Improved Financial and Commodity Markets Oversight and Accountability Act

Madam Speaker, I move to suspend the rules and pass the bill (H.R. 885) to elevate the Inspector General of certain Federal entities to an Inspector General appointed pursuant to section 3 of the Inspector General Act of 1978, as amended.

Madam Speaker, I ask that all Members may have 5 legislative days within which to revise and extend their remarks.

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

Madam Speaker, I rise in support of H.R. 885, the Improved Financial and Commodity Markets Oversight and Accountability Act. This bill, introduced by my friend Representative John Larson of Connecticut, would enhance the independence of Inspectors General at key financial regulatory agencies.

Right now we have an inconsistent system where some financial agencies like the FDIC have an Inspector General appointed by the President and

confirmed by the Senate, while other large and important agencies like the SEC have an Inspector General who is appointed by and reports to the head of the agency they are supposed to be investigating.

This bill would create a more consistent and independent structure by elevating the Inspectors General at five financial regulatory agencies to be Presidentially appointed and Senate confirmed. This will enhance their independence from the agencies they are overseeing.

This committee has worked on Inspector General reform for the past several years now, and one of our key findings is that the Inspectors General have to be independent from the agency they are supervising if they are going to be effective. The situation at some agencies, where the head of the agency hires and fires the Inspector General and sets the office budget for that Inspector General, does not give these IGs, the Inspectors General, the independence they need.

Making the Inspector General a Presidential appointee confirmed by the Senate not only gives them independence from their agency management but also gives them more stature to come directly to Congress with any problems that they encounter.

Congresswoman Diane Watson, the chairwoman of the Oversight and Government Reform Subcommittee on Government Management, held a hearing on this bill where it had the support of the GAO. At the hearing, the agency Inspectors General made some suggestions on improving the bill, which has been incorporated in an amendment adopted at the committee markup. The amendment specifically clarifies that the Inspector General and the Inspector General staff retain their existing pay and personnel structure. It also clarifies and strengthens the subpoena authority of these Inspectors General, and it requires the heads of the agencies to report to Congress on actions they have taken in response to Inspector General recommendations.

Inspectors General have the unique responsibility of reporting both to the President and to Congress. Congress has to make sure that the Inspectors General have the legal authority and tools they need to continue their roles as nonpartisan, professional, honest brokers; and this bill, I believe, does that.

I urge all Members to support H.R. 885.

I reserve the balance of my time.

Madam Speaker, I want to thank the gentleman from Utah for his hard work on this bill and his ongoing commitment, and it has been that case on much of the legislation that comes before our committee for his bipartisanship and willingness to work very hard on these issues. I consider it an honor to work with him.

I would like to submit for the Record an exchange of letters between the Honorable Collin Peterson, chairman of the House Committee on Agriculture, and the Honorable Edolphus Towns, chairman of our Oversight Committee, with respect to their concerns regarding this bill.

Committee on Agriculture,

Washington, DC, June 8, 2009.

Hon. Edolphus Towns,

Chairman, Committee on Oversight and Government Reform,

Washington, DC.

Dear Chairman Towns: I write to you regarding H.R. 885, the

Improved Financial and Commodity Markets Oversight and

Accountability Act.

H.R. 885 contains provisions that fall within the

jurisdiction of the Committee on Agriculture. I recognize and

appreciate your desire to bring this legislation before the

House in an expeditious manner and, accordingly, I will not

seek a sequential referral of the bill. However, agreeing to

waive consideration of this bill should not be construed as

the Committee on Agriculture waiving its jurisdiction over

Madam Speaker, in closing, we would like to reiterate our strong support for H.R. 885 and its lead sponsor and champion, Mr. Larson. Again, we appreciate the great work being done by Ed Towns, the full committee Chair; Mr. Issa, its ranking member; and the gentleman from Utah, because this will increase the independence of these Inspectors General at financial regulatory agencies at a time when we need these internal watchdogs to be more effective than ever. We do appreciate the work that is being done by our Inspectors General and their staff, investigators and researchers. They work very hard for us. They do work that is not often appreciated, I think, on behalf of the American people; and this will, I think, allow them a greater level of independence to do the job that needs to be done. So I urge my colleagues to join Mr. Larson and all of us in supporting the passage of this measure.

I yield back the balance of my time.

I thank the gentleman from Massachusetts (Mr. Lynch). Chairman, you have done an outstanding job, along with the gentleman from Utah (Mr. Chaffetz), in outlining what this bill does.

Before I begin, because this has been such a nonpartisan effort in so many respects and a commitment, first and foremost, on the part of the Oversight Committee to take a bill, whose genesis evolved out of the last session, and make it a better bill and perfect it, to those ends, along with Mr. Lynch and Mr. Chaffetz, I would especially like to thank Chairman Ed Towns. Mr. Towns has done such a great job in marshaling this bill forward, along with Diane Watson.

I would further like to thank, on their staff, Mike McCarthy, Adam Bordes and Bert Hammond of the Oversight and Government Reform Committee; Austin Burns of the majority leader's staff; and Barney Frank, Mel Watt and Dennis Moore for their ongoing efforts to reform the regulation of our markets and financial sectors and for their input into this legislation; my good friend Todd Platts, who also assisted in this; and Frank LoBiondo, who was a cosponsor of this

bill almost 2 years ago. I especially want to single out for their efforts two reform-minded freshmen who have come to Congress, John Boccieri of Ohio and Glenn Nye of Virginia, and especially to Amy O'Donnell of my staff and Jackie Sheltry.

We refer to this bill in the short form, just frankly, as providing an independent Inspector General for the financial services industries that are in such desperate need of this oversight, and I think the chairman outlined it well. The genesis of this bill actually took place from conducting a public forum back in my district and listening to former Republican mayor of South Windsor, Connecticut, John Mitchell, and our attorney general of the State of Connecticut, Richard Blumenthal. When we were looking at speculation in the market and what was happening with the CFTC and oil commodities, when we realized that the more and closer we looked at who was regulating these agencies, it was somewhat a case of the foxes guarding the henhouse.

Many have asked when we went home over this break and since the financial collapse on Wall Street, people have been astounded in trying to answer the question of, how could it be that Bernie Madoff was scamming thousands of innocent Americans into giving up their life savings? Where were the regulators? Where were the agencies? Where were they when speculators were wreaking havoc on the oil markets?

I can think of no sector where honesty, independence and transparency are needed more right now than in our financial and commodity markets, yet the regulators of these markets have been allowed to work with no oversight of what they are doing and whether they are fulfilling their mission to protect the American consumer. That's because the Inspectors General, as the chairman outlined, who should be working on behalf of average Americans, were working for the heads of the agencies they should be overseeing. As I said earlier, this is a classic case of the fox watching the henhouse, and it's having a profound impact on the work of our regulatory agencies.

We have done a review, and this is something that we pointed out at the committee. The review found that offices of the Inspector General, that independent offices where they are appointed by the President and approved by the Senate, completed over 117 investigations in 2008 while their nonindependent counterparts completed just 12. That's 117 versus 12. The Inspector General of the Commodity Futures Trading Commission released information, showing that despite the recent economic crisis and the turbulence in the oil market, his office completed just two investigations and updated one from October of last year through March. Simply stated, an independent watchdog ensures better performance from a government agency.

I commend the committee because what they've done is provide greater accountability and transparency. I also commend United States Senator Dodd, who will also be taking this bill up on the Senate side as well. Again, I thank everybody on the committee and especially Ed Towns for his hard work and dedication to make sure this bill got to the floor.

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

As we all noted this year, oversight and accountability are vitally important, and the Inspectors General are on the frontline of this effort. This bill will enhance the independence and effectiveness of the IGs at several critical institutions.

Currently the IGs at the Commodity Futures Trading Commission, the National Credit Union Administration, the Securities and Exchange Commission, the Pension Benefit Guaranty Corporation, and the Board of Governors of the Federal Reserve System are appointed and can be removed by the head of the institution. This structure could limit the IG's independence. This bill will make these IGs Presidentially appointed and Senate-confirmed, reducing the risk of undue influence by the heads of these institutions. Although additional Senate-confirmed positions are unnecessary in most cases, it is important that we preserve and enhance their independence within these organizations. I want to thank our colleagues for working with us to improve this bill and making several important changes.

We now ensure that the positions covered by this bill will not suffer a reduction in pay and the individuals will remain on par with similarly situated senior individuals at the institution. More importantly, we also provide IGs with subpoena authority, an important tool for oversight and accountability, as we all know from our work on the Oversight Committee. Finally, the bill requires the regulatory agencies to take some action on the deficiencies identified by the IGs. These agencies cannot simply ignore the findings.

Madam Speaker, given the enormous role these institutions play in our Nation's financial sector, it is important that the IGs have the tools and independence to ensure that these institutions operate above reproach.

I urge my colleagues to support this measure.

I reserve the balance of my time.

Madam Speaker, I want to also echo my compliments to Chairman Towns for his bringing this forward; Ranking Member Issa who has a keen interest in this area for his work; and the Chair of the subcommittee, Mr. Lynch, who is truly a gentleman and a great person to work with.

I also want to put comments in for the good men and women throughout our Federal Government that are working in all of these types of functions. I was excited to participate on the Oversight and Government Reform Committee because of the tremendous workload that they have. There's a great expectation from the American people that we deal with their money fairly and honesty, that we make sure that every dollar is accounted for; and we've seen too many mishaps where dollars have been overspent or overused. Certainly as we look at what is going to be, surely, the single-largest tax increase in the history of the United States with the so-called cap-and-trade, as the Democrats move this bill forward, if it were to pass, literally hundreds of billions of dollars taken out of the pockets of Americans all across the country that will be spent on who knows what, we have got to make sure that every single one of those dollars is accounted for.

Even though I voted ``no,'' this body passed a $1 trillion stimulus package, again, pulling $1 trillion dollars out of our economy, pulling $1 trillion out of Americans' pockets, handing it out to somebody else, bailouts and the rest of it. We need to make sure that the independent auditing, the people who are involved in oversight and government reform at every agency across the Nation throughout our government are doing their job, paying attention and making sure that every dollar is accounted for.

Having no other speakers, I will yield back the balance of my time.

Madam Speaker, I rise today to express my support for H.R. 885, the Improved Financial and Commodity Markets Oversight and Accountability Act. The bill is sponsored by my friend and colleague from Connecticut, Congressman Larson, and I commend his leadership on strengthening oversight and accountability to our government.

As I have told him personally, I appreciate the hard work Congressman Larson put into crafting H.R. 885, a bill to reform several Offices of Inspector General in an effort to bring a greater level of independence and transparency to the agencies they oversee. And as the sponsor of the bill knows, I initially raised a few concerns with the bill to make sure we maximize the efforts of these Inspectors General to provide strong and tough oversight.

As a former District Attorney, the focus of any investigation should always be quality over quantity. Inspectors General should not focus on meeting some meaningless quota of closed cases. Instead, we want our Inspectors General to uncover waste, fraud and abuse wherever they find it so the agency they supervise and Congress can promptly address those abuses.

The House Financial Services Committee, under the leadership of Chairman Barney Frank and of which I chair the Oversight and Investigations Subcommittee, will soon be considering a comprehensive regulatory reform package to overhaul our financial regulatory system.

In that effort, I will be working with Members on both sides of the aisle to identify any additional oversight protections we need to implement to ensure our financial system is transparent and protects consumers, investors and taxpayers. For example, I personally would like to see better coordination between Inspectors General on a regular basis to identify waste, fraud and abuse by creating a ``Financial Inspectors General Council'' where oversight concerns that may have a broader reach can be identified and corrected quickly.

I appreciate Congressman Larson listening to me and discussing my concerns. We both agree that we need to move quickly on all fronts to strengthen oversight of our financial system, and it is in that spirit that I support this bill that the House is considering now.

I look forward to working closely with Congressman Larson, Republicans and Democrats to take the necessary, additional steps to make certain we have an improved oversight structure in place so we don't have a repeat of a financial crisis of this magnitude.

Mr. President, I, Senator Chuck Grassley, intend to object to the proceeding to H.R. 885, the Improved Financial and Commodity Markets Oversight and Accountability Act, and a similar Senate bill, S. 1354, dated July 29, 2009, for the following reasons.''

I object to provisions regarding inspectors general in H.R. 885, and a similar Senate bill, S. 1354, based on my reading of the language in the Improved Financial and Commodity Markets Oversight and Accountability Act. The act is intended to require Presidential appointments and Senate confirmation for the following five inspectors general: Commodity Futures Trading Commission, CFTC; the National Credit Union Administration, NCUA; the Pension Benefit Guaranty Corporation, PBGC; the Board of Governors of the Federal Reserve System, FRB; and the Securities and Exchange Commission.

In essence, the act will change dramatically the historical and longstanding classification of these five organizations from ``designated federal entities'' DFE, under the original Inspector General Act of 1978, to Presidential appointees.

These IGs, who are all nonpartisan civil servants, oppose H.R. 885. I have come to agree with their conclusion that the act will neither improve the independence of the five IGs nor enhance their accountability to the American people. Requiring that these five IGs be made Presidential appointees introduces the potential for partisan politics where none currently exists. This is especially true because we have an administration that is not even a year old and three IGs have already been dismissed. I have not yet seen a consistent policy reason articulated for treating these five IGs differently from other DFE IGs. If Congress wants to increase the independence and accountability of all inspectors general, there are numerous, more effective ways of doing so, and I would be eager to work toward that common goal. However, this legislation has not had a full and, complete hearing in the Senate, targets only five of the DFE inspectors general for reasons that are unclear, and does not appear to achieve its stated purpose.