Floor Statements

Mr. President, for the Committee on Armed Services I report favorably the following nomination lists which were printed in the Records on the dates indicated, and ask unanimous consent, to save the expense of reprinting on the Executive Calendar that these nominations lie at the Secretary's desk for the information of Senators.

I suggest the absence of a quorum.

Reserving the right to object.

Mr. President, I do intend to object to the resolution for a number of reasons.

First of all, the resolution prejudges the very conclusion that the resolution

says it wants an investigation to determine. It calls for an investigation, but then it already concludes that the President violated the law. That is not what I call an impartial investigation. That is a resolution which reaches a conclusion prejudging the very investigation it calls for.

There are other problems here as well. My good friend from Ohio said the President violated the law because he didn't give 30 days notice to Congress. Indeed, the National Defense Authorization Act provides for 30 days notice. But it also is a matter of fact the President said, when he signed the National Defense Authorization Act, that if there were necessary circumstances where there were negotiations going on with foreign countries or foreign people in terms of preserving or saving an American life that he is not going to be bound by 30 days notice. He said that at the signing ceremony.

You can't change a law at a signing ceremony, but what you can do at a signing ceremony is what this President did: At the very signing ceremony for the very act the Senator is relying on, the President put us on notice that there could be circumstances under which he could not give 30 days notice to the Congress.

When he did not give 30 days notice in this circumstance, he did it on the advice of counsel. The Department of Justice told him that he has powers, as Commander in Chief, under article II. That is part of the law of this land. The law of this land includes the National Defense Authorization Act. As a matter of fact, the Presiding Officer is very much aware of the fact that the National Defense Authorization Act, of which he is so important a part, is part of the law of this land. But so is article II of the Constitution, which gives the Commander in Chief certain powers, and the Department of Justice said he could use those powers to not give 30 days notice because it could jeopardize the life of an American citizen.

Maybe there are those who argue that is OK, follow the authorization law instead of article II, because the authorization law somehow or another has precedence over article II, which it doesn't. Article II is part of the Constitution. But the authorization act itself was said to be subject to article II powers of the President when he signed the very act.

So what happened? The President decided, because of the exigencies of these circumstances--whether you agree or don't agree with the details of the deal, that is one issue. People can disagree with that all they want. But as to whether once the President decided he was going to make that deal and save that life and not jeopardize that life by waiting 30 days, at that point the question is, was that illegal? That is what a court could decide if it so chose as to whether a President could use article II powers in order to act quickly to save an American life.

I think that prejudging this kind of an issue with the kind of investigation that would prejudge it--because that is part of the resolution itself--is not what this Senate should be doing.

By the way, during that 30-day period the President would have had to have not just waited 30 days; he would have also had to have made all kinds of detailed and substantive classified notifications. He would have had to have made certain kinds of findings, detailed statements, the basis for the transfer release, and explanation of why the transfer release is in the national security interest of the United States, a description of any actions taken to mitigate the risks. He would have had to have done all that before he was able to execute the transfer of an American citizen to the safety of this country.

The President did do all of those things immediately after he made the decision to act. So we got all of that notification that is required by law, but we didn't get it 30 days in advance because of the jeopardy it would have created to American life.

Again, people are going to disagree as to whether this agreement should have been reached. That is fair discussion, fair game for debate, but that is a very different issue as to whether we should prejudge as to whether the President, who acted under his article II powers--and told us he might do so when he signed this bill--acted illegally, and that is what this resolution says happened--that the President acted illegally. It prejudges the investigation.

I think for a number of reasons it is inappropriate for us to adopt this resolution, so I will object.

I thank the Presiding Officer.

Mr. President, first of all, look at what the resolution says. When you read the resolution, it says: Congress should investigate the actions taken by President Obama and his administration that led to the unlawful transfer of such detainees.

So when my friend says it doesn't prejudge that it was unlawful, by its very terms it says ``investigate the actions taken by President Obama that led to the unlawful transfer of such detainees.'' That is what the resolution says.

Secondly, the point that the resolution makes no reference to article II--my friend says that, and he is accurate in that regard. That is the problem. What is missing is a reference to what the President was advised he could do--which is act under his article II powers--and what the President said he would do when he signed this bill.

Third, the fact that we were notified of the bin Laden capture--I don't know how many of us were notified, but it certainly wasn't 30 days before he was captured, if it was at all. That is the issue here-- not whether the President should have notified--by the way, I think he could have done a better job of notifying Congress. That is not the question. The question is whether he acted illegally, as the resolution says he did, because he didn't follow the 30-day notice requirement, which, in his judgment and I think a lot of other people's judgment, including mine, would have jeopardized the life of an American citizen. So he acted under article II powers to avoid that jeopardy, and there is no reference to article II in here. There is no reference to the fact that the Department of Justice informed the President he could act without abiding by a 30-day provision if he acted under his article II powers to save the life of an American citizen.

There are many reasons that this resolution--there are many problems that it seems to me this resolution does not fairly address or resolve, and that is the reason I object.

One other issue; that is, my friend from Ohio made reference to James Clapper, who is the Director of National Intelligence. Well, Director Clapper supports the deal that was made relative to this transfer, as does General Dempsey, the Chairman of the Joint Chiefs of Staff, and Admiral Winnefeld, the Vice Chairman of the Joint Chiefs.

I yield the floor.

Mr. President, I ask unanimous consent that the time until 4:45 p.m. be equally divided between the two leaders or their designees and that at 4:45 p.m. all postcloture time be expired and the Senate proceed to vote on the confirmation of Calendar No. 572, with all the provisions of the previous order remaining in effect, and that the Senate then resume legislative session.

Mr. President, with this agreement there will be two rollcall votes at 4:45 p.m., first on the confirmation of Peter Kadzik to be Assistant Attorney General and second on cloture on the motion to proceed to H.R. 4660, the House Commerce, Justice, Science Appropriations Act.

Madam President, I ask unanimous consent that at a time to be determined by the Majority leader, in consultation with the Republican leader, the Senate proceed to executive session to consider Calendar No. 9, treaty document 112-1; that the treaty be considered as having advanced through the various parliamentary stages up to and including the presentation of the resolutions of ratification; that any committee declarations be agreed to as applicable; and that the resolution of ratification be agreed to.

Madam President, I now ask unanimous consent that I be recognized immediately following the three voice votes that we expect coming up now.

Madam President, the unanimous consent proposal that I just made a few moments ago that was objected to by the Senator from Kentucky related to the need of the Senate to take up the ratification of five tax treaties that were approved by the Committee on Foreign Relations on a unanimous voice vote, including a revised U.S.- Switzerland tax treaty that was amended in 2009, with a protocol enabling the United States to obtain more information--more information from Switzerland about U.S. taxpayers with hidden Swiss bank accounts.

We have been trying to close down these offshore tax havens and the way in which they aid and abet American tax avoidance for years. Here we have a tax treaty which will help us get more information about the American taxpayers who are trying to avoid paying their taxes to Uncle Sam, and we get an objection to the ratification, even to taking up the ratification of this treaty.

American taxpayers have had it. I would say have had it up to here, except that will not come across on the record. They have had it with profitable corporations and wealthy individuals avoiding taxes through the use of tax havens, shell companies, and tax avoidance schemes. The American people want us to end it. We ought to legislate an end to it.

By the way, it is long overdue. We ought to close the tax loopholes which are used so the most profitable corporations in this country avoid paying taxes by shifting their intellectual property to shell corporations that they create in tax havens or by other kinds of tax dodging.

We can put an end to it. We can close those tax loopholes. We ought to do it but that is not what should be before us today. What should be before us today but for that objection we had from the Senator from Kentucky, are the tax treaties which have been approved by our Foreign Relations Committee, one of which was signed 4 years ago.

We have all heard about Swiss bank accounts that are used to hide money from Uncle Sam. Back in 2008, in a bipartisan report I issued with then the ranking Republican on the Permanent Subcommittee on Investigations, Norman Coleman, with bipartisan support, we disclosed that UBS, the largest bank in Switzerland, had opened as many as 52,000 bank accounts, with about $20 billion in assets, for U.S. citizens who had hidden their accounts from our Treasury.

UBS later signed a deferred prosecution agreement with the U.S. Treasury and the Department of Justice in which they admitted helping; that is, aiding and abetting, U.S. clients evade U.S. taxes. We are talking about UBS now. They paid a $750 million fine. They turned over the names of about 4,700 U.S. clients who had hidden accounts in that bank.

UBS was not alone. Earlier this year in a bipartisan report--this is not a partisan issue--in another bipartisan report that I issued with my current ranking member, Senator McCain, the Subcommittee showed that Credit Suisse, Switzerland's second largest bank, had been engaged in the same type of aiding and abetting. Credit Suisse had opened about 22,000 Swiss bank accounts for U.S. account holders, with up to $12 billion in assets, that were undisclosed to U.S. tax authorities. After its wrongdoing was exposed, Credit Suisse pled guilty to facilitating U.S. tax evasion and paid a fine of about $2.6 billion.

In both those cases, the Swiss banks had quietly sent Swiss bankers to do business on U.S. soil, opening accounts, sometimes in the name of offshore shell corporations, arranging all of that; bringing in cash, by the way, from Switzerland; and slipping account statements between magazine pages to their U.S. clients. In order that there not be anything visible at an airport or wherever, they put the statement of their U.S. account holder in a Sports Illustrated magazine and would hand the magazine to their clients. How surreptitious can you get?

We also heard about how U.S. clients who visited Credit Suisse in Switzerland rode in a secret, remotely controlled elevator to a room with no windows and reviewed documents that were then shredded. Why? Why all of that secrecy and surreptitiousness? They wanted to show those U.S. clients, to dramatize, just how secretly the Swiss banks operate and how those Swiss bank accounts would be hidden from U.S. authorities.

But after years and years of effort, we found out what was going on, and we made it public. Even Switzerland could not defend what its banks were doing.

So in 2009, Switzerland agreed to strengthen the U.S.-Swiss tax treaty to enable us to obtain more information about secret Swiss bank accounts opened by U.S. taxpayers.

It is still not voluminous information which we are going to get under that tax treaty, but it is more information. It would give us a better chance of finding the tax dodgers, those U.S. citizens who try to avoid paying their share of taxes and dumping the tax load on all of their fellow citizens, by the way, who have to pick up the added burden.

So with the existing U.S. treaty--we already have a tax treaty with Switzerland, the one that we want to amend--it requires us to establish something which is very difficult to prove; that is, tax fraud, before Switzerland would hand over the information on U.S. account holders with Swiss bank accounts.

We have treaties with all kinds of countries. No other treaty we have has that standard; that we have to show tax fraud before we can get information from a foreign bank. So the revised tax treaty, approved by the Foreign Relations Committee, again unanimously, would enable the United States to obtain information from Switzerland that ``may be relevant'' to

the ``administration or enforcement'' of U.S. tax laws.

That is the same standard, ``may be relevant,'' that has been in effect for decades in the United States when the Treasury seeks to obtain information in a tax inquiry about American citizens from their own banks. That standard has been upheld by the U.S. Supreme Court.

I am not going to go through all of the cases that have upheld this standard but there are two direct Supreme Court opinions on the subject that say it is proper for Congress to legislate a standard of Treasury getting information from banks about our people that ``may be relevant'' to the requirement that taxes be paid.

The standard comes from a 1954 Federal statute that authorizes the IRS, for the purpose of examining a tax return or determining a person's tax liability, ``to examine any books, papers, records, or other data which may be relevant or material to such inquiry.'' The statute is 26 U.S.C. Section 7602(a)(1).

Thirty years ago, the Supreme Court upheld that standard in a 1984 case called United States v. Arthur Young & Co., 465 U.S. 805. The Supreme Court wrote:

In seeking access to [a corporation's] tax accrual

workpapers, the IRS exercised the summons power conferred by

Code Sec. 7602, which authorizes the Secretary of the

Treasury to summon and `examine any books, papers, records,

or other data which may be relevant or material' to a

particular tax inquiry. . . .

The language `may be' reflects Congress' express intention

to allow the IRS to obtain items of even potential relevance

to an ongoing investigation, without reference to its

admissibility. The purpose of Congress is obvious: the

Service can hardly be expected to know whether such data will

in fact be relevant until it is procured and scrutinized. As

a tool of discovery, the Sec. 7602 summons is critical to

the investigative and enforcement functions of the IRS. . . .

In short, the Supreme Court upheld the authority of the IRS to request information that ``may be relevant'' to a tax inquiry, and described the ability to examine that information as ``critical to the investigative and enforcement functions of the IRS.''

Last week Senator Paul indicated on the floor that the IRS can obtain information from a U.S. bank only when it establishes ``probable cause'' that the accountholder was cheating on their taxes. In fact, the U.S. Supreme Court rejected that approach over 50 years ago in a 1964 case called United States v. Powell, 379 U.S. 48, in which the Court wrote: ``[T]he [IRS] Commissioner need not meet any standard of probable cause to obtain enforcement of his summons.''

The revised U.S.-Swiss tax treaty would instead apply the same statutory standard to Americans with bank accounts in Switzerland as already applies to Americans with bank accounts in the United States. Using the same standard makes perfect sense. Otherwise Americans with Swiss bank accounts would have a greater right to stymie IRS information requests than Americans with U.S. bank accounts.

In addition, the Senate has already approved other U.S. tax treaties using the relevance standard. They include a 1999 tax treaty with Denmark, a 2007 tax treaty with Belgium, and a 2008 tax treaty with Canada, among others. Those tax treaties already treat Americans abroad in the same way as Americans at home.

In contrast, Switzerland has long been an exception in need of correction. Back in the 1950s, the Swiss somehow managed to get the United States to agree to make it harder for the IRS to scrutinize Americans with Swiss bank accounts than Americans with U.S. bank accounts, which helps explain why so many hidden bank accounts ended up in Switzerland.

The UBS and Credit Suisse bank scandals show it is long past time to end the Swiss exception.

So if we just keep this current treaty, without modifying it, we are actually giving a standard to the Swiss that would allow them to keep information away from our Treasury that is not permitted in our own banks or to banks in any other country that we have a tax treaty with.

Why would we want to preserve a treaty standard that the Swiss themselves have already agreed to replace with a better standard in terms of tax collection? I mean, if the Swiss agree to a standard which gives us better information, why would we want to keep in place a treaty which denies us that information, denies revenue to the Treasury, creates a double standard? If you want to avoid paying taxes, go to Switzerland and you will have a better chance of evading your taxes than if you stay in the United States. Why would we want to give an incentive like that?

That is what we are doing. As long as we have the current treaty in place and do not ratify the proposed treaty, that is exactly what we are doing.

It is so unfair to give special treatment to Americans who send their money to Switzerland, compared to Americans who keep their money right here at home. It is one thing to advocate lower taxes--that is one thing--but it is quite another to advocate policies that would help U.S. taxpayers use Swiss bank accounts to hide their assets and to offload their tax burdens onto the U.S. taxpayers who are not trying to dodge paying taxes.

It has been now 3 years, as Senator Menendez has pointed out, since the U.S. Senate has ratified a tax treaty. Ratifying this treaty would finally bring the Swiss into alignment with U.S. policy and U.S. tax treaties with other countries. Once ratified, it will take effect from the date it was signed in order to help stop tax dodging from 2009 forward. It is long overdue that we ratify this.

I am very disappointed there has been another objection by Senator Paul to proceeding to ratify--or to at least consider the ratification of this treaty. I believe Senator McCain will try to come later, if he can, to also speak in support of bringing up these treaties for debate.

I yield the floor.

If the Senator from Montana would yield for a question, is there any kind of order established regarding whom would be recognized at this point?

The Senator from Oklahoma and I thought we would be recognized 1 hour ago. We understood the exigency that there would be some delay.

If we could establish an order--apparently Senator Grassley is waiting to be recognized as well.

May I ask the Senator from Montana how long he would be speaking? Would it be in order?

Yes.

I thank the Senator.

I would say about 7 or 8 minutes.

Before the Memorial Day recess, the Armed Services Committee voted 25 to 1 to favorably report out S. 2410, the National Defense Authorization Act for Fiscal Year 2015.

The bill is on the calendar, and both it and the committee report have been filed and are available online and in print.

As the chairman and ranking member of the Armed Services Committee, Senator Inhofe and I hope to bring the bill to the Senate floor as soon as the Senate schedule allows. I have talked with the majority leader about it, and he says he is going to do his best, but there are a number of things that we can do to be helpful on this effort.

Neither of us wants to be in the position that we were in last year when Senators were unable to take up the bill and vote on any amendments to this important legislation because of how close it was to the end of the session when it was brought up.

Both of us are on the floor today urging Senators who are considering amendments to the bill to file them before the July recess.

We would then be in a position--both of us, with our staffs--to work with Senators to clear as many amendments as possible for inclusion in a manager's package and to begin identifying relevant amendments that would be likely to be contested.

Now, we believe if we can develop a list of a few relevant amendments that would require votes to start with when we first take up the bill, it would help us in getting to the floor. I believe that is the case, given the circumstances the Senate is in.

We have an awful lot of work ahead of us. We don't have a long time to do it. If we were able to put together a proposal to the leaders, that we have not only the bill, which is obviously on the calendar we have worked on a bipartisan basis to pass with the 25-vote majority-- which is minus 1 vote in the Senate--it would be our belief this would have greater practical appeal to our leaders.

We think this approach would enable us to reach unanimous consent as to an initial set of relevant amendments to be considered so we could then move forward expeditiously when the Senate returns to the bill. I hope our colleagues will help us in this matter.

I think it is in everybody's interest and it is in the national security interest that we have a bill before us. We have to pass a bill in order to go to conference with the House or else we are put in the same kind of position we were in last year, where we simply present what amounted to a conference report before a bill had ever been truly debated and sent. We and our staff, working with colleagues, put together what amounted to a conference report, which was not a conference report in technical terms but was in effect the work product of both the Senate and the House and our committees by process of negotiation.

So our colleagues can be very helpful in getting this bill to the floor, meeting the concerns of our Nation and doing what we should be doing for our troops and our families.

I yield the floor.

If the Senator will yield.

I thank Senator Grassley for his patience.

Senator Inhofe and his staff worked extraordinarily well with us on this side of the aisle. It is a bipartisan bill. It is a bipartisan committee. Senator Inhofe has helped in a very important way to maintain this bipartisan tradition of our committee. I thank him for the remarks, and I thank him and his staff.

I hope our colleagues will listen to what we both are urging them to do. Let us take a look at the amendments now, instead of waiting and waiting and waiting. Because if we look at amendments now, we increase our chances of getting this bill to the floor earlier rather than later.

I thank the Presiding Officer and my friend from Oklahoma.

Mr. President, I would like to announce for the information of the Senate and the public that the Permanent Subcommittee on Investigations of the Committee on Homeland Security and Governmental Affairs has scheduled a hearing entitled, ``Conflicts of Interest, Investor Loss of Confidence, and High Speed Trading in U.S. Stock Markets.'' The Subcommittee hearing will examine conflicts of interest in the U.S. stock markets and the impact of such conflicts on consumer confidence, including in the context of high frequency trading. In particular, the hearing will focus on the conflicts of interest that arise between the obligation of brokers to provide their customers with best execution of their orders to buy or sell securities, and the brokers' receipt of payments from other brokers for order flow and rebates from some trading venues for placing those orders directly. Witnesses will include representatives of stock exchanges, brokerage firms, and institutional investors, as well as a securities market expert. A witness list will be available Friday, June 13, 2014.

The Subcommittee hearing has been scheduled for Tuesday, June 17, 2014, at 9:30 a.m., in Room 216 of the Hart Senate Office Building. For further information, please contact Elise Bean of the Permanent Subcommittee on Investigations at 224-9505.

Mr. President, in the fall of last year, Adrian College in Adrian, MI, made an announcement that received national attention. Adrian, one of the finest private liberal arts colleges in America, made a promise to prospective students: Beginning this fall, incoming students who graduate from Adrian carrying student loan debt and are unable to find a job that pays above a set income will be eligible for support from the college to pay part or all of that student's loan payments. The program, known as AdrianPlus, will ensure that students who are not able to find good-paying jobs after graduation will still be able to begin their work careers without facing crushing debt payments all alone.

This announcement was notable for two reasons. The first is that it represents a visionary choice on the part of President Jeffrey Docking and the rest of Adrian's leadership. I am grateful to them for showing the kind of leadership that makes Adrian a proud example of my State's outstanding higher education institutions. Adrian has long been recognized not just for the quality of its instruction, but for its efforts to make that education accessible and affordable, and this is just the latest example of the school's forward thinking.

The second reason this announcement was so notable is that it was so necessary.

As President Docking said in announcing the program, ``Student debt load continues to be a national concern.'' That is surely the case. According to the Project on Student Debt, nearly two-thirds of graduates from Michigan colleges and universities leave school with student debt. They owe an average of more than $28,000. The rising tide of student loan debt threatens to overwhelm the financial futures of these graduates before they can even get their working lives started. And the looming prospect of heavy loan debt threatens to keep many young people from even reaching a college campus.

Adrian College's program will not completely erase this problem, but it is a good start. Likewise, no single piece of legislation will make college more affordable, increase access to education for middle-class families, or eliminate the mountain of debt many students carry. But it is time for us to start taking some steps in the right direction. A number of Senators have introduced or are working on student loan legislation, including legislation allowing students to refinance their debt at lower interest rates. I believe the Senate should take up, debate and pass legislation to lighten the all-too-formidable load. We should explore other ways to ensure that college education is indeed affordable to all.

Study after study shows that a college education makes an enormous difference in allowing Americans to pursue rewarding careers. But if we can not ensure that all Americans have access to higher education, we shut off access to the American dream. We cannot let the disturbing trends in student debt and college costs continue unabated, and I hope that, inspired by the Adrian College example, we will act to halt and reverse those trends.

On this vote I have a pair with the Senator from New Jersey [Mr. Booker]. If he were present and voting, he would vote ``yea.'' If I were permitted to vote, I would vote ``nay;'' therefore, I withhold my vote.

Madam President, I will support this legislation to strengthen our Nation's water infrastructure. For Michigan, the Water Resources Reform and Development Act, WRRDA, means that harbors, channels, breakwaters, and locks in the Great Lakes will be better maintained; Federal assistance for wastewater system upgrades will be more flexible and affordable; and the Great Lakes fishery will be better protected from destructive invasive species. Surrounded by water on all but one side, Michigan is a water state and our waters fuel our economy, create jobs, offer a vast array of recreational opportunities, and provide drinking water to millions. I am pleased this bill will help protect our waters and improve their navigability.

The report makes progress on increasing funding for harbor maintenance, with the goal of aligning revenues collected in the harbor maintenance trust fund with those expended for this purpose. Over 5 years have passed since I led a bipartisan and multiregional group of Senators to call to the attention of the Senate Environment and Public Works Committee the imbalance in collections and spending for harbor maintenance. I am pleased the committee worked with us to reduce this disparity. This conference report aims to increase spending on harbor maintenance so that it is more in line with the fees collected for maintaining our Nation's navigation infrastructure. I am also pleased the Great Lakes navigation system is prioritized for the increased funds through a specific set-aside of 10 percent. Also, Great Lakes projects are eligible for other types of prioritized funds, which will position us to compete for this additional assistance.

The conference report authorizes the Great Lakes as a single navigational system, recognizing the interconnectedness of its 140 harbor projects. During Senate consideration of the water resources bill, I entered into a colloquy with Chairman Boxer to discuss the system's interdependence. I am pleased the conference committee included this Great Lakes authorization, as it should help allow all of our harbors--both large and small--to be recognized for Federal assistance.

While the harbor maintenance provisions in the report are good, we will still need to continue to fight for appropriations and ensure that budget requests reflect the true needs of the Great Lakes Navigation System. This vital transportation network carries about 130 million tons of critical commodities to supply raw materials to our manufacturing sector, power homes and businesses, build roads and bridges, and provide food for people around the world. Surely it should be maintained so that it can carry these critical commodities effectively and efficiently.

In addition to carrying millions of tons of goods, the Great Lakes also boast a $7 billion fishery. To protect this significant resource, destructive invasive species need to be kept out of the lakes. I am pleased the conferees retained an important provision I worked with my colleagues to include in the Senate bill, an authorization for the Corps of Engineers to implement emergency measures to prevent invasive species, including the destructive Asian carp, from dispersing into the Great Lakes. This authorization makes clear that such emergency authority can be implemented at any hydrologic connection between the Great Lakes and Mississippi River basins which will provide important flexibility to the Corps to respond to emergencies.

Our Nation's economy, health, and well-being depend on a strong water infrastructure. WRRDA makes progress in authorizing programs to strengthen our navigation systems, flood control, drinking water and wastewater systems, and natural resources. We now

need to make sure that appropriations are provided for these improvements to be made real.

Mr. President, I am joined today by Senators McCain, Rockefeller and Coburn in introducing a bill to respond to overwhelming and indisputable evidence of large scale cyber intrusions by the Government of China into the computer networks of private U.S. companies for the purpose of stealing valuable intellectual property and proprietary information. Such illegal and damaging behavior demands strong and immediate action.

American companies invest hundreds of billions of dollars every year in research and development. The innovation that results from those investments drives the growth of American companies and the U.S. economy. Unfortunately, our companies are having their intellectual property stolen right out from underneath them through cyberspace. According to a 2013 Center for Strategic and International Studies study, cyber theft costs American companies $100 billion annually--a staggering amount that threatens to undermine America's global competitiveness.

General Keith B. Alexander, former head of the National Security Agency and U.S. Cyber Command, has called the cyber theft of U.S. intellectual property ``the greatest transfer of wealth in history.''

Monday's Department of Justice indictment of 5 Chinese military officials for computer hacking, economic espionage and other offenses directed at 6 American companies confirms what earlier U.S. Government reports have documented: the culprits of cyber theft are frequently foreign governments and China is the worst offender. The indictment alleges that the defendants, members of China's People's Liberation Army, conspired to hack into the computers of U.S. companies to steal information useful to those American companies' Chinese competitors, including state-owned enterprises.

The indictments demonstrate the administration's willingness to take on cybercrime through the aggressive use of the criminal justice system. The legislation we are introducing today, a revised version of a bill we introduced last year, gives our Government another tool to impose costs on those who steal and profit from the cyber theft of American technology, trade secrets and proprietary information.

Our bill would authorize the President to direct the Treasury Department to freeze the assets of any foreign person or company, including a state owned enterprise, determined to have benefitted from the theft of U.S. technology or proprietary information stolen in cyberspace.

The Deter Cyber Theft Act would also require the Director of National Intelligence to compile an annual report on foreign economic and industrial espionage that includes: a list of foreign countries that engage in economic or industrial espionage in cyberspace against U.S. firms or individuals, including a priority watch list of the worst offenders; a list of U.S. technologies or proprietary information targeted by such espionage, and, to the extent possible, a list of such information that has been stolen; a list of items manufactured or produced or services or services provided using such stolen technologies or proprietary information; a list of foreign companies, including state-owned firms, that benefit from such theft; details of the espionage activities of foreign countries; and actions taken by the DNI and other Federal agencies to combat industrial or economic espionage in cyberspace.

As Dennis C. Blair, former director of national intelligence and co- chair of the IP Commission report has said, ``Jawboning alone won't work. Something has to change China's calculus.'' We need to call out those who are responsible for cyber theft and empower the President to hit the thieves where it hurts most--in their wallets.

If foreign governments, like the Chinese government, want to continue to deny their involvement in cyber theft despite the proof, that is one thing. We can't stop the denials. But we aren't without remedies. We can make sure that the companies that benefit from cyber theft, including state-owned companies, pay the price. Blocking these companies from doing business in the United States will send the message that we have had enough.

We worked closely with the administration in developing this bill. I believe it is an important complement to their recent aggressive efforts to respond to economic espionage by members of the Chinese military.

In light of the Snowden leaks, some have charged that it is inconsistent of the U.S. to criticize China's campaign to steal our intellectual property

through cyberspace. Let's be clear. Attempts to equate China's actions and our own are false. The United States economy is built on the hard work and innovation of American entrepreneurs who are free to think for themselves, develop new products and deliver them to the world. China's actions, on the other hand, reveal a country that is satisfied with theft as a means of economic growth while ironically, suppressing the freedoms that encourage new ideas and innovation. The Snowden revelations are about espionage; the United States does not steal intellectual property for economic gain.

I urge the speedy enactment of the Deter Cyber Theft Act.

Mr. President, I am joined today by Senators McCain, Rockefeller and Coburn in introducing a bill to respond to overwhelming and indisputable evidence of large scale cyber intrusions by the Government of China into the computer networks of private U.S. companies for the purpose of stealing valuable intellectual property and proprietary information. Such illegal and damaging behavior demands strong and immediate action.

American companies invest hundreds of billions of dollars every year in research and development. The innovation that results from those investments drives the growth of American companies and the U.S. economy. Unfortunately, our companies are having their intellectual property stolen right out from underneath them through cyberspace. According to a 2013 Center for Strategic and International Studies study, cyber theft costs American companies $100 billion annually--a staggering amount that threatens to undermine America's global competitiveness.

General Keith B. Alexander, former head of the National Security Agency and U.S. Cyber Command, has called the cyber theft of U.S. intellectual property ``the greatest transfer of wealth in history.''

Monday's Department of Justice indictment of 5 Chinese military officials for computer hacking, economic espionage and other offenses directed at 6 American companies confirms what earlier U.S. Government reports have documented: the culprits of cyber theft are frequently foreign governments and China is the worst offender. The indictment alleges that the defendants, members of China's People's Liberation Army, conspired to hack into the computers of U.S. companies to steal information useful to those American companies' Chinese competitors, including state-owned enterprises.

The indictments demonstrate the administration's willingness to take on cybercrime through the aggressive use of the criminal justice system. The legislation we are introducing today, a revised version of a bill we introduced last year, gives our Government another tool to impose costs on those who steal and profit from the cyber theft of American technology, trade secrets and proprietary information.

Our bill would authorize the President to direct the Treasury Department to freeze the assets of any foreign person or company, including a state owned enterprise, determined to have benefitted from the theft of U.S. technology or proprietary information stolen in cyberspace.

The Deter Cyber Theft Act would also require the Director of National Intelligence to compile an annual report on foreign economic and industrial espionage that includes: a list of foreign countries that engage in economic or industrial espionage in cyberspace against U.S. firms or individuals, including a priority watch list of the worst offenders; a list of U.S. technologies or proprietary information targeted by such espionage, and, to the extent possible, a list of such information that has been stolen; a list of items manufactured or produced or services or services provided using such stolen technologies or proprietary information; a list of foreign companies, including state-owned firms, that benefit from such theft; details of the espionage activities of foreign countries; and actions taken by the DNI and other Federal agencies to combat industrial or economic espionage in cyberspace.

As Dennis C. Blair, former director of national intelligence and co- chair of the IP Commission report has said, ``Jawboning alone won't work. Something has to change China's calculus.'' We need to call out those who are responsible for cyber theft and empower the President to hit the thieves where it hurts most--in their wallets.

If foreign governments, like the Chinese government, want to continue to deny their involvement in cyber theft despite the proof, that is one thing. We can't stop the denials. But we aren't without remedies. We can make sure that the companies that benefit from cyber theft, including state-owned companies, pay the price. Blocking these companies from doing business in the United States will send the message that we have had enough.

We worked closely with the administration in developing this bill. I believe it is an important complement to their recent aggressive efforts to respond to economic espionage by members of the Chinese military.

In light of the Snowden leaks, some have charged that it is inconsistent of the U.S. to criticize China's campaign to steal our intellectual property

through cyberspace. Let's be clear. Attempts to equate China's actions and our own are false. The United States economy is built on the hard work and innovation of American entrepreneurs who are free to think for themselves, develop new products and deliver them to the world. China's actions, on the other hand, reveal a country that is satisfied with theft as a means of economic growth while ironically, suppressing the freedoms that encourage new ideas and innovation. The Snowden revelations are about espionage; the United States does not steal intellectual property for economic gain.

I urge the speedy enactment of the Deter Cyber Theft Act.

Mr. President, for the Committee on Armed Services I report favorably the following nomination lists which were printed in the Records on the dates indicated, and ask unanimous consent, to save the expense of reprinting on the Executive Calendar that these nominations lie at the Secretary's desk for the information of Senators.

I thank the Presiding Officer.

(The remarks of Mr. Levin pertaining to the introduction of S. 2360 are printed in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

I yield the floor and note the absence of a quorum.

Mr. President, along with 16 cosponsors, I have introduced and am introducing today the Stop Corporate Inversions Act of 2014.

This legislation is designed to address a loophole which, unless we close it, will be used to unleash a flood of corporate tax avoidance that threatens to shove billions of dollars in tax burden from profitable multinational corporations onto the backs of their American competitors and other American taxpayers.

The issue we seek to address is known technically as corporate inversion. The details of inversion sound complex, but the principle is not. Inversion means avoiding potentially billions of dollars of U.S. taxes by changing a corporation's address for tax purposes to an offshore location. What we have is a tax avoidance scheme, an enormous loophole that allows companies to avoid billions in taxes without any significant change in where they operate, where their profits are generated, or where the location is of the executives who manage and control these corporations.

A recent prominent example involves Pfizer, a U.S. drug company, and AstroZeneca, a U.K.-based company. This proposed corporate takeover, which Pfizer makes abundantly clear is all about avoiding U.S. taxes, has gotten a lot of attention, and for good reason. It would cost the United States about $1 billion a year in tax revenue. But this is not just about two companies. This is not just about one merger, even a merger that could shove billions of dollars of tax burden on other U.S. taxpayers. The Pfizer-AstroZeneca deal is the latest example of abusive inversion deals. You cannot pick up a newspaper's business section these days without reading about what Reuters calls ``a wave of tax- driven overseas deal-making.'' Some companies that believe they are meeting their tax obligations are under competitive pressure to invert. It is clear dozens, perhaps scores, of companies are preparing to file their change-of-address cards and in doing so avoid billions in U.S. taxes. That burden doesn't just go away. Either our remaining constituents must pick up the tab or the loss of Treasury revenue adds to the Federal deficit.

We tightened the rules regarding inversion schemes in 2004, and we did so promptly and on a bipartisan basis, but recent events show an enormous loophole remains, and so our bill seeks to address that loophole, and I hope once again we can do so promptly and on a bipartisan basis.

Essentially the problem we have today is that a U.S.-based multinational can file a change-of-address card with the IRS simply by acquiring an offshore company that is much smaller than the U.S. company. Our bill would ensure that any inversion would meet a much more stringent test.

Under current law, companies can pull off an inversion with a fraction of their stock, just over 20 percent, in the hands of the new stockholders overseas. Our bill would raise that threshold to 50 percent or more. In addition, it would stop tax-avoiding inversions in cases where management and control remain in the United States.

President Obama's 2014 budget included a similar proposal which one expert told the New York Times ``essentially eliminates inversions as we know them.''

Our bill provides for a 2-year moratorium of tax avoidance through the use of inversions. Why a 2-year moratorium? This is in response to a number of our colleagues who say this is an issue which should wait for comprehensive tax reform. We all believe in comprehensive tax reform--or most of us do--but it is going to take time and it is uncertain. These corporate inversions represent an immediate threat. Our Treasury is bleeding from these inversions and from other loopholes which corporations use to avoid paying taxes. This bill is first aid for the Tax Code. A 2-year moratorium on inversions that do not meet our tougher standard stops the bleeding while we debate the comprehensive tax reform that most of us believe is desirable.

As of this moment, however, there is no comprehensive tax reform legislation pending in either Chamber of Congress. There is no debate scheduled.

There is, in fact, not a single comprehensive tax reform proposal that has been formally introduced as legislation. That is not because no one in Congress cares about tax reform; nearly everybody does. But broadly reforming taxes is a complicated and time-consuming process.

But we simply cannot wait. Multinationals are exploiting this loophole today. Meanwhile, hard-working American taxpayers and small business owners and even large corporations that have to compete with the tax avoiders but believe that inversion is wrong for their companies and for America see their tax burden rise while our national debt grows. How do we look them in the eye and say, ``We had a way to halt this gimmick, but we decided to wait for comprehensive reform that may or may not ever materialize?''

This is similar to what Congress did on a bipartisan basis a decade ago. Then Senators Baucus and Grassley jointly declared they were working on legislation to stop abusive tax inversions. The bill, along with Chairman Wyden's announcement 2 weeks ago, should make clear to companies that considering tax inversion is now a mistake, because they are now on notice that it is not going to gain anything if a bill that prohibits tax avoidance through tax inversion passes, because the chairman of the Finance Committee has made it clear such a bill is going to be effective as of May 8 of this year, regardless of when the bill passes.

So companies are on notice. There is no use rushing to the door to invert, or leaving the country to invert. It won't do them any good if the Finance Committee chairman has his way with either of these bills or other bills that set an appropriate date, such as May 8, to pass the Congress.

These multinational companies benefit from the safety and security the U.S. Government provides. Our troops protect them. Our intellectual property rights protections allow them to profit from their innovation. They benefit from federally funded research. They claim tax subsidies for their research and development. They raise capital in U.S. securities markets that are the envy of the world, thanks to the rule of law this government protects.

In the last 4 years, one of the companies at the center of this debate, Pfizer, received more than $4.4 billion in taxpayer money for federal contracts. Last month the Centers for Disease Control and Prevention awarded Pfizer a $1.1 billion contract.

Yet that company and others are now poised to shortchange Uncle Sam by billions of dollars simply by changing their address for tax purposes. I am sure most of our constituents wish they could do that. Michigan taxpayers cannot reduce their tax bill with the stroke of a pen. Michigan small businesses cannot pretend they are based offshore for tax purposes. There is no pretense that any of these corporate inversions make sense from any standpoint other than avoiding U.S. taxes. That is their motivation and these companies aren't shy about saying so. They will continue to operate in the United States. The executives who manage them will continue to live and work in the United States. They will live under the umbrella of protection that our men and women in uniform provide, at the same time that we are cutting support to those same men and women because of the deficit these tax avoidance schemes have helped to create.

Few even try to defend these inversions on principle. They are simply tax avoidance. Even the corporate executives who engineer them make little pretense as to any other purpose. So let us reform the Tax Code, yes. But while we craft and debate that reform, let us stop these transactions that add massively to our deficit and to the burden America's working families and small businesses must carry.

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