Mr. President, in light of the most recent evidence uncovered about Enron's participation in the Western Energy Crisis, I rise today to introduce the Energy Market Oversight Bill with Senators Levin,…
Mr. President, in light of the most recent evidence uncovered about Enron's participation in the Western Energy Crisis, I rise today to introduce the Energy Market Oversight Bill with Senators Levin, Harkin, Cantwell and Wyden.
This bill would: Improve Price Transparency in Wholesale Electricity Markets. The bill directs the Federal Energy Regulatory Commission to establish an electronic system to provide information about the price and availability of wholesale electricity to buyers, and sellers, and the public.
Prohibit Round Trip Electricity Trades. The bill prohibits the simultaneous buying and selling of the same quantity of electricity at the same price in the same location with no financial gain or loss. Round trip or ``wash trades'' are essentially bogus trades whereby no electricity changes hands, but the profit from the trades enriches the bottom-line of a company's financial report.
Increase Penalties for Violations of Federal Power Act. Maximum fines for violations of the Federal Power Act are increased from $5,000 to $1,000,000.; and maximum sentences are increased from 2 to 5 years. Current fines are extraordinarily low and therefore provide no deterrence to illegal activity.
Increase Penalties for Violations of Natural Gas Act. The bill increases maximum fines for violations of the Natural Gas Act from $5,000 to $1,000,000.
Prohibit Manipulation in Electricity Markets. Manipulation is prohibited in the wholesale electricity markets and FERC is given discretionary authority to revoke market-based rates for violations. Strangely enough, manipulation of energy markets is not specifically prohibited. This would add language to Part II of the Federal Power Act.
Repeal the ``Enron exemption''. Repeals the Commodities Future Modernization Act exemption for large traders in energy commodities and applies the anti-manipulation and anti-fraud provisions of the Commodities Exchange Act to all Over the Counter trades in energy commodities and derivatives. In my view, when Congress exempted energy from the Commodity Futures Modernization Act of 2000, it created the playing field for the Western Energy Crisis of 2000 and 2001, and cost millions of people millions of dollars.
Provide CFTC the Tools to Monitor OTC Energy Markets. For Over the Counter trades in energy commodities and derivatives that perform a significant price discovery function, including trades on electronic trading facilities, the bill requires large sophisticated traders to keep records and report large trades to the CFTC. This does not change the law, only applies the law that exists for futures contracts to over the counter trades in the energy markets.
Limit on Use of Data. Requires the Commodity Futures Trading Commission to seek information that is necessary for the limited purposes of detecting and preventing manipulation in the futures and over the counter markets for energy; to keep proprietary trade and business data confidential except when used for law enforcement purposes. This does not require the real-time publication of proprietary data.
No Effect on Non-Energy Commodities or Derivatives. The bill would not alter or affect the regulation of futures markets, financial derivatives, or metals. We have specifically stated on page 20 the following: ``The amendments made by this title have no effect on the regulation of excluded commodities under the Commodity Exchange Act.''
In addition, the bill states: ``The amendments made by this title have no effect on the regulation of metals under the Commodity Exchange Act.''
The Western Energy Crisis of 2000-2001 has still not been resolved. Meanwhile, more and more information about Enron's role in the crisis emerges. On February 3, 2005, the Snohomish Public Utility District released transcripts of tapes showing that on January 17, 2001, Enron traders concocted false repairs for a Las Vegas power plant--making power unavailable that would have been delivered to California--on the very same day that supplies were so tight that Northern California experienced a Stage 3 power emergency and rolling blackouts hit as many as 2 million consumers.
By taking the plant offline, Enron was also in direct violation of an Emergency Power Order by U.S. Energy Secretary Bill Richardson that required power generators to make power available to California.
Telephone transcripts between Enron and the Las Vegas plant
Mr. President, Senator Sessions and I are introducing legislation to combat the use of fraudulent immigration documents, particularly passports and other travel documents.
The need to prevent and prosecute passport and travel document fraud is clear, and this bill would increase penalties for the use of fraudulent travel documents.
We know that the threat of terrorism against the United States is real and as the 9/11 Commission Report states, ``for terrorists, travel documents are as important as weapons.'' In order to minimize the threat of terrorism to the United States, we must make every effort to limit the use of fraudulent immigration documents.
The bill Senator Sessions and I are introducing would make the use of fraudulent travel documents--such as passports, Border Crossing Cards, Canadian driver's licenses or identification cards, transportation letters for parolees, military identification cards or green cards--an aggravated felony which will mandate detention and increase the likelihood of prosecution.
Today, this is not the case. Instead, fraudulent documents are routinely returned to the offender and individuals are allowed to return home without suffering any consequences from their attempts to circumvent our immigration laws.
Why is this a problem?
Firstly, admission to the United States is a privilege and not a right. We should not tolerate fraud and deception at our ports of entry, particularly because it should be apparent that a terrorist organization as sophisticated as Al Qaeda is well aware of our current procedures and can be expected to take full advantage of them.
Secondly, the 9/11 Commission found that as many as 15 of the 19 hijackers on September 11, 2001 could have been intercepted by border officials, based in part on their travel documents. In fact, all but one of the September 11 hijackers acquired some form of U.S. identification document and some of those documents were acquired by fraud. All of the hijackers opened bank accounts in their names and used passports and other identification documents that appeared valid on their face.
Even before September 11, 2001, the use of fraudulent immigration documents to enter the United States was a threat that we did not sufficiently heed.
Let me give you some known examples of terrorists who have entered, or attempted to enter the United States, with fraudulent travel documents: Ahmed Ajaj and Ramzi Yousef attempted to enter the United States with fraudulent passports. Both were later implicated or convicted in the first World Trade Center bombing in February of 1993.
Ahmed Ressam used a fraudulently obtained Canadian passport, and, in 1999 attempted to cross the border from Canada at Port Angeles in Washington State. A border inspector felt Mr. Ressam looked nervous, and a search of his car turned up a trunk full of bombs. There is some debate about the exact target(s) of the attack; however, it seems likely that Los Angeles International Airport and perhaps the millennium celebrations in Seattle were the intended targets.
It is no secret that: as the 9/11 Commission Report makes clear, Al Qaeda has established a complex international travel network that allowed, and presumably still allows, its operatives to legally travel worldwide to train, conduct reconnaissance or otherwise prepare for an attack. This network included, and presumably still includes, the use of altered and counterfeit passports and visas.
Many countries, including France, Portugal and Saudi Arabia, have reported tens of thousands of passports and travel documents stolen. When these are stolen in large numbers, they are sold on the black market to others.
The 9/11 Commission found that had the immigration system set a higher bar for determining whether individuals are who they claim to be--and ensured consequences for any violations--it could potentially have denied entry, deported or come into further contact with the terrorists that were involved in the September 11, 2001 attack on the United States.
Last year, the Department of Homeland Security Office of the Inspector General issued the following reports on lost and stolen passports: ``A Review of the Use of Stolen passports from Visa Waiver Countries to Enter the United States'', December 2004; and, ``An Evaluation of the Security Implications of the Visa Waiver Program'' (April 2004).
I encourage my colleagues to read these reports on the vulnerabilities in our current border security. To summarize, the reports state that: In the United States alone, immigration officials have records for 1.2 million stolen passports.
Aliens applying for admission into the United States using stolen passports have little reason to fear being caught and are usually admitted. It has been standard practice to simply return a fraudulent passport to an individual seeking entry and let them return to their country. This, in effect, is the soft underbelly of the entire passport system.
The Director of the U.S. National Central Bureau of INTERPOL said that for 55 of the 181 INTERPOL countries, there probably were over 10 million lost and stolen passports that might be in circulation.
Law enforcement officials state that lost and stolen passports are the greatest security problem associated with the Visa Waiver Program.
And now that I've mentioned the Visa Waiver Program, let me say a few things about this program.
I believe the Visa Waiver Program is the Achilles heel in our immigration system. This program allows roughly 13 million individuals to enter the United States each year from 27 countries, without a visa--meaning they enter without a thorough background and security check.
Since we do not have in place a fully operational entry and exit program, specifically an exit system, we have no real way of knowing if millions of travelers who entered the United States have left as required.
Last year, Congress extended the deadline for one year for countries participating in the Visa Waiver Program to include biometric indicators in passports to verify the identity of bearers at the request of the Administration.
It is likely this deadline will again need to be extended.
I believe that granting another extension will be another opportunity for terrorists, organized crime rings, petty crooks, counterfeiters and forgers to continue entering the United States virtually unnoticed because we won't be able to confirm that they are who they say they are.
The bottom line is that we must crack down on document fraud if we are to protect our borders. There are thousands, even millions, of lost, stolen and fraudulent international passports, travel documents, driver's licenses and other identity documents in circulation, and we must now allow those to compromise our homeland security.
The purpose of this bill is twofold: first, to give the Department of Justice the incentive to vigorously prosecute all cases involving passport and travel document fraud, as well as certain other egregious cases of immigration document fraud.
Second, by encouraging policies that make these cases a priority for prosecution, it will require that Department of Homeland Security officials not return fraudulent documents to travelers, but instead turn them over to the Department of Justice so that they can institute criminal proceedings.
Unfortunately, the prosecution of immigration document fraud is not a high priority for the Department of Justice, because, although current penalties allow for a sentence of up to 25 years, typically most alien's convicted of travel document fraud serve less than one year in prison.
Also, the immigration consequences of document fraud are relatively minor. Low sentences, coupled with minimal immigration consequences, do not provide much incentive for U.S. Attorneys nationwide to consider the prosecution of immigration document cases a priority nor can they be seen as anything but a slap on the wrists of the offenders.
Senator Sessions and I pose a solution to this problem by toughening penalties so that we instill in those seeking to use fraudulent travel and immigration documents a real sense of fear that they will be caught and prosecuted to the fullest extent possible under our laws.
In any kind of meaningful border protection plan, one must have a good sense of who is entering and exiting the country. That simply cannot be known if the individual is using a fraudulent document.
Mr. President, I ask my colleagues to join me in supporting this legislation.
I also ask by unanimous consent that the text of this bill be printed in the Record.