[Congressional Record (Bound Edition), Volume 155 (2009), Part 8]
[SE]
[Pages 10662-10668]
[From the U.S. Government Publishing Office, www.gpo.gov]




               FRAUD ENFORCEMENT AND RECOVERY ACT OF 2009

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of S. 386, which the clerk will report by title.
  The legislative clerk read as follows:

       A bill (S. 386) to improve enforcement of mortgage fraud, 
     securities fraud, financial institution fraud, and other 
     frauds related to federal assistance and relief programs, for 
     the recovery of funds lost to these frauds, and for other 
     purposes.

  Pending:

       Reid amendment No. 984, to increase funding for certain HUD 
     programs to assist individuals to better withstand the 
     current mortgage crisis.
       Inhofe amendment No. 996 (to amendment No. 984), to amend 
     title 4, United States Code, to declare English as the 
     national language of the Government of the United States.
       Vitter amendment No. 991, to authorize and remove 
     impediments to the repayment of funds received under the 
     Troubled Asset Relief Program.
       Boxer modified amendment No. 1000, to authorize monies for 
     the Special Inspector General for the Troubled Asset Relief 
     Program to audit and investigate recipients of nonrecourse 
     Federal loans under the Public Private Investment Program and 
     the Term Asset Loan Facility.
       Coburn amendment No. 982, to authorize the use of TARP 
     funds to cover the costs of the bill.
       Thune amendment No. 1002, to require the Secretary of the 
     Treasury to use any amounts repaid by a financial institution 
     that is a recipient of assistance under the Troubled Assets 
     Relief Program for debt reduction.

[[Page 10663]]

       DeMint amendment No. 994, to prohibit the use of Troubled 
     Asset Relief Program funds for the purchase of common stock.
       Coburn amendment No. 983, to require the Inspector General 
     of the Federal Housing Finance Agency to investigate and 
     report on the activities of Fannie Mae and Freddie Mac that 
     may have contributed to the current mortgage crisis.
       Kohl amendment No. 990, to protect older Americans from 
     misleading and fraudulent marketing practices, with the goal 
     of increasing retirement security.
       Ensign amendment No. 1004, to impose certain requirements 
     on public-private investment fund programs.
       Ensign amendment No. 1003 (to amendment No. 1000), to 
     impose certain requirements on public-private investment fund 
     programs.
       Hatch amendment No. 1007, to prohibit the Department of 
     Labor from expending Federal funds to withdraw a rule 
     pertaining to the filing by labor organizations of an annual 
     financial report required by the Labor-Management Reporting 
     and Disclosure Act of 1959.

  The PRESIDING OFFICER. The Senator from Vermont.
  Mr. LEAHY. Madam President, I thank the distinguished Presiding 
Officer.
  The bill, S. 386, is the bipartisan Fraud Enforcement and Recovery 
Act of 2009, the Leahy-Grassley bill. When I mention my name and 
Senator Grassley's name, we are only two of a large number of people on 
this bill. We have Senators Kaufman, Klobuchar, Schumer, Murray, Bayh, 
Specter, Snowe, Harkin, Levin, Dorgan, Whitehouse, Rockefeller, 
Shaheen, Stabenow, Sanders, Bennet of Colorado, Durbin, Mikulski, 
Gillibrand, Begich, Burris, Dodd, Menendez, Cardin, Reid, and Pryor as 
co-sponsors.
  I mention those names because they go across the political spectrum. 
They know we have to strengthen the Federal Government's capacity to 
investigate and prosecute the kinds of financial frauds that have 
severely undermined our economy and hurt so many hard-working people in 
this country.
  The reason so many of us came together, again, across the political 
spectrum--and I note there are several former prosecutors in that 
group--is we have seen what some of these unscrupulous people have 
done. They have set up these mortgage frauds in basically an 
unregulated area. They will come to somebody who is facing difficulty 
in paying off a mortgage--there has probably been a foreclosure and 
they come and say: Here, we can take care of you. Sign these papers. 
Put this money down. Send payments to us. We will take care of 
everything.
  So people exhaust their life savings. Maybe they send the money they 
put away for their kids to go to college. Probably it is part of their 
retirement account. By the time they get done, the people committing 
the fraud are gone. The mortgage on the house, however, has not been 
paid off. In fact, the bank is still going to foreclose. They have lost 
their life's savings. They have lost all the money they have set aside 
for whatever reasons so many millions of Americans set money aside for. 
And these people who committed the fraud are gone. They have been 
robbed of their savings, their retirement accounts, their children's 
college funds, their equity, and, of course, many have lost their homes 
on top of that.
  When the testimony of the FBI and the Department of Justice and 
others showed this type of fraud--which was bad enough in years past--
has skyrocketed in the last couple of years, the Senator from Iowa and 
I decided we should bring a piece of legislation that would allow the 
FBI and the Department of Justice to go after these people defrauding 
Americans.
  I do not want to just have a simple fine. If somebody steals $100 
million, and they get a fine of $5 or $10 million, it is a matter of 
doing business. I want enough teeth in here that they will go to jail. 
If you steal somebody's home, if you steal their dreams, if you steal 
their retirement, you should go to jail. We send kids to jail for 
sealing a car. How much more important is it that we should send these 
white-collar thieves to jail for stealing someone's life and someone's 
dreams? That is what we want to do here.
  The bill will help provide the resources and legal tools needed to 
police and deter fraud but also to protect the taxpayer-funded economic 
recovery events now being implemented.
  I was disappointed that last week our efforts to enact this 
legislation were stalled. But I take a great deal of hope now to know 
that by tomorrow midday it should be passed. It is, as I said, a 
bipartisan bill. It does strengthen the tools available to law 
enforcement to combat financial and mortgage fraud.
  We were delayed a number of times before we got on the floor of the 
Senate, and I compliment the distinguished majority leader for bringing 
it to the floor last week. And when we did, we began to work on 18 
amendments that were offered to the bill. We had votes on a number of 
them. By Thursday afternoon, we had voted on all the germane 
amendments. We also worked in good faith on a number of amendments not 
related to the underlying fraud enforcement legislation.
  I would like to mention the kind of cooperation we had. The 
distinguished Republican deputy leader, Senator Kyl, had a series of 
amendments that I believe would have passed the test of germaneness. He 
talked with Senator Grassley and myself, and we arranged a vote on one 
amendment. He had wanted to bring up several similar ones. They were 
objected to. He pulled them down, and we had a vote on the one. We 
spent very little time doing that. We had plenty of time for Senator 
Kyl to make his points, Senator Grassley and I to make ours, and then 
we had a vote on it.
  So we voted on all the germane amendments. For the remaining 
amendments, we sought an agreement to proceed to vote on each of those 
pending amendments, the ones that had not been voted on. When the offer 
was rejected, after being on this bill for several days, the majority 
leader was forced to file cloture to conclude consideration of this 
bipartisan legislation.
  Majority Leader Reid did the only thing he could responsibly do 
because this is timely legislation. It is needed to protect people from 
losing their retirement funds, their homes, and their savings for their 
children to go to college. Americans are seeing their life's savings 
taken from them by unscrupulous criminals.
  I think of my parents who came up during the time of the Great 
Depression and started a small business. They saved all their lives for 
their own retirement, to send their children to college. I think of how 
I would have reacted if I had seen somebody steal from them. Well, it 
is happening to a lot of other parents and grandparents around this 
country. It is time for the Senate to act before more people have their 
lives destroyed.
  The Fraud Enforcement and Recovery Act will make necessary changes to 
criminal laws, including criminal fraud, securities, and money-
laundering laws. It will increase the funding available to Federal law 
enforcement agencies to combat mortgage fraud and financial fraud. It 
will revise the False Claims Act to ensure that the Government can 
recover taxpayer dollars lost to fraud. This is a very important part 
of the bill. If somebody is stealing the taxpayers' dollars too, we 
want to get that back for the taxpayers.
  Throughout this debate, I have several times commended the Senator 
from Iowa, Mr. Grassley, our lead cosponsor. I commend him and I thank 
him for his contributions to the bill and the debate, his work in the 
Judiciary Committee, in getting us this far, and for his dedication to 
protect taxpayer funds by deterring, investigating, and prosecuting 
fraud. I thank our many cosponsors for their steadfast support. I have 
named them. I shall not again. But everybody I have heard from across 
this country supports this bill.
  No one should want to see taxpayer money intended to fund economic 
recovery efforts diverted by fraud. No one should want to see those who 
engage in mortgage fraud escape accountability. That is what is going 
to happen unless we vote to conclude the debate on this bill, pass it, 
get it to the other body, get it passed, get it signed into law, and 
give law enforcement the resources and tools they so desperately need.

[[Page 10664]]

  During the first months of this year, the Judiciary Committee has 
concentrated on what we can do legislatively to assist in the economic 
recovery. Already we have considered and reported this fraud 
enforcement bill and the patent reform bill, and worked to ensure that 
law enforcement assistance was included in the economic recovery 
legislation.
  The recovery efforts are generating signs of economic progress. That 
is good. That is necessary. But that is not enough.
  We need to make sure we are spending our public resources wisely. We 
want to make sure they are not being taken by fraud. We also need to 
ensure that those responsible for the downturn through fraudulent acts 
in financial markets and the housing market are held to account. It 
should not be a case where we taxpayers pay for what they did and they 
get away scot-free. Two decades ago we responded during the savings and 
loan crisis by hiring more agents, analysts, and prosecutors. We 
allocated the resources needed to catch those who took advantage to 
profit through fraud. We have to do it again.
  At our February hearing, we heard from the FBI, the Special Inspector 
General for the Troubled Assets Relief Program, and the Justice 
Department. All of our law enforcement witnesses testified of the need 
for this legislation and these additional law enforcement resources.
  Deputy Director John Pistole of the FBI warned that the losses of 
this economic crisis dwarf those of the savings and loan debacle, and 
the need for more enforcement is even greater now than it was then.
  Special Inspector General Neil Barofsky described how law enforcement 
resources had understandably been diverted from traditional white 
collar crime to terrorism, but that had left the Justice Department's 
capacity to respond to financial and securities fraud significantly 
weakened. He warned that with trillions of dollars being spent under 
TARP and other associated programs, ``it is essential that the 
appropriate resources be dedicated to meet the challenges of both 
deterring and prosecuting fraud.'' I agree.
  Acting Assistant Attorney General Rita Glavin of the Justice 
Department testified that our bill would provide the Justice Department 
with needed tools ``to aggressively fight fraud in the current economic 
climate'' and ``provide key statutory enhancements that will assist in 
ensuring that those who have committed fraud are held accountable.''
  We then held a hearing with FBI Director Robert Mueller. Director 
Mueller reiterated law enforcement's message. Here is what he said: 
``[The bill] will be tremendously helpful in giving us the tools to 
investigate . . . to help prosecutors prosecute, and finally to obtain 
the convictions and the jail sentences that are the deterrent to this 
activity taking place in the future.''
  Each week we learn of additional scandals in the financial industry, 
as leading money managers are charged with multimillion dollar fraud 
schemes carried out over the years. We need to clean up the mess. That 
means providing the tools and resources that law enforcement needs to 
get to the bottom of this, restore order, and exact accountability.
  To show how severe this is, reports of mortgage fraud are up 682 
percent over the past 5 years, more than 2,800 percent over the past 
decade. Some say we are losing more than $4 billion a year to mortgage 
fraud. And massive, new corporate frauds, like the $65 billion Ponzi 
scheme perpetrated by Bernard Madoff, are being uncovered as the 
economy has turned worse, exposing many investors to massive losses.
  The problem is getting worse, not better. The victims of these frauds 
have to be protected now more than ever. The victims include, as I have 
said, homeowners who have been fleeced by unscrupulous mortgage 
brokers, retirees who have lost their life savings in stock scams and 
Ponzi schemes, which have come to light only as corporations collapse 
and the market falls.
  They also include American taxpayers who have invested billions of 
dollars to restore our economy. These American taxpayers expect us to 
protect the investment they have made to make sure those funds are not 
exploited by crime. Each one of us is among those taxpayers. We all 
want to make sure the money is not stolen.
  I urge all Senators to support our efforts and work with us to pass 
this bill without further delay. That means to vote for cloture so that 
we can conclude the amendment process and vote on the bill.
  I see the distinguished cosponsor of this bill, Senator Grassley, on 
the floor and I yield to him.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. GRASSLEY. Madam President, I heard the kind remarks of the 
Senator from Vermont. I thank him for those remarks about this Senator 
and I thank him for his cooperation on this bill, including some things 
I am very much interested in, but also the basis of the legislation 
that he proposed, and I support it as enthusiastically as I do the rest 
of the bill. I thank the Senator from Vermont.
  I am here, obviously, to speak in support of the Fraud Enforcement 
Recovery Act which has been so thoroughly discussed by our 
distinguished chairman of the Judiciary Committee. As the lead 
Republican cosponsor of this timely antifraud legislation, I believe it 
is a very important component--a very important component--to help get 
both the financial and the housing markets back on track. The fraud 
enforcement tools and resources provided in this bill are very 
necessary. They will ensure that the taxpayers' dollars that have been 
expended to shore up bank and financial institutions and corporations 
and Freddie Mac and Fannie Mae and others aren't lost to fraud, waste, 
and abuse.
  This bill sends a very clear message to would-be bad actors that 
their conduct will have repercussions from here on out. It will also 
make sure money lost to fraud can be recovered through the False Claims 
Act. Most importantly, this bill will help show the American people we 
are doing something to try and prevent future fraud and recover moneys 
lost to that fraud and that abuse. That is why I am voting for cloture 
on this bill.
  Early in the process of bringing this bill to the floor, I explained 
to the Democratic leadership that I wanted an open process for 
amendments to be considered on this bill before I supported the cloture 
that we will be voting on. The leadership honored that and we had a 
number of amendments filed on this bill. We have spent a week and have 
debated and disposed of a number of amendments to the bill. We have 
some other amendments that remain outstanding that are good amendments 
and should be debated on a housing or banking bill that is coming up in 
the very near future. It is now time to pass this bill. Our law 
enforcement officials need these tools and they need these resources 
and they need them now. That is why I am going to vote for cloture on 
this bill.
  Taxpayers have been asked to shoulder an enormous burden at this time 
of economic crisis created by a credit crisis. They have shouldered an 
enormous burden, be it the bailout of financial institutions, an 
economic stimulus bill that handed out $1 trillion, and more recently 
the Omnibus appropriations bill loaded full of Government spending. To 
my colleagues: Whether you agree with these expenditures, we simply 
cannot allow these funds to be unprotected from fraud, waste, and 
abuse.
  This legislation ensures that our law enforcement officials and our 
prosecutors have the tools necessary to enforce our laws and the 
resources to hunt down the bad actors. It makes revisions to our 
criminal fraud laws to ensure that complex financial and mortgage 
crimes aren't outside the scope of Federal jurisdiction in the future. 
It also makes necessary corrections to our antimoney laundering laws to 
ensure that a recent Supreme Court decision doesn't limit the ability 
of our Department of Justice to go after criminals who launder their 
ill-gotten funds.
  Finally, and perhaps most importantly from the standpoint of this 
Senator, the bill amends the civil False

[[Page 10665]]

Claims Act to ensure that taxpayers' money lost to fraud, waste, and 
abuse can, in fact, be recovered and particularly when that recovery is 
associated with a patriotic work of whistleblowers who make that known. 
Back in 1986, I authored major revisions to the False Claims Act and 
did that so we could fight fraud, particularly against Government then 
more so than now, by defense contractors. Now it seems to be Medicare 
and the health care industry. Since those revisions were signed into 
law in 1986 by President Reagan, the False Claims Act has recovered 
over $22 billion of taxpayer money.
  This powerful law allows citizen taxpayers to act as private 
attorneys general by going to court on behalf of our Government when 
they know of fraud against the Government. These qui tam whistleblowers 
are the heart and soul of the False Claims Act. They uncover fraud from 
the inside, bringing schemes to light so taxpayers are not taken for a 
ride. However, in recent years, litigation fueled by powerful 
Government defense and health care contractors has created legal 
loopholes that threaten the application of this powerful tool that has 
brought in billions of dollars. This legislation fixes this, thus 
ensuring that no fraud can go unpunished by simply navigating through 
the legal loopholes.
  This bill will help deter potential defrauders from attempting to 
scam the Government and the taxpayers. In addition, this legislation 
will help instill confidence back into the housing and financial 
markets. I hope my colleagues will join me by voting for cloture on 
this bill to help make sure these taxpayer dollars are protected.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. INHOFE. Madam President, I ask unanimous consent to speak as in 
morning business. However, if anyone wishes to come in and talk about 
the pending bill, I will certainly defer to them.
  Mr. LEAHY. Reserving the right to object, and I shall not object, 
what time is this bill scheduled for a vote?
  The PRESIDING OFFICER. The vote will occur at 5:20, the vote on 
cloture.
  Mr. LEAHY. If the Senator will be kind enough to amend his unanimous 
consent request to include not to interfere with the vote at 5:20.
  Mr. INHOFE. I certainly amend it accordingly.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. INHOFE. Again, I would say if anyone wants to come in and talk 
about this vote that is coming up, I will yield to them.


                             Guantanamo Bay

  I seem to be involved in four missions right now and one of them 
happens to be the Guantanamo Bay detention facility. I have had 
occasion to be down at that facility right after 9/11 and then, of 
course, the other day I was there again. There are some very serious 
problems I think many Members of this body are not aware of. One is 
that when President Obama gave his excellent speech that was his 
inaugural speech, he recognized we need to determine what we are going 
to do with those who are currently detained at Guantanamo Bay and those 
who may come into that facility as a result of the escalation of 
activity in Afghanistan before making a determination that it has to be 
closed. Unfortunately, 2 days after he made that speech, he stated it 
was going to be closed and the prison would be closed within a year.
  On February 2, I took a group down there with some Senators who had 
never been to Guantanamo Bay. All they could do on the way back is say: 
Why are we considering giving up this facility? In fact, shortly after 
that, I introduced legislation that would prevent any transfers of 
detainees from Guantanamo Bay to anywhere in the United States or its 
territories. The reason I did this is because while this has been used 
to detain some 800 al-Qaida and Taliban combatants, they are down right 
now to about 525 of those who have been tried and departed from Gitmo 
for other countries. Today, there are approximately 245 detainees left. 
This is the problem. These detainees--about 170 as near as we can 
determine--are very serious detainees such as Khalid Mohammed and 
others who were directly involved in the planning of 9/11. Many of the 
countries will not accept them back. They cannot be repatriated to any 
country; nobody wants them. So the choices are limited either to keep 
them at that facility or to figure out some way to put them in, as has 
been suggested, to some facility in the continental United States. They 
have talked about some 17 places that could detain these terrorists.
  The problem we have with that is these would become 17 magnets for 
terrorism in the United States. I can't find one Member of the U.S. 
Senate--not one--who is willing to have any of these detained in his or 
her State. I often wonder what is this obsession that people have to 
closing this facility. It is kind of funny because it is one of the few 
good things that is out there--few good deals we have. We have had this 
facility since 1903. We are still paying the same amount of money--
$4,000 a year--for this facility, and it is the state-of-the-art place 
for the United States to take care of this type of detainee. Let's keep 
in mind that we also have a complex called the expeditionary legal 
complex located at Gitmo. It is about the only place of its kind in the 
world where you can try these cases. If you don't try them there, very 
likely they could find their way into our justice system. Of course, I 
think we all understand the rules of evidence are different in that 
facility than they are in our Federal judiciary system.
  I had occasion to go to Fort Sill in my State of Oklahoma, which is 1 
of the 17 that have been named as possible areas for detention of these 
individuals.
  Sergeant Major Carter was there, the one running the facility. She 
had occasion to be stationed for over a year at Guantanamo. She said: 
Why in the world would we give up that facility to send them down here 
to Fort Sill? First of all, we don't have the capacity to keep them in 
the various classifications in security that they do at Guantanamo. 
Second, she said that the ratio is 1 to 2 in terms of health care 
facilities. There is just one health care person in most locations, but 
there are doctors and nurses for each two detainees at Guantanamo Bay. 
We don't have anything like that at Fort Sill or Leavenworth or any of 
the other suggested places.
  Consequently, they have studied and found and determined that never 
has there been a case of abuse in the way of human rights abuses with 
the detainees. There has never been a case of waterboarding or of any 
kind of torturing. Yet they are there, and nobody has been able to say 
why it is that they should be closed down.
  What troubles me most is that the Obama administration seems more 
focused on closing Gitmo and protecting the rights of those detainees 
than on conducting the war on terror and protecting our country and our 
people from the terrorists currently held there.
  It is interesting that Attorney General Holder went down to look at 
Gitmo to determine what we should do. He came back with a glowing 
report about the conditions. The Pentagon released a report stating 
that Gitmo meets the highest international standards, the very highest 
standards. Unfortunately, the Obama administration seems bent on 
closing Gitmo--I guess for political reasons. Yet I have not heard the 
reasons why it is that people are so obsessed with the idea of closing 
it down.
  I think it is time for the Members of Congress to weigh in because as 
we look at the evidence and the problems, we have to find a place to 
put the detainees who are there. I say to my friend from Vermont, it is 
not just the 245 detainees currently there, it is the ones who are 
going to be there as a result of the surge. People say there are two 
prisons in Afghanistan, there is Bagram and Kandahar. The problem with 
that is, it is my understanding they will only accept detainees who are 
Afghan. You have others going from Saudi Arabia, from other areas, and 
there is no place else they can be put.
  I think we have an opportunity there to have a place that is secure, 
with the

[[Page 10666]]

highest standards. Again, the only alternative would be to put them in 
places where we have detainees--where we have other facilities in the 
United States.
  In 2007, the Senate passed a resolution by a vote of 94 to 3. It 
stated that the detainees housed at Gitmo should not be released into 
American society, nor should they be transferred stateside into 
facilities in American communities and neighborhoods. That vote was 94 
to 3.
  Madam President, I suggest to you that we will have the opportunity 
to call on those 94 Members, and certainly their constituents back 
home, who don't want to have them released and housed in any area other 
than Gitmo. My State of Oklahoma is not the only State where the State 
legislature has passed resolutions saying we don't want any of those 
detainees housed in our State. I think we will have an opportunity--
since the vote is taking place in a minute and my time has expired--an 
opportunity in the next few days, before any final action takes place, 
to allow the Members of both the House and Senate to express a very 
strong position that they don't want to have these detainees placed in 
any of the stateside facilities.
  With that, I yield the floor.
  Mr. LEAHY. Madam President, we have about a minute left. I reiterate 
for my colleagues that this is a bill that, when it is voted upon, I 
predict--and I am fairly good about such predictions--will pass almost 
unanimously, certainly with 80 to 90 votes for it. We handled a number 
of amendments--mostly Republican amendments--and we either included 
them or voted them down. Most were included in this bill. Cloture was 
filed only because a huge number of amendments came in that had 
absolutely nothing to do with the jurisdiction of either the Judiciary 
Committee or this bill. That is the only way to get on to the bill and 
give our law enforcement the tools they need. Many law enforcement 
groups in this country has spoken in favor of this.
  I ask unanimous consent that a group of letters from law enforcement 
organizations and other groups in favor of it be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                National Fraternal


                                              Order of Police,

                                   Washington, DC, March 18, 2009.
     Hon. Patrick J. Leahy,
     Chairman, Committee on the Judiciary, U.S. Senate, 
         Washington, DC.
       Dear Mr. Chairman, I am writing on behalf of the members of 
     the Fraternal Order of Police to advise you of our support 
     for S. 386, the ``Fraud Enforcement and Recovery Act.''
       This bill will strengthen our ability to investigate and 
     prosecute the kinds of financial crimes that have so severely 
     undermined our economy by providing law enforcement with the 
     tools they need to investigate fraudulent activity in 
     connection with bailout and recovery legislation,
       The legislation you have introduced along with Senators 
     Grassley, Schumer, Klobuchar, and Kaufman will authorize $165 
     million a year for hiring fraud prosecutors and investigators 
     at the U.S. Department of Justice for FY2010 and 2011, 
     including specific funding for the Federal Bureau of 
     Investigation to hire additional special agents, professional 
     staff and forensic analysts to rebuild its ``white collar'' 
     investigation program. The bill also authorizes $80 million a 
     year over the next two years for investigators and analysts 
     at the U.S. Postal Inspection Service, the U.S. Secret 
     Service, and the Office of Inspector General for the Housing 
     and Urban Development Department to combat fraud against 
     Federal assistance programs and financial institutions.
       Additionally, the bill will make changes to fraud and money 
     laundering statutes to enhance prosecutors' ability to combat 
     this growing wave of fraud and improve one of the most potent 
     civil tools we have for rooting out fraud in government--the 
     False Claims Act.
       I applaud you for your leadership on this issue and look 
     forward to working with you and your staff to move this bill 
     forward. If I can be of any help, please do not hesitate to 
     contact me or Executive Director Jim Pasco through my 
     Washington office.
           Sincerely,
                                                 Chuck Canterbury,
     National President.
                                  ____



                                      Taxpayers Against Fraud,

                                                   Washington, DC.
     Hon. Patrick J. Leahy,
     Chairman, Senate Judiciary Committee, Russell Senate Office 
         Building, U.S. Senate, Washington, DC.
       Dear Senator Leahy: I am writing to express Taxpayers 
     Against Fraud's support for the recently introduced Fraud 
     Enforcement and Recovery Act of 2009 (S. 386). Taxpayers 
     Against Fraud is dedicated to eradicating fraud against the 
     United States government. We strongly believe that this well-
     reasoned legislation will serve that end, and will greatly 
     benefit the American people during this trying time. In 
     particular, the S.386 provisions closing False Claims Act 
     loopholes will prevent fraudsters from stealing tax dollars 
     with impunity.
       Over the past twenty years, it has become utterly clear 
     that the government's most effective fraud-fighting tool is 
     the federal False Claims Act, returning over $22 billion in 
     settlements and judgments. However, recent court decisions 
     have interpreted the False Claims Act in ways inconsistent 
     with the Congressional intent, causing harm to taxpayers. 
     These judicial rulings could leave billions of federal 
     dollars exposed to fraud. Perhaps most disturbing, the 
     Supreme Court recently held that the False Claims Act does 
     not impose liability for false claims on government funds 
     disbursed by a government contractor for government purposes. 
     This ruling severely limits the reach of the False Claims 
     Act. S. 386 specifically addresses this Court ruling. 
     Therefore, during this time, when the government is 
     distributing unprecedented funds as part of the economic 
     recovery efforts, Congress is rightly seeking to strengthen 
     the False Claims Act, thus ensuring that every stimulus 
     dollar is appropriately spent to get our country back on 
     track.
       We strongly support this legislation, and we encourage 
     others to join the fight in protecting Amercia's scarce 
     fiscal resources.
           Sincerely,
                                               Joseph E. B. White,
     President & C.E.O.
                                  ____

                                           Federal Law Enforcement


                                         Officers Association,

                                   Lewisberry, PA, March 22, 2009.
     Hon. Patrick J. Leahy,
     U.S. Senate,
     Washington, DC.
       Dear Senator Leahy: As the National President of the 
     Federal Law Enforcement Officers Association (FLEOA), a 
     26,000 member organization exclusively representing federal 
     law enforcement officers, I would like to commend you for 
     your introduction of Senate Bill 386, the Fraud Enforcement 
     and Recovery Act of 2009.
       Three sections of the bill in particular are of great 
     importance to our membership. First, Subsection 27, paragraph 
     (1) seeks to define the term ``proceeds'' correctly as 
     relates to a money laundering violation (Title 18, USC 1956 
     C). Your bill will ensure that a criminal is charged for the 
     ``gross receipts'' they earned from a specified unlawful 
     activity. Money launderers should not be allowed to use 
     receipts from their criminal enterprise as a means to lower 
     the dollar amount for which they are criminally charged.
       Under Section 3, paragraph (2) (A), your bill specifies 
     funding the Federal Bureau of Investigation (FBI) for fiscal 
     years 2010 and 2011. Specifically, your bill recommends 
     funding the FBI $65 million each year in an effort to combat 
     crimes involving ``federal assistance programs and financial 
     institutions.'' In light of the economic crisis our country 
     is facing, and the rampant fraud being committed against 
     programs designed to assist Americans, it is imperative that 
     the FBI receives the proper funding and resources to 
     investigate criminals who seek to steal from our government.
       We also support the additional $30 million allocations 
     specified for both the Postal Inspection Service and the 
     Inspector General of the Department of Housing and Urban 
     Development (HUD-OIG), As the Postal Service confronts its 
     fiscal challenges, it is imperative that the Postal 
     Inspection Service is properly funded in order to carry out 
     its vital mission. If the Postal Service continues to tighten 
     the Postal Inspection Service belt, our Inspectors won't be 
     able to breathe, i.e. continue to conduct high impact 
     criminal institution crimes. They, too, need to be properly 
     funded so they can continue to investigate those who seek to 
     steal from our government.
       Thank you, Senator Leahy, for recognizing the need to fund 
     those agencies who are dedicated to protecting our 
     government's capital. We also applaud your recognition of the 
     need to address the misguided interpretation of the money 
     laundering statute that was rendered in the Santos case.
           Respectfully submitted,
                                                         J. Adler,
                                               National President.

[[Page 10667]]

     
                                  ____
                                           National Association of


                            Assistant United States Attorneys,

                                   Lake Ridge, VA, March 20, 2009.
     Re Fraud Enforcement and Recovery Act of 2009, S. 386

     Hon. Harry Reid,
     Senate Majority Leader,
     U.S. Capitol, Washington, DC.
     Hon. Mitch McConnell,
     Senate Republican Leader,
     U.S. Capitol, Washington, DC.
       Dear Majority Leader Reid and Republican Leader McConnell: 
     On behalf of the National Association of Assistant United 
     States Attorneys, I write to urge the Senate to proceed 
     without delay to approve the Fraud Enforcement and Recovery 
     Act of 2009, S. 386. This legislation was reported by the 
     Senate Judiciary Committee on March 5. Our organization, 
     which represents the interests of the 5,400 Assistant United 
     States Attorneys responsible for enforcement of the nation's 
     laws and the pursuit of justice, strongly supports this 
     legislation and urges prompt Senate passage. The legislation 
     also has the support of the Department of Justice itself.
       The Fraud Enforcement and Recovery Act (FERA) will make new 
     tools and resources available to prosecutors and law 
     enforcement authorities to investigate and prosecute the 
     corporate and mortgage frauds that have contributed to the 
     collapse of our economy and caused such widespread harm. The 
     legislation authorizes $230 million for hiring fraud 
     prosecutors and investigators at the Justice Department for 
     fiscal years 2010 and 2011. This includes $50 million for 
     U.S. Attorneys' offices to expand prosecutorial staffing of 
     its mortgage fraud strike forces and $40 million for the 
     criminal, civil, and tax divisions at the Justice Department 
     to provide special litigation and investigative support to 
     those efforts.
       FERA also makes a number of important improvements to fraud 
     and money laundering statutes to strengthen the ability of 
     federal prosecutors to combat this growing wave of fraud.
       This legislation, like the FIRREA legislation responding to 
     the savings and loan crisis, is the most significant effort 
     to reinvigorate our federal fraud enforcement program in more 
     than two decades. Congress should move quickly to pass this 
     legislation so American taxpayers can be confident that those 
     who are criminally responsible for contributing to the 
     present economic disaster, as well as those who may attempt 
     to exploit federal efforts to promote recovery, are 
     apprehended and held fully accountable fox their wrongs.
           Sincerely yours,
                                                  Richard Delonis,
     President.
                                  ____

                                                    Association of


                                    Certified Fraud Examiners,

                                       Austin, TX, March 10, 2009.
     Hon. Patrick Leahy,
     U.S. Senate,
     Washington, DC.
       Dear Mr. Chairman: The Association of Certified Fraud 
     Examiners (ACFE) is the world's largest anti-fraud 
     organization and the premier provider of anti-fraud training 
     and education. Together with nearly 50,000 members, the ACFE 
     is reducing business fraud world-wide and inspiring public 
     confidence in the integrity and objectivity within the 
     profession. The mission of the ACFE is to reduce the 
     incidence of fraud and white-collar crime and to assist in 
     fraud detection and deterrence.
       On behalf of the ACFE, I applaud you and the Senate 
     Judiciary Committee for your commitment to reduce fraud and 
     your diligence in creating S. 386, The Fraud Enforcement and 
     Recovery Act of 2009. This is an important piece of 
     legislation that will make a significant impact on reducing 
     the impact of Fraud and restoring public confidence in our 
     financial markets.
       According to a Survey of Certified Fraud Examiners (CFEs) 
     who investigated cases between January 2006 and February 
     2008, U.S. organizations lose an estimated seven percent of 
     their annual revenues to fraud. When applied to the projected 
     2008 United States Gross National Product, the seven percent 
     figure translates to approximately $994 billion in fraud 
     losses. The ACFE published the results of the survey in our 
     2008 Report to the Nation on Occupational Fraud & Abuse
       The ACFE administers the CFE credential. The CFE denotes 
     proven expertise in fraud prevention, detection and 
     deterrence. CFEs are trained to identify the warning signs 
     and red flags that indicate evidence of fraud and fraud risk. 
     CFEs around the world help protect the global economy by 
     uncovering fraud and implementing processes to prevent fraud 
     from occurring in the first place. As you stated in a recent 
     press release, the Fraud Enforcement and Recovery Act of 2009 
     was created to strengthen the Federal Government's capacity 
     to investigate, prosecute, and even deter financial frauds. 
     In order to be effective at these goals, it requires 
     practitioners who are trained with the necessary fraud 
     prevention, detection, and examination skills. The CFE 
     credential and the training and experience required of an 
     individual to become a CFE are critical skill sets that the 
     Federal Government should demand of its resources. We 
     encourage you to include CFE training and credentials as part 
     of any plan to help prevent and detect fraud.
       With our compliments, enclosed is our Report to the Nation 
     as well as the current issue of Fraud Magazine. We hope these 
     publications provide greater insight into the valuable work 
     that both the ACFE and its members provide. The ACFE is proud 
     to have such an honorable colleague in the fight against 
     fraud and we are deeply appreciative of your exemplary work.
       If there is anything I can offer or extend to you in the 
     future, please do not hesitate to ask.
           Cordially,
                                              Scott J. Grossfield,
                                                              CEO.
       Enclosures: Report to the Nation, Fraud Magazine.

  The PRESIDING OFFICER. The time of 5:20 having arrived, under the 
previous order, pursuant to rule XXII the clerk will report the motion 
to invoke cloture.
  The assistant legislative clerk read as follows:

                             Cloture Motion

       We, the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     hereby move to bring to a close debate on the committee 
     substitute amendment to S. 386, the Fraud Enforcement and 
     Recovery Act of 2009.
         Patrick J. Leahy, Debbie Stabenow, Kent Conrad, Barbara 
           Boxer, Patty Murray, Herb Kohl, Jeff Bingaman, Russell 
           D. Feingold, Bernard Sanders, Bill Nelson, Ben Nelson, 
           Richard Durbin, Jack Reed, Amy Klobuchar, Robert P. 
           Casey, Jr., Claire McCaskill, Harry Reid.

  The PRESIDING OFFICER. By unanimous consent, the mandatory quorum 
call has been waived.
  The question is, Is it the sense of the Senate that debate on the 
committee substitute amendment to S. 386, the Fraud Enforcement and 
Recovery Act of 2009, shall be brought to a close?
  The yeas and nays are mandatory under the rule.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Louisiana (Ms. Landrieu) 
and the Senator from West Virginia (Mr. Rockefeller) are necessarily 
absent.
  Mr. KYL. The following Senators are necessarily absent: the Senator 
from Kansas (Mr. Brownback), the Senator from Kentucky (Mr. Bunning), 
the Senator from North Carolina (Mr. Burr), the Senator from Texas (Mr. 
Cornyn), the Senator from Nevada (Mr. Ensign), the Senator from Florida 
(Mr. Martinez), the Senator from Kansas (Mr. Roberts), the Senator from 
Louisiana (Mr. Vitter), and the Senator from Ohio (Mr. Voinovich).
  Further, if present and voting, the Senator from Kentucky (Mr. 
Bunning) would have voted ``yea.'' The Senator from Texas (Mr. Cornyn) 
would have voted ``yea.''
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The yeas and nays resulted--yeas 84, nays 4, as follows:

                      [Rollcall Vote No. 170 Leg.]

                                YEAS--84

     Akaka
     Alexander
     Barrasso
     Baucus
     Bayh
     Begich
     Bennet
     Bennett
     Bingaman
     Bond
     Boxer
     Brown
     Burris
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Cochran
     Collins
     Conrad
     Corker
     Crapo
     Dodd
     Dorgan
     Durbin
     Enzi
     Feingold
     Feinstein
     Gillibrand
     Graham
     Grassley
     Gregg
     Hagan
     Harkin
     Hatch
     Hutchison
     Inouye
     Isakson
     Johanns
     Johnson
     Kaufman
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     McCain
     McCaskill
     McConnell
     Menendez
     Merkley
     Mikulski
     Murkowski
     Murray
     Nelson (NE)
     Nelson (FL)
     Pryor
     Reed
     Reid
     Risch
     Sanders
     Schumer
     Sessions
     Shaheen
     Shelby
     Snowe
     Specter
     Stabenow
     Tester
     Thune
     Udall (CO)
     Udall (NM)
     Warner
     Webb
     Whitehouse
     Wicker
     Wyden

                                NAYS--4

     Coburn
     DeMint
     Inhofe
     Kyl

                             NOT VOTING--11

     Brownback
     Bunning
     Burr
     Cornyn
     Ensign
     Landrieu
     Martinez
     Roberts
     Rockefeller
     Vitter
     Voinovich
  The PRESIDING OFFICER. On this vote, the yeas are 84, the nays are 4.

[[Page 10668]]

Three-fifths of the Senators duly chosen and sworn having voted in the 
affirmative, the motion is agreed to.
  The Senator from Vermont.
  Mr. LEAHY. Madam President, I ask unanimous consent that it be in 
order for me to raise a point of order en bloc against all pending 
amendments; that they are not germane postcloture.
  The PRESIDING OFFICER. Is there objection?
  The Chair hears none, and, it is so ordered.
  Mr. LEAHY. Madam President, I raise a point of order en bloc that the 
pending amendments are not germane postcloture.
  The PRESIDING OFFICER. The point of order is well taken. The 
amendments fall en bloc.
  Under the previous order, all postcloture time is yielded back, the 
substitute amendment is agreed to, and the clerk will read the bill for 
the third time.
  The bill was ordered to be engrossed for a third reading and was read 
the third time.
  Mr. LEAHY. Madam President, I understand the vote will be tomorrow on 
the bill. Would it be in order to ask for the yeas and nays at this 
point?
  The PRESIDING OFFICER. It is.
  Mr. LEAHY. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be. The yeas and nays are ordered.
  Mr. LEAHY. I thank the distinguished Presiding Officer, and I yield 
the floor.
  Mr. WHITEHOUSE. Madam President, I rise in strong support of S. 386, 
the Fraud Enforcement and Recovery Act, and I congratulate Chairman 
Leahy for introducing this important piece of legislation. If enacted, 
this bill will enhance our ability to combat fraud and help bring 
justice to those injured by misconduct that contributed to our current 
financial crisis.
  The bill has several important aims. First, it provides badly needed 
additional funds for fraud-fighting efforts at the FBI, the Department 
of Justice, and other agencies. It also makes critical changes to our 
existing criminal fraud statutes, so they capture the malfeasance in 
the mortgage and financial markets that we hear about every day. Last, 
certainly not least, it strengthens the False Claims Act to facilitate 
actions against Government contractors or their subcontractors for 
wasting Government money.
  First, I want to say a few words about the additional resources 
authorized by this bill. In recent years, the number of fraud cases has 
ballooned. Last month, the Director of the FBI, Robert Mueller, told 
the Judiciary Committee that his agency's caseload of active mortgage 
fraud cases, for example, has almost tripled in the past 3 years.
  The FBI, along with Department of Justice and other agencies, has 
struggled with allocating their scarce resources. As Director Mueller 
testified, ``these cases are straining the FBI's resources. . . . [W]e 
have had to shift resources from other criminal programs to address the 
current financial crisis.''
  The Fraud Enforcement and Recovery Act provides essential money for 
investigating and prosecuting fraud. Both in the last Congress and 
earlier this Congress, Senator Snowe and I had introduced legislation, 
which also would have temporarily increased resources at the FBI to 
fight white-collar crime because we recognized that our law enforcers 
do not have the resources they need to fight the ever-growing caseload 
of fraud cases. S. 386 serves the same important end by providing $245 
million a year to the Justice Department, the FBI, and other 
investigative agencies.
  S. 386 does more than just provide money, though; it aims to fight 
fraud in a comprehensive, far-reaching manner by amending criminal 
laws. The changes in the Fraud Enforcement and Recovery Act will give 
Federal law enforcement agencies the tools they need to address some of 
the most nefarious criminal activity in the financial world.
  As we have seen in recent years, many of our vulnerabilities in the 
financial sector originated from bad mortgages and dangerous 
derivatives. The companies in the center of the storm are the names you 
hear every night on the news. Of course, not every person in those 
companies has acted criminally. But some have. These the actors who 
were able to exploit holes in the regulatory system or identify 
problems with oversight--often with intentional disregard for the 
health of the economy. Unfortunately, our present laws don't neatly 
capture some the criminal acts that are at the heart of financial 
crisis.
  To that end, this bill will amend the definition of ``financial 
institution'' to extend the fraud laws to private mortgage-lending 
businesses that were not directly regulated or insured by the Federal 
Government. It will also amend the law to cover mortgage-backed 
derivatives--so intentional, fraudulent acts related to those 
instruments can be prosecuted.
  The Fraud Enforcement and Recovery Act also changes the law to better 
capture Ponzi schemes. As it stands now, courts have held that the 
perpetrators of those schemes are liable only for ``profits'' they 
earned--rather than being liable for all the ``proceeds'' they received 
over the course of time.
  Furthermore, the bill puts the money expended through the Troubled 
Asset Relief Program, the American Recovery and Reinvestment Act, and 
other stimulus bills under the ambit of the fraud statutes. By making 
this change now, we hopefully will deter the type of intentional, 
criminal activity that has contributed to the present financial crisis.
  There is also another way we can protect the TARP and ARRA money--by 
strengthening civil fraud enforcement. The Fraud Enforcement and 
Recovery Act makes overdue changes to the False Claims Act, so that the 
Federal Government can recover money lost due to contractor abuse and 
fraud.
  Through Senator Grassley's efforts since the 1980s, the False Claims 
Act has become the powerful tool that it is today. Individuals, on 
behalf of the Government, or the Government itself can sue to recover 
money from contractors who have abused their access to Government 
funds. We have seen in the Iraq war context that when contractors have 
access to large tranches of Government money, fraud and abuse will 
often follow.
  Yet some of the False Claims Act cases decided by courts in the last 
decade have made the False Claims Act less effective. One line of cases 
determined that fraudulent actions by subcontractors are not subject to 
the False Claims Act. A change in the Fraud Enforcement and Recovery 
Act plugs this hole in the existing law.
  It is too late to turn back the clock and prevent today's financial 
crisis from happening. But we can hold the bad actors accountable now 
by prosecuting the perpetrators to the fullest extent of the law. The 
provisions of the Fraud Enforcement and Recovery Act will help ensure 
that our enforcement resources match the gravity of the situation 
before us.
  Mr. DURBIN. Madam President, I ask unanimous consent to speak as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DURBIN. Madam President, I ask unanimous consent that Senator 
Sherrod Brown of Ohio be allowed to speak at the conclusion of my 
remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________