns with the bill to make 
sure we maximize the efforts of these Inspectors General to provide 
strong and tough oversight.
  As a former District Attorney, the focus of any investigation should 
always be quality over quantity. Inspectors General should not focus on 
meeting some meaningless quota of closed cases. Instead, we want our 
Inspectors General to uncover waste, fraud and abuse wherever they find 
it so the agency they supervise and Congress can promptly address those 
abuses.
  The House Financial Services Committee, under the leadership of 
Chairman Barney Frank and of which I chair the Oversight and 
Investigations Subcommittee, will soon be considering a comprehensive 
regulatory reform package to overhaul our financial regulatory system.
  In that effort, I will be working with Members on both sides of the 
aisle to identify any additional oversight protections we need to 
implement to ensure our financial system is transparent and protects 
consumers, investors and taxpayers. For example, I personally would 
like to see better coordination between Inspectors General on a regular 
basis to identify waste, fraud and abuse by creating a ``Financial 
Inspectors General Council'' where oversight concerns that may have a 
broader reach can be identified and corrected quickly.
  I appreciate Congressman Larson listening to me and discussing my 
concerns. We both agree that we need to move quickly on all fronts to 
strengthen oversight of our financial system, and it is in that spirit 
that I support this bill that the House is considering now.
  I look forward to working closely with Congressman Larson, 
Republicans and Democrats to take the necessary, additional steps to 
make certain we have an improved oversight structure in place so we 
don't have a repeat of a financial crisis of this magnitude.
  Mr. LYNCH. I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Massachusetts (Mr. Lynch) that the House suspend the 
rules and pass the bill, H.R. 885, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________