Senate Continues Debate On Leahy-Authored Anti-Fraud Legislation

Leahy Pushes For Vote On Final Passage Later Today

WASHINGTON (Thursday, April 23, 2009) – The Senate Thursday continued debate on the Fraud Enforcement and Recover Act of 2009, legislation that would reinvest in federal agencies’ white collar crime investigative units, and strengthen tools to root out and prosecute fraud.

The bill was introduced earlier this year by Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.), and Committee members Chuck Grassley (R-Iowa) and Ted Kaufman (D-Del.).  Several amendments remain pending on the legislation, but Leahy Thursday morning expressed optimism that the Senate could complete consideration of the bill later in the day.

The Fraud Enforcement and Recovery Act will make necessary changes to criminal laws, including criminal fraud, securities law, and money laundering laws; increase the funding available to federal law enforcement agencies to combat mortgage fraud and predatory lending; and revise the False Claims Act to ensure that the government can recover taxpayer dollars lost to fraud and abuse.

Statement Of Senator Patrick Leahy (D-Vt.),
Chairman, Senate Judiciary Committee,
S. 386, the Fraud Enforcement and Recovery Act of 2009
April 23, 2009

Yesterday, when we were finally allowed to proceed to the Fraud Enforcement and Recovery Act, we began making progress.  Ten amendments were offered during the course of the day.  Four amendments were adopted, and six remain pending.  Had we not had to stop voting at 5 o’clock, I believe we could have finished consideration of the bill and passed it last night.  As things stand, we will dispose of the six remaining amendments through the course of this morning, and should complete Senate consideration of the bill without further delay.  

The number of Senators cosponsoring the underlying Fraud Enforcement and Recovery Act continues to grow.  Our total now stands at 17.  And most of the Senators offering amendments yesterday praised the underlying bill. 

I think we have only one pending amendment that regards the underlying bill, and Senator Grassley will speak to that amendment.  Most of the amendments that have been offered, and almost all of the remaining amendments pending, are within the jurisdiction of the Banking Committee.  I will be looking to the leadership of that Committee, the committee of jurisdiction, with respect to guidance on these amendments.  In my view, it would have been better if Senators had withheld their amendments and waited to offer them on the housing and banking legislation slated to be considered next week by the Senate.  They did not.  Instead, those amendments will complicate passage and enactment of what everyone agrees is needed fraud enforcement legislation.  That is unfortunate. 

Among the examples are amendments affecting the use of TARP funds.  Modifying the Troubled Assets Relief Program is a complicated matter.  I wish it were not complicating this bill. Indeed, in the six weeks since the fraud enforcement bill was reported by the Judiciary Committee, as my staff and I reached out to Senators across the aisle, no one raised with us these TARP issues.  Had they, we would have engaged with Chairman Dodd and Senator Shelby and tried to work them out as best we could in the proper setting.

The Obama administration has reformed the TARP process and is doing its best to get a handle of the use of those funds.  I will look to their views, and to those of Chairman Dodd, but I believe that complicating passage of this fraud enforcement bill with those issues is not helpful.  Nonetheless, we will do what we have to in order to complete this process.

The Obama administration’s Statement of Administration Policy expresses their strong support for enactment of the underlying fraud enforcement bill. They note:  “Its provisions would provide Federal investigators and prosecutors with significant new criminal and civil tools and resources that would assist in holding accountable those who have committed financial fraud.”  

The Justice Department, the FBI, the Secret Service, the Special Inspector General for the TARP, law enforcement officers, and good government advocates support the underlying bill.   As The New York Times wrote last weekend: “Senators should not be asking if the expenditure [on fraud enforcement called for in this bill] is affordable, but whether it is enough.”  Fraud has damaged our economy, and wrecked the lives and life savings of thousands of hard working Americans.  We should pass this bill without further delay and move to the task of helping law enforcement find and hold accountable those who engaged in such fraudulent conduct.

Strengthening fraud enforcement is a key priority for President Obama.  During the campaign, President Obama promised to “crack down on mortgage fraud professionals found guilty of fraud by increasing enforcement and creating new criminal penalties.”  And the President made good on this promise in his budget outline to Congress by calling for additional FBI agents “to investigate mortgage fraud and white collar crime,” as well as more Federal prosecutors and civil attorneys “to protect investors, the market, and the Federal Government’s investment of resources in the financial crisis, and the American public.”  This bill, the bipartisan Fraud Enforcement and Recovery Act, is our chance to authorize the necessary additional resources to detect, fight and deter fraud that robs the American people and American taxpayers of their funds. 

Investing resources in detecting and deterring fraud yields dividends for the American people.  That is what this bill will do.  We should pass it without further delay.  

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