[Congressional Record (Bound Edition), Volume 157 (2011), Part 7]
[Senate]
[Pages 10152-10153]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    COMBATING MILITARY COUNTERFEITS

  Mr. WHITEHOUSE. Madam President, our Nation asks a lot of our troops. 
In return, we must give them the best possible equipment to fulfill 
their vital missions and come home safely. We have a powerful 
obligation to them to ensure the proper performance of weapons systems, 
body armor, aircraft parts, and countless other mission-critical 
products.
  Today, however, America's military faces a significant and growing 
threat from counterfeit products entering the military supply chain.
  I rise to speak about a bill I have introduced with Senator McCain, 
Senator Graham, and Senator Coons: the Combating Military Counterfeits 
Act of 2011. This bill will enhance the ability of prosecutors to keep 
counterfeit goods out of the military supply chain. In so doing it will 
help protect America's Armed Forces from the risk of defective 
equipment.
  These counterfeit products do not meet military standards. As a 
result, they put troops' lives at risk, compromise military readiness, 
and cost the country enormous sums in replacement costs.
  In the case of microelectronics, counterfeit parts also provide an 
avenue for cybersecurity threats to infiltrate military systems, 
possibly enabling hackers to track or even disable crucial national 
security applications.
  With troops from Rhode Island and all over the United States serving 
overseas in Iraq and Afghanistan, we cannot accept criminals selling 
fake versions of products used by our troops. Unfortunately, however, 
this unacceptable threat to troop safety and national security is 
growing.
  A report by the Government Accountability Office provides examples 
that demand stiff criminal punishment. It explains that the Defense 
Department found out in testing that what it thought was Kevlar body 
armor was in fact nothing of the sort and could not protect our troops 
the way proper Kevlar can. Our troops going out on patrol in fake body 
armor is simply unacceptable.
  In another example, a supplier sold the Defense Department a part 
that it falsely claimed was a $7,000 circuit that met the 
specifications of a missile guidance system. Military grade chips are 
called that for a reason: they are required to withstand extreme 
temperature, force, and vibration. Chips that don't meet those 
specifications are prone to fail; for example, when a jet is at high 
altitude, when a missile is launching, or when a GPS unit is out in the 
rugged field. The possible consequences of such equipment failing are 
dire.
  A January 2010 study by the Commerce Department quoted a Defense 
Department official as estimating that counterfeit aircraft parts were 
``leading to a 5 to 15 percent annual decrease in weapons system 
reliability.''
  The Commerce Department study, which surveyed military manufacturers, 
contractors, and distributors, reported approximately 2\1/2\ times as 
many incidents of counterfeit electronics in 2008 as in 2005. The high 
price of military grade products is going to attract more and more 
counterfeiters.
  On a related matter, one source of the problem has been the often 
illegal dumping of U.S. electronic waste in countries such as China. 
Business Week reported in 2010 that used computer chips from old 
personal computers are fraudulently remarked in China as ``military 
grade'' chips and sold to U.S. military suppliers. A bill I introduced 
last week, the Responsible Electronics Recycling Act, would help 
address that issue by cracking down on the profligate dumping of 
electronic waste.
  We should also evaluate this combating military counterfeits bill in 
the context of the relentless cyber attacks America weathers every day. 
The chip might not only be counterfeit, it might be the carrier for 
dangerous viruses and malware that may create windows our enemies can 
enter to sabotage our military equipment or to steal our military 
secrets.
  I applaud those of my colleagues who have worked with the Department 
of Defense to ensure that it can keep counterfeits out of the supply 
chain.
  I particularly appreciate the leadership of Chairman Carl Levin and 
Ranking Member John McCain of the Armed Services Committee. I am also 
pleased that the administration, and particularly its intellectual 
property enforcement coordinator, Victoria Espinel, is working hard to 
protect our military from counterfeits. I am also pleased that the 
National Intellectual Property Rights Coordination Center recently 
began Operation Chain Reaction, a new initiative targeting counterfeit 
items entering the military supply chain.
  I strongly believe that strengthened criminal provisions should be 
part of our strategy going forward. As a former U.S. attorney I know 
the significant deterrent effect criminal sanctions can provide.
  The Department of Justice has a vital role to play in using criminal 
investigations and prosecutions to identify and deter trafficking in 
counterfeit military goods.
  To that end, the administration has endorsed increasing penalties for 
trafficking in counterfeit military goods as part of recent 
recommendations to Congress for better protecting American intellectual 
property. I am glad the administration has recognized the need for 
legislation, and I look forward to working with them to see the 
necessary changes made.
  Our laws currently do not impose any special punishment for 
trafficking in counterfeit military goods. 18 U.S.C, section 2320, the 
counterfeit trafficking statute, provides heightened penalties for 
trafficking and counterfeits that result in bodily injury or death. But 
out on the battlefield it is not clear that the part will ever be 
recovered, and it is impossible sometimes to tell them the counterfeit 
caused the bodily injury or death.
  As a result, traffickers in military counterfeits are less likely to 
face penalties that reflect the unacceptable risk their counterfeits 
impose on our soldiers, our military readiness, our cybersecurity, and 
our national security.

[[Page 10153]]

  The legislation I am introducing today with Senators McCain, Graham, 
and Coons addresses this inadequacy in our laws. I urge my colleagues 
to join me in seeing it passed into law soon. Traffickers should pay a 
heavy price if they knowingly sell the military a piece of counterfeit 
body armor that could fail in combat, a counterfeit missile control 
system that could short-circuit at launch, or a counterfeit GPS that 
could fail on the battlefield. Our troops deserve Kevlar that is 
Kevlar, and military grade chips that are military grade.
  By creating an enhanced offense for an individual who traffics in 
counterfeits and knows that the counterfeit product either is intended 
for military use or is identified as meeting military standards, this 
bill will help. It doubles the statutory maximum penalty for such 
offenses, and it directs the sentencing commission to update the 
sentencing guidelines as appropriate to reflect Congress's intent that 
trafficking in counterfeit military items be punished sufficiently to 
deter this wrongful endangerment of our servicemembers.
  The bill targets only particularly malicious offenders--those who 
already are guilty of trafficking in counterfeit goods and know they 
are selling military counterfeits.
  This approach means the bill will not affect legitimate military 
contractors who might be unaware that a counterfeit chip has been 
entered into one of their products. It will not apply to makers of 
products that unintentionally fall short of military specifications. 
This bill is intended to help military suppliers by deterring the 
criminals who sell counterfeits to them or to their subcontractors. 
Manufacturers, such as the many high-tech innovators in Rhode Island, 
will actually benefit from the protection of their intellectual 
property.
  I am grateful to have the support of the Chamber of Commerce, the 
Semiconductor Industry Association, the International Anti-
Counterfeiting Coalition, and others. I look forward to working with 
them and other interested stakeholders to make this legislation as 
effective as possible at deterring this particularly reprehensible form 
of criminal activity.
  Let me close by thanking Senator Graham, Senator McCain, and Senator 
Coons for joining me in introducing this bill today. As my colleagues 
know, Senator McCain and Senator Graham both have long stood out as 
champions for our troops. Senator Coons has already become a staunch 
defender of our national security and our Nation's intellectual 
property.
  I very much look forward to working with them and other colleagues on 
this important bill.
  All of us in the Senate have the privilege of visiting with and 
supporting our troops. We all know the sacrifices they make for our 
country. We all want to do everything we can to ensure that their 
equipment functions properly and that counterfeits do not compromise 
our Nation's military readiness or security. Passing the Combating 
Military Counterfeits Act of 2011 will be a valuable step toward these 
important goals.

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