[Congressional Record (Bound Edition), Volume 156 (2010), Part 15]
[House]
[Pages 22403-22405]
[From the U.S. Government Publishing Office, www.gpo.gov]




     PRESERVING FOREIGN CRIMINAL ASSETS FOR FORFEITURE ACT OF 2010

  Ms. CHU. Mr. Speaker, I move to suspend the rules and pass the bill 
(S. 4005) to amend title 28, United States Code, to prevent the 
proceeds or instrumentalities of foreign crime located in the United 
States from being shielded from foreign forfeiture proceedings.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                                S. 4005

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Preserving Foreign Criminal 
     Assets for Forfeiture Act of 2010''.

     SEC. 2. PRESERVATION OF PROPERTY SUBJECT TO FORFEITURE UNDER 
                   FOREIGN LAW.

       Section 2467(d)(3)(A) of title 28, United States Code, is 
     amended to read as follows:
       ``(A) Restraining orders.--
       ``(i) In general.--To preserve the availability of property 
     subject to civil or criminal forfeiture under foreign law, 
     the Government may apply for, and the court may issue, a 
     restraining order at any time before or after the initiation 
     of forfeiture proceedings by a foreign nation.
       ``(ii) Procedures.--

       ``(I) In general.--A restraining order under this 
     subparagraph shall be issued in a manner consistent with 
     subparagraphs (A), (C), and (E) of paragraph (1) and the 
     procedural due process protections for a restraining order 
     under section 983(j) of title 18.
       ``(II) Application.--For purposes of applying such section 
     983(j)--

       ``(aa) references in such section 983(j) to civil 
     forfeiture or the filing of a complaint shall be deemed to 
     refer to the applicable foreign criminal or forfeiture 
     proceedings; and
       ``(bb) the reference in paragraph (1)(B)(i) of such section 
     983(j) to the United States shall be deemed to refer to the 
     foreign nation.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
California (Ms. Chu) and the gentleman from Texas (Mr. Poe) each will 
control 20 minutes.
  The Chair recognizes the gentlewoman from California.


                             General Leave

  Ms. CHU. Mr. Speaker, I ask unanimous consent that all Members have 5 
legislative days to revise and extend their remarks and include 
extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from California?
  There was no objection.
  Ms. CHU. I yield myself such time as I may consume.
  Mr. Speaker, the Preserving Foreign Criminal Assets for Forfeiture 
Act of 2010 will ensure that U.S. courts can freeze assets while 
foreign legal proceedings are pending. This fix permits Federal law 
enforcement to assist foreign governments without waiting for a final 
judgment in a foreign court.
  I want to tell you a story that highlights the importance of this 
legislation. Years ago, I met a bright young man named Bobby Salcedo, 
who grew up in my district it in El Monte, California. What struck me 
right away was Bobby's dedication to improving the lives of children 
and residents of his community. It was that dedication that gave him 
his incredible energy and passion to achieve as much as he did.
  He was an elected member of the El Monte School District. He returned 
to his alma mater, Mountain View High School, to become its assistant 
principal, and was studying for his doctorate in education at UCLA.
  Aside from his caring, selfless nature, Bobby was very intelligent, 
driven, and charismatic. It was clear to everyone who knew him that he 
was going somewhere. He was our rising star.
  A year ago, Bobby traveled to Gomez Palacio in the Mexican state of 
Durango to visit his wife's family for the holidays. On New Year's Eve, 
he was out with family and friends at a local restaurant when gunmen 
burst in and dragged Bobby, along with five other men, out of the 
restaurant at gunpoint. They were then each shot to death execution-
style. The next day, all six bodies were found dumped in a ditch. Bobby 
was only 33 years old.
  After the investigation began, it was confirmed that none of the six 
murder victims were connected to the drug

[[Page 22404]]

trade in any way. Bobby and the others were in the wrong place at the 
wrong time. Their deaths exemplify a growing number of innocent 
bystanders who are becoming victimized in the cartel violence in 
Mexico.
  It had seemed as though the situation could not get worse. However, 
only weeks after Bobby was so brutally murdered, the lead state 
investigator in his case was also shot dead.
  For me and thousands of others, Bobby's death is a symbol for both of 
our countries that progress for peace in Mexico must be made. We cannot 
allow the death of innocent bystanders or American citizens to pass 
without consequences. Until there is true accountability for the 
violence, there is little incentive for the drug lords to keep the 
peace.
  In my conversations with law enforcement, I hear the same thing over 
and over again. In order to stop this wave of violence on the border 
and protect both American and Mexican citizens, we must hit the cartels 
where it hurts the most--their bank accounts and property, which are 
often located in the United States. So when I heard that Federal courts 
had severely limited law enforcement's ability to freeze foreign assets 
in the United States at the request of foreign governments, I had to 
act.
  In 2000, Congress passed the Civil Asset Forfeiture Reform Act of 
2000, which authorized Federal courts to assist foreign nations by 
freezing assets located in the United States while individuals stood 
trial in foreign courts. This process is consistent with our treaty 
obligations and, under those same international agreements, foreign 
courts will offer the United States similar assistance with assets 
located overseas.
  This law is an important tool to fight organized crime, money 
laundering, and drug trafficking. It allows the U.S. to assist foreign 
governments in cutting the money supply to international criminal 
organizations.
  Earlier this year, however, Federal courts interpreted the statute to 
apply only after a final decision has been reached in a foreign court 
proceeding. After the decision, law enforcement had no way to prevent 
illicit property from being moved out of our grasp before it was too 
late.
  In the past few months, our government has been unable to protect 
more than $550 million that had been identified for forfeiture by 
foreign governments. This money will remain a continuing resource for 
criminal organizations, allowing them to fund extensive additional 
criminal activity.
  The bill we are considering today includes due process protections 
similar to those used for restraining orders in anticipation of 
domestic forfeiture judgments. It also requires the courts to verify 
that the relevant foreign tribunal observes due process protections, 
has subject matter jurisdiction, and is not acting as a result of 
fraud.
  This is just one small step to ensure that international criminal 
organizations like the cartels that murdered Bobby Salcedo have fewer 
resources to evade prosecution. It is for Bobby, his family, and the 
thousands of others who have been affected by cartel violence around 
the world that I fought to pass this important legislation.

                              {time}  1320

  I thank the chairman of the Judiciary Committee for allowing this 
bill to come to the floor so quickly, and I want to recognize the 
steadfast bipartisan support of my friend, Judge Ted Poe, and our 
colleagues in the Senate, Senators Whitehouse and Cornyn.
  This bill has the support of the Department of Justice, which is 
eager to use this tool to protect our borders and make the world a 
safer place. I urge my colleagues to support this important 
legislation.
  I reserve the balance of my time.
  Mr. POE of Texas. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, S. 4005, the Preserving Foreign Criminal Assets for 
Forfeiture Act of 2010, makes a simple, yet very important, technical 
change to Federal law to facilitate asset preservation for foreign 
countries. I am pleased to be a cosponsor of this legislation, and I 
commend my colleague from California (Ms. Chu) in sponsoring this House 
companion to S. 4005. I would like to thank her for her work on this 
issue in bringing it before Congress.
  Federal law currently provides procedures by which the Federal 
Government can seek a court order to preserve or freeze certain 
domestic assets on behalf of a foreign government. This is an important 
tool to take out of the hands of criminals the proceeds that fund their 
illegal operations.
  Criminals will go to great lengths to stash their ill-gotten profits. 
And whether it is an international drug cartel, a terrorist group, 
organized crime syndicate, or simply a savvy computer hacker or corrupt 
corporation, the key to putting a stop to their crimes is to put a 
stranglehold on their money that they have illegally obtained. But a 
recent D.C. circuit court of appeals decision limits the ability of the 
United States to assist foreign governments in retaining and 
restraining those assets.
  The court interpreted section 2464 of title 28, governing the entry 
of foreign judgments, to authorize a U.S. court to freeze assets only 
after the foreign court's final forfeiture judgment. This is a 
significant limitation on our ability to assist in foreign forfeiture 
proceedings. If forced to await until a final foreign judgment is 
entered, we run the risk of allowing thousands, if not millions, of 
dollars to slip through our hands into the hands of the criminals.
  In many countries, like Mexico, their judiciaries operate at a much 
slower pace than ours, and their prosecution rates are much lower. In 
fact, the criminal conviction rate in Mexico is less than 10 percent. 
Therefore, a lot of times, by the time a forfeiture judgment is made, 
the target has already moved their assets someplace else. This hampers 
our ability to go after Mexican cartel members who have assets here in 
the United States. So unless Congress clarifies the scope of section 
2467, we run the risk of losing cooperation from foreign governments in 
our request to seize assets that are held abroad.
  The investigation into the multi-billion dollar Ponzi scheme 
undertaken by Allen Stanford demonstrates our need for foreign 
countries to continue to freeze assets on our behalf. To date, 
Switzerland, Canada, and the United Kingdom have restrained a combined 
$400 million on behalf of the United States in just the Stanford case. 
This is money that certainly could have been lost if the United States 
was prevented from requesting such assistance from our allies until a 
final judgment was made.
  The court of appeals was correct that it is not a court's role to 
substitute its view or policy for the legislation which has been passed 
by Congress. So I don't argue with the court's decision; but it is 
Congress' obligation to change and fix the law so that this does not 
occur in the future. With adoption of this legislation, Congress is 
establishing a clear and simple policy on the restraint of foreign 
assets.
  So I commend my colleagues, Senators Whitehouse and Cornyn, and of 
course the gentlelady from California (Ms. Chu), for their efforts to 
clarify this statute. We must ensure that foreign governments can 
continue to rely on our assistance with their criminal prosecutions and 
the United States will continue to receive the same cooperation from 
our foreign allies.
  I urge my colleagues to support this legislation.
  I yield such time as he wishes to consume to the gentleman from 
Louisiana (Mr. Scalise).
  Mr. SCALISE. I thank my colleague from Texas for yielding.
  Mr. Speaker, I rise in strong support of the Preserving Criminal 
Assets for Forfeiture Act, and I want to commend my colleagues, both 
Ms. Chu and Judge Poe, for bringing this forward.
  As he talked about, we've got a problem right now where a court case 
has allowed a loophole, a major loophole, where criminal organizations 
are able to shield their assets from our Justice Department. We do not 
want, and we cannot allow, for these foreign criminal organizations, 
whether it is drug cartels, money launderers, or others, to be able to 
shield those assets from the law, not only removing the accountability, 
but allowing them to keep

[[Page 22405]]

those assets that they may use against our law enforcement here in the 
United States. It is critical that we get this passed quickly to close 
this loophole and prevent those types of shielding from the law as it 
is currently happening.
  I also want to point out something else that my colleague from Texas 
talked about. In the Stanford case, this is a case where somebody 
created a Ponzi scheme that affected lots of people in my State, in 
Texas, and other States. We cannot allow these kinds of people to be 
able to shield their assets from justice. Ultimately, they need to have 
their day in court, and they need to have to face justice for the 
things that they did to our American citizens here.
  I strongly support this legislation and urge all of my colleagues to 
do so as well.
  Ms. CHU. I reserve the balance of my time.
  Mr. POE of Texas. I yield myself such time as I may consume.
  Mr. Speaker, the forfeiture concept is very important to the helping 
of our law enforcement agencies throughout the United States. It is the 
concept that criminals, drug cartels make a lot of money off the crimes 
they commit; and that money, when confiscated, should be not given back 
to the perpetrator, of course. It should be used for law enforcement 
and other worthwhile endeavors.
  Under current law, this problem is an extreme problem because of the 
fact that many times, by the time the criminal cartel has been captured 
and they go to trial, they have hidden their assets and then there is 
no money to go back into the forfeiture.
  So this legislation prevents this problem from occurring in the 
future. It allows the seizure of those assets where they can be used 
for law enforcement. It makes criminals pay the rent on the courthouse 
and pay for the system that they have created, and it helps in the 
forfeiture.
  I cannot overemphasize how important forfeiture of illegal, ill-
gotten gain is to our law enforcement agencies. Just one example of 
this: down on the Texas border where our sheriffs are operating on the 
border, we have got one county. The sheriff in Hudspeth County doesn't 
even have a budget for the motor pool; in other words, he has no 
vehicles that are funded at taxpayer expense. So the only way he gets 
vehicles is capturing drug cartels and drug runners when they come into 
Hudspeth County and forfeiting their vehicles to law enforcement. That 
is why they have a nice set of Escalades that they use in the fight on 
the drug cartel.
  So forfeiture, whether it is vehicles or whether it is money, is 
extremely important to law enforcement; and we must continue to help 
them where we can and make the criminals pay for the system they have 
created and pay the rent on the courthouse.
  I yield back the balance of my time.
  Ms. CHU. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from California (Ms. Chu) that the House suspend the rules 
and pass the bill, S. 4005.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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