Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in opposition to H.R. 1996. I want to begin by commending my colleague from Colorado, Mr. Perlmutter, for the way that he…
Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in opposition to H.R. 1996.
I want to begin by commending my colleague from Colorado, Mr. Perlmutter, for the way that he has approached this legislation. He is incorporating a lot of ideas from Members all across this Chamber and from across the country. He has doggedly pursued this legislation for many years, and I want to commend him for that.
I also want to thank my colleagues, Mr. Stivers and Mr. Joyce of Ohio, for the way they have approached this bill. I think this is a testament to constructive criticism of a bill and it becoming better as a result of it.
Let me say, regardless of your position on this bill, I do think the fact remains that cannabis is a prohibited substance under schedule I of the Controlled Substances Act.
Let me further state that, by enacting this legislation, we are effectively kneecapping law enforcement in legalizing money laundering. These are concerns that I have, that still remain.
By effectively legalizing money laundering, we are inserting a new level of risk in our financial system. We are preventing our legal entities from doing their jobs. We are encouraging bad actors and placing our financial institutions at risk.
Rather than dealing with the issues of cannabis and the question of its Federal legalization, we are dealing with a component of the challenge, which is the banking of it, and it is a challenge. I think we are adding a new risk to our banking system and our anti-money laundering reforms that we passed just in January of this year. That seems counterintuitive to me.
For years, Congress has worked to reform our anti-money laundering laws. Now, in one fell swoop, we are undoing a lot of that hard work and we are going to make it easier for money launderers.
If you want to help the system, if you want to give financial institutions the certainty and security they want and need to do the job with the cannabis industry, where it is legalized in these
States, we should debate the merits of cannabis remaining a schedule I substance, not pass a bill that skirts around the substance of the issue.
This bill we are considering today is one of the biggest changes to U.S. drug policy, yet it was done with little debate this Congress. There has been a lot of debate overall in this Congress, far more than the Senate has even had, on the question of cannabis.
This bill, which is really the first step in legalizing cannabis at the Federal level, was reported out of the Financial Services Committee last Congress, and it is a committee that really has no jurisdiction over the Controlled Substances Act. We only had one hearing featuring one panel of witnesses. We haven't had a hearing this Congress to discuss changes over the last 2 years, let alone a markup to discuss any changes that might strengthen or impact the bill.
For example, late last year, Congress passed a sweeping bipartisan anti-money laundering piece of legislation. These reforms include prohibitions on the concealment of sources of assets in monetary transactions; a prohibition, I will add, that comes with a steep penalty of up to 10 years in prison and up to $1 million in fines.
If we were doing our due diligence, we would have done a deeper discussion on how these new AML Act changes would impact banks working with cannabis industries as clients instead of me raising this issue at the eleventh hour on the floor, which is what I have got to resort to.
In addition to this concern, I believe I have voiced many other concerns, including our need to better comprehend and address the supervisory and regulatory issues that would result from enactment of
Mr. Speaker, this letter raises a number of concerns, including:
What changes to our banking laws are necessary to implement the SAFE Banking Act, a number of questions that I have;
What agencies are going to be necessary for this working group to actually ensure that the letter of this law is adhered to by the executive branch, that they actually follow it as the writer of the legislation intends;
How the executive branch will interpret the ``know your customer'' rules enacted in the SAFE Banking Act, compared to what we enacted just 2 months ago, 3 months ago;
How we would deal with suspicious activity reporting requirements under the new guidelines of the SAFE Banking Act, compared to what we enacted at the end of last year;
How we deal with currency transaction reports under this law, compared to what we just passed; and
What are the implications on nonbank financial firms as well, such as insurers and investment companies.
Mr. Speaker, I think the author of the bill intends for insurers and investment companies and banks to have the same qualifications when they are handling money that has touched the cannabis industry. I think that is the intent.
Mr. Speaker, I think we need to understand whether or not the administration would follow that intent that the author has stated clearly in debates here on the House floor last Congress and this Congress and, furthermore, whether or not Federal, State, and local law enforcement will have a similar interpretation that the writer of this bill says is his intent, that Federal law enforcement should hear the voice of Congress and hear this step to legalization which is part of this bill.
I do not think it is the author of the bill's idea to get into sort of the broader conversation about legalization at the State level and what we should do at the Federal level in this bill. However, that is a part of it.
In March of 2019, the National Sheriffs' Association voiced concern with this bill, saying that it could easily be exploited. They echoed my concerns that ``allowing banking access for a Schedule 1 drug gives money laundering access to international drug cartels, which are already using the cover of legalization.''
Mr. Speaker, I include that letter in the Record.
National Sheriffs' Association,
March 19, 2019.
Hon. Maxine Waters,
Chairwoman, House of Representatives, Committee on Financial
Services, Washington, DC.
Hon. Patrick McHenry,
Ranking Member, House of Representatives, Committee on
Financial Services, Washington, DC.
Dear Chairwoman Waters and Ranking Member McHenry: On
behalf of the National Sheriffs' Association (NSA) and more
than 3,080 sheriffs nationwide, I write to express our deep
concern and opposition to H.R. 1595, The SAFE Banking Act.
This bill creates protections for depository institutions
that provide financial services to cannabis-related
businesses and service providers for such businesses.
H.R. 1595 will increase the legalization of marijuana
across the Nation, which we understand is an intended
consequence of this bill. Furthermore, allowing banking
access for a Schedule 1 drug gives money laundering access to
international drug cartels, which are already using the cover
of legalization. This will inevitably open the door to other
criminal activity!
NSA is concerned with the welfare and safety of citizens
and works to preserve their rights to live and work in
communities where drug abuse is not accepted and they are not
subjected to the adverse effects of drug abuse. The dangers
of illegal drugs, including marijuana, and the threat to
public safety caused by their use in terms of highway safety,
criminal activity, and domestic violence are well-documented.
NSA believes that any legislation regarding national
legalization must engage the nation's law enforcement
agencies in order to have a comprehensive discussion
regarding the potential implications this bill could have on
our communities. We urge The House of Representatives to
defeat this dangerous bill.
Sincerely,
Jonathan F. Thompson,
Executive Director and CEO.
Furthermore, we see cannabis-legal States like California, Washington, and Colorado, as the subject of recent news reports that cartels have found that it is easier to grow and process marijuana in legal States like Colorado and ship it throughout the United States than it is to bring it from Mexico or Cuba. I include that article in the Record, Mr. Speaker.
[From Global Power, May 29, 2018]
Foreign Cartels Embrace Home-Grown Marijuana in Pot-Legal States
(By Dennis Romero, Gabe Gutierrez, Andrew Blankstein and Robert Powell)
Los Angeles.--General Jeff Sessions called it ``one of the
largest residential forfeiture actions in American history.''
In early April, local and federal authorities descended
upon 74 marijuana grow houses in the Sacramento area they say
were underwritten by Chinese organized crime. They filed
court paperwork to seize the properties, worth millions of
dollars.
Federal officials allege that legal recreational marijuana
states like California, Colorado and Washington, where
enforcement of growing regulations is hit-or-miss, have been
providing cover for transnational criminal organizations
willing to invest big money to buy or rent property to
achieve even bigger returns.
Chinese, Cuban and Mexican drug rings have purchased or
rented hundreds of homes and use human trafficking to bring
inexperienced growers to the United States to tend them,
federal and local officials say.
The suspects are targeting states that have already
legalized marijuana ``in an attempt to shroud their
operations in our legal environment here and then take the
marijuana outside of the state,'' said Mike Hartman,
executive director of the Colorado Department of Revenue,
which regulates and licenses the cannabis industry.
Authorities say they've seen an increase in these ``home
grows'' since the launch of recreational pot sales in
Colorado.
While California and Washington have mainly seen organized
criminals from China buying homes and converting them into
grow houses, Colorado has largely been grappling with Cuban
and Mexican-led cartels, said Sheriff Bill Elder of the El
Paso County Sheriffs Office in Colorado.
``They have found that it's easier to grow and process
marijuana in Colorado, ship it throughout the United States,
than it is to bring it from Mexico or Cuba,'' Elder said.
Furthermore, because of this patchwork at the State level, I think you are seeing additional concerns at the southern border right now, and I will include for the Record a letter that the former Border Patrol chief submitted that in February alone there was nearly $14 million a day of marijuana caught at the southern border.
Despite these many issues I still have with the SAFE Banking Act, I do appreciate the work that my colleagues
have put into this legislative effort, but considering that the larger issue of cannabis legalization has not yet been debated here on the House floor, I think it is premature for the Financial Services Committee to do the full work of this Congress on the question of cannabis legalization at the Federal level. I think that would be better left to the Judiciary Committee, with a wider debate here on the House floor, and I would encourage that wider debate.
Notwithstanding that, I would like to thank my colleagues for the hard work that they have put into this legislation. Even if I have concerns, I know that there is more than sufficient support to pass this under the suspension calendar, and that would not happen were it not for the good legislative work of my colleague and friend from Colorado (Mr. Perlmutter).
I do believe that my colleague was quite intentional about the date that he wanted to actually have the vote here on the House floor. With that, for those of you who don't know, tomorrow is 4/20/21, 4/20 being the operative date.
Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, I yield 2 minutes to the gentleman from Ohio (Mr. Stivers), the subcommittee chair on Housing, Community Development, and Insurance.
Mr. Speaker, I yield 2 minutes to the gentleman from Kentucky (Mr. Barr), the ranking member of the Subcommittee on Oversight and Investigations of the House Financial Services Committee.
Mr. Speaker, I would say that if we are going to have legalization of cannabis, let's have legalization of cannabis and do it in regular order in the House of Representatives, not have it come through the Financial Services Committee. I wanted to be clear, and I wanted to make sure my colleague heard that.
But I do commend my colleague, Mr. Perlmutter, for taking every bit of the jurisdiction that we currently have and using it smartly for the best outcome possible.
I yield 2 minutes to the gentleman from Ohio (Mr. Joyce), my colleague and good friend.
Mr. Speaker, may I inquire how much time I have remaining.
Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Florida (Mr. Gaetz).
Mr. Speaker, I yield myself such time as I may consume.
I want to repeat this from my earlier remarks. This bill represents one of the biggest changes to U.S. drug policy. If we want banks to provide services risk-free, then we should do it thoughtfully and address the legality of cannabis instead of this workaround. This bill represents a yeoman's task of a legal framework so that funds from cannabis in those legalized States can be legally banked.
But that is not a holistic approach to this issue, nor should it be the Financial Services Committee leading the debate, which we have had one hearing on in the last 3 years in this committee--actually, you could say probably one hearing in the last decade on the Financial Services Committee. Yet, we have this bill, which, frankly, on its face is a very well-balanced bill to fix a glaring problem that is happening across the country.
This bill will legalize the banking of a federally illegal product. I am sure the irony of this is not at all lost on the American public.
The drug cartels, frankly, are keen to this, and other bad actors are keen to this. They will attempt to take advantage of this if it is not well-implemented, if it is not thoughtfully implemented, especially if those things are not the case.
No matter how we spin what is happening right now, we currently have a crisis at the southern border, and human trafficking is certainly a part of that; a desire to come to the United States is certainly a part of that; and the movement of illegal drugs into the United States is certainly a part of that. This doesn't help with that crisis at the southern border.
Again, we are the House Financial Services Committee. We are not the Homeland Security Committee, and we are not the Appropriations Committee, so we can't fix all things within our jurisdiction.
Let me close with this. I do not support this bill because it represents a workaround to a much bigger debate that we need to have in the United States, and that is whether or not cannabis should remain a schedule I substance under the Controlled Substances Act. This fact is the bigger issue that I think this Congress should wrestle with, and I would welcome it. In fact, I think we can have a much more nuanced debate here.
But I do want to close by thanking my colleagues for creating a very thoughtful product. This legislative text is much improved upon from where it was originally. I thank my colleague, Mr. Perlmutter, for leading that conversation and leading that set of negotiations.
It has taken years to produce this product. It is strong legislative text. It is a strong legal framework. Even though I have pointed out a number of its deficiencies and challenges, I do see on its face how this would resolve a huge problem in a large number of States.
I understand that, and I am inviting the larger discussion about cannabis, as well. I think we need to have that conversation.
But I do thank my colleague, Mr. Perlmutter, for his leadership there, and I thank my colleagues, Mr. Stivers, Mr. Davidson, and Mr. Joyce, on our side of the aisle for engaging in that, as well as Mr. Luetkemeyer and Mr. Barr who dealt with particular issues in their States and their jurisdictions, as well.
Mr. Speaker, I urge my colleagues to vote ``no,'' but I understand if they do vote ``yes.'' I yield back the balance of my time.