Re: Global Settlement

Re: Global settlement

Sen. Chuck Grassley, chairman of the Committee on Finance, today made the following comment on a report in today's New York Post that some of the Wall Street firms that were parties to this week's "global settlement" are trying to recoup millions of dollars of their settlement payment from insurers. This week, Grassley, Sen. Max Baucus, ranking member of the Committee on Finance, and Sen. John McCain, chairman of the Commerce Committee, introduced legislation to make clear that payments made to acknowledge actual or potential violations of any law are not tax-deductible.

"I'm very disappointed but not surprised. This is the outcome that many of us predicted and many on Wall Street schemed to achieve. Common sense tells you it's not much punishment when someone else is picking up the tab. I said this settlement was half a loaf. Maybe it'll be just a slice of bread. The legislation Senators Baucus and McCain and I introduced will address the tax deductibility of fines and penalties in settlements. Insurance regulation is mostly a state issue, and a function of the type of contracts insurers and their clients sign. But the SEC and the state attorneys general could have and should have prevented the insurance grab resulting from the settlement. Senators Baucus, McCain and I made this point clear months ago."