Fraud Enforcement and Recovery Act of 2009

Floor Speech

FRAUD ENFORCEMENT AND RECOVERY ACT OF 2009 -- (House of Representatives - May 06, 2009)

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Mr. ISSA. I yield myself such time as I may consume.

Mr. Speaker, in closing, this legislation is a combination of two well thought-out compromises. First of all, the Fraud Enforcement and Recovery Act, in fact, is going to take the place of a piece of legislation that is far more reaching and, in my opinion, overreaching, that passed out of Judiciary just this past week. In fact, by making this narrower, what we do is help the whistleblowers and those who would support them, while not going too far as to cripple the legitimate enforcement by cities and States and the right for them to discover waste, fraud and abuse themselves, make those in corrections without seeing both punitive fines and perhaps 30 percent going to plaintiffs' trial lawyers.

The fact is, Mr. Speaker, this narrowing is a good compromise coming from the Senate, and I want to thank all of those in both parties who worked on this. I think it makes moot the legislation that was passed under Judiciary.

Secondly, another compromise, and one that I want to speak to, this 9/11-style commission, something that, as you can see, many people on both sides of the aisle--on both sides of the Capitol--thought was necessary. Over the last period of months, we have seen the Speaker of the House going from not supporting, and supporting only that her committee chairmen do the work, to supporting the concept of a House committee, to then a House-Senate committee, and, finally, I believe today, support for something that gets it almost right.

Mr. Speaker, I believe that, on nearing the third anniversary of the 9/11 Commission, we should begin looking at what we did in the 9/11 Commission.

In 2007, on the third anniversary, Speaker Pelosi praised the bipartisan, independent commission for its work, calling the recommendations made by the commission earned and achievable, and, in fact, speaking to its bipartisan nature.

This year, as we pass legislation to make a similar-type commission to deal with the meltdown last year in our markets, I would call on Speaker Pelosi to help make the balance right.

As was previously stated, based on the current nominating system in the ordinary course, this would end up being a 6-4 split and be questioned by the American people as to whether or not it was Democratically led and Democratically dominated.

The Speaker has the ability, with her three appointments, to make this right, either by appointing one Republican and one Democrat, or, in this case, two; or I might suggest that even if she cannot find a Republican appropriate to be appointed from her allocation, that she could look to an independent or somebody independent of party politics.

I have previously supported, when asked, Sandra Day O'Connor, a retired Justice, or somebody of her stature who rises well above party politics, who may be considered to have some Republican background but who, clearly, in the eyes of the American people, would be a consensus-builder, able to look for the truth and look for compromise so as to reach the consensus, not a majority decision, but a consensus of this commission, as in almost every case--I believe in every case--the 9/11 Commission did.

I understand that this bill is the best bill we can get here today and I intend to vote for it, support it, and urge my colleagues to support it; not because I don't believe it should be above party politics and should be a 5-5 split, but because this is so much better than nothing at all and because I believe that the Speaker has it within her appointment powers to make this a perfectly good commission, one that we can all be proud of, and one that lives up to exactly what Speaker Pelosi asked for when the shoe was on the other foot after September 11, when we were looking at the need to get above party politics and we were looking to find people of stature to appoint.

Mr. Speaker, I hope my suggestions over and above my support for this legislation will be heeded.

Mr. Speaker, S. 386, the Fraud Enforcement and Recovery Act of 2009, improves current criminal and civil fraud statutes to help the federal government bring predatory lenders and unscrupulous financial institutions to justice.

Judiciary Chairman Conyers and Ranking Member Smith sponsored the companion legislation in the House, H.R. 1748, the Fight Fraud Act of 2009. The bill before the House today is a true example of bipartisan, bicameral cooperation.

S. 386, as amended, merges these two important pieces of legislation together to provide comprehensive and effective solutions to combating mortgage fraud, securities fraud, and other financial crimes.

In times of crisis, crime often flourishes. Following the 9/11 terrorist attacks and Hurricane Katrina, unscrupulous people chose to exploit these tragedies to pad their pockets with money intended to help the victims.

The country's housing crisis is no exception. America's economic downturn, brought on by the housing crisis and other factors, exposed a significant amount of fraud and corruption within the mortgage, banking, and securities industries.

The drive for expanded homeownership along with unchecked lending practices and inflated property values, encouraged mortgage fraud, predatory lending, and institutional corruption.

Mortgage fraud comes in many forms, including deceptive practices by borrowers, predatory lending and institutional fraud.

And now, the fraud is spreading to schemes targeting homeowners who are facing foreclosure as a result of the plummeting housing market. Foreclosure scams are targeting cash-strapped consumers on the verge of losing their homes. Victims are lured into the fraud scheme with promises of financial assistance that never materializes.

S. 386 amends federal fraud statutes to specifically prohibit false statements by mortgage brokers and agents of mortgage lending businesses.

The bill also expands the major fraud statutes to include fraud against the Troubled Assets Relief Program, economic stimulus funds, or other federal rescue or recovery plans.

The Fight Fraud Act authorizes additional funds for federal law enforcement agencies, the Departments of Justice and Housing and Urban Development, and the Securities and Exchange Commission.

This legislation promotes the ongoing investigative partnerships between federal, state and local law enforcement agencies.

The bill also supports programs that provide critical training and investigative support services, intelligence services, research support and other resources necessary to investigating these financial crimes.

Additionally, this legislation will strengthen the liability provisions of the False Claims Act as well as make some necessary technical changes to the Act.

The False Claims Act provisions in this bill will undoubtedly enhance the Federal government's ability to recover government money and property that would otherwise be lost to waste, fraud, or abuse.

What's more, these provisions do so in a responsible manner that will not encourage the filing of frivolous or unfounded False Claims Act cases.

Simply put, the False Claims Act provisions in this bill go the proper distance in ensuring that the Act remains a viable tool in the government's continuing fight to protect taxpayer dollars from fraud.

The Fraud Enforcement and Recovery Act also contains provisions to create a bipartisan, independent ``Financial Markets Commission.''

This Commission will examine the questions of ``Why?'' and ``How?'' the current financial and economic crisis occurred.

We have seen the success of past blue-ribbon panels, such as the 9/11 Commission.

In 2007, on the 3rd anniversary of the 9/11 Commission report, Speaker Pelosi praised the bipartisan, independent Commission for its work--calling the recommendations made by the Commission ``urgent and achievable'' making the country more ``unified'' and ``effective.''

Speaker Pelosi is right. A bipartisan, independent commission can produce valuable results.

Which is why I proposed a similar bill last fall and again this Congress, H.R. 74.

I view the effort to create this commission as a vehicle for this Congress to demonstrate a willingness to set aside partisanship and put the interests of our country first.

As with the 9/11 Commission, the Financial Markets Commission report should be free of accusations of political showmanship and a partisan slant that have tainted current investigations.

This Commission is not the place for partisanship OR Congressional meddling.

It is a place for the American people to get answers.

Ideally, in today's bill, the composition of this Commission would have been bipartisan down the line, with a 5-5 split like the 9/11 Commission that was adopted by a Republican Congress instead of the 6-4 divide that has come to the floor today at the direction of the Democratic Leadership.

Speaker Pelosi said in 2005, when discussing a possible Commission to review Hurricane Katrina events, a ``real commission'' is bipartisan and independent.

The decision to depart from the 5-5 model of the 9/11 commission in favor of a commission whose composition has a partisan slant is disappointing.

But I believe the credibility of this commission's report will still depend on its ability to deliver conclusions and recommendations that all the members of the commission will embrace.

I am hopeful that the members of Congress who will be responsible for appointments to this Commission will ensure that the panel's composition is bipartisan, independent, and focused on producing a nonpartisan report--not scoring political points.

In closing, The Fraud Enforcement and Recovery Act of 2009 is a good government bill.

I urge my colleagues to support this legislation.

I yield back the balance of my time.

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