Plain Writing Act of 2010

Mr. President, I am introducing today, with my colleagues Senator Grassley and Senator McCaskill, the Incorporation Transparency and Law Enforcement Assistance Act. This bill tackles a longstanding homeland security problem involving inadequate State incorporation practices that leave this country unnecessarily vulnerable to wrongdoers, hinders law enforcement, and damages the international stature of the United States.

The problem is straightforward. Each year, our States allow persons to form nearly 2 million corporations and limited liability companies in this country without knowing, or even asking, who the beneficial owners are behind those corporations. Right now, a person forming a U.S. corporation or limited liability company, LLC, provides less information to the State than is required to open a bank account or obtain a driver's license. Instead, States routinely permit persons to form corporations and LLCs under State laws without disclosing the names of any of the people who will control or benefit from them.

It is a fact that criminals are exploiting this weakness in our State incorporation practices. They are forming new U.S. corporations and LLCs, and using these entities to commit crimes ranging from drug trafficking, money laundering, tax evasion, financial fraud, and corruption.

Law enforcement authorities investigating these crimes have complained loudly for years about the lack of beneficial ownership information. Last year, for example, the U.S. Department of the Treasury sent a letter to the States stating: ``the lack of transparency with respect to the individuals who control privately held for-profit legal entities created in the United States continues to represent a substantial vulnerability in the U.S. anti-money laundering/counter terrorist financing (AML/CFT) regime. . . . [T]he use of U.S. companies to mask the identity of criminals presents an ongoing and substantial problem . . . for U.S. and global law enforcement authorities.''

Michael Chertoff, former Secretary of the U.S. Department of Homeland Security, wrote the following:

In countless investigations, where the criminal targets

utilize shell corporations, the lack of law enforcement's

ability to gain access to true beneficial ownership

information slows, confuses or impedes the efforts by

investigators to follow criminal proceeds. This is the case

in financial fraud, terrorist financing and money laundering

investigations. . . . It is imperative that States maintain

beneficial ownership information while the company is active

and to have a set time frame for preserving those records. .

. . Shell companies can be sold and resold to several

beneficial owners in the course of a year or less. . . . By

maintaining records not only of the initial beneficial

ownership but of the subsequent beneficial owners, States

will provide law enforcement the tools necessary to clearly

identify the individuals who utilized the company at any

given period of time.

These types of complaints by U.S. law enforcement, their pleas for assistance, and their warnings about the dangers of anonymous U.S. corporations operating here and abroad are catalogued in a stack of reports and hearing testimony from the Department of Justice, the Department of Homeland Security, the Financial Crimes Enforcement Network of the Department of the Treasury, the Internal Revenue Service, and others.

To add insult to injury, our law enforcement officials have too often had to stand silent when asked by their counterparts in other countries for information about who owns a U.S. corporation committing crimes in their jurisdictions. The reality is that the United States can't answer those requests, because we don't have the information.

Our bill would cure the problem by requiring State incorporation forms to include a request for the names of a corporation's beneficial owners. States would not be required to verify the information, but civil or criminal penalties would apply to persons who submitted false information. If law enforcement issued a subpoena or summons to obtain the ownership information, States would then supply the data contained on its forms.

This bill has received the support of numerous law enforcement associations, including the Federal Law Enforcement Officers Association, the Fraternal Order of Police, the National Association of Assistant United States Attorneys, the National Narcotic Officers' Associations Coalition, the United States Marshals Service Association, and the Association of Former ATF Agents.

The Federal Law Enforcement Officers Association, FLEOA, for example, which represents more than 26,000 Federal law enforcement officers, states that ``the unfortunate lax attitude demonstrated by certain states has enabled large criminal enterprises to exploit those state's flawed filing systems.'' FLEOA goes on:

We regard corporate ownership in the same manner as we do

vehicle ownership. Requiring the driver of a vehicle to have

a registration and insurance card is not a violation of their

privacy. This information does not need to be published in a

Yellow Pages, but it should be available to law enforcement

officers who make legally authorized requests pursuant to

official investigations.

The National Association of Assistant United States Attorneys, NAAUSA, which represents more than 1,500 Federal prosecutors, urges Congress to take legislative action to remedy inadequate State incorporation practices. NAAUSA states:

[M]indful of the ease with which criminals establish `front

organizations' to assist in money laundering, terrorist

financing, tax

evasion and other misconduct, it is shocking and unacceptable

that many State laws permit the creation of corporations

without asking for the identity of the corporation's

beneficial owners. Your legislation will guard against that

from happening, and no longer permit criminals to exploit the

lack of transparency in the registration of corporations.

Our bill was also endorsed by President Obama during the last Congress when he was a member of the U.S. Senate and served as an original cosponsor of the predecessor bill, S. 2956.

In 2006, the leading international anti-money laundering body in the world, the Financial Action Task Force on Money Laundering--known as FATF--issued a report criticizing the United States for its failure to comply with a FATF standard requiring countries to obtain beneficial ownership information for the corporations formed under their laws. This standard is one of 40 FATF standards that this country has publicly committed itself to implementing as part of its efforts to promote strong anti-money laundering laws around the world.

FATF gave the United States 2 years, until July 2008, to make progress toward coming into compliance with the FATF standard on beneficial ownership information. That deadline passed long ago, and we have yet to make any real progress. Enacting the bill we are introducing today would bring the United States into compliance with the FATF standard by requiring the States to obtain beneficial ownership information for the corporations formed under their laws. It would ensure that the United States met its international commitment to comply with FATF anti-money laundering standards.

The bill being introduced today is also the product of years of work by the U.S. Senate Permanent Subcommittee on Investigations, which I chair. As long ago as 2000, the Government Accountability Office, GAO, at my request, conducted an investigation and released a report entitled, ``Suspicious Banking Activities: Possible Money Laundering by U.S. Corporations Formed for Russian Entities.'' This report revealed that one person was able to set up more than 2,000 Delaware shell corporations and, without disclosing the identity of the beneficial owners, open U.S. bank accounts for those corporations, which then collectively moved about $1.4 billion through the accounts. It is one of the earliest government reports to give some sense of the law enforcement problems caused by U.S. corporations with unknown owners. It sounded the alarm years ago but to little avail.

In April 2006, in response to a Subcommittee request, GAO released a second report entitled, ``Company Formations: Minimal Ownership Information Is Collected and Available,'' which reviewed the corporate formation laws in all 50 States. GAO disclosed that the vast majority of the States do not collect any information at all on the beneficial owners of the corporations and LLCs formed under their laws. The report also found that many States have established automated procedures that allow a person to form a new corporation or LLC within the State within 24 hours of filing an online application without any prior review of that application by a State official. In exchange for a substantial fee, at least two States will form a corporation or LLC within one hour of a request. After examining these State incorporation practices, the GAO report described the problems that the lack of beneficial ownership information has caused for a range of law enforcement investigations.

In November 2006, our subcommittee held a hearing further exploring this issue. At that hearing, representatives of the U.S. Department of Justice, DOJ, the Internal Revenue Service, IRS, and the Department of Treasury's Financial Crimes Enforcement Network, FinCEN, testified that the failure of States to collect adequate information on the beneficial owners of the legal entities they form has impeded Federal efforts to investigate and prosecute criminal acts such as terrorism, money laundering, securities fraud, and tax evasion. At the hearing, DOJ testified:

We had allegations of corrupt foreign officials using these

[U.S.] shell accounts to launder money, but were unable--due

to lack of identifying information in the corporate records--

to fully investigate this area.

The IRS testified:

Within our own borders, the laws of some states regarding

the formation of legal entities have significant transparency

gaps which may even rival the secrecy afforded in the most

attractive tax havens.

FinCEN identified 768 incidents of suspicious international wire transfer activity involving U.S. shell companies.

In addition, in a list of the ``Dirty Dozen'' tax scams in 2007, the IRS highlighted shell companies with unknown owners as number four on the list, as follows:

4. Disguised Corporate Ownership: Domestic shell

corporations and other entities are being formed and operated

in certain states for the purpose of disguising the ownership

of the business or financial activity. Once formed, these

anonymous entities can be, and are being, used to facilitate

underreporting of income, non-filing of tax returns, listed

transactions, money laundering, financial crimes and possibly

terrorist financing. The IRS is working with state

authorities to identify these entities and to bring their

owners into compliance.

That is not all. Dozens of Internet websites advertising corporate formation services highlight the fact that some of our States allow corporations to be formed under their laws without asking for the identity of the beneficial owners. These Web sites explicitly point to anonymous ownership as a reason to incorporate within the United States, and often list certain States alongside notorious offshore jurisdictions as preferred locations for the formation of new corporations, essentially providing an open invitation for wrongdoers to form entities within the United States.

One Web site, for example, set up by an international incorporation firm, advocates setting up companies in Delaware by saying: ``DELAWARE--An Offshore Tax Haven for Non U.S. Residents.'' It cites as one of Delaware's advantages that: ``Owners' names are not disclosed to the state.'' Another Web site, from a U.K. firm called ``formacompanyoffshore.com,'' lists the advantages to incorporating in Nevada. Those advantages include: ``No I.R.S. Information Sharing Agreement'' and ``Stockholders are not on Public Record allowing complete anonymity.''

Despite this type of advertising, years of law enforcement complaints, and mounting evidence of abuse, many of our States are reluctant to admit there is a problem with establishing U.S. corporations and LLCs with unknown owners. Too many of our States are eager to explain how quick and easy it is to set up corporations within their borders, without acknowledging that those same quick and easy procedures enable wrongdoers to utilize U.S. corporations in a variety of crimes and tax dodges both here and abroad.

Since 2006, the subcommittee has worked with the States to encourage them to recognize the homeland security problem they have created and to come up with their own solution. After the subcommittee's hearing on this issue, for example, the National Association of Secretaries of State, NASS, convened a 2007 task force to examine state incorporation practices. At the request of NASS and several States, I delayed introducing legislation while they worked on a proposal to require the collection of beneficial ownership information. My subcommittee staff participated in multiple conferences, telephone calls, and meetings; suggested key principles; and provided comments to the task force.

In July 2007, the NASS task force issued a proposal. Rather than cure the problem, however, the proposal was full of deficiencies, leading the Treasury Department to state in a letter that the NASS proposal ``falls short'' and ``does not fully address the problem of legal entities masking the identity of criminals.''

Among other shortcomings, the NASS proposal does not require States to obtain the names of the natural individuals who would be the beneficial owners of a U.S. corporation or LLC. Instead, it would allow States to obtain a list of a company's ``owners of record'' who can be, and often are, offshore corporations or trusts. The NASS proposal also doesn't require the States themselves to maintain the beneficial ownership information, or to supply it to law enforcement upon receipt of a subpoena or summons. The proposal also fails to require the beneficial ownership information to be updated over time. These and other flaws in the proposal have been identified by the

Treasury Department, the Department of Justice, me, and others, but NASS has given no indication that the flaws will be corrected.

It is deeply disappointing that the States, despite the passage of more than 1 year, were unable to devise an effective proposal. Part of the difficulty is that the States have a wide range of practices, differ on the extent to which they rely on incorporation fees as a major source of revenue, and differ on the extent to which they attract non-U.S. persons as incorporators. In addition, the States are competing against each other to attract persons who want to set up U.S. corporations, and that competition creates pressure for each individual State to favor procedures that allow quick and easy incorporations. It is a classic case of competition causing a race to the bottom, making it difficult for any one State to do the right thing and request the names of beneficial owners.

That is why we are introducing Federal legislation today. Federal legislation is needed to level the playing field among the States, set minimum standards for obtaining beneficial ownership information, put an end to the practice of States forming millions of legal entities each year without knowing who is behind them, and bring the United States into compliance with its international commitments.

The bill's provisions would require the States to obtain a list of the beneficial owners of each corporation or LLC formed under their laws, to maintain this information for 5 years after the corporation is terminated, and to provide the information to law enforcement upon receipt of a subpoena or summons. If enacted, this bill would ensure, for the first time, that law enforcement seeking beneficial ownership information from a State about one of its corporations or LLCs would not be turned away empty-handed.

The bill would also require corporations and LLCs to update their beneficial ownership information in an annual filing with the State of incorporation. If a State did not require an annual filing, the information would have to be updated each time the beneficial ownership changed.

In the special case of U.S. corporations formed by non-U.S. persons, the bill would go farther. Following the lead of the Patriot Act which imposed additional due diligence requirements on certain financial accounts opened by non-U.S. persons, our bill would require additional due diligence for corporations beneficially owned by non-U.S. persons. This added due diligence would have to be performed--not by the States--but by the persons seeking to establish the corporations. These incorporators would have to file with the State a written certification from a corporate formation agent residing within the State attesting to the fact that the agent had verified the identity of the non-U.S. beneficial owners of the corporation by obtaining their names, addresses, and passport photographs. The formation agent would be required to retain this information for a specified period of time and produce it upon request.

The bill would not require the States to verify the ownership information provided to them by a formation agent, corporation, LLC, or other person filing an incorporation application. Instead, the bill would establish Federal civil and criminal penalties for anyone who knowingly provided a State with false beneficial ownership information or intentionally failed to provide the State with the information requested.

The bill would also exempt certain corporations from the disclosure obligation. For example, it would exempt all publicly traded corporations and the entities they form, since these corporations are already overseen by the Security and Exchange Commission. It would also allow the States, with the written concurrence of the Homeland Security Secretary and the U.S. Attorney General, to identify certain corporations, either individually or as a class, which would not have to list their beneficial owners, if requiring such ownership information would not serve the public interest or assist law enforcement in their investigations. These exemptions are expected to be narrowly drawn and used sparingly, but are intended to provide the States and Federal law enforcement added flexibility to fine-tune the disclosure obligation and focus it where it is most needed to stop crime, tax evasion, and other wrongdoing.

Another area of flexibility in the bill involves privacy issues. The bill deliberately does not take a position on the issue of whether the States should make the beneficial ownership information they receive available to the public. Instead, the bill leaves it entirely up to the States to decide whether and under what circumstances to make beneficial ownership information available to the public. The bill explicitly permits the States to place restrictions on providing beneficial ownership information to persons other than government officials. The bill focuses instead on ensuring that law enforcement and Congress, provided they are equipped with a subpoena or summons, are given ready access to the beneficial ownership information collected by the States.

To ensure that the States have the funds needed to meet the new beneficial ownership information requirements, the bill makes it clear that States can use their DHS state grant funds for this purpose. Every State is guaranteed a minimum amount of DHS grant funds every year and may receive funds substantially above that minimum. Every State will be able to use all or a portion of these funds to modify their incorporation practices to meet the requirements in the act. The bill also authorizes DHS to use appropriated funds to carry out its responsibilities under the act. These provisions will ensure that the States have the funds needed for the modest compliance costs involved with amending their incorporation forms to request the names of beneficial owners.

It is common for bills establishing Federal standards to seek to ensure State action by making some Federal funding dependent upon a State's meeting the specified standards. This bill, however, states explicitly that nothing in the bill authorizes DHS to withhold funds from a State for failing to modify its incorporation practices to meet the beneficial ownership information requirements in the act. Instead, the bill simply calls for a GAO report in 2013 to identify which States, if any, have failed to strengthen their incorporation practices as required by the act. After getting this status report, a future Congress can decide what steps to take, including whether to reduce any DHS funding going to the noncompliant States.

Finally, the bill would require the U.S. Department of the Treasury to issue a rule requiring formation agents to establish anti-money laundering programs to ensure they are not forming U.S. corporations or LLCs for criminals or other wrongdoers. GAO would also be asked to conduct a study of existing State formation procedures for partnerships and trusts.

We have worked hard to craft a bill that would address, in a fair and reasonable way, the homeland security problem created by States allowing the formation of millions of U.S. corporations and LLCs with unknown owners. What the bill comes down to is a simple requirement that States change their incorporation applications to add a question requesting the names and addresses of the prospective beneficial owners. That is not too much to ask to protect this country and the international community from wrongdoers seeking to misuse U.S. corporations and to help law enforcement stop those wrongdoers.

For those who say that, if the United States tightens its incorporation rules, new companies will be formed elsewhere, it is appropriate to ask exactly where they will go. Every country in the European Union is already required to get beneficial information for the corporations formed under their laws. Most offshore jurisdictions already request this information as well, including the Bahamas, Cayman Islands, Jersey, and the Island of Man. Our States should be asking for the same ownership information, but they don't, and there is no indication that they will any time in the near future, unless required to do so.

I wish Federal legislation weren't necessary. I wish the States could solve this homeland security problem on their own, but ongoing competitive pressures make it unlikely that the States will reach agreement. It has been more than 2 years since our 2006 hearing with no real progress to show for it, despite repeated pleas from law enforcement.

Federal legislation is necessary to reduce the vulnerability of the United States to wrongdoing by U.S. corporations with unknown owners, to protect interstate and international commerce from criminals misusing U.S. corporations, to strengthen the ability of law enforcement to investigate suspect U.S. corporations, to level the playing field among the States, and to bring the United States into compliance with its international anti-money laundering obligations.

There is also an issue of consistency. For years, I have been fighting offshore corporate secrecy laws and practices that enable wrongdoers to secretly control offshore corporations involved in money laundering, tax evasion, and other misconduct. I have pointed out on more than one occasion that corporations were not created to hide ownership, but to shield owners from personal liability for corporate acts. Unfortunately, today, the corporate form has too often been corrupted into serving those wishing to conceal their identities and commit crimes or dodge taxes without alerting authorities. It is past time to stop this misuse of the corporate form. But if we want to stop inappropriate corporate secrecy offshore, we need to stop it here at home as well.

For these reasons, I urge my colleagues to support this legislation and put an end to incorporation practices that promote corporate secrecy and render the United States and other countries vulnerable to abuse by U.S. corporations with unknown owners.

As I mentioned earlier, in the 110th Congress, then-Senator Obama was an original cosponsor of this legislation. I look forward to working with President Obama to ensure this homeland security bill is enacted into law.

I thank my cosponsor, Senator Grassley, who has been such a leader in this effort for so long, as he has in so many other good government initiatives. I also thank Senator McCaskill for her cosponsorship.

Mr. President, I ask unanimous consent that the text of the bill and a bill summary be printed in the Record.

I thank my friend, the Republican whip, for yielding.

Madam Speaker, on Monday the House will meet at 12:30 p.m. for morning-hour debate and at 2 p.m. for legislative business, with votes postponed until 6:30 p.m. On Tuesday the House will meet at 10:30 a.m. for morning-hour debate and 12 p.m. for legislative business. On Wednesday and Thursday, the House will meet at 10 a.m. for legislative business. On Friday, the House will meet at 9 a.m. for legislative business.

We will consider several bills under suspension of the rules, including a number of bills focused on improving government operations: the Plain Language Act, H.R. 946, by Representative Braley; H.R. 4720, Taking Responsibility for Congressional Pay Act, by Representative Kirkpatrick of Arizona. A complete list of suspension bills will be announced by the close of business today, as is the custom.

In addition, we will consider further action on H.R. 1586, the FAA Air Transportation Modernization and Safety Improvement Act. Further action on the jobs agenda is possible, and further action on health care legislation is also possible.

First, let me say that no matter how often the gentleman and his colleagues want to say so, that we are going to ``ram through'' something, no matter how many times the press and public may be misled by that assertion, we are not ramming through anything, I tell my friend.

We are following the rules of the House and following the rules of the Senate that have been decades in existence, which, when they have been used, 72 percent of the time they have been used, 72 percent of the time they have been used, I tell my friend, your party used them. They are the rules, and we are going to follow the rules.

Both bills that are pending before the Congress of the United States have been passed with a majority, and, in fact, the Senate bill was passed by a 60 percent majority, I tell my friend, not rammed through, after a full year of debate and discussion, scores of hearings, hundreds of witnesses, and thousands of hours of consideration.

I tell my friend that you can say we are ramming something through as much as you want and it will not make it true, no matter how often it is said by your side of the aisle, who, in my opinion, wants simply to stop the legislation in its tracks.

I tell my friend that we are going to be in the regular order, as we have been on these bills since they were introduced. We are going to be in the regular order in terms of considering the passage of bills that have received majorities in both Houses. As I say again, the Senate bill has received a 60 percent majority in its House.

Now, the American public, frankly, I expect when we vote on bills, they expect things to pass by majority vote. They do here. They unfortunately don't in the other body. So you can have 59 percent, as we had in the House, to give children health care, and children don't get health care.

So I say to my friend, as I said, the expectation is we will consider passing health care legislation this coming week. We think it is long overdue. We expect the Budget Committee to mark up a reconciliation bill, as the committee did when the Republicans were in charge on 16 occasions out of the 22 that reconciliation has been used, 72 percent of the time, as I want to reiterate; because I, frankly, get a little impatient with this assertion that somehow a process that you utilized 72 percent of the times it has been utilized, which means we used it 28 percent, that somehow now when we are using it, it is somehow now not consistent with the rules. My friend knows it is consistent with the rules, and we are pursuing that process.

The committee, I expect, will mark up on Monday. I expect thereafter the Rules Committee to meet, as is consistent with the rules, to prepare a reconciliation bill and to report it to this floor. I expect them to report a rule to consider that reconciliation bill, and I expect that reconciliation bill to be considered.

No, you said a number of things before that which I was responding to. But, yes, Members should prepare to be here next weekend.

Of course, as the gentleman knows, the gentleman's party has used that process as well, as I am sure the gentleman knows. But, in any event, we will follow the rules. We will have a vote on the rule, consistent with the rules.

I have not talked to the chairwoman of the Rules Committee at this point in time, so that I cannot give you a specific response and have not heard--this is the first I have heard something referred to in the terms you have just referred to it as. But we will provide for a rule for consideration of the Senate bill for reconciliation, and the process of doing so will be consistent with the rules.

What the President was referring to, of course, in terms of an up-or-down vote, was a majority vote. One of the problems we have had in the Senate, as the gentleman knows and experienced as well when his party was in the majority, it is difficult to get an up-or-down vote when the majority of the Senate is for something. They have to get an extraordinary majority, some 60 votes, before they can bring a bill to the floor.

That process, obviously, thwarts, does not facilitate, a vote by the majority. In fact, a minority in the Senate on a regular basis thwarts the will of the majority. That is what the President was referring to, that he wanted an up-or-down vote on that, and I expect we are going to get an up-or-down vote in the Senate. Why? Because in the Senate they have rules that we are going to follow, as you did in 16 out of the 22 times, that allow for an up-or-down majority vote in the United States Senate.

We have to have, as you know, a majority vote in the House, and we consistently do have measures that can fail or succeed, depending upon the will of the majority, as opposed to the thwarting by the minority.

I tell the gentleman that nothing will pass here without a majority vote.

I expect the House to have very significant time to consider the proposals that come out of the Budget Committee and/or the Rules Committee. And this bill, of course, either bill, the House bill or the Senate bill, as proposed, have been online for some 2\1/2\ months, otherwise known as about 75 days. So there has been ample time to review the bill, whether it is the Senate bill or the House bill. So my friend is, I am sure, well aware of what is in the Senate bill and what is in the House bill.

In addition to that, the President put online his proposed compromises between the Senate and the House, which have been the subject of great discussion, including the bipartisan meeting that the gentleman and I attended at the White House, an extraordinary, historical meeting at which the President invited leaders from both parties and both Houses to come and discuss what he believed to be a historic opportunity to provide health care accessibility to all Americans.

So I say to my friend that we will certainly give as much notice as possible, but I am not going to say that 72 hours is going to be the litmus test, per se, because that which we have voted on already in the House and the Senate have given Members months of notice and the American public months of notice on the substance of the propositions that are pending before us.

First of all, the 72-hour rule, I didn't say that we were casting aside any rule, nor did I say that we may not have more than 72 hours' notice. You may well have more than 72 hours' notice. What I said to you was I am not going to commit myself and then have 70 hours as opposed to 72 hours and think that I have violated some representation that I made. We want to give as much notice as we possibly can.

This has been a very difficult discussion, as you know, and as you well know, the Members on your side of the aisle in the other body have indicated they are going to do everything in their power to stop the passage of this legislation. So we need to get about this business and engage, if you will.

The gentleman has had 72 days, I tell the gentleman, to review the bill that he refers to--72 days, not 72 hours--72 days in final form to review the bill.

Now, you can keep saying this. You can keep telling the American public that somehow we are ramming something through. You have had, I tell the gentleman, and you know you have had, 72 days, at least, to review the bill as it stands today.

Let me repeat the process that I'm sure the gentleman knows well. The Budget Committee will meet. They will report out the bills that are to be reconciled. The Rules Committee will then take them under consideration shortly thereafter and will present a reconciliation bill. We will all see it at that point in time. It will obviously do exactly what the instructions that we adopted in the budget a year ago instructed it to do, and that is to reconcile these bills.

And it will have a fiscally positive effect, in my view. I haven't seen it yet finally, but my expectation is it will have a positive fiscal impact, and we will all see that. But it will be simply following the instructions that the Budget Committee in the budget passed. I don't think the gentleman voted for it; but, nevertheless, the majority of the House did vote for it.

I know that the other body doesn't like majority will. Maybe that is not the case here. But I will tell the gentleman that, yes, he is going to see the reconciliation bill. And as I said, the reconciliation bill, which will be drafted by the Rules Committee after the Budget Committee reports to it, the process that you followed on a regular basis when you utilized reconciliation. We will hope to have as much notice of that particular piece of legislation as possible.

But I tell my friend, again, when he refers to the health care bill, the Senate bill or the House bill, you have had months to review the substance of that bill. You don't like it. We understand it. You're going to oppose it. We understand that as well. But the fact of the matter is you cannot say that you have not had notice of each and every one of its provisions for over 2 months.

I don't have knowledge of that at this point in time; so I can't give my friend a definitive answer. But as my friend does know, that language, or any other alternative language, may not qualify for reconciliation.

It wasn't a translation. It was an accurate reporting of what I said.

As I said, we don't believe that any change in that language--because the gentleman is well aware reconciliation needs to deal with budgetary impact--we don't believe that can be dealt within reconciliation.

Will my friend yield on that issue?

That is an interesting letter. I'm glad you brought it up, because you brought it up in juxtaposition to the issue of the Stupak amendment. What the letter essentially said is, even if you send over the Stupak language and we agree with the Stupak language, we will not waive the Byrd rule.

So even though they agree with the policy, they won't waive the Byrd rule. Why? They want to defeat the bill. We understand that. That is what that letter said. And I think Americans probably, if they knew enough about the process and could take the time to do what you and I do to follow this very closely, they know what is going on.

And, very frankly, it is ironic that 41 Senators will say, notwithstanding the fact that they may agree with the proposition that we put in the bill and sent over to them, that they would not waive the rule to adopt the proposition with which they agree for procedural purposes of defeating the bill.

As the gentleman knows, the language in the Senate bill specifically provides for no government funding. I know there is a dispute because there is a contribution towards policies. But, as you know, the Senate drew language very carefully to ensure that no public funds were spent for or participated in purchasing insurance for abortion services.

In fact, as the gentleman, I'm sure, well knows, the Senate language specifically provides that if those protections are going to be purchased, they must be purchased by separate payment with none, either subsidy dollars or government dollars, that they must be spent out of an individual's personal pocket.

This is an extraordinarily difficult issue not only for the Congress but for Americans generally and for individuals. There is a dispute on this language, he is correct. As he knows, neither side likes the language in the Senate bill. One side, the pro-choice side if you will, for simplification, believes that the language goes beyond the Hyde language. The Catholic bishops believe it is short of the Hyde language. There is a difference of opinion on that. I think the gentleman understands that well. There are other groups which believe that, in fact, the language that is in the Senate bill does, in fact, as I have projected it does, preclude any public dollars from being spent, which is consistent with the Hyde language.

I tell my friend that from our perspective on this side of the aisle, there is no intent nor objective of changing the Hyde language in any health care legislation that is adopted. The President has indicated that is his intent. That is our intent. And that is why we are proceeding in the manner we are.

I think the gentleman correctly states the Senate Parliamentarian's position, and therefore I think the gentleman is correct on that observation. I might say to him, while I do not know the entire thrust of the reconciliation bill, I can guarantee him this: The reconciliation bill will take out that Nebraska provision which offended him, offended me, and I think offended people across America, not because it advantaged Nebraska, but because it advantaged Nebraska unequally.

I think the gentleman is going to be pleased that Nebraska will be treated like every other State; and, in fact, every other State will be advantaged to the same extent that the Senator wanted to make sure that Nebraska was advantaged. But the Nebraska provision to which the gentleman speaks, and which all of us have felt was inappropriate, will be changed.

Will the gentleman yield?

I thank the gentleman for yielding.

First of all, let me say to the gentleman from Virginia that Maryland and Virginia and a lot of other States think the bill we passed through this House on algae is critically important to the health of the Chesapeake Bay. I'm sure the gentleman shares that view with me, a critically important bill for the health of our bay and its estuaries. I happen to live on a river, the Patuxent River, and the gentleman's State feels the Chesapeake Bay is a major asset of his, as well and of his State. So I know that he is pleased that we passed that bill. It was an important bill.

We are here trying to make sure that we have the time to get ready to pass a major historic piece of legislation that Teddy Roosevelt set us on the path to accomplish over a century ago so that we have accomplished, I think, a significant piece of legislation today.

Let me say that in addition to that, we believe the jobs agenda is very important. We passed a bill through here last week. The Senate passed a bill over to us. We are in the process of considering those bills. And I want to say to the gentleman that I share his view, that we look forward to working together to try to get Americans back to work.

I won't go through the litany of how we got here. The gentleman has heard it before. But I will tell the gentleman this part of it, that in 4 months of the last administration, as he well knows, we lost over 700,000 jobs per month. During the last 4 months here, we have lost 27,000 jobs per month. That is a 95 percent reduction in the loss of jobs. Surely anybody who is fair-minded will say that is progress. It is not success. We need to create jobs. We have lost 8 million jobs over the last 2 years.

People are hurting in America. Families are hurting in America. We need to get people back to work. We are going to keep continuing to make sure that when they can't find a job because they are not available that they don't go hungry, that they can support themselves and their families, not to the level that they would if they were working, but certainly support themselves in a way that we think is humanitarian. So those are included in those bills, as the gentleman knows.

I will tell the gentleman that we feel keenly the pain of the American public confronting this historic great recession, the deepest recession that we have seen in 75 years. The gentleman knows that in the decade of the 1990s, we saw the best economy that you and I have seen in our lifetime, and I, of course, am very substantially older than you are. That is an admission against interest, but it nevertheless is true. So I will yield back to the gentleman saying we share your view. We want to continue to work on this jobs agenda.

Madam Speaker, I yield to the gentleman from Maryland, the majority leader, for the purposes of announcing next week's schedule.

I thank the gentleman.

Madam Speaker, I think it has been well reported that the majority plans to try to use the reconciliation process to ram a health care bill through this House and the one across the Capitol, and we also know from the reports that it is imperative that this House and the House majority and members of the majority must first pass the Senate's health care bill before any other action on a reconciliation measure is taken. The gentleman has announced, Madam Speaker, that all this will take place next week.

I wonder if the gentleman could give us a little bit more clarity as to the schedule and perhaps the need for Members to keep their schedules flexible through the weekend.

I thank the gentleman.

Madam Speaker, all I asked was whether the Members should be prepared to be here over the weekend.

I thank the gentleman.

Madam Speaker, without having to delve back into the debate on what makes this health care bill different than the other times reconciliation was used, I think the American people are those that see the obvious.

But I would ask the gentleman, since he says we will be employing regular order here in response to the President's request that there be an up-or-down vote in this House, could the gentleman give us some enlightenment as to the suggestion surrounding something called the ``Slaughter solution'' and whether, in fact, Members can have an up-or- down vote, clean up-or-down vote on this bill, or whether there will be some procedural maneuvering, self-executing rule deeming the Senate bill passed? If he could give us some indication of what we may be able to expect next week.

I thank the gentleman.

Madam Speaker, I would like to ask again, consistent with the President's request that there be an up-or-down vote on the Senate bill itself, can we expect an up-or-down vote on the Senate bill itself?

I thank the gentleman.

Madam Speaker, I know the gentleman would like to speak to the Senate. We are trying to focus on the House here and what the vote will look like. Since the gentleman has indicated that the President and he and all of America would like to see a vote up or down in this House as well, I would ask the gentleman whether we can expect an up-or-down vote on the health care bill itself or not.

I thank the gentleman.

I take that to mean that there is a likelihood that we will not see an up-or-down vote on the Senate bill itself and that perhaps these reports of a concept called the Slaughter solution in which the majority will deem it passed, the Senate bill, in some type of procedural move, that maybe the public can expect that to happen. I know that the gentleman does not think that that represents the kind of vote that the American people expect, but I take that to mean that that certainly is a possibility.

Madam Speaker, I would ask the gentleman whether he expects the House to have 72 hours to review whatever legislation comes to the floor next week.

I thank the gentleman.

Again, I am a little bit taken aback that now the 72-hour rule has been completely cast aside, since no one in this House has had an opportunity to see what is in the reconciliation bill, at least I speak for the Members on our side of the aisle that have not had an opportunity to see what is in the reconciliation bill, and I imagine would have some of the provisions that the President in his plan, not the legislation, put up online prior to the Blair House meeting.

Again, it is rather disturbing, Madam Speaker, that the 72-hour rule has now been completely cast aside.

I thank the gentleman.

I guess the gentleman may begin to understand why it is some on our side of the aisle, including yours truly, depict this as ramming the bill through. I mean, if we can't even get a commitment from the gentleman, as well as the Speaker had indicated prior, that we would have 72 hours to review any piece of legislation that comes to the floor, I think that that is consistent with the depiction that perhaps there is a ramming through going on.

Madam Speaker, I tell the gentleman again, we are expecting, as he said, to see a new bill, a reconciliation bill on the floor next week. That bill, no one on our side of the aisle has had an opportunity to see. Perhaps the Congressional Budget Office has had 72 hours to see it, but we haven't. No one, I believe, has had 72 hours in this body to see the reconciliation bill. That is the bill that I am speaking to.

I thank the gentleman, Madam Speaker.

And, again, it seems as if we are not going to get an up-or-down vote on the Senate bill in the House, but we will be voting on a reconciliation measure. And the instructions that were included in the budget bill are not legislative text. That is my point, Madam Speaker.

But since we are not going to, since we cannot be guaranteed a 72- hour period for review, Madam Speaker, nor can the American people realize their right to know during the 72-hour period, I would ask the gentleman whether the reconciliation package will contain the House language referred to as the Stupak-Pitts language.

I yield.

I thank the gentleman.

I would just like to, Madam Speaker, read a recently reported statement by the gentleman in which he said, it is clear that the matter of abortion cannot be dealt with per se in the reconciliation bill; so we are pretty much going to have to deal with it as is at this point in time.

I ask the gentleman if that is a correct translation of his remarks today.

I yield.

So, Madam Speaker, I would take that to mean the Stupak- Pitts language will not be in the reconciliation package.

I thank the gentleman.

I would say to the gentleman that I'm sure he has seen a letter that has been signed by 41 Senate Republicans in which they indicated they would oppose any effort to waive the so-called Byrd rule during the Senate's consideration of the reconciliation bill, which means to me, Madam Speaker, it is far from certain that the Senate will actually pass the bill when the House sends it to the Senate. And, in fact, I would just call that to the gentleman's attention that we stand ready to continue to work in another direction, but it seems to me very much in doubt with this bill.

I will yield.

Madam Speaker, I thank the gentleman.

I would indicate that in that letter there is no specific language that directly relates to an abortion provision or any other. And the gentleman I know agrees that this country has had

a longstanding tradition of denying government funding for abortion services. That is the very important issue behind the Stupak-Pitts language. In fact, 45 Senators voted in favor of that language, just as a majority of this House voted for that language. That is why it is so important, I think, that the Members, as well their constituents, understand that you will not be including the Stupak-Pitts language with the protection that will guarantee no government funding goes toward abortion services, which is why I bring the point up, Madam Speaker.

Madam Speaker, I say to the gentleman, if that is his interpretation and belief that this language in the Senate bill protects that longstanding tradition, that may be. However, the U.S. Catholic Bishops as well as Right to Life have strongly, strongly opposed the language in the Senate bill as not having the adequate safeguards to deny government funding of abortion services.

I yield.

I thank the gentleman for his clarification of his intent. I would just say again the Catholic bishops, as well as the right-to-life organizations, stand very much in opposition to this language. I stand with them.

I would say to the gentleman, Madam Speaker, that the Parliamentarian in the Senate has ruled that the Senate cannot take up the reconciliation package until the Senate-passed health care bill is signed into law. That is the bill, Madam Speaker, that contains provisions such as the Cornhusker kickback. And I would ask the gentleman if it is his position that that would be the case that this House must pass the Senate bill first, it must be signed into law before the Senate can even take up the reconciliation package.

I yield.

I thank the gentleman.

In closing, Madam Speaker, I look forward to working with the gentleman in trying to refocus the issue of this House on getting Americans back to work. And the gentleman did indicate that there will be further action in what he is calling a ``jobs agenda.'' Certainly that didn't happen today, as we are here already having finished the legislative business of the day and only having considered a bill dealing with algae.

I only mention this because 52 percent of Americans do think that jobs and the economy are the Nation's top issue; and, by contrast, only 13 percent of Americans think that health care is our Nation's top priority. This was according to a CBS-New York Times poll.

So I do thank the gentleman for his willingness, hopefully, to get back to the question of how we get America back to work.

I thank the gentleman for his view of history. I also would like to say to the gentleman, Madam Speaker, I share his commitment to the preservation of the Chesapeake Bay. I do, however, think that the American people are most interested in seeing us get back to the business of focusing on the economy. That is why I

raised the issue of our being here today, not doing anything today to promote job creation.

And as far as any quarrel we may have with history as to why we got or how we got to where we are today, I would just like to quote to the gentleman in closing Winston Churchill's speech to the House of Commons June 18, 1940. And he said, ``Of this I'm quite sure, that if we open a quarrel between the past and the present, we shall find that we have lost the future.''

And with that, Madam Speaker, I yield back.

Mr. President, I rise to speak on the same bill the Senator from Michigan spoke on, but I ought to compliment him. He is most known for being a leader in the area of military affairs because of being chairman of that committee. But for sure, for years he has been also a chairman of the Permanent Subcommittee on Investigations and so much of the work that comes out of this legislation comes out of his work on that committee. I think he ought to be commended for the work he does through investigations there as well.

I am happy to join Senator Levin and Senator McCaskill in cosponsoring the Incorporation Transparency and Law Enforcement Assistance Act. This bill requires States to obtain corporate ownership information at the time of formation and help law enforcement investigate shell companies which are set up for the sole purpose of conducting illegal activities.

Earlier this year, Senator Levin joined me when I introduced a bill that we entitled the Hedge Fund Transparency Act. I said then that the major cause of the current financial crisis is a lack of transparency among hedge funds. That same thing can be said about corporate ownership. In too many States, very little ownership information is needed to register a corporation, and the actual owners of that corporation are often hidden behind the agents and lawyers who register the corporation on behalf of owners.

One example of how these criminals take advantage of this lack of transparency is the practice of setting up and using shell corporations to hide corporate ownership information. These individuals set up shell corporations that have the benefits of corporate registration and function legitimately. But these same corporations are being used to hide illegal activities. These activities include a variety of elaborate schemes to disguise money laundering, tax evasion, and securities fraud. Law enforcement officials from the Department of Justice and the Internal Revenue Service have testified before Congress about how the lack of corporate information has been a very significant impediment to their ability to conduct criminal investigations.

For example, when a corporation is involved in illegal activities, the legitimate corporate owners are often hidden, making it difficult for law enforcement agencies to determine who is actually responsible. That, in turn, makes it difficult to bring the real culprits to justice. States differ as to what corporate information is required to register a corporation and how long it takes to process that paperwork. Most States require only the name of the company, the name and address of the agent, a signature, and, of course, a fee.

In fact, the Government Accountability Office found that most States will take the time to verify that the fee has been paid but do not take the time to verify the identities of the incorporators, officers, and directors. Perhaps even more important, no State checks the names of incorporators, officers, or directors against criminal records and the watch lists that sometimes Federal agencies have. As a result, we have no way of knowing if the beneficial owners are criminals, or they could even be terrorists, for that matter. Many States now have introduced electronic registration procedures that enable a new corporation to be registered on line within 24 hours. States offer this expedited service in exchange for yet an additional fee. In fact, there are two States where an individual can form a corporation within 1 hour of making the request. The promise of quick registration and little oversight has proven to be a very popular revenue generator for some States. But this process is not necessarily in the best interest of protecting our financial system or our national security.

Some States have raised concerns that if their incorporation laws are tightened, corporations will simply register in other States where there are less stringent registration requirements. This bill is to take care of that problem. It is designed to bring some sanity to this whole process. It makes the registration requirement uniform over all 50 States, as well as the District of Columbia. This way corporations will simply not be able to ``shop around'' for the State with the most relaxed standards and simply play one State against the other. Further, much of the information set forth in this bill is already required by the European Union and many offshore jurisdictions. This bill simply updates our laws to match those of other nations combating the same problems with money laundering, tax evasion, and terrorist financing.

The legislation I am introducing today with Senators Levin and McCaskill requires that States obtain a list of the beneficial owners of each corporation or limited liability company formed under their laws before the corporation is registered in that particular State. The bill also requires that States ensure required information is updated annually and that States provide the information to civil or criminal law enforcement agencies upon receipt of a subpoena or summons. This also establishes a civil penalty of up to $10,000 and a criminal penalty of up to 3 years in prison for providing false information.

Additionally, the bill would exempt publicly traded companies that are already regulated by the Securities and Exchange Commission. Further, the bill requires non-U.S. beneficial owners to provide certification from an in-State agent that verifies the identity of the beneficial owner.

Finally, this bill requires the Government Accountability Office to complete a study of State beneficial ownership information requirements for in-State partnerships and trusts and gives the States until October 2011 to require beneficial ownership information for the corporations and limited liability companies formed under their laws.

I urge colleagues to cosponsor and support this legislation as we try to bring greater transparency to our financial system.

Madam Speaker, I rise in support of the bill. Madam Speaker, I yield myself as much time as I may consume.

Madam Speaker, I want to join with my colleague from Missouri in supporting this bill. I really think that we need to see more bills like this. Plain language sounds so simple, but for so long the American people have been asking for Washington to do what it tells everyone else to do, and that is reform itself. You shouldn't have to hire a lawyer to be able to understand what the government is telling you or doing, and sadly that has been historically the fact. And I want to thank the author of this bill for bringing this forward.

I hope that this is the beginning of the melting of the gridlock of always trying to not change the way Washington operates. I hope this is the beginning of saying, before we ask the private citizens to change the way they live their lifestyle, the way they act, before we start asking the private sector to reform their way of operation, we should lead through example by changing the way Washington operates and the way the Federal Government relates not just to its services but to its constituency. And I think this bill does that.

I think one of the greatest frustrations that we find in the American people today is the fact that they feel that Washington is disconnected. And a bill like this points out how disconnected, that when we can't even send out notices to inform our citizens of what is going on, what they need to do, or what is possible--we can't even do it in plain language. We have to do it in a legalese that may sound good here in Washington, but it is not understood out in the real streets of America.

So I ask my colleagues, again, to use this as an example of just the first of many. And so we can look at not just reforming how we communicate, but how we govern, how we represent, and how we tell the American people we really do finally care enough to change the way we are operating, and that for once, Washington is going to lead through example rather than edict.

I would again compliment the author and the Representative of the majority for bringing this forward.

I reserve the balance of my time.

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

Again, I would like to thank the author. And let me clarify: there are many of us who could explain what the turkeys are talking about in Texas, but I don't think it is appropriate on this floor.

But I have to say that you are right, so much of this documentation is written where the public can't understand it. And, to be blunt about it, as somebody who has worked in government since I was 24, they don't want the public to understand. They purposely think that legalese and elite discussion and text is some way to be able to safeguard traditional government structures; and I think that this breaks down that, and I think you would agree.

I will say this as a former mayor. If a city manager sent out a letter to a constituent of a mayor or city council member in the manner that the Federal Government sends it out, that city manager wouldn't be employed for very long. I think that is the same standard that we should hold for the Federal Government. If it isn't appropriate for our council members or mayors or our school district representatives to send out those kinds of information, to have that kind of relationship between the constituency and the taxpayer and the government, then, doggone it, it shouldn't be appropriate for the Federal Government to think that somehow we are so high and mighty that we can't break down and finally start using plain speech and straight talk. And I think that is what your bill starts with, and I think it is a step in the right direction. I just hope to see us follow through.

And I will say this personally: my wife is a tax consultant, and I would love to see the day that we make the IRS and tax consultants obsolete so I can see more of my wife during certain times, put them both out of business. And maybe this is one step there.

I yield to the gentleman from Iowa.

Reclaiming my time, I would actually even ask the gentleman to take a look at the fact that it is sad that in the United States, that if you go to the translated interpretations of our government regs, they tend to be much more simply put and much easier to understand than the so-called English legalese that is being put out there. So I think the challenge is really one that is long and weighty, and so I thank you very much for it.

I reserve the balance of my time.

Announcement By the Speaker Pro Tempore

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

I just want to use this instance to thank Chairman Towns. At a time when the American people are crying out for bipartisan effort, I think his leadership on a very critical committee, the Oversight Committee, has been stellar in a manner that the rest of America I think would love to see the rest of this town operate as well as your committee does, Mr. Chairman. And thank you very much for that bipartisan effort, including everyone in the process.

I reserve the balance of my time.

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

Again, I call on all of us to vote together to support this bill and to use it as a marker for more progress at clarifying and opening up the government process and allowing the average citizen to participate. And the only way to do that is for Washington to change the way we do business.

I yield back the balance of my time.