To amend the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the Investment Advisers Act of 1940 to provide for certain disclosures under section 552 of title 5, United States Code, (commonly referred to as the Freedom of Information Act), and for other purposes.

Madam Speaker, I move to suspend the rules and pass the bill (S. 3717) to amend the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the Investment Advisers Act of 1940 to provide for certain disclosures under section 552 of title 5, United States Code, (commonly referred to as the Freedom of Information Act), and for other purposes.

Madam Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks on this matter and to insert therein extraneous material.

Madam Speaker, this is a bill that reflects cooperation not just between the parties but, sometimes even harder to achieve, between committees. This is a joint product of deliberations among the gentleman from Alabama, the ranking member of the Financial Services Committee; myself; and other members--Mr. Campbell of California, for example, and the chairman and ranking member of the Committee on Government Reform and Oversight, Mr. Towns and Mr. Issa.

This goes back to 2006. In that year, Christopher Cox, then the chair of the Securities and Exchange Commission and our former colleague, sent to the Congress a request that we give an amendment to the SEC law dealing with freedom of information. And it was an entirely reasonable request.

What they said was, the SEC from time to time obviously gets information from private entities that they are investigating. What they were afraid of was the company saying, But, you know what, if you take our data, it will then be a matter of public record, and we may have proprietary information; we may have information that we have every legal right to keep confidential, competitive reasons to keep confidential; and, therefore, unless you can assure us that this will not be made public, we're going to fight you. And that made it harder for the SEC to get this. So it was particularly the enforcement arm of the SEC that asked for it.

When Mr. Cox asked for it in 2006, no action was immediately taken. But in 2008, the House did unanimously pass the bill on a voice vote in a suspension granting that power. It never got acted on in the Senate.

Last year, 2009, both the House and the Senate included that provision in our versions of the financial reform bill. Although the financial reform bill was obviously heavily debated between the parties, no one on either side raised any objection to that provision, which had been out there in plain sight, because it was seen as enabling enforcement.

Subsequently, a lawsuit was brought by Fox Business News against the SEC involving information as to how they handled the Madoff case. Of course, the answer, as we all know, is the way they handled the Madoff case is they didn't until far too late. What happened then was Fox News brought a lawsuit. And someone at the SEC inappropriately cited this provision, which had been enacted in the financial reform bill, as a reason why they couldn't go along with the lawsuit.

As I noted, this had been in both Houses' versions. It was in the conference report. It sat there. So I want to be very clear nothing about the adoption of this exemption from FOIA was underhanded or secretive. It was out there and publicly debated. None of us knew, perhaps could have known, what the implications were.

Once that became clear, a consensus developed that this was an exemption that was far too broad. We then talked about what to do about it. But as Members know, we are in a short session now, with only another week after this to go. Doing this right is somewhat complex because there are some subtleties.

Here is the point we want to make clear: we don't want the SEC at any point to be able to shelter information about what it's doing. On the other hand, we don't want a situation where if company A is suing company B because company B's data had been requested by the SEC for some unrelated purpose, we don't think company A should be able to get easy access to that data when they otherwise could not have gotten it under our law.

We all talked about this, but we also thought it was very important to set the principle that there were no exemptions from the SEC. In defense of Chairman Schapiro, she promulgated rules that made it very clear that the SEC would never invoke it. And when she testified before our committee, she made a point of saying that it would never be used in the Fox lawsuit. But it was not enough for us. Even those who agreed with the guidance subsequently pointed out it could be changed in a further period.

So we all agreed it was important to act. While we were deliberating, something which we are not used to, frankly, happened. The Senate moved quickly. Let me repeat that: the Senate moved quickly. Last night, the Senate adopted a version of a fix for this, an amendment substantially narrowing it, sponsored by the gentleman from Vermont (Mr. Leahy), the chairman of the Judiciary Committee. Over there the Judiciary Committee did it.

The bill he got the Senate to pass is substantially similar to a bill that was drafted by, or introduced by, our colleague, the gentleman from New York (Mr. Towns), the chairman of the Government Reform Committee. The gentleman from California (Mr. Issa) had another very vigorous approach to this.

We had a useful hearing in which it became clear to us that the exemption went much too far, but there was this issue that we talked about of not allowing this to be a way around legitimate protections for business A and for business B. Making it very clear that the SEC would never be protected by it, that whistleblowers would not be harmed by it, but we had that narrow fix.

What we decided to do, and I know the gentleman from California (Mr. Issa), the gentleman from Alabama (Mr. Bachus) are here, Mr. Towns has agreed with us, the four of us agreed, of the two committees of jurisdiction, that the best thing to do in this climate was to accept the Senate bill. Yes, we would make some changes if we could, but this is a very important issue for public confidence. We did not want to risk this bill dying in a House-Senate disagreement.

So what we are proposing to do here today is to accept the bill that Senator Leahy put forward, send that to the President, which we hope he will sign. We will then begin, among the two committees, and in a totally bipartisan way and involving both committees, come up with language that will do the one thing that we think needs to be done to prevent this from being a pawn in an intercompany lawsuit, and at the same time that will, we think, serve the SEC's legitimate purpose of not engendering resistance to their request.

I note we have been joined by the gentleman from New York (Mr. Towns).

I reserve the balance of my time.

Will the gentleman yield?

I think on that you will get cover from the gentleman from California (Mr. Issa).

Madam Speaker, I yield such time as he may consume to my colleague and coworker on this, the chairman of the Oversight and Government Reform Committee, the gentleman from New York (Mr. Towns).

Madam Speaker, I yield back the balance of my time.

Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, I rise in support of S. 3717. At the risk of some political damage, I associate myself with the remarks of Chairman Frank.

I yield to the gentleman.

I thank the chairman.

This amendment repeals section 929I of the Dodd-Frank bill that grants the Securities and Exchange Commission a broad exemption for disclosure under the Freedom of Information Act.

A hearing that the Financial Services Committee held on this provision last week yielded a bipartisan agreement that the section needed to be tailored more narrowly. And this was consistent with what Chairman Ed Towns and Ranking Member Darrell Issa had determined in the Oversight and Government Reform Committee. I want to commend Chairman Towns and Ranking Member Darrell Issa for their leadership on this matter and for their draftsmanship on amendments which we think are actually more proper than the Senate amendment. But as Chairman Frank said, the Senate amendment is an improvement over the existing provision. I think it merits bipartisan support.

Additionally, I want to thank SEC Chairman Mary Schapiro, who expressed her willingness early on to

work with the committee in a spirit of cooperation to address the concerns that we had raised about the section.

Madam Speaker, the Dodd-Frank Act confers significant new supervisory, rulemaking, and investigative powers on the SEC. Combining these broad powers with the existing powers, and then with the provision that appears to insulate the SEC, or could be interpreted as insulating the SEC, from public scrutiny has caused an understandable alarm and angst among Members on both sides of the aisle.

Congress must support a legislative fix; but as Chairman Frank said, they must support one that not only ensures proper accountability at the SEC, but also doesn't undermine the agency's ability to effectively exercise supervision over the thousands of companies that it's responsible for overseeing in a post-Dodd-Frank world.

Now, someone might ask, well, why wouldn't they disclose all information? To give you an example a little closer to home, the IRS requires us to file documentation every year, our income tax returns, and they have a proper motive behind that. But, obviously, I think most of us would agree that the general public does not have a right to that information in a carte blanche way. That's also true of our health records. We place great value on the confidentiality and our privilege that our health records won't be disclosed. And we have faced those matters before in this House.

And that's true of companies that have confidential, proprietary, or sensitive information, that they have some assurance that that information will not be shared. Because the purpose of the SEC is not to share that information. The purpose is to investigate and enforce their rules. To her credit, as I said, Chairman Schapiro has been forthright with Congress and the American people in acknowledging past failures at the SEC in protecting investors and regulating large investment banks.

We can all agree that the agency that presided over the collapse of some of the largest financial institutions on Wall Street and allowed Bernie Madoff to perpetrate the largest financial fraud in American history must be fully transparent in its operations, and that any statutory departures from that general rule of openness must be narrowly defined because they should be accountable to the American people, and also to scrutiny of the media and the press, which can be an important governor or safeguard.

While this bill coming over from the Senate makes some improvements to section 929I, it's not a perfect solution. As I said, we would have preferred something more in line with what Chairman Towns and in my mind Ranking Member Issa have proposed; and we look forward to working with Chairman Frank and Chairman Schapiro of the SEC as well as Chairman Towns.

However, we are sensitive to the fact that an outright repeal of the section could result in the SEC being compelled to release proprietary information in response to subpoenas issued in litigation to which the commission is not a party; and as Chairman Frank said, it could actually result in an increase in litigation of companies not willing to disclose certain information or gaining injunctions by courts, and there would be some basis without some information being privileged. I commend Chairman Frank for also acknowledging their legitimate concern, and that is the SEC's legitimate concern during the committee's hearing on the issue last week when he stated that whatever amendment we propose for section 929I should not provide an opportunity for third parties to engage in an SEC ``fishing expedition'' seeking a company's proprietary information; and I think that was a very succinct description of what we want to avoid.

In closing, Madam Speaker, the challenge for this Congress is to strike a proper balance, one that ensures that the SEC has real-time access to the kind of sensitive, proprietary information it needs to catch the next Bernie Madoff, while also giving the public the tools it needs to hold the agency accountable when it fails to fulfill its mission of protecting investors and policing our financial markets. Acknowledging the amendment we are considering is an important and significant improvement over the status quo--and as Chairman Frank we are actually very encouraged that our colleagues on the other side of this Capitol have acted in a speedy manner--it will still be necessary to revisit this issue. With Chairman Schapiro's cooperation, I am confident that we, working in a bipartisan way, can arrive at a solution that achieves a proper balance between disclosure and protection of sensitive proprietary information in the next Congress. The American people, and those dealing with the SEC, deserve nothing less.

I reserve the balance of my time.

Madam Speaker, I yield such time as he may consume to the very capable ranking member of the Oversight and Government Reform Committee, the gentleman from California (Mr. Issa).

I yield back the balance of my time.

I thank my friend and fellow ranking member.

Chairman Frank, I am perfectly happy to work with you on this. I'm perfectly happy to be associated with you. When people who are considered at least in their own districts as smart come together and realize that we reached the wrong conclusion, we allowed a bill that we worked on hard, in which each of us had victories and failures, each of us would say something was flawed, to have a flaw that was not picked up by any of us or by countless staff. That is what Senate bill 3717 at least partially undoes.

The Dodd-Frank Act was not envisioned to cause the problem that it clearly caused. We can find no evidence of anybody deciding that we would simply shut down the ability for FOIA, and yet that was the effect it had. When this was brought to congressional awareness, multiple bills, including one that myself dropped and also one that Chairman Towns put, plus Senate bills, all were feverishly put in in order to unring the bell. I would say today that we are considering an A version of the unring-the-bell type bill; but I am particularly pleased that on numerous occasions, working with Ranking Member Bachus and with Chairman Frank, we have agreed that this is only a first step. It's the one you can do in the latest days of a Congress, knowing that in fact follow-on legislation is required.

This is in addition to the promise that Chairman Frank made me in open session when we were unable to get some of the provisions that Chairman

Towns and I had offered, had been accepted, that were rejected by the Senate. So I am pleased today that when we look and realize that we have, as Ranking Member Bachus said, we have the chairwoman of the SEC on our side, we have the chairman of both the committee that I serve on, the Government Oversight Committee and the Financial Services Committee, plus both of us as ranking members saying that sometimes you just have to take ``yes'' for an answer. The Senate has moved and moved quickly. This is a step in the right direction. For all those entities who have historically filed and believed in good faith they were entitled to freedom of information delivery, we're taking a step back to where we were.

I might note that only a fraction of those applications are ever granted and the SEC is but once ever reversed when they deny FOIA. So we believe this does not open Pandora's box, that section 929I will in fact still be intact for purposes of privacy, something that we think is important.

We do note, and I think we're noting in every single statement, that we need to ensure that additional work is done to make certain that no one uses FOIA as a backdoor way to receive information in litigation or other matters that they would otherwise not receive. We certainly do not want to have the SEC be a place that you withhold by any means possible information even when you have nothing to hide because, of course, as we know, voluntary compliance is what allows the SEC to do what they should do which is look for those who are not following the rules.

So in my support of Senate 3717, I certainly would say it's a big step in the right direction. It's one in which I believe all four of us, as chairmen and ranking members, are here today to say we support it. We are glad that it will be in front of the President in a matter of days.

In the next Congress, we will put together, with all four of our staffs, the kind of additional follow-on legislation that the American people expect after any large piece of legislation. I, for one, would like to thank Chairman Frank. I do want to be associated with his intellect and hard work and immediate grasp that this and other matters need to be followed on.

I don't know about the gentleman from Alabama, but I am happy to believe that smart people don't always reach the same conclusion. But if they are smart, they work on common solutions whenever possible.

Mr. President, I commend the Senate for promptly taking up the Freedom of Information Act amendments to the Securities Exchange Act, Investment Company Act and Investment Advisers Act of 2010, S. 3717--an important, bipartisan bill to ensure that the Freedom of Information Act FOIA remains an effective tool to provide public access to information about the stability of our financial markets. This bill eliminates several broad FOIA exemptions for Security and Exchange Commission--SEC--records that were recently enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The bill will also help ensure that the SEC has access to the information that the Commission needs to carry out its new enforcement activities under the new reforms.

I thank Senators Grassley, Cornyn, and Kaufman for cosponsoring this important open government bill, and for working with me to promptly address this issue. I commend the many open government organizations, including OpenTheGovernment.org, the Project on Government Oversight, the American Library Association and the Sunlight Foundation for their support of this bill. I also thank the distinguished chairman of the House Committee on Oversight and Government Reform, Representative Edolphus Towns, for introducing a companion bill, H.R. 6086, in the House of Representatives.

I supported the historic Wall Street reform law, because that law takes significant strides toward enhancing transparency and accountability in our financial system. But, I am concerned that the FOIA exemptions in section 9291 of that law, which was originally drafted in the House of Representatives and included in the final legislation, could be interpreted and implemented in a way that undermines this very important goal.

The Freedom of Information Act has long recognized the need to balance the government's legitimate interest in protecting confidential business records, trade secrets and other sensitive information from public disclosure, and preserving the public's right to know. To accomplish this, care must always be taken to ensure that exemptions to FOIA's disclosure requirements are narrowly and properly applied.

When Congress enacted the FOIA exemptions in section 929I, we sought to ensure that the SEC had access to the information that the Commission needed to protect American investors--not to shield information from the public. I

am also troubled by attempts in recent weeks to retroactively apply these exemptions to pending FOIA matters.

I am also troubled by the sweeping interpretation that the Commission has expressed, to date, that these exemptions would shield from public scrutiny all information provided to the Commission in connection with its broad examination and surveillance activities.

To truly restore stability and accountability to our financial system, Congress should take immediate steps to clarify this matter and eliminate overly broad FOIA exemptions. Not surprisingly, there is growing concern about these exemptions from across the ideological and political spectrum.

I have said many times that open government is neither a Democratic issue, nor a Republican issue--it is truly an American value and virtue that we all must uphold. It is in this bipartisan spirit that Senators from both sides of the aisle have joined together to pass this bill. I urge the House of Representatives to enact this good government bill without delay.

Let me begin by thanking you, Mr. Chairman, for a hearing and arranging for us to be where we are here today.

I rise in strong support of S. 3717, a bill to improve transparency at the Securities and Exchange Commission. I introduced a companion bill, H.R. 6086, on August 10, 2010.

The landmark Dodd-Frank Wall Street Reform and Consumer Protection Act made significant improvements to the accountability and transparency of our Nation's financial system. But the Dodd-Frank Act includes a secrecy provision that I believe undermines the purposes of the act. This provision allows the SEC to avoid disclosing virtually any information it obtains under its examination authority.

S. 3717 repeals that provision. This legislation strikes a careful balance to address concerns raised by the SEC without compromising the goals of transparency and accountability that are at the heart of the Dodd-Frank Act.

In a letter supporting this legislation, a coalition of over 30 public interest organizations wrote that ``this bill sends a clear message that public access is vital to accountability.'' I would like to thank Senator Leahy, I would like to thank Congressman Issa, I would like to thank Congressman Bachus, and I want to thank Chairman Frank, first of all for giving us a hearing and his support in bringing this bill to the floor and, of course, his consideration of doing that has made the difference in the reason why we are here today.

I urge my colleagues to support this legislation. This is good government legislation. And, of course, we need good government legislation.