Floor Statements

Madam President, I ask unanimous consent that privilege of the floor be granted to Craig Harper, a fellow in my office, during consideration of the VA-HUD legislation.

Mr. President, today, on Veterans Day, we commemorate and pay special honor to all the veterans who have made such great sacrifices in the name of country and democracy.

This day is particularly poignant as our Nation is at war. There are more than 150,000 military service members in harm's way, fighting overseas in Iraq and Afghanistan.

They fight for freedom of the Iraqi people, who have faced decades of extreme oppression and brutality under Saddam Hussein, and against the Taliban forces, who continue to pose a challenge in Afghanistan.

Sadly, nearly 500 have paid the ultimate sacrifice and many more have sustained life altering injuries.

And as we prepare to send thousands more in harm's way, I believe that it's our obligation to ensure that our military service members and veterans receive full support from Congress, and that our efforts are tailored to benefit those who proudly serve this Nation.

We have recently granted the Administration an additional $87 billion dollars in supplemental funding for Iraq and Afghanistan.

While I would have preferred that some of those funds be in the form of a loan to Iraq, and that there be more safeguards to ensure the funds are well-used, I believe that it was necessary to provide these funds.

It is clear to me that we must stay the course, and we must rebuild the infrastructure, prevent civil war, and see to it that Iraq does not become a base for terror and instability throughout the region.

We must see to it that a stable governmental structure and viable economy apart from Saddam's tyrannical dictatorship can be put in place.

And most importantly, we must see to it that our troops are given all the tools necessary to accomplish these objectives.

Approving the additional funding was the only way to truly support our military service members and aid their ultimate success.

As we seek to ensure that the current war efforts are well funded, we also need to realize that very soon, the young men and women of our armed forces will be returning home.

Some will require extraordinary care for a long period of time. It is incumbent upon us to ensure that they have adequate facilities to aid them in their recovery and recuperation.

There must not be any doubt by any of our injured veterans that they did the right thing in sacrificing health to defend our nation's interest.

The best way to prove to them that they have our full support is to ensure that they receive good health care and adequate benefits once they return home.

It is our responsibility to make sure that our veterans are not waiting six months or longer for appointments at VA hospitals, nor should they have to wait for 15 months for disability claims to be finalized, as is now often the case.

And prescriptions costs must be affordable.

We need to make room available in VA hospitals to ensure that all of our veterans whether active duty or reserves are adequately served.

In order to accomplish this task we must be cautious as we close hospitals under the Capital Assets Realignment for Enhanced Services-- CARES--program to ensure that we don't leave our veterans stranded without accessible services.

As our veterans return home, some with great and debilitating injuries, we must also ensure that their compensation is just, full, and reflective of the American spirit.

Finally, we need to remember the families of the great men and women who are separated from their loved ones.

We must make sure that their concerns are the Nation's concerns. While their loved ones are overseas fighting for America's interest, Congress must ensure that their medical needs are covered.

As I reflect on the origin of Veterans Day, it brings me great hope that our service members will be home and peace will reign again.

On June 4, 1934, Congress enacted a concurrent resolution, recognizing November 11, 1918. The resolution states: ``Whereas the 11 of November 1918, marked the cessation of the most destructive, sanguinary, and far reaching war in human annals and the resumption by the people of the United States of peaceful relation with other nations, which we hope may never again be severed, and Whereas it is fitting that the recurring anniversary of this date should be commemorated with thanksgiving and prayer and exercises designed to perpetuate peace through good will and mutual understanding between nations; . . . ''

On May 13, 1938, the 11 of November was approved as a legal holiday dedicated to world peace, known as Armistice Day. Finally, on June 1, 1954, Congress renamed Armistice Day to Veterans Day, thereby commending all veterans.

Veterans Day is often associated with war, but its true significance lies in peace and humanity.

Since September 11 this country has undergone tremendous struggle and uncertainty.

We have shown that our resiliency is greater than our fears and our convictions of freedom and right can not be compromised.

This country is great because its citizens are great. This country was born from the sacrifice of its citizens and the vision they saw.

Today we honor the citizens who served and continue to serve our great country. They are the protectors of our democracy and our way of life; they are our veterans.

Mr. President, I rise today to express my support for the Syria Accountability Act of 2003, a bipartisan piece of legislation of which I am proud to be a cosponsor.

The time has come for the Senate to send a strong message to Syria that its support for terrorism, its occupation of Lebanon, and its development of weapons of mass destruction are unacceptable and will not be tolerated.

This legislation, introduced by my friend and colleague from California, Senator Boxer, and Senator Santorum provides the President with maximum flexibility to target specific sanctions against Syria subject to a national security waiver.

Specifically, it requires that sanctions be imposed on Syria unless the President certifies that Syria: is not providing support for international terrorists; has withdrawn all military, intelligence, and other security personnel from Lebanon; has ceased the production, development, acquisition, or transfer of weapons of mass destruction and long range ballistic missiles, and; has ceased support for terrorist activities inside of Iraq.

If the President does not make such a certification, the bill requires the President to prohibit the export to Syria of military items and dual use technology and impose two or more sanctions from a list of options including: prohibiting the export of products of the United States--other than food and medicine--to Syria; prohibiting United States businesses from investing or operating in Syria; restricting the travel of Syrian diplomats in Washington, D.C. and New York; and reducing diplomatic contacts with Syria.

I, for one, believe that sanctions should be imposed only as a last resort and that all avenues should be explored to change another state's behavior before taking such action.

With regard to Syria, Congress has passed numerous resolutions calling on Syria to change its ways and Republican and Democratic administrations alike have made it clear that Syria's actions are wholly inconsistent with a peace-loving and productive member of the international community.

Nevertheless, words have not achieved the results we are looking for and as a result, we must take further substantive action.

Syria's behavior and actions leave a lot to be desired and have severely hindered the Arab-Israeli peace process.

First, it continues to be listed as a state sponsor of terrorism by the State Department and is reported by the Secretary of State to provide ``safe haven and support to several terrorist groups'' including Hizballah, Hamas, and the Popular Front for the Liberation of Palestine.

Despite repeated calls by Secretary of State Colin Powell that Syria cease its support for terrorism and close the facilities and offices of these groups, it has refused to do so.

Second, for over 20 years Syria has ignored United Nations Security Council resolutions and has failed to withdraw completely from Lebanon, maintaining 20,000 troops and security personnel in that sovereign country. The presence of those troops restricts the political independence of Lebanon and harms relations between Israel and Lebanon.

Finally, Syria has continued its development and deployment of short and medium range ballistic missiles and biological and chemical weapons. It has not signed the Chemical Weapons Convention and has one of the largest missile inventories in the Middle East. It is reported to have three production facilities for chemical weapons and has a stockpile of the nerve agent sarin.

In the post-September 11 world, we all understand the dangers posed by states who sponsor terror and seek weapons of mass destruction.

I had hoped that Syria would realize that it is in its best interests to turn a new page in its relations with the United States and the international community and cease its support for terror, withdraw from Lebanon, and halt its pursuit of chemical and biological weapons.

It has not done so and it is time for the United States Senate to respond. I urge my colleagues to support this legislation.

Mr. President, I thank the Senator from North Dakota.

Mr. President, I very much hope we do not pass the underlying bill today. I believe it is premature. In my 10 years in the Senate, I have never heard from more California cities, specifically 104 of them, indicating their concerns about what the underlying bill would do to the budgets of their cities.

Here in my hand are some of the letters. This issue has energized cities in my State like no other. City mayors are incensed that we would pass a law without knowing with certainty how it would impact local revenues.

I have received letters from the League of California Cities, which represents all of California's 478 cities, from county administrators, police officer associations, firefighter associations, all of whom are concerned about this bill--and I cannot answer their questions about it.

But, they understand the larger issue. They are telling us the bill contains language that threatens their ability to collect existing taxes on certain telecommunications services. And, again, I cannot answer these questions, and these questions cannot be answered on the floor of the Senate today. They are too complex.

This is precisely why the Carper-Alexander amendment is the most appropriate approach: extend the moratorium for another 2 years and do a study. Bring the cities together with the professionals, and see exactly what taxes are impacted by the underlying bill.

I want to take a moment to commend Senators Allen and Wyden for their work and also to thank Senators McCain and Hollings for guiding the issue through the Commerce Committee.

I also know the minority and majority staff on the Commerce and Finance Committees have been working to provide the Senate with the information it needs to weigh the competing views, and I thank them. But the competing views are still there, and there are no answers for the cities.

Since we originally passed the Internet Tax Freedom Act, we knew this day would come, the day when we would need either to extend the tax moratorium or allow the temporary moratorium to expire.

California has a passionate interest in maintaining unfettered access to the Internet. We have a globally recognized concentration of high- tech and telecommunications firms. We provide much of the infrastructure required to gain access to the Internet and many of the services that make the Internet so useful. However, we have to make sure that maintaining tax-free access to the Internet does not inadvertently destroy the budgets of cities and counties throughout my State and the Nation. Many of them have come to rely on a variety of telecommunications services fees and taxes as an important part of their revenue base.

Now, I support the permanent extension of the Internet Tax Freedom Act, but if I had to vote today on it, I would have to vote no. I am a cosponsor of Senator Wyden's original legislation that would make permanent the current moratorium. But if I had to vote today on the Allen-Wyden bill, I would vote no because a number of uncertainties have arisen and nobody can answer those uncertainties.

Additionally, as a letter circulating through the Senate today indicates, we have been told that we violate the Unfunded Mandates Act. I was here when that Act was passed in 1995. I voted for that Act. Now we hear from the Congressional Budget Office that the underlying bill would, in fact, create an unfunded mandate on States and local jurisdictions. I think we need to find out how and what can be done to prevent that from happening.

If this bill's definition of telecommunications services is interpreted in an overly broad way, as many of us think it may be, it will negatively impact local budgets. It will lead to the possibility of reduced preparedness in our firehouses and our police stations and less money for our schools, and it will do so at a time when States and cities face large budget deficits.

Right now, in San Diego, CA, a huge debate is going on as to whether the San Diego County firefighting forces are adequate; whether they have the vehicles, whether they have the training, whether they have the ability to really respond to fire conflagration. If we move ahead precipitously today, this bill will make that situation worse.

I must tell you, as a former mayor, these are my concerns. For San Francisco, the city in which I served, the bill's current definition of telecommunications services could lead to a loss of $30 million annually. San Francisco, as their experts compute, will lose $30 million of existing taxes if we pass this bill in its present form. That translates into 300 police and firefighters.

In the city of Pasadena, the mayor, Bill Bogaard, says this would cost his city $11.4 million. That is the legislation before this body today. Let me quote from his letter:

By using vague language to include broadband Internet

access under the moratorium, we fear that the bill will allow

telephone and cable companies to use that protection to avoid

paying local franchise or utility fees.

He goes on to state:

It is our understanding that it was not the intent of the

bill's sponsors to endanger local franchising authority, but

the legislation has yet to be changed to correct these

unintended consequences.

Mr. President, this is not the first time in this debate we have heard someone mention unintended consequences. The distinguished Senator from New Jersey, Mr. Lautenberg, mentioned last night that since this debate has started we have been hearing it from all of our mayors and State officials all across this great land.

I wish to quote from one more of the letters I have received from our mayors. This is from Judith Valles, the mayor of the City of San Bernardino, which was the focus of one of California's main wildfires. She wrote to me to point out, and I quote:

Currently, 150 cities in California levy a utility users

tax, or what is called a UUT, which in many cases includes

telephone and cable television services. Utility users taxes

provide a critical contribution to local discretionary

revenue, on average 15 percent of general purpose revenues,

making the utility users tax vital in helping fund critical

city services, particularly public safety.

This comes from a mayor who is still dealing with the threat that her city faced due to the recent California wildfires. And why? Because we are afraid to step back and give the telecommunications industry and cities more time to work out a solution to this issue with which they can both live?

I appreciate Senator Wyden's frustration that if we let the debate rage on too long, it will never end. I appreciate that sometimes you have to make a decision, and that if it is not perfect, you fix it along the way. But this is not one of those times.

If you run the risk of repealing taxes that are already in place, you unavoidably affect local budgets, and I am not willing to do that at this time. I believe people want their tax dollars used on the local level. They want better police. They want better fire protection. They want the emergency services for adequate protection, particularly at this point when America stands a risk from terror. And it makes no sense to rush to pass a bill when you have cities all across this country saying: Don't do it. It is going to inevitably impact what we now levy.

This will not affect the telecommunications companies because the Carper-Alexander amendment extends the current law with minor changes. Just extend the moratorium for 2 years, do the study, permit the parties to come together and work this out.

I do not think it is one Member's goal to undermine the existing tax base of local cities and counties across this great Nation in passing a permanent moratorium. We have never wanted to do that. We are told today that the underlying bill does, in fact, do that. So why--why-- rush to pass it? My goodness.

I love my high-tech companies, but the cities and counties are where the people are, and they need police and fire and emergency services. In a day of cutbacks, it makes no sense, because we don't know what we are doing today--and to simply willy-nilly pass a bill that may well do that makes no sense. We then will have to shuffle around and find a way to correct it at some point in the future. In the meantime, budgets are upset all across the Nation. That is not good government, it is not good public policy, and it is not good legislation.

I am here to add my support and the support of 104 cities in California to the Carper-Alexander amendment. I would be most happy to offer my services in any way I can to work with the committee chair, the ranking member, and Senators Wyden and Allen, to try to find a solution. It makes no sense to pass something without an adequate study and the reconciliation of the industries.

I remember when we were working out a solution to the taxation of cellular phone calls. At that time, we told the parties that we needed them to develop a mutually agreeable solution to the problem of how to tax mobile phone calls and then present it to Congress. The cellular industry and local governments did exactly that. We now have a cellular phone tax standard in place that most people can live with. It is my understanding that the cities and States would be comfortable with this same approach to Internet access taxes. That is the kind of approach I believe will make this debate much more productive.

The debate on this issue should not be centered on who is right and who is wrong. Unfortunately, that is where we are today. On one side we have the telecommunications industry saying the cities are overreacting to the impact this bill will have on their budgets. On the other side, we have the cities saying the telecommunications industry is seeking special, nearly unprecedented, tax treatment.

Why is it we would not want to give these two stakeholders time to put their heads together and bring Congress an agreement they can both live with?

Let me be clear: I want a permanent extension but not at the cost of laying off firefighters, police officers, and teachers.

Should the Carper-Alexander amendment not be adopted, I will offer my own amendment that simply strips out this confused language in the context of a permanent moratorium. While not a perfect solution to the complex problem we face, it is far better than forcing our cities and States to send out pink slips to public safety personnel. I am hoping it will not come to that. Cities and their technical experts have my attention. This is true throughout the rest of the United States.

I hope the Carper-Alexander amendment will be passed and that the moratorium will continue for 2 years so a study can be conducted and a reconciliation of conflicts within this legislation settled so that we can move ahead knowing we have not inadvertently decimated up to 15 percent of the tax base of local communities.

I yield the floor.

Mr. President, I rise to submit S. Con. Res. 795, a Senate concurrent resolution calling upon the President to address Mexico's failure to fulfill its obligations under the U.S.-Mexico Extradition Treaty, which entered into force in January 1980. I am delighted that Senators Brownback, Bill Nelson, Hutchison, Bingaman, Domenici, Kyl, and Campbell join me in submitting this resolution.

Specifically, this resolution calls upon President Bush to renegotiate the Extradition Treaty or take other actions to ensure that the U.S. can extradite serious criminals back to the U.S. for appropriate prosecution and punishment.

In my view, this treaty--at least as interpreted by Mexico--is simply not working as intended. While the U.S. is currently attempting to extradite hundreds of fugitives from Mexico, since 1996, Mexico has sent back only a relative handful every year. For example, in fiscal years 1996 through 2002, Mexico only extradited an average of 14 individuals to the U.S. each year. Even worse, Mexico's recent interpretation of this treaty has effectively eliminated our ability to extradite persons charged with serious crimes who flee to Mexico to avoid prosecution in the United States.

This interpretation has jeopardized the safety of both American and Mexican citizens, undermined the integrity of our criminal justice system, denied basic rights and closure to crime victims, and allowed serious felons to escape just punishment. The result is that Mexico is becoming a safe haven for hard-core criminals. If you steal a car in the U.S., Mexico will return you to face prosecution and punishment. If you kill the driver, Mexico will protect you.

The problem in a nutshell is that, since October 2001, Mexico has read the U.S.-Mexico Extradition Treaty as barring the extradition to the United States of anyone who faces a potential life term. In other words, if a person commits a serious crime in the U.S.--one that could subject them to a maximum life term--and heads south, Mexico will refuse to extradite that person to the U.S. to face prosecution and punishment in this country.

While it has been difficult to determine the full scope of the problem, I am informed by prosecutors in California that, as a result of Mexico's interpretation of the Extradition Treaty, there are as many as 350 people who have committed murder and other serious crimes in California who have either not been extradited or have been effectively rendered non-extraditable.

These 350 people have thus escaped appropriate prosecution and punishment under California law. Many of these people are living free and unpunished in Mexico. In some cases, we even know where they are.

Let me quote from a recent Santa Barbara News Press article: A half dozen people wanted in the slayings of Santa Barbara residents are believed to be living free in Mexico. Santa Barbara police detectives even know where three of them live. But there's not much they can do about it. ``If I had unfettered access to the proper investigative tools and contacts, we could have them in custody in a matter of days,'' said Detective Tim Roberts . . . ``But that's not the case.''

Let me give you an example of another especially heinous case.

On April 29, 2002, Armando Garcia, a Mexican national who had been previously charged in the U.S. with two counts of attempted murder, allegedly shot and killed, execution-style, 33-year-old Los Angeles County Deputy Sheriff David March during a routine traffic stop in Irwindale, CA. Garcia then fled to Mexico, where he remains a free man.

Los Angeles District Attorney Steve Cooley has not formally requested Garcia's extradition because he says that there is no point. Mexico will demand that Cooley promise that Garcia will not receive life in prison for his crime--a promise that cannot be made because in this country sentences are up to a judge to set, once a person has been convicted of a crime. The results is that Garcia remains at large in Mexico.

And earlier this year there was a horrific case in Santa Cruz implicating the Extradition Treaty. Miguel Ramirez Loza, 27 years old, allegedly attacked his 17-year-old girlfriend in an abandoned preschool building, slashing her throat and then spitting on her. As his girlfriend lay dying, he then raped the victim's 17-year-old friend. Loza's girlfriend was in a coma for months after the crime and just recently died.

Loza is now in Mexico and is apparently in a Mexican jail as a result of a stabbing in Mexico unrelated to the Santa Cruz incident. However, according to Santa Cruz District Attorney Bob Lee, Loza cannot be extradited for the murder and rape in California because of Mexico's interpretation of the Extradition Treaty.

It is true that Mexico does sometimes prosecute individuals in Mexico who committed crimes in the U.S. under Article IV of its Criminal Code. But often Mexico fails to do this. And, in any event, there is no substitute for extraditing the person to the United States.

There are credible reports that defendants in Mexico sometimes buy their acquittals. And, at least by U.S. standards, Mexican standards of justice can be quite low. Trials often take place with no testimony and no witnesses. Victims and their families are not invited or consulted. And sentences--often reduced on appeal--frequently bear little resemblance to those authorized by U.S. sentencing laws.

Not surprisingly, according to an article in the Las Vegas Review- Journal, ``More than a dozen prosecutors in Nevada, California and Arizona who were interviewed for this story criticized Article IV as an ineffectual alternative to extradition.'' One prosecutor, Jan Maurizi of the Los Angeles District Attorney's Office, stated that she ``sent demands to the Mexican government asking what happened to 97 Article IV cases that have seemingly disappeared from the justice system. Mexico . . . never responded. But from others we've talked to in unofficial channels, it's clear the vast majority of them are grossly inadequate sentences. Most of them, nothing happens.''

Another prosecutor, Val Jimenez, the special agent supervisor of the Foreign Prosecution Unit at the California Attorney General's Office, has mentioned one recent case where a defendant ``got 20 years for doing a homicide, appealed, and he was out in 18 months.'' And even if defendants were convicted, they may not serve real time. It was not until last year that Mexico finally tore down the infamous La Mesa State Penitentiary in Tijuana. La Mesa was a place where prisoners were free to purchase $25,000 townhomes with cell phones, tiled bathrooms, Jacuzzis, microwaves, computers, DVD players, and guard dogs such as Rottweilers. One murder in the prison was committed with a Uzi.

The U.S.-Mexico Extradition Treaty provides that neither country is bound to deliver up its nationals for extradition. It further provides that where the offense for which extradition is sought is punishable by death, a country may refuse to extradite unless the country seeking extradition assures that it will not impose the death penalty. Under the Treaty, the death penalty is the sole punishment for which assurances may be required. For decades, Mexico has extradited suspects to California and other states without inordinate problems. Then, in October 2001, the Mexican Supreme Court ruled that life imprisonment violates the Constitution of Mexico and extended this interpretation to the Extradition Treaty. Specifically, the Court decided that Mexico could no longer extradite a fugitive who is subject to life imprisonment with or without the possibility of parole, unless assurances are given that guarantee a determinate term of years.

Here is what the Mexican Supreme Court said in Opinion No. 125/2001, which is about a half-page long: [T]he punishment of life imprisonment is considered an unusual penalty and is prohibited by . . . article 22 of the [Mexican Constitution], inasmuch as it departs from the essential purpose of the penalty, which is the rehabilitation of the offender to incorporate him/her into society. It is, therefore, unquestionable that the requesting [i.e., extraditing] State must bind itself not to impose the penalty of life imprisonment, only another less serious punishment.

Article 22 of the Mexican Constitution prohibits ``[p]unishment by mutilation and extreme cruelty, branding, flogging, beating with sticks, torture of any kind, excessive fines, confiscation of property and any other unusual or extreme penalties. . . .''

In light of the fact that the Extradition Treaty prohibits Mexico from extraditing criminals to the U.S. unless the U.S. agrees to waive the death penalty, it is interesting to note that Article 22 of the Mexican Constitution specifically allows the death penalty for ``high treason committed during a foreign war; parricide; murder that is treacherous, premeditated, or committed for profit; arson; abduction; highway robbery; piracy; and grave military offenses.''

So, in other words, according to the Mexican Supreme Court, the Mexican Constitution allows the death penalty for highway robbery in Mexico but, should an American criminal murder a police officer in California and then flee to Mexico, Mexico will refuse to turn this person over to the U.S. if he would face either the death penalty or a possible life term.

In my view, this makes no sense. However, Mexico as a sovereign nation is free to interpret its domestic law as it sees fit. I do not quarrel with their interpretation of their own law. But I do question whether Mexico can unilaterally rewrite the U.S.-Mexican Extradition Treaty. And that is exactly the effect of its interpretation of the Treaty as barring extradition to the U.S. of any alleged criminal who faces a possible life term. In fact, Mexico's interpretation of the Treaty is unsupported by and inconsistent with the Treaty's language, purpose, structure, and history. It is also conflicts with the Vienna Convention on the Law of Treaties, which states that a treaty shall be interpreted ``in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in light of its object and purpose.''

As the U.S. State Department has made clear in a Protest Note to the Mexican Government after the October 2001 decision, [R]equiring assurances for a punishment other than the death penalty is unsupported by the Treaty, which provides the substantive extradition requirement. . . . To give [the Treaty] the reading Mexico has given it eviscerates the Treaty, for such a reading would disregard the substantive exceptions found in Articles 5 through 9, and would permit each Party to refuse each other's extradition requests based on its domestic law on sentencing, which could be changed unilaterally at any time, even if that change rendered the law inconsistent with the Treaty.

Moreover, Mexico's interpretation of the Treaty has made it effectively impossible to extradite from Mexico individuals who commit murder or other serious crimes in California and many other States. In California, for example, over 40 different crimes are punishable by possible life sentences and neither a judge nor a prosecutor can give assurances of a determinate term for these crimes. As a result, Mexico's policy encourages people committing serious crimes in California to flee to Mexico and escape just punishment. Indeed, individuals in the United States with a criminal history have a perverse incentive to kill an arresting police officer and head for Mexico rather than face possible prosecution and imprisonment in the United States.

Given Mexico's interpretation of the Treaty, the only way to extradite a Mexican national charged with a ``life'' crime is to seek extradition on reduced charges punishable by a determinate sentence. But this would mean treating more harshly those who commit a crime and remain in California than those who commit the same crime and flee to Mexico. This is not only unfair and a blow to the integrity of our criminal justice system. But it also just encourages criminals to flee to Mexico to reduce their potential punishment.

Moreover, it is unclear exactly what assurances will suffice. In at least one Federal major narcotics trafficking case, a Mexican court determined that a twenty-year sentence was ``cruel and unusual'' and thus unconstitutional. And some Mexican courts have ruled that only a judge can give sufficient assurances--a legal impossibility under California's judicial system.

Mexico's interpretation of the U.S.-Mexico Extradition Treaty has unquestionably had a particularly harmful effect on my home state of California. I would like to commend the Los Angeles District Attorney Steve Cooley and Deputy District Attorney Jan Maurizi for their work in identifying cases of individuals who have committed murder and other serious crimes in California who have either not been extradited or have been effectively rendered non-extraditable. As I noted before, there are at least 350 such cases just in my home state. Many district attorneys do not keep adequate records of which suspects fled to Mexico, which cases are potentially extraditable, and which cases have been or could be subject to Article IV prosecution.

In fact, when we asked the National Association of District Attorneys to conduct a survey of how many cases have been affected by Mexico's interpretation of the Treaty, it received responses from only 17 jurisdictions, and much of this information was anecdotal. This survey, though, does demonstrate that the problem caused by Mexico's interpretation of the Extradition Treaty also afflict a number of other states. Based on the information we received, there are at least 60 cases around the country outside of California--and this number probably grossly understates the problem. These cases are in Arizona, Florida, Hawaii, Nevada, New York, Oregon, Tennessee, Texas, and Washington. These numbers, though, do not tell whole story. In every case, there is a horrible crime, a victim, a shattered family, and a horrible injustice.

I have already discussed a couple of specific criminal cases implicating the U.S.-Mexico Extradition Treaty. But now I would like to talk about four more. In every case, the perpetrator of a heinous crime has escaped appropriate punishment because of Mexico's interpretation of the U.S.-Mexico Extradition Treaty.

In August of 1999, Daniel Perez, a Mexican national, was convicted in absentia in Los Angeles County by a jury for the crimes of attempted first degree murder, use of a firearm, espousal battery, kidnapping, false imprisonment and stalking his estranged wife.

Perez and the 21-year-old victim, Anabella Vera, were separated. They met at a pizza place. After kidnapping her at gunpoint and terrorizing her for two hours, Anabella finally convinced Perez that she would return home with him. Perez then drove Anabella to her car. After Anabella tried to drive away from him, Perez chased her in his car, ramming her vehicle and forcing her to run red lights. Ultimately, Anabella became stuck in traffic and, in a desperate bid to save her life, abandoned her car and tried to flee. Perez then caught Anabella at a gas station and shot her in the head. Miraculously, she survived.

During the trial and while out on bail, Perez drove to Fontana, CA to the home of Anabella's father, who had been a key witness against Perez. In front of Anabella's siblings, Perez shot and killed Anabella's father. Perez then allegedly fled to Mexico, where he is still at large.

Perez was sentenced in absentia in Los Angeles County for attempted murder to a term of 33 years to life, plus an additional life term. In addition, the San Bernardino County District Attorney's Office has charged Perez with the murder of the victim's father and the special circumstances of killing a witness. These charges carry a potential punishment of life in prison without the possibility of parole or, if it is not waived, the death penalty. Because Mexico does not recognize convictions in absentia, my understanding is that Mexico will neither extradite Perez for attempted murder nor prosecute him under Article IV of the Mexican Federal Penal Code.

Alvara Luna Jara has been charged with the special circumstances murder of 12-year-old Steven Morales and the attempted murder of three others. On August 29, 1998, Steven was playing with several other children in front of their apartment, near three members of a local sheet gang. As Jara drove by, he and the three gang members exchanged hand gestures. Jara then extended his arm out of the car window and fired three rounds into the crowd, killing Steven with a gunshot to the head. Jara then fled to Mexico. If convicted in the United States, Jara could face life without possibility of parole or, if it is not waived, the death penalty. However, while Jara is not a Mexican national, the Mexican government has refused to deport him because his parents are Mexican nationals. After this refusal, Los Angeles District Attorney Cooley began formal extradition proceedings. However, because of Mexico's interpretation of the October 2000 Mexican Supreme Court decision, Cooley never submitted the formal request.

On May 7, 1988, Father Nicholas Aguilar Rivera, a Catholic priest, was charged with 19 counts of child molestation. The day after he was charged, Father Rivera fled to Mexico. Although the case was supposed to be prosecuted promptly under Article IV, Mexican prosecutors failed to submit the case for prosecution until 1995. The Mexican court dismissed the matter as untimely and entered an acquittal. Now, both countries are barred from further prosecution.

On May 17, 1998, Ruben Hernandez Martinez and Luis Castanon allegedly broke into the Nashville apartment of Kelly Quinn and her roommate after waiting for Ms. Quinn to return home. They then attacked her, raping her continuously for hours. When they were done, they made Ms. Quinn shower to remove any DNA evidence. However, Ms. Quinn was able to conceal semen that was on her neck. Castanon was arrested and, on the basis of fingerprint and serology evidence, convicted of aggravated sexual assault. He was sentenced to 60 years. Martinez, whom Nashville police believe committed several other rapes as well, fled to Mexico. I am informed that, while Martinez has been in custody in a Mexico City jail for over a year, Mexico has still refused to make a decision as to whether they will extradite him.

The United States can and must retain discretion to prosecute and punish its most dangerous and violent offenders who commit crimes in the United States according to U.S. laws. Criminals should not be allowed to escape justice in the U.S. for the price of a bus ticket to Mexico.

I would now like read a letter I received from a youngster in California about this problem. Here is what he says:

My mom is a deputy sheriff for Los Angeles. Every night she

goes to work. I say a prayer for her she will come home

safely. So far she has. Deputy March was not so lucky. I

wonder how his kids must feel not having a dad any longer.

Could you please help catch the man that killed Deputy March.

I listen to the radio a lot and they said the bad man that

did this is in Mexico and he is not in jail. Could you please

get him back here so my mom will be safer when she goes to

work.

Thank you.

It is unfortunate that we live in a country where we cannot assure a youngster that the man who killed his mom's colleague won't come back and hurt her too. That is why we need to pass this resolution now. That is why we need the President to act.

I ask my colleagues for their support.

I also ask unanimous consent that an October 24, 2003 Resolution of the International Association of Chiefs of Police be printed in the Record.

Will the Senator yield for a colloquy?

I thank my distinguished colleague and the chairman of the Agricultural Appropriations Subcommittee. As the committee completes its work on the floor and heads to conference to finalize this important bill, I want to call the committee's attention to a unique project in California that has national implications.

I want to call the committee's attention to the Chino Basin Manure Management Project in Southern California. This project is funded through the National Resources Conservation Service of the U.S. Department of Agriculture.

In fiscal year 2002, this committee provided $10 million for the Chino Basin project. Half of the money was spent for regional flood control, and the other half went to the development and construction of an anaerobic digester facility.

The Manure Management Project is cosponsored by the Inland Empire Utilities Agency and the Milk Producers Council, both in San Bernardino County. The purpose of this project was to explore an innovative and effective solution to the problems associated with vast quantities of animal pollution which naturally results from large-scale dairy operations.

This project collects manure from several thousand local dairy cows, transporting it to a local facility equipped with an industrial size anaerobic digester. The animal waste is placed in a closed, sealed vat, where it is then simultaneously starved of oxygen and heated for several days.

Under normal circumstances, we would typically think of manure as both a cost and a pollutant. However, the end result of this project is the development of two marketable products: methane gas and organic fertilizer. The methane is used in the production of electricity, and the project's proponents are currently in the process of developing a market for the resulting fertilizer.

In addition to creating marketable methane and fertilizer, this project also produces an impressively long list of additional benefits, including improved air quality, reduced groundwater contamination, and even improved health of the cows at the dairy.

A recent estimate indicates that if all the manure in the Chino area was processed in anaerobic digesters this would eventually produce approximately 50 megawatts of renewable electric power per year. Even more significantly, it will also remove significant amounts of air pollutants. For example, the current operational digester removes 15,000 tons of carbon dioxide or its equivalent from the atmosphere per year. The next anaerobic digester built because of its larger capacity will likely triple that amount to about 45,000 tons of CO2 or its equivalent per year.

The Inland Empire Utility Agency and the Milk Producers Council are seeking funding to expand and refine the application of this and similar technologies. The cost of a second digester is approximately $9 million dollars, and they have already received a

commitment from the California Energy Commission for the balance of the necessary funds.

The Inland Empire Utility Agency and the Milk Producers Council are requesting that a $5 million grant be inserted into this appropriations bill.

The first plant--a demonstration of this technology--was built on time and on budget, and is successfully operating today. Although the next phase of this project was contemplated as part of their original program, the National Resources Conservation Service has informed Inland Empire and the Milk Producers Council that funds are unavailable at this time.

The National Resources Conservation Service highlights and salutes this project nationally, as this project has become a de facto ``national demonstration project.'' Communities, water districts, dairymen, and even Indian tribes from across the Nation have gone to Chino to examine this unique partnership between the Chino Basin dairy industry and the local water agency.

The Inland Empire Utilities Agency and Milk Producers Council's request deserves consideration by this committee in the pending appropriations bill. I ask the subcommittee chairman to consider this project as the appropriations bill is finalized.

I thank the Senator. I hasten to point out another attribute of this project. As the water quality problems on the Santa Ana River are gradually resolved--and this project certainly contributes to resolving some of those problems--the supply of clean, usable water in Southern California is expanded. It is yet another way to ensure that the Quantification Settlement Agreement on the Colorado River is implemented in a timely and meaningful manner. Utah and the rest of the Colorado Basin States should welcome these types of investment in Southern California.

Mr. President, I wish to express my support for the Fiscal Year 2004 Agriculture appropriations bill and to commend the leadership of the subcommittee for crafting this bill under very difficult financial constraints.

I wish to thank the subcommittee for recognizing the importance of the winegrape and wine industry for the U.S. economy and the economy of California. Winegrapes account for two-thirds of the total U.S. grape crop. Furthermore, grapes are the highest value fruit crop in the U.S. and are the seventh largest agricultural crop in our nation. For my home State of California, the winegrape industry produces $33 billion for the economy, making winegrapes the State's largest agricultural crop. Yet, unlike most of our Nation's largest crops, winegrapes receive no direct farm subsidies.

I would like to ask Ranking Member Kohl about two items in this legislation that involve cooperative research efforts that are essential to the future of the winegrape and wine industry. First, the House legislation includes $3 million in ARS funding for a Grape Genomics Research Center at the University of California at Davis. It is important that this funding level be maintained in the final version of this bill. Funding for such projects is crucial since cooperative research has been behind the success of the winegrape industry. Investment in research must continue if we are to withstand the rigid competition from our world neighbors who would love to replace our industry with their own products. This can only be done with the cooperation of the U.S. Congress to ensure the American wine industry has the necessary resources to continue the cutting edge research and development that has kept this industry competitive.

In California, winegrapes are grown in areas being rapidly developed into urban uses. If our winegrape and wine industry is to continue to thrive, we must be more efficient with our land; we must produce grapes more resistant to diseases; and we must be good neighbors to the surrounding environment. This proposed $3 million investment in viticulture research will ensure that already successful collaborative efforts among the grape and wine industry, universities, and USDA is continued in the years to come. It is a wonderful investment into our industry's future. I ask Senator Kohl that in conference with our House colleagues, we make every effort to ensure this important funding in the House bill is kept in the final version of the fiscal year 2004 Agricultural appropriations bill.

Mr. President, once again, I thank the subcommittee, and I wish to raise one more issue that relates to getting the best possible use of the research dollars. Both the Senate and House bills include funding for the Viticulture Consortium at last year's level of $1.8 million from CSREES. I remain hopeful that this funding level can be increased to $2.5 million. The Viticulture Consortium is a truly unique and effective research program that addresses unmet national research needs important to the winegrape growing industry. The consortium is an active partnership of Federal, State, and industry resources which enhances research coordination, improves research efficiency, and eliminates duplication of effort. This is a collaborative program administered by Cornell University, Penn State University, and the University of California. Research proposals have been received from 20 States and research priorities are developed by a national network of key industry research and extension representatives known as the American Viticulture and Enology Research Network, AVERN. This type of collaborative program can serve as a model for research involving other commodities.

Again, recognizing the limits facing us, I ask the leaders of the subcommittee to work with me to provide a modest increase in the funding level for the Viticulture Consortium in this bill.

Thank you very much, Mr. President.

Amendment No. 2083

(Purpose: To improve the operation of energy markets)

On behalf of Senators Lugar, Levin, Harkin, Cantwell, Boxer, Leahy, Wyden, Durbin, and Hollings, I send an amendment to the desk.

I ask unanimous consent that reading of the amendment be dispensed with.

Mr. President, this amendment has to do with providing some regulatory oversight over energy trading. It has to do with closing the Enron loophole. It has to do with providing transparency. Energy trades today are not subject to the 2000-passed Commodity Modernization Act. Rather, these energy trades take place electronically, take place in secret, without transparency, with no records kept, with no audit trail available, and with no regulatory oversight to prevent fraud and manipulation in energy trading.

I would like, first of all, from the Derivatives Study Center, to indicate and read a couple of paragraphs from the letter they have sent, which I think defines the issue very well.

I quote:

This regulatory assistance comes at a critical time.

According to the Federal Energy Regulatory Commission's

Director of the Office of Market Oversight, ``energy markets

are in severe financial distress.'' Along with the decline in

credit quality in these markets, the loss of confidence and

trust has led to a ruin in the liquidity and depth of these

markets. This legislation will go a long way to address this

problem.

Then he defines what derivatives are. This is important for Members to know. It is complicated. We went through this once before. I would like to give you this definition because it is a good one:

Derivatives are highly leveraged financial transactions,

allowing investors to potentially take a large position in

the market without committing an equivalent amount of

capital. Moreover, derivatives traded in over-the-counter

markets are devoid of the transparency that characterizes

exchange-traded derivatives, such as futures, and this lack

of transparency introduces a greater potential for abuse

through fraud and manipulation.

That is exactly what happened. He goes on to say:

Derivatives are often combined into highly complex,

structured transactions that are difficult, even for the

seasoned securities trader and finance professionals, to

understand and price in the market. Enron used such over-the-

counter derivatives extensively in order to hide the nature

of their activities from investors. The failure of Enron and

the demise of other energy derivatives dealers has had a

devastating impact on the level of trust in energy markets.

That is a good definition of what we are trying to do, why we are trying to do it, and what we are trying to involve.

Now I would like to read into the Record a portion of a letter from Eliot Spitzer. Mr. Spitzer is the attorney general of the State of New York. That is the place where many of these cases are now coming to trial.

He says:

I firmly support your efforts to make energy markets

competitive and protect those markets from fraud and

manipulation. The bill sponsored by Senators Feinstein,

Levin, and Lugar, and under consideration as an amendment to

the proposed 2004 agricultural appropriations bill, is a

major step toward both goals.

He goes on to say:

The amendment makes a major contribution to competitive

energy markets by initiating an electronic information system

to be operated through the Federal Energy Regulatory

Commission. This system will provide open access to

comprehensive, timely, and reliable wholesale electricity and

transmission, price and supply data, greatly expanding the

choices of both buyers and sellers. In addition, the

reliability of market information would be markedly improved

by the amendment's general prohibition on manipulation of the

purchase or sale of electricity or the transmission services

needed to deliver electricity, and by specific prohibition of

the round-trip trading manipulation used so effectively to

inflate electricity prices to the public's injury.

This is a letter from the attorney general of the State of New York. As such, it places an imprimatur of correctness, of need, and of value on the amendment that we introduce today.

Now, what is in that amendment? Specifically, the amendment would improve price transparency in wholesale electricity markets. The amendment directs the Federal Energy Regulatory Commission to do just what Mr. Spitzer said it would do: to establish an electronic system to provide information about the price and availability of wholesale electricity to buyers, to sellers, and to the public. This provision is actually similar to the transparency provision offered by my colleague from New Mexico, Senator Domenici, in the Energy bill.

Secondly, this legislation would prohibit round-trip electricity trades. What is a round-trip trade? It is the simultaneous buying and selling of the same quantity of electricity at the same price, in the same location, with no financial gain or loss. In other words, no commodity ever changes hands. Again, this is similar to a provision that Senator Domenici offered during consideration of the Energy bill. Round-trip or wash trades are bogus trades. No electricity changes hands but the profits from the trades enrich the bottom line of a company's financial report.

In fact, I think we had one company--I believe it was CMS--say that 80 percent of their balance sheet in a given year was from bogus trades. And there is nothing we can do about it? Does anyone believe that is right? I think not. I don't think the American people do, and that is one of the reasons these markets are so decimated.

Next we would increase penalties for violations of the Federal Power Act and the Natural Gas Act. Maximum fines for violations of the Federal Power Act would be increased from $5,000--that is nothing to a big company--to $1 million. And maximum sentences are increased from 2 to 5 years. Remember, these rip-offs were tremendous. Just look at the people plea-bargaining from Enron, look at what they did, look at the amounts of money they fraudulently compromised.

This language is identical to section 209 of the Senate-passed Energy bill. Current fines are extraordinarily low and, therefore, provide no deterrence to illegal activity.

We also amend the Natural Gas Act to do essentially the same thing. Senator Domenici, in his substitute electricity title to the Energy bill, increased the fines in the Gas Act but he did not do so in the Federal Power Act. We would do both in this amendment.

Next the amendment would prohibit manipulation in electricity markets. Manipulation is prohibited in the wholesale electricity markets, and FERC is given discretionary authority to revoke market- based rates for violators.

Strangely enough, manipulation of energy markets is not prohibited in current law. Can you believe that? Manipulation of energy markets is not prohibited in current law. This would add language to part 2 of the Federal Power Act to do just that.

Most importantly, this bill would repeal the Enron exemption and allow the Commodities Futures Trading Commission, which has oversight over virtually all other trading, to monitor the over-the-counter energy market.

This would repeal what happened in 2000 when Enron pushed the Commodities Futures Modernization Act exemption for large traders in energy commodities. And it would apply antimanipulation and antifraud provisions of the Commodities Exchange Act to all over-the-counter trades in energy commodities and derivatives.

In my view, when Congress exempted energy from the Commodities Futures Modernization Act of 2000, it created the playing field for the western energy crisis of 2000 and 2001. The western energy crisis cost millions of people millions of dollars in my home State of California. So this is a charge I am making. When this Congress permitted

the Enron loophole to exist in the Commodities Modernization Act, they created the loophole for the playing field that Enron and others used to manipulate the western energy markets.

Next, our bill would provide the Commodity Futures Trading Commission the tools to monitor over-the-counter energy markets. Over-the-counter energy trade in energy commodities and derivatives performs a significant price discovery function, including trade on electronic trading facilities. Our amendment requires large, sophisticated traders to keep records and report large trades to the Commodity Futures Trading Commission. This doesn't change the law. It only applies the law that exists for futures contracts to over-the-counter trades in energy markets.

We would limit the use of data. This requires the CFTC to seek the information that is necessary for the limited purpose of detecting and preventing manipulations in the futures and over-the-counter markets for energy, to keep proprietary business data confidential, except when used for law enforcement purposes. This does not require the real-time publication of proprietary data. It does not.

This would have no effect on nonenergy commodities or derivatives. The amendment would not alter or affect the regulation of futures markets, financial derivatives, or metals. We have specifically stated on page 20 the following:

The amendments by this title have no effect on the

regulation of excluded commodities under the Commodity

Exchange Act.

In addition, we state:

The amendments made by this title have no effect on the

regulation of metals under the Commodity Exchange Act.

Mr. President, my colleagues may be asking themselves why I continue to press this cause. Here I note that Senator Levin has come to the floor. I want the Senate to know how helpful the Senator from Michigan has been in working on this complicated issue. He has spent hours and hours of his time. His staff has worked with my staff in evolving this measure. We have carefully vetted it. I believe we really know what we are doing here.

The energy crisis in the West demonstrated that, without Federal oversight, a business becomes solely concerned with its bottom line and not with any sense of ethical behavior; and arrests and convictions to date have clearly documented this to be the case.

Californians are still paying the price of this unethical behavior. I make the point that we are not talking about one bad player in the California market. This goes way beyond Enron. It extends to others as well--to Reliant, Dynegy, Williams, AEP, CMS, El Paso Merchant Energy, Duke, Mirant, Coral, Sempra Energy Trading--unfortunately, in my own State--Aquila, the City of Redding, Morgan Stanley Capital Group, Pacificorps, and to the Puget Sound Energy.

We believe California was duped out of $9 billion. The Federal Energy Regulatory Commission has illustrated its inability to refund California the money it is owed by recently recommending settlements that in no way, shape, or form reflect the damage that was caused to both consumers and the economy of the largest State in the Union. In fact, FERC settled with Reliant on August 29, allowed them not to admit wrongdoing, and fined them $836,000. That was $836,000 for rules of conduct that cost the State $13 million--hardly fair.

This disproportionately low fine gives credibility to the fact that the price one would have to pay in penalties, if caught manipulating the market, is worth the risk since the benefits of not getting caught far outweigh any penalty that may be levied upon a company.

I think it is pretty clear that this disproportionately low fine gives credibility to the fact that the price one would have to pay in penalties, if caught manipulating in the market today, is worth the risk. There is no deterrence, since the benefits of not getting caught far outweigh any penalties that may be levied on a company. That is what we are trying to change.

If I left any doubt in my colleagues' minds about the widespread manipulation that took place during the western energy crisis, let me point out some recent examples of a case that was brought by the Securities and Exchange Commission against David Delaney, a former chief executive with two of the most prominent divisions of Enron.

On October 30, 2002, Delaney pled guilty to insider trading. The SEC brought charges against him for selling millions of dollars in Enron stock at a time he knew it was being manipulated. While these charges appear to be financial in nature, the underlying facts of the case were that Enron was engaged in manipulative business practices, especially in California.

In March of 2003, the FERC staff report on price manipulation in western markets: Investigators said they suspected Enron was using price information obtained in regulated deals to manipulate trades in unregulated energy derivative markets.

In one instance, Enron manipulated the price of physical gas, upward, then downward. Although the price change in the physical markets was only 10 cents per million Btus, Enron profited due to the effect that this small change in the physical price had on its large financial position. Enron earned more than $3 million in the unregulated over- the-counter markets, while losing only $86,000 on the physical sale of natural gas.

I think it is important to note that the FERC report also states:

Enron's corporate culture fostered a disregard for the

American energy customer. The success of the company's

trading strategies, while temporary, demonstrates the need

for explicit prohibitions on harmful and fraudulent market

behavior and for aggressive market monitoring and

enforcement.

That is what we are trying to provide in this amendment. That is what FERC says is missing.

Our amendment would provide greater oversight over these markets so that fraudulent and manipulative behavior could be prevented. It would increase the penalties if, in fact, a company engaged in fraudulent or manipulative behavior, and it would outlaw all types of manipulation including round-trip trading, wash trades, false reporting, churning, and deliberately withholding generation. All of the Enron trading strategies, such as Ricochet, Death Star, Get Shorty, Fat Boy, Non-Firm Export, Load Shift, Wheel Out, Black Widow, Red Congo, and Cuddly Bear: these are euphemisms for fraud and manipulation and our amendment would cover them all.

It is not clear to me why energy derivatives are not regulated while the Federal Government oversees some physical energy transactions. In other words, if I buy natural gas, and it is delivered to me, then that transaction is overseen by FERC, which has the authority to ensure that this transaction is both transparent and reasonably priced.

But a giant loophole is opened where there is no Government oversight, when transactions are carried out in electronic exchanges. As a result, if I sell natural gas to you, and you sell it to someone else who sells it to another person who then sells it again, none of these transactions are covered by FERC or the CFTC. Because of that, what we saw in the western energy crisis is that this particular loophole allowed energy companies to manipulate prices and to escape any investigation or prosecution by any regulatory agency.

Our amendment will close the loophole, as Senator Levin said, created in 2000 when Congress passed the Commodities Futures Modernization Act.

The loophole exempted energy trading from regulatory oversight, and it excluded it completely if the trade was done electronically. At the time, Enron was the main force behind getting this exemption in this act. By closing this loophole, the amendment will prohibit fraud and price manipulation in all over-the-counter energy commodity transactions and provide the CFTC the authority it needs to investigate and prosecute allegations of fraud and manipulation.

Opponents of this amendment have questioned why we need to explicitly give the CFTC this authority. The answer is we need to give the Commodities Futures Trading Commission this authority because we learned during the western energy crisis that there was, in fact, pervasive manipulation and fraud in energy markets, and that FERC and the CFTC were either unable or unwilling to use the authority they

had to intervene. I think Mr. Delaney's plea bargain is eloquent testimony to that.

We need to give the CFTC this authority because we need regulators to protect consumers and make sure they are not taken advantage of. We need to give the CFTC this authority because, when there are inadequate regulations, consumers are ripped off. Let me be clear. Our amendment will provide the same protections to consumers in energy markets as these same consumers have in all other commodity markets such as the New York Merchantile Exchange or the Chicago Merchantile Exchange. Our amendment does not provide more regulation or greater oversight than what currently exists for other commodity markets, merely the same protections: Protections which are currently lacking.

In fact, in an effort to avoid onerous or complicated requirements, Senator Levin, Senator Lugar, and I have worked together to make sure the recordkeeping and reporting requirements are very clear. Our amendment only requires traders to keep records of over-the-counter trades in energy commodities and derivatives that perform a significant price discovery function. In other words, these are the trades that affect the pricing for everyone. These are the big trades, and these are the trades where there needs to be transparency because they affect the market.

If I am a large company and I sell you 1,000 decatherms of natural gas in a typical transaction on the spot market, this is a price discovery transaction because the prices of these transactions are usually covered and reported by the press and will affect prices of subsequent transactions. Trades on electronic markets serve, by their very nature, as price discovery functions. They should be available for everyone to see because they will very likely influence what price the next trader will buy or sell at in an open and transparent fashion.

Our amendment would require traders to keep records of their trades and to maintain an audit trail. This requirement would simply regulate energy trading in the same way other finite commodities are handled. Why should pork bellies or frozen concentrated orange juice have more protection for consumers than electricity?

There is nothing in this amendment that should be burdensome for traders in any way. I would think responsible traders would already be keeping records and maintaining an audit trail for their own protection in this world. In fact, the amendment only allows the CFTC to seek information to investigate allegations of wrongdoing.

We have worked for almost 3 years to craft this provision. It has had hearings in the committee. It has been discussed on the floor. We have met with dozens of people. We understand there are those who do not want to support it. But in not supporting it, what they are doing is condoning a marketplace that has practiced deep fraud and deep manipulation and for the most part gotten away with it.

I don't think we do our job as Senators if we can't protect an unsuspecting public. As the Derivative Center pointed out, these markets are in disarray now. Why are these markets in disarray? They are in disarray because people do not have confidence in them. They are in disarray because there is no transparency because there are hidden markets, and when they explode, they explode big time.

Why should Mrs. Smith from Texas or Mr. Jones from Pennsylvania or Mr. Cornyn from Texas invest in these markets? Why should he? He wouldn't have confidence in them. He would have no transparency. He would have no ability to know what is going on.

What we are trying to do is put that confidence back in the marketplace by providing some prudent, commonsense, antifraud, antimanipulation oversight by saying: If you trade this way, you must keep a record of the trade. You must keep an audit trail. And these trades must be transparent so that the Smiths, the Jones, and the Cornyns, if they so desire, can find out what in fact is going on.

Let me stress that this does not impact financial derivatives in any way whatsoever. We have clarified that. Our opponents persist in using the argument that financial derivatives are affected. They are not. Look at page 20, lines 17 to 20, if you want to see it in black and white. Nothing in this provision affects the authority of the Federal Energy Regulatory Commission. We don't change it in any way.

To respond to concerns about trading platforms that only match buyers and sellers, there is no capital requirement. Let me repeat that because people are going around saying there is. To respond to concerns about trading platforms that only match buyers and sellers, there is no capital requirement.

Bottom line: Our amendment merely gives back to the CFTC most of the authority it had before Congress passed the Commodity Futures Exchange Act.

I note that Senator Levin is in the Chamber. I wonder if it would be appropriate for him, if other Members would agree, to make some comments at this time.

If I might respond, I believe Senator Levin will speak, Senator Lugar wishes to speak, and Senator Cantwell wishes to speak. So on our side of this issue, I believe it will be at least an hour and a half.

It may not be. I will try to move it rapidly along. These Senators have indicated they wish to come to the floor.

I thank the Senator from Michigan. More than just thank him, I thank him for his brilliance and for his willingness to be part of this effort. I think Senator Levin is really one of the fine minds in this Senate. It has been a great delight for me to have the opportunity to work with him. I think he has helped us make this a much better bill. I thank him so much.

Mr. President, at this point I would like to read into the Record a colloquy between the two leaders, Senators Frist and Daschle, which makes clear the parameters of this and why we are on the floor on this bill. If I may:

Senator Daschle: Mr. President, Senator Feinstein has a

market manipulation amendment that she was seeking a vote on.

It is my understanding that the agricultural appropriations

bill would be the appropriate bill for that amendment. I

would inquire of the majority leader, should she offer her

amendment to that bill, would she be assured of a vote on or

in relation to her amendment with no second-degree

amendments, prior to such vote?

The majority leader responds:

The Democratic leader is correct. If Senator Feinstein

offers her amendment to that bill, she will get a vote on or

in relation to it.

I just offer that to clarify the present legal situation.

Mr. President, I thank the Senator from Indiana. He has taken a position based on extraordinary knowledge, having served on that committee for 27 years, having been its chair, having seen what happened with the Commodity Futures Oversight Act.

In resisting, as he termed it, the movement just to have anything go, let anything go, if they are not regulated, let it go that way, he realizes the American people are not well served and the investment community is not well served when every day you pick up a newspaper and someone else is being arrested for fraud or manipulation. Our laws can prevent that from happening.

I thank the Senator very much. You have been terrific. Your support is very meaningful to us.

I have stated in the Senate numerous times it is the duty of this Congress to make sure our regulators have all the authority they need to prevent fraud and manipulation in the energy markets. Simply put, this is what our amendment does.

Enron remains the perfect example of how the systems were so easily gamed. After Enron successfully lobbied for an exemption to the Commodity Futures Modernization Act in 2000, they and others in the energy sector quickly took advantage of this new freedom by trading energy derivatives absent any transparency and regulatory oversight. In other words, in secret. Thus, after the 2000 legislation was enacted, Enron began to trade energy derivatives literally without being subject to proper regulatory oversight. That is how all these schemes came about. Some hot-shot trader, sitting in front of his computer, found a way to evolve a strategy for the fraudulent and manipulative action of the marketplace. They let these various strategies play out.

Unlike the NASDAQ, from which timely electronic trade reports are available to the public, even prior to its transparency-enhanced reforms in 1997--in 1997, the NASDAQ reformed itself to make their traders more transparent--EnronOnline did not offer timely reporting of executions. This means EnronOnline provided no data regarding recently executed transactions. Consequently, even after the trades, basic market information was not provided to market participants.

It should not surprise anyone that without basic transparency, without the ability to see what is happening, prices would soar. What interests me is they did and yet there is still resistance to this legislation.

In 2 years, Enron's derivatives business had been a stand-alone company. It would have been the 256th largest company in America. That year, according to author Robert Bryce, Enron claimed it made more money from its derivatives business, $7.23 billion, than Tyson made from selling chickens. That is huge, if you think about it. Think what that means. This segment of the market in one year made $7 billion and nobody knew how. No one knew what the trades were. They were all in secret. Nothing was registered. There was no audit trail. There was no antifraud, antimanipulation oversight. Boom. It happened.

EnronOnline rapidly became the biggest platform for electronic energy trading. But unlike the regulated exchanges, such as the New York Mercantile Exchange, the Chicago Mercantile Exchange, and the Chicago Board of Trade, EnronOnline was not registered with the CFTC. So Enron set its own standards. In other words, it had a very secure, quiet, protected niche on the market.

Others have tried to replicate that. The banks, for example, Senator Levin said, devised something called the IntercontinentalExchange so they could do the same thing Enron has done. It is wrong.

Traders and others in the energy sector came to rely on EnronOnline for pricing information. Yet the company's control over this information and its ability to manipulate it was tremendous. As author Robert Bryce went on to describe--and this is very colorful and true-- Enron did not just own the casino. On any given deal, Enron could be the house, the dealer, the oddsmaker, and the guy across the table you are trying to beat in diesel fuel futures, gas futures, or the California electricity market. You tell me that is a good situation?

You tell me this Senate and this Congress should let that happen. We should not. That is just plain wrong. Those who want to protect this secret niche are just dead wrong. It is not in the American people's interest to have a secret trading niche that can be an empire for fraud and manipulation. We need to protect consumers from future Enron-like scams because they are going to happen.

Now, was Enron and its energy derivative trading arm, Enron Online, the sole reason California and the West had an energy crisis? Absolutely not. Was it a continuing factor to the crisis? I certainly believe that evidence has shown it was.

Unfortunately, because of the energy exemptions in the 2000 Commodity Futures Modernization Act, which took away the CFTC's authority to investigate, we may never know for sure. In other words, quite purposely, this Congress, in 2000, let this secret world be created and said: We are going to take energy and metals out of the entire trading regulatory structure and we are going to let them go ``on operating'' on their own, without the proper oversight. That is exactly what happened. It is just plain wrong.

I repeat, once again, the amendment we offer will subject electronic exchanges such as EnronOnline to the same oversight as other commodity exchanges, such as the Chicago Mercantile Exchange, the New York Mercantile Exchange, and the Chicago Board of Trade--no more, no less. Without this type of legislation, there is insufficient authority to investigate and prevent fraud and price manipulations since parties making the trade are not required to keep a record.

This amendment is not going to do anything to change what happened in California and the West. That is done. But it does provide the necessary authority for the CFTC to protect other parts of this country against this kind of thing happening again. And it well could happen.

Nobody thought we would ever see the kind of event that blacked out most of the east coast and the Midwest, but we did. Nobody thought we would ever see what happened in the West, but we did. Nobody ever thought anybody would come up with schemes like ``Ricochet,'' ``Death Star,'' ``Get Shorty,'' ``Fat Boy,'' but they did. Nobody thought they could use them to commit a manipulation of the market, but they did.

I will leave you with one fact: The total cost of electricity in California in 2000 was $7 billion. The cost the next year was $28 billion. Does anyone believe that market forces--namely, supply and demand--could account for a 400-percent increase in the cost of electricity in a year? The answer has to be no. The answer has to be that bad things were done.

So we have worked on this amendment. I sit on the Energy Committee. I have tried to pay a great deal of attention to these matters, to follow this, and I am absolutely convinced that America and the business climate of America is much better off when things are transparent, when there are records kept, when there is a regulatory authority that can say: Whoa. Something may be going haywire. Let's take a look at it. That is all we do--no more and no less than for any commodity.

I wish to say one other thing. A financial derivative is not like an energy derivative. For people to confuse this and say it affects financial derivatives is not right. Energy is a finite commodity. There is a beginning and there is an end, and it is different from a financial derivative.

Mr. President, may I ask how much time our side has remaining?

Thank you. I retain the remainder of my time.

I yield the floor.

Is this meant to be an amendment to my amendment?

Correct.

Will the Senator be quick? I want to address some of the comments that have been made.

Mr. President, I would like to try to respond to some of the comments that have been made.

I believe the CFTC has antifraud and antimanipulation oversight on futures exchanges but not on over-the-counter energy trades. That is the difference here. We would cover over-the-counter energy trades and particularly those trades that are electronic.

I also want to show where existing law is inadequate. There is a case that has just been brought to my attention which I think shows that the existing law is inadequate, and this is what we are trying to fix.

Two energy traders from the energy firms Dynegy and El Paso were charged by the U.S. Government with reporting false information on a number of trades--at least 48 trades. They falsely reported the number and the prices used in trades they conducted involving natural gas in an attempt to influence the natural gas spot price indices.

The Federal indictment charged them, among other matters, with wire fraud and violation of the Commodity Exchange Act, which is what we are talking about, provisions prohibiting price manipulation and dissemination of false information about energy commodity rates.

The Federal court allowed the wire fraud charges, but it dismissed the Commodity Exchange Act charges on the ground that the wording of the act failed to prohibit persons from knowingly providing false information. While the CEA used the word ``knowingly'' in an earlier part of the provision, the court ruled that the word had to be repeated in the section prohibiting false information.

The Feinstein-Lugar-Levin amendment would clarify the wording of the CEA provision to resolve the problem identified by this Federal district court in the case of the United States of America v. Michelle Valencia, Criminal Action No. 8-03-024.

That is a pretty clear indication of where present law is not adequate. These were bogus trades. These trades never took place. There were totally bogus, and yet the wording in the Commodity Exchange Act, which we are trying to fix, was judged by the court as too vague to take any action.

Second, I want to make this point: What we are trying to do is prevent fraud and manipulation. We are trying to prevent it and deter it from happening. The soft penalties we have now don't prevent it. That should be very clear. We toughen the penalties in the Electricity Act and in the National Gas Act. Clearly, a number of these schemes that Enron practiced, whether it was Death Star, Ricochet, or Black Widow, or any of these other terrible schemes, took place. Our bill would specifically prevent them.

We are trying to prevent and deter, and the way we do that is by strengthening the law.

I am really puzzled by the administration's position. I am really puzzled because it seems to me they should be on the side of the American people, not on the side of the traders and those who want to get rich quick from this open marketplace.

Additionally, it is interesting to me that the President's working group, when it came out in 1999, specifically said:

``Due to the characteristics of markets for nonfinancial commodities with finite supplies''--that is energy--``however, the working group is unanimously recommending that the exclusion''--the exclusion from the bill--``not be extended to agreements involving such commodities.''

So beginning in the year 2000, they have done a total switch and I do not understand why, particularly after the events of 2000 and 2001, where we know fraud and manipulation was explicit. Now when the Government tries to go after two companies for bogus trades, a court finds the Commodities Exchange Act is inadequate; it is vague.

Why would people oppose what we are trying to do? I think we are on the side of the angels.

Let me quickly go over some points. Why do we need this legislation? We need it because companies are now permitted to trade large amounts of energy in virtually unregulated markets, which makes it easier for unscrupulous companies such as Enron to manipulate the price of energy. The bill would close the Enron loophole that allows this unregulated trading.

Secondly, do we have any examples of how these markets have been manipulated? FERC recently released a 1-inch thick report on how the markets for electricity and natural gas in the western United States were manipulated in 2000 and 2001. So we know it happened. The FERC found Enron and other companies lied about the prices of their trades, reported fictitious trades to drive up prices, did wash trades with each other, and engaged in rapid trading to drive prices up and then back down, reaping millions of dollars of profits in the process and costing customers billions of dollars in unjustified energy costs. That is according to FERC. That is a finding in their study. Yet people still oppose this legislation. Unbelievable.

Would this legislation have prevented these manipulations? Under current law, the CFTC is totally in the dark about what goes on in the over-the-counter markets. Under this legislation, manipulation in these markets would be a felony and the CFTC would get reports about large trades in the over-the-counter markets, so it would be able to monitor these markets, something it cannot do now. Should anybody be able to escape from ongoing monitoring of what they do in these markets, big traders? I do not think so. Yet they are in this little loophole that was created. That was the purpose of the loophole, to prevent anybody from looking; keep no records. Therefore, they are not going to be able to catch us, and there will be a weak law so it will not be sustained in court when they try to bring a case.

Another question: Enron is bankrupt. A number of traders have been fined and energy trading is back on the rise. The marketplace seems to be correcting itself. Why is this legislation needed?

It is needed to avoid more problems like we have just had. Although everything mentioned in the question I just asked may be true, there is one other significant fact. The consumers and businesses that paid higher prices have only recovered a small fraction of their losses. It is better to prevent the manipulation and the losses from happening than try to make up for them after they take place. That is the point. What our agencies have shown is there is, up to this point at least, no way for an aggrieved marketplace to recover its losses from fraud and any manipulation. Therefore, it should be our job to see the laws are accurate and in place to prevent this kind of activity from taking place in the beginning. That is where increasing the penalties comes in.

Imagine, a $2,000 penalty for doing this. That is nothing. That is not even a slap on the wrist for multibillion-dollar companies.

How does one respond to the concerns that this legislation will increase costs and uncertainty and scare off investment in the energy markets? It will not. The regulated U.S. commodities

markets are the most successful and reliable in the world. Ever since the agricultural exchanges were first regulated, we have heard dire predictions from commodities traders that regulation will drive business overseas. In fact, the opposite has happened. We have seen a flight to quality as investors seek safe and reliable markets. That is a fact. This helps the market.

Many traders and energy companies have said the actual cost of compliance with this legislation will be minimal.

The final question: Why should energy derivatives be regulated differently or more stringently than financial derivatives? Because we do not touch financial derivatives. Mr. Greenspan, please know that.

The price of energy derivatives can be manipulated by manipulating the supply of the underlying energy commodity. The price of financial derivatives is very difficult to manipulate because it is difficult to manipulate the price of financial measures underlying the instruments, which generally are not commodities but abstract financial measures such as interest rates and currency exchange rates.

Then again, in 1999, the President's working group saw this. They recommended they not put energy into the loophole. The Congress saw differently and put energy into this loophole, and the never-never land of secrecy went on. These bogus trades were enabled. These bogus trades took place.

There are cases being brought, and we are even finding that the law is inadequate because a court has said it is too vague. We correct that.

I think this is really an important amendment. I do not think I could live with myself if I did not try to do it. If we lose today, believe me, I will come back again and again, because we saw what happened. We know there was massive fraud and manipulation. We know the loophole was there. We know there is no transparency, no record, no audit trail, and no antifraud and antimanipulation oversight for any over-the-counter energy trade. That is what we are trying to do.

My colleagues have referred to futures exchanges rather than over- the-counter energy trades, and that is what we are referring to in this bill. Please, I know back here people look at the West and they say, aha, it is not us, but what I say to them is some day it could be them. Do they not want the law right? Do they not want to be protected? Do they not want a record kept so the regulatory agency can look at it? I really hope the answer is yes, and I hope this Senate will vote for this amendment.

If there are no further comments, I will yield the remainder of my time. If there are, I reserve the remainder of my time.

I thank the Senator. I will do that.

Madam President, I would like to respond to the Senator. I think this discussion is constructive and I am pleased to partake in this exchange with my good friend from Idaho.

This is a report entitled ``The Over-the-Counter Derivatives Market in the Commodity Exchange Act'' which was written by the President's working group on financial markets in 1999.

On page 16 of that report, it goes on to say--and I want to read it in its context:

Due to the characteristics of markets for nonfinancial

commodities with finite supplies--

Which energy would be one--

the working group is unanimously recommending that the

exclusion--

In other words, the loophole--

not be extended to agreements involving such commodities. For

example, in the case of agricultural commodities, production

is seasonal and volatile and the underlying commodity is

perishable, factors that make the markets for these products

susceptible to supply and pricing distortions and to

manipulation. There have also been several well known efforts

to manipulate the prices of certain metals by attempting to

corner the cash or futures markets. Moreover, the cash market

for many nonfinancial commodities is dependent on the futures

market for price discovery. The CFTC, however, should retain

its authority to grant exemptions for derivatives involving

nonfinancial commodities as it did in 1993 for energy

products, where exemptions are in the public interest and

otherwise consistent with the Commodities Exchange Act.

Then the loophole was promulgated. The section of the Commodities Exchange Act which contains that loophole is section 2(g) and is titled, ``Excluded Swap Transactions.''

The section reads, No provision of this Act (other than section 5a (to the extent provided in sections 5a(g)), 5b, 5d, or 12(e)(2) shall apply to or govern any agreement, contract or transaction in a commodity other than an agricultural commodity if agreement, contract or transaction is . . .

And then it goes on.

This section in the Commodities Exchange Act is what creates the loophole, and that is the problem that we are trying to correct in this legislation. I believe we do correct it.

Again, it is very hard for me--and this might have something to do with the fact we went thorough it the west--to understand why we would not want to deter this activity and strengthen the rules to prohibit such manipulation from happening in the future.

We want to be very certain that with all of this kind of trading, including over the counter trades and electronic trades, that the records are kept and there is an audit trail clearly exists and there is an opportunity for the Commodity Futures Trading Commission to note something may be wrong and hold the proper investigation. This is no more and no less than what exists on the exchange today.

Why should this secret world of trading be allowed to exist? I know people get rich through it. This secret trading world allows people to get rich by engaging in fraudulent trades, as was seen during the Western energy crisis. It is this type of manipulative behavior that we are trying to stop.

I can't understand why the administration would not want to support this. When Mr. Greenspan came in and talked to me a few years ago when we first proposed this legislation, his main concern was financial derivatives. This is why we made certain, as I have said in my comments, that this legislation does not concern financial derivatives. He may well have expanded his view to all kinds of over-the-counter trades since then, but at the time I sat down and met with him, that was not his position.

Regardless, we are talking about public policy. We are talking about protecting the people of America. We are talking about strengthening the law so that what happened on the west coast can never happen in the Midwest or on the east coast or any part of the nation.

I mentioned what the attorney general of the State of New York--the attorney general, not a deputy--Mr. Spitzer, has written. Once again, let me read what he said. He is the one who prosecutes many of these cases and I really think his views in this area should make a difference.

He says:

I urge your amendment's adoption. In addition to providing

wholesale electricity markets, the transparency vital to

effective competition, the amendment closes loopholes used to

manipulate energy markets. It improves the ability to detect

fraud and other manipulation, and it deters manipulation by

establishing substantive penalties.

This is the attorney general of the State of New York who is going to be prosecuting many of these cases. He says it is a wise thing to do, it is a prudent thing to do, and you should do it.

He also says that this amendment makes a major contribution to competitive energy markets by initiating an electronic information system to be operated through the Federal Energy Regulatory Commission. I have already talked about this. Earlier, I said how this legislation will provide open access to comprehensive, timely, and reliable wholesale electricity and transmission prices. The attorney general repeats that. He says:

The reliability of market information would be markedly

improved by the amendment's--

Don't we want that? I think so--

general prohibition on manipulation of the purchase or sale

of electricity, or the transmission services needed to

deliver electricity and by the specific prohibition of the

round trip trading manipulation used so effectively to

inflate electricity prices to the public's injury.

This is the prosecutor in one of the main States that would have this kind of litigation.

Then he goes on to say:

Enforcement of the law and regulation safeguarding our

energy markets would be greatly aided by other reforms the

amendment provides. The amendment would repeal the so-called

Enron exemption which shields large energy traders from

oversight.

Once again, I want to iterate that this is the attorney general of New York speaking.

In addition, the amendment would apply to anti-manipulation

and anti-fraud provisions of the Commodity Exchange Act--

I just read to this provision to you. Clearly this section of the Act is inadequate by anybody's reading to effectively regulate all energy transactions--

Our legislation would improve the Federal Energy Regulatory

Commission's ability to

address complaints, and it would lift the restriction on the

Federal Energy Regulatory Commission's authority to order

refunds. These reforms will make accountable parties, which

are currently beyond the law's reach accountable for their

actions and will increase recovery of overcharges.

Once again, I ask, don't we want to do this? Do we really want to protect these people who are willing to do such harmful things to the American people?

I am shocked at the administration's letter. I thought they were there to protect the public.

I thank the Chair. I reserve the remainder of my time.

I would be very happy to yield my 2 minutes to the ranking member if I might have 3 minutes to conclude.

Madam President, there really is a difference of opinion. I would like to have the time to read part of the transcript in a hearing on the Committee on Agriculture on July 10. A question that Senator Crapo asks to Mr. Newsome of the CFTC.

Senator Crapo: I know we have been over this before but I

want to be sure that I have it right. As I listened to the

testimony of both of you it seems to me that there is

actually a lot more agreement than disagreement with respect

to what we ought to be doing and where we ought to be. The

disagreement, as I understand it, is over whether 2G excludes

from the fraud and manipulation provision swap transactions.

Now, swap transactions are the dominant majority of what goes over the over-the-counter market.

I am correct about that. Would the two of you agree that is

the core of the disagreement between your testimony?

Mr. Newsome: 2G certainly does exclude swap transactions.

That is my point. And he is testifying to it in this committee that this is not covered by the CFTC.

It goes on.

Senator Crapo: It excludes them from fraud and manipulation

protections.

Mr. Newsome: 2G excludes them from jurisdictions of the

I ask unanimous consent for 1 minute to permit Senator Cantwell to speak.

Madam President, I have a copy of a colloquy between the leaders that we would have an up-or-down vote on the amendment.

Madam President, the extraordinary courtesy of the Senator is appreciated because he is actually correct. It did say ``in relation to.'' But I quickly accept his offer to have an up-or-down vote.

Mr. President, I have decided to vote against the National Consumer Credit Reporting System Improvement Act because, bottom line, this bill reduces the privacy rights of 36 million Californians.

These rights were obtained through the passage of landmark legislation sponsored by Senator Jackie Speier earlier this year in California, which gave consumers the right to tell financial institutions that they don't want their most sensitive personal information shared with hundreds or even thousands of affiliated companies.

This practice--affiliate sharing--can include your most sensitive information--the stocks you own, the certificates of deposit you hold, or the amount of money in your checking account.

Importantly, California's financial industry signed off on Senator Speier's bill, rather than face a ballot initiative, which likely would have succeeded.

Industry executives said at the time that the California bill ``encompasses all aspects of the workability needed to ensure protection of customers' privacy'' and that it is ``a workable, reasonable compromise.'' In fact, the only major reservation expressed about that provision was that the bill did not represent a national standard. But now, given the opportunity to set such a national standard, these same companies worked to wipe out such protections--and I find this conduct particularly concerning. Attached is a letter from Senator Speier that attests to the behavior of California's financial industry.

So in response to calls for a national standard and to protect the rights of Californians, Senator Boxer and I developed an amendment that would have established a strong national standard on affiliate sharing, consistent with California's law, which would have given consumers a real voice in how their personal information is used.

This amendment came up for a vote and, unfortunately, it was defeated. I think time will show that this was the wrong vote, and I have no doubt that this issue will resurface as consumers learn more about the misuse of their most sensitive personal information.

I am disappointed that we did not achieve our main goal of adopting an amendment which would allow consumers to have control over their personal data, but I am pleased that the Senate approved two amendments, which I sponsored along with Senator Boxer, to protect consumers.

The first amendment, authorized by Senator Boxer, which I cosponsored, would give consumers greater protection against unwanted marketing.

Most importantly, the amendment would allow consumers to permanently opt-out of marketing by unrelated affiliates, while the underlying bill would have only limited the opt-out to 5 years. This means that if a consumer asks a corporation not to share information with its affiliates for the purpose of marketing, the affiliate cannot solicit them--forever. Without this amendment, a consumer would have been required to go back to the corporation and reiterate his request after 5 years.

Additionally, this amendment clarified what the bill meant by a ``pre-existing business relationship'', where there was no definition before. With this amendment, a company's affiliate would only be able to market to consumers who have:

One, purchased, rented or leased the seller's goods or services or completed a financial transaction between the consumer and seller, within the 18 months immediately preceding the date of a solicitation; or

Two, inquired about or applied for a product or service offered by the seller, within the 3 months immediately preceding the marketing contact.

Without this clarification, companies might have been able to market to customers who purchased goods as many as 5 or 10 years earlier, or who made the mildest inquiry a few years ago. It is the same definition developed by the Federal Trade Commission in creating a national ``Do Not Call'' registry for telemarketers.

The Senate also adopted a second amendment, which I authored and was cosponsored by Senators Boxer and Kennedy, that essentially provided a far more encompassing definition of medical information than is contained in current law.

Simply put, this amendment will help ensure that consumers aren't discriminated against based on their medical or health information when they apply for credit, insurance, or employment. The amendment also has the support of the American Medical Association, the American Cancer Society, and the California Medical Association.

The Feinstein amendment would broadly expand the definition of ``medical information'' to read:

Information or data except age or gender, whether oral or

recorded in any form or medium, created by or derived from a

health care provider or the consumer that relates to:

(1) The past, present or future physical, mental or

behavioral health or condition of an individual;

(2) The provision of health care to an individual; or

(3) Payment for the provision of health care to an

individual.

This is the same definition of medical information established by the National Association of Insurance Commissioners in 2002. This definition has been implemented in a vast majority of our states.

Even with these modest amendments, however, I cannot support the reauthorization of the Fair Credit Reporting Act.

The Boxer-Feinstein marketing amendment will help prevent consumers from receiving unwanted solicitation, but it will do nothing to limit

the ability of companies to share information with their affiliates.

Affiliates, therefore, will continue to be able to use personal information to profile consumers in a way that leads to unfair increases in premiums or interest rates, to giving certain consumers inferior service, or to outrightly deny them credit cards, insurance policies, or other products.

Furthermore, the bill will do nothing to stop the creation of ``internal credit reports'' by large financial institutions. Unlike with traditional credit reports, consumers will continue to have no ability to access or correct errors in these documents.

Most Americans consider their personal information their private property. Yet, this bill will continue to deprive ordinary American consumers from having any choice over how their information is shared in the business world. This is the fundamental issue.

To give you a sense of the deep support for privacy, I would point to a survey of California voters completed on February 7 of this year.

The statewide survey found that by a 91-to-7 percent margin, California voters would favor a ballot proposition that ``would require a bank, a credit card company, insurance company, or other financial institution to notify a customer and receive a customer's permission before selling any financial information to any separate financial or non-financial company.''

This means that 9 out of 10 Californians support even stronger protections--where companies would have to gain your prior consent-- opt-in--to share your financial data--than the amendment which Senator Boxer and I offered. And polls across the country reflected similar levels of support by Americans for stronger privacy laws.

This only underscores the need for strong federal standards. Clearly, businesses should be able to manage customer information in order to enhance services. But there must be strong rules that protect consumers. That is why Congress should have given consumers a choice-- allowing them to tall companies that they don't want their most personal information shared.

So despite the fact that I support efforts in this legislation to combat identity theft and improve consumer access to credit report information, I believe that the bill doesn't do enough to protect consumer's privacy, and that is why I am voting against it.

Mr. President, I ask unanimous consent that a letter from Senator Jackie Speier be printed in the Record.

Mr. President, on behalf of Senator Boxer and myself, as well as Senators Harkin, Feingold, Durbin, Lautenberg, and Nelson, I send an amendment to the desk.

Mr. President, the bill before the Senate in its current form allows huge conglomerates, with just limited restrictions on marketing, to freely share vast quantities of personal customer information with commonly owned companies even if a consumer asks that the information not be shared.

Let me list the types of information we believe could be shared among companies that have common ownership--called affiliates--under the bill: Information mined from your check and credit card payments such as your political or charitable contributions, your magazine subscriptions, your liquor purchases, the location and identity of stores you frequent; the stocks you own and stock trading patterns; the cash you have in the bank; when your certificates of deposit mature; how much you owe on a credit card and what rate you get; your insurance claims history such as whether you pay your premiums on time, how many claims you have made and whether claims were paid out; how many times a consumer called the company's call center or complained about the company's service; an employee's work history, including performance ratings, use of sick days, vacation, and salary.

To make matters worse, the bill permanently preempts States from taking stronger action.

What we have before the Senate today is a weak privacy standard built for businesses at the expense of consumers which legislatures in all 50 States are forever barred from improving.

I am particularly concerned that financial institutions in California, with the lone exception of the California Credit Union, negotiated and signed off on State legislation resolving this issue, and now the same financial institutions are trying to eliminate the California law with national legislation.

I will spend just a moment on that because it is important. Essentially, the banks and financial institutions in California worked with the State legislature in crafting the Californlia law that has an opt-out for affiliate sharing. The reason they did so was because waiting in the wings was a well-funded initiative to pass an even stronger privacy law. They knew the people of California would pass that privacy law.

Senator Jackie Speier, who was the author of the California privacy bill, has sent Senator Boxer and I a letter. I will read two paragraphs from the letter.

``It has recently come to my attention that the financial services industry has been criticizing the contents of your amendment to S. 1753, substituting the newly-enacted and stronger California privacy standard on affiliate sharing in the `corporate family of companies,' as unworkable and unreasonable. This same industry recently called my California bill `workable and reasonable,' specifically removing their opposition to my measure and lavishing praise upon it, even helping to gather votes. Industry made it clear that my bill met their workability concerns, progress made with their active participation. If my bill was workable for industry in California, then why shouldn't it be the national standard?''

``One industry representative stood with me on that day and said my bill `encompasses all aspects of the workability needed to ensure protection of consumers' privacy,' while another called it `a balanced measure that will provide meaningful privacy protections to consumers while also addressing the workability concerns.' . . . Now the story is different, as industry sees a political opportunity to preempt California's standard on affiliate sharing with a weaker one.''

I ask unanimous consent the entire letter be printed in the Record.

Mr. President, while I was in California, I met with the CEOs of the major banks. It became very clear to me at that time what they were going to do. They were going to come back here and they were going to get a national standard that clearly preempted the California opt-out.

Incidentally, we have modified the amendment I have sent to the desk. I know there was some criticisms of the amendment. We have tightened it up. I think it will stand the test of scrutiny. This amendment protects American consumers' basic privacy rights. It creates a national opt-out standard for affiliate sharing. This would give consumers the choice of whether their personal information can be shared among unrelated companies in a corporate family of companies.

Under the amendment, a company would have to notify a consumer that it intended to share the consumer's information with unrelated affiliates and give the consumer the opportunity to opt out of this sharing. If the consumer does nothing, the institution is perfectly free to share the information.

This amendment is fully sensitive to the real-life demands of business. Where there is a legitimate business need for the information, this amendment provides exceptions to the opt-out.

First and foremost, related affiliates--which are defined as affiliates in the same line of business with the same functional regulator and with the same brand name--are exempt from the opt-out.

Second, the amendment does not affect the ability of companies to have common databases with their affiliates so long as the information is not accessed, disclosed, or used by the affiliate. This is one of the arguments they have raised that this exception is a big loophole. Answer, untrue. While a common database can exist, the amendment explicitly states that an affiliate cannot access or use the information in a manner inconsistent with the consumer's opt-out.

Third, to use consumer information to complete transactions; fourth, to protect against or prevent actual or potential fraud or identity; next, to comply with Federal, State, or local laws and to do data processing, billing, or mailing. This amendment does not affect the ability of affiliated companies to do any of these six things. There are a number of other standard exceptions.

Before I go into detail describing the amendment. I will spend some time talking about the shortcomings of the ``National Consumer Credit Reporting System Improvement Act'' with respect to a person's natural privacy and why this amendment is needed.

At the outset, I recognize the author of the bill, Chairman Richard Shelby. He has met with me and I am grateful for that meeting. He has listened to my concerns. He has made longstanding efforts to balance the rights of individual privacy with legitimate business needs. I deeply respect the commitment of Senator Shelby to consumer privacy. It is well known. He deserves recognition for his work to strengthen the privacy provisions of the Driver's Privacy Presentation Act and for introducing legislation to require an opt-in for affiliate sharing in the 106th Congress.

In the 107th Congress, he joined me as a cosponsor of the Identity Theft Prevention Act. Many of these provisions he has incorporated in the bill on the floor today, and I thank him.

I also thank Senator Sarbanes. I think his record on privacy is equally impressive. He fought hard to create the opt-out standards for nonaffiliated third parties during enactment of the Gramm-Leach-Bliley financial services modernization law. I have the utmost respect for his work on privacy legislation. He is a champion of consumer privacy.

The American people should know this about both of these Senators. It is just that Senator Boxer and I have a very strong view on the need to give consumers this opt-out on affiliates.

I also recognize this bill has a number of provisions I strongly support. It entitles every consumer to a free credit report. That is great. It creates fraud alerts. Great. It creates a national standard for truncating credit card numbers on store receipts. That is great.

I was delighted, because when I introduced identity theft legislation earlier this Congress, the chairman and CEO of Visa, Carl Pascarella, came and held a press conference and indicated that Visa was not going to wait for the bill, they were going to go ahead and truncate all but the last four digits, in any event, on their credit cards. As of June, all the new merchant terminals using the VISA system--affecting tens of millions of Visa credit cardholders--do have that truncation. Shortly, Visa will have all other stations truncating as well.

This morning Senator Kyl and I held a hearing on hackers getting into data bases and how you prevent that from happening. Visa testified, and it is clear they have taken this very seriously with a very elaborate system to get at the problem and to use technology to solve it.

So all these provisions were included in legislation that I have offered over the last 4 years, and I am very grateful to both the chairman and ranking member, who are here on the floor, that they have been incorporated into this bill. So I say, thank you, Senator Shelby; thank you, Senator Sarbanes.

Now, I think, though, that some of these needed provisions just become window dressing, if you really can't protect a person's privacy. The affiliate sharing provisions of the legislation would set that back because the information age is going to move ahead rapidly. That is one of the problems: Technology finds a way of moving ahead so fast before we have a chance to see that there is an appropriate regulatory system in place.

So the debate today over this bill is really part of a great struggle over whether Americans--ordinary Americans--will have basic control over the most elemental parts of their identity, and whether we can stop the misuse and commercialization of their most personal information.

Most Americans, I believe, consider their personal information their private property. I do. I consider my health data my personal data, my financial data my personal data. When I do business with a bank, I do not expect to see my mortgages purchasable on the Internet for $15 or $20. I do not expect somebody to buy my Social Security number over the Internet, or anything of that kind. Nor do I expect the bank with which I do business to give my data to a thousand--and it can be a thousand-- of their affiliates so their affiliates can contact me about traveling with them, investing with them, that they have a better scheme than my checking account. I do not expect that, and guess what. I do not think the majority of Americans do, either.

To give you a sense of the groundswell of public support for privacy, I would like to mention a survey of California voters by Fingerhut Granados Opinion Research on February 7 of this year.

The statewide survey found that by a massive 91-to-7 percent margin, California voters would favor a ballot proposition--and let me quote what it would say--that ``would require a bank, a credit card company, insurance company, or other financial institution to notify a customer and receive a customer's permission before selling any financial information to any separate financial or non-financial company.''

Mr. President, 91 percent would support an initiative to do just that. So they are supporting not opt-out, which is a lower, lesser standard, but they are supporting opt-in when it comes to affiliate sharing. Similar polls across this great land have reflected a landslide of support by Americans for stronger privacy laws.

In my 10 years in this Senate, I have never seen anything like it. There is a groundswell out there, let there be no doubt.

Here in the Senate we have taken some strong action to protect privacy in recent months. In one day, the Senate drafted and passed a bill upholding the ``National Do Not Call'' list. Recently, we passed legislation limiting e-mail spam. In each of these cases, Congress accepted the near unanimous will of the public that there should be limits on when and how commercial entities can invade ordinary Americans' privacy--be it at their homes from telemarketing calls or on their computers from endless e-mail spam.

These concerns are equally present in the debate over affiliate sharing, except the dangers to privacy are so much more insidious. Americans are fully aware of telemarketing calls because their dinners and evenings at home are interrupted by them. Americans are fully aware of spam because their e-mail is clogged with them. In the case of affiliate sharing, most Americans are not aware that their personal information travels from their bank to hundreds or even thousands of other companies.

What is an affiliate and why should we be concerned about the sharing of information among affiliates?

Affiliates are companies related by common ownership. As one example, Travelers Insurance, Diners Club International, Citi Financial, and Salomon Smith Barney are all affiliated companies owned by Citigroup. So the types of businesses that financial institutions can be affiliated with run the gambit: insurance companies, so you can be bugged by insurance companies; securities brokerages; mortgage lenders; travel agencies; retailers; automobile dealers; collection agencies; financial advisers; tax preparation firms. I even think they buy them just for this reason.

In 1999, Congress passed the Gramm-Leach-Bliley Act, which repealed portions of the Glass-Steagall Act that prohibited banks from entering into affiliations with other lines of business. So it became fair game. These financial institutions have moved, in a major way, to affiliate themselves with a tremendous array of businesses. These include insurance and securities brokerages, as I said, mortgage lenders, ``pay day'' lenders, finance companies, and on and on and on.

It could include investment advisers who are not required to register with the Securities and Exchange Commission. These are not mom-and-pop companies. The top dozen U.S. banks and financial institutions alone control thousands of health and life insurance companies, home mortgage companies, car loan lenders, housing developments, securities brokers, and other businesses.

Take a look at this. Citibank alone has 1,736 affiliates which they own. They own a mortgage company, an insurance company, a student loan corporation, Travelers Life and Annuity, Diners Club International, and Salomon Smith Barney holdings. This becomes a veritable goldmine of information trading for them, and the information that is traded is your personal information that lets an insurance company, or a mortgage company, or an investment banking company know where to go to get business.

Morgan Stanley has 628 affiliates, including the Discover Card, Dean Witter Realty, Southeastern Energy Corporation, and a number of insurance companies.

Wells Fargo, headquartered in my city of San Francisco, has 777 affiliates, including, again, a mortgage company, Advance Mortgage, Dial Finance Company, Pacific Rim Health Care Solutions, Tower Specialists, Norwest Auto Finance, and Auto Risk Managers. Again, a veritable treasure trove, a goldmine for the sharing of private, personal information.

Bank of America has 815 affiliates, including T-Oak Apartments, Stanton Road Housing, NationsBanc Insurance Agency, and General and Fidelity Life Insurance. By mining data from their affiliates, these corporations can compile vast dossiers on consumers to use to their commercial advantage. An affiliated company can call you up with full knowledge of your financial history and offer you credit cards, securities, loan consolidation, whether you need it or not, and you have no way to prevent the company from using your most intimate personal information.

Consider the following case: Several years ago, Nationsbank paid fines of $7 million to the Securities and Exchange Commission and other agencies over its sharing of confidential customer financial statements and account balances with affiliated securities firms. Nationssecurities used the account information to identify those bank customers who had expiring certificates of deposit. Sales representatives then marketed to these customers highly leveraged investments, mischaracteriz- ing them as straightforward U.S. Government bond funds. Investors, 65 percent of whom were over 60 years old, lost millions of dollars from this practice.

While Nationsbank paid a fine for its false and misleading sales practices, its sharing of customer information was perfectly legal under existing law. We need stronger laws to protect us from the potential predations of affiliate sharing. Unfortunately, the Senate bill does not rise to this test.

The 1996 Fair Credit Reporting Act standard on affiliate sharing, which is, for the most part, preserved in S. 1753, is not a strong national standard. The 1996 act permits financial institutions to share ``transaction and experience'' information with affiliates without restrictions. This experimental standard has proven vague and unworkable. Even though the 1996 act has been in effect for 7 years, no one can definitively say what the terms ``transaction and experience'' information mean.

When I asked the CRS to explain the FCRA standard, here is what they said:

The [Fair Credit Reporting Act] does not offer a definition

of a phrase, nor does the act provide any guidance with

respect to what types of information may be included.

Furthermore, none of the Federal bank regulators, nor the

Federal Trade Commission, have promulgated regulations

regarding the definition of ``information solely as to

transactions or experiences'' or what information may be

included in such.

Finally, discussions with industry representatives did

articulate a consistently used definition of what constitutes

a ``transaction or experience'' information.

In essence, both the House bill and the Senate bill maintain an exemption for the sharing of personal information, which nobody has defined.

Seven years after passage of the 1996 FCRA amendments, neither Congress, nor the Federal Trade Commission, nor any other agency has defined the term. An empty standard is a nonenforceable standard. I think America's personal privacy deserves better protection.

Consider again the sensitive information which could be shared among unrelated corporate affiliates if we allow the current standard to stand. This

chart refers to the information I have just been over: an employee's work history, including performance ratings, sick and vacation days, safety, whether the consumer is a complainer or not, can go out to all affiliates, your certificates of deposit maturity dates, so somebody can contact you when that certificate matures; stocks you own, so others can approach you. Then there are the personal things, such as political contributions, charitable contributions, your magazine subscriptions.

Think about that. These companies develop a personal profile on who you are and what you like, and then tell other companies about you. Today, I heard testimony at a Senate Judiciary Committee hearing about someone who shopped at Victoria's Secret who had their personal information used in that way. That is what this allows.

The collection of this information is not hypothetical. In Great Britain, unlike the United States, companies are required by law to file a report with the Government on the type of information they collect about consumers.

Here is what Citibank reported to the British Government about the type of information it was collecting about British citizens for marketing purposes. I think it is likely they collect the same information about United States customers. This information includes: personal identifiers, financial identifiers, identifiers issued by public bodies, personal details, habits, current marriage or partnerships, details of other family, household members, other social contacts, accommodations or housing, travel movement details, lifestyle, academic record, membership of professional bodies, publications, current employment, career history.

Mr. President, I am not aware of a time limitation.

Mr. President, I ask unanimous consent that I might be permitted to continue when the Senate resumes.

I thank the Chair.

Reserving the right to object.

Mr. President, the Senator from Florida has asked if I would yield for just a short time before I begin. Is that agreeable?

I thank the Chair.

Mr. President, is it possible for me to yield for 3 minutes to the Senator from Florida?

I thank the Senator from Florida and I thank the Chair for allowing this opportunity for the Senator to make a statement. I think he is referring to an amendment that I will introduce at a later time having to do with clearing up the health definition in the bill.

The health definition in the bill is archaic. The vast majority of states have adopted more fully inclusive definitions, and we would like to have that definition in the bill.

Prior to the break for lunch, I was beginning to explain why the bill before us has a weak privacy standard on affiliate sharing. Specifically, the underlying bill permits financial institutions to share a customer's transaction and experience information with affiliates with few, if any, restrictions. As I stated, transaction and experience information could include extremely sensitive information about individuals such as their bank account balance and data mined from their check or credit accounts or where they buy goods.

If consumers cannot preserve the privacy of their bank balances or the places they go to make purchases, they do not have meaningful privacy protections. That is the weak privacy standard that will become the national norm if this bill passes the way in which it is envisioned.

Supporters of the existing weak standard argue that America's credit environment has thrived since 1996. So they say, why mess with a system that is working? I challenge that assertion.

First, because transaction and experience information remains undefined. As I pointed out before lunch, we asked the CRS to look at current law. We asked them how they would define ``transaction and experience'' information. They said it has never been defined. So it is questionable whether any privacy regime at all exists for the bulk of affiliate-sharing practices.

Secondly, identity theft has emerged as a national epidemic in the last 7 years. Both the chairman and the ranking member of this committee have done their utmost and been very receptive to trying to enact legislation to prevent identity theft.

The Federal Trade Commission recently published a study that suggested 9.9 million Americans are victims of identity theft every year. The cost is $50 billion annually. Studies have shown that much identity theft occurs in the workplace. So increased affiliate sharing will likely facilitate this crime. Potentially, thousands of employees in affiliated businesses will have increased access to the currency of identity theft, and that is Social Security numbers and other sensitive identifying information, such as date and place of birth and mother's maiden name.

In her testimony before the Senate Banking Committee, Vermont Assistant Attorney General Julie Brill directly linked affiliate sharing to identity theft. Here is what she said:

Many identity fraud cases stem from the perpetrator's

purchase of consumers' personal information from commercial

data brokers. Financial institutions' information sharing

practices contribute to the risk of identity theft by greatly

expanding the opportunity for thieves to obtain access to

sensitive personal information.

So that is what we are doing here. Now, this is a prosecutor who should know. This is what she deals with. So why broaden the scope and opportunity for identity theft to take place?

Assistant Attorney General Brill also cited work by researchers at Michigan State University who studied 1,000 cases of identity theft and found that 50 percent of the victims traced the theft of information to an employee of a company compiling personal data on individuals.

Third, it is an open question whether affiliate sharing has offered any price or service advantage to customers. According to an article by Janet Gertz in the San Diego Law Journal, there is some evidence that businesses use affiliate sharing to extract concessions from consumers. Let me quote her:

By profiling consumers, financial institutions can predict

an individual's demand and price point sensitivity and thus

can alter the balance of power in their price and value

negotiations with that individual. Statistics indicate that

the power shift facilitated by predictive profiling has

proven highly profitable for the financial services industry.

However, there is little evidence that any of these profits

or cost savings are being passed on to consumers.

Just recently, for example, the Federal Reserve issued a report on financial service fees and services showing that fees at larger institutions are generally increasing and services are decreasing.

So we are letting exist this whole area where businesses buy other businesses just to share consumers' data? And the consumer has no control over their personal data. That is wrong.

My colleagues may hear during the debate on this amendment that the affiliate sharing problem is addressed because S. 1753 allows consumers to opt out of certain marketing solicitations by affiliates.

I want to go into this because this has been widely circulated by the financial institutions. Senator Boxer and I were just questioned about it at a press conference we held. In truth, these restrictions that they say are there are grossly inadequate, and they barely scratch the surface of the problem.

Let me describe some of the uses of affiliate sharing that the bill does permit. First, internal credit reports: The bill permits companies to use transaction and experience information to create internal credit reports.

Martin Wong, general counsel of Citigroup's Global Consumer Group, testified before the Senate Banking Committee in June that:

Citigroup is able to use the credit information and

transaction histories that we collect from affiliates to

create internal credit scores and models that help determine

a customer's eligibility for credit.

In other words, a bank can use transaction and experience from its affiliates to determine if it is going to charge a higher interest rate to certain credit card customers and give perks to others or to deny a credit applicant a credit card.

In contrast to a traditional credit card report, a consumer has no right of access to transaction and experience information used by a bank to deny him or her credit. Nor would a consumer have any right to correct any errors made in compilation of these internal credit reports. So one can have their credit changed even without their knowledge. It can be wrong, and the person would not know about it. It all happens in this secret world of affiliate sharing.

Similarly, a health insurer could deny a customer a health insurance or life insurance policy based on transaction and experience information. For example, a life insurer might reject an insurance applicant because of evidence in his card or check transaction record that he visits liquor stores frequently, buys products at stores selling mountain climbing equipment and therefore is at risk of injury, or has purchased a gun.

These are just indications. These are just areas. But you can see where this thing is going. Essentially, consumers can be denied products or services and they will have no ability to determine why the denial occurred.

The bill would permit prospective or current employers, without an individual's knowledge or consent, to mine information about the individual from other affiliates with whom the individual does business. This could be used for hiring decisions, disciplinary action, job evaluations, or other employment purposes. Again, all of this goes on simply because you bank with a given bank. You think all these things are protected and in fact they are data-mining checks, where you go, who you are paying. This information is going out to a whole host of other companies, sometimes thousands of companies.

Some affiliates are offshore and American consumer protection laws do not apply to those countries. As United States companies continue to acquire affiliates overseas, consumers may not even be able to depend on existing consumer protection laws to protect information that is shared with an affiliate.

Earlier this month, and many of us read about it, a woman in Pakistan, transcribing medical files for the University of California Medical Center in San Francisco, threatened to post patient medical records on the Internet unless she was paid more money. While we have strict laws governing medical files in the United States, these laws are virtually unenforceable overseas.

The Senate bill does not prevent affiliated companies from accumulating and sharing uncomplimentary information about customers, such as if they have filed for bankruptcy, do not pay their credit on time, or complain a lot. This information can be used to push unprofitable customers into a different tier of customer services. Example, where there are longer waits for a customer representative, or eliminate the customer altogether. All of this happens because of the ease with which this information can be shared among commonly held companies.

Let me give an example. Business Week magazine has reported that Sanwa Bank gives A's to its best customers, but those whose profiles show they will generate less revenues get C's from the bank. The bank tends to charge those earning C's more fees, and is more likely to put them on hold when they call in for service. This type of profiling certainly can occur in the context of affiliate sharing.

Even in the area of marketing, this bill is grossly inadequate. It purports to give consumers the right to opt out of the sharing of transaction and experience information for marketing, but there are loopholes. The institutions are going around the Hill today, pointing out they already do protect this.

Let me talk for a minute about the loopholes. The bill excludes companies from the opt-out if they have a preexisting business relationship with the consumer.

What is a preexisting business relationship? Your guess is as good as mine because the bill doesn't define it. Presumably, a bank could argue it has a preexisting relationship with a consumer if a consumer came into the bank 5 years ago to cash a check, or even just made an inquiry about an account. Additionally, if a consumer does exercise the opt-out for marketing, which is in the bill, the opt-out expires after 5 years. At that time, affiliates can then start marketing again to the customer.

I find it disturbing that the supporters of the bill want to permanently preempt States from enacting stronger affiliate-sharing laws for credit reporting purposes, but only think customers' preferences should be recognized for 5 years.

Last, but perhaps most fundamental, the Senate bill denies the consumer the ability to define the parameters of his or her relationship with a company, and this, I think, is really important. Under the current bill, when a consumer purchases a product from a megacorporation, the consumer automatically, without his or her choice or consent, makes his or her information available to hundreds of companies. Lawyers call this type of relationship, where one side has all the bargaining power, an adhesion contract. Some courts rule these types of contracts invalid because they do not reflect arm's-length negotiation and could result in unconscionable terms for the consumer.

Our amendment is a substitute to the affiliate-sharing language in S. 1753. Supporters of the underlying bill claim the Government needs a viable national standard to ensure the efficiency of our credit market. This amendment provides such a standard. It gives consumers all across the country--in Alabama, in Maryland, in Kentucky, in Colorado, in Washington--the opportunity to have some say, some choice in how their personal data is shared. With the privacy of Americans more at risk because of the latest technological developments and identity theft, with privacy invasions at its core becoming the fastest growing white- collar crime in the United States, we believe strong national standards are critical.

Our amendment reflects the terms of the California privacy law, which the California Bankers Association just a very short time ago called reasonable and workable, and are now lobbying against.

I read the letter of the author of the California bill, which I think irrefutably states the turnaround the financial institutions have done in this opt-out provision. Jim Bruner of the Securities Industry Association stated at the press conference announcing the agreement on California law on August 14, just a short time ago:

``While we would have preferred a national standard,'' [the

California law] ``encompasses all aspects of the workability

needed to ensure protection of consumers' privacy.''

And then they turned around and did a 180.

Jamie Clark of the California Bankers Association said at the same press conference that the banks:

``. . . have no objection to the measure passing'' and

would tell its supporters to vote for the bill.

Clark added:

``We prefer a national standard so that you have a uniform

operating environment.''

But they didn't tell anyone in California, which has just passed a new law which provides opt-out, that they could not live with the opt- out standard.

They did not come back here saying the law was sloppily drafted. They liked it then. When you do the law back here, all of a sudden it is sloppily drafted.

Diane Colborn of the Personal Insurance Federation called the California bill ``a balanced measure that will provide meaningful privacy protections to consumers while also addressing the workability concerns that our members and customers had.''

The California credit unions supported this legislation and still do. I thank them for their support.

This amendment offers businesses in California and around the country the chance to get a moderate, reasonable, uniform national standard on personal privacy.

Under the amendment, companies would be required to give consumers notice of their intent to share transactions and experience and other information with their affiliates. Consumers would then have the opportunity to opt out--to say, I don't want you to do it, or to do nothing at which point the information could be shared. The company would be notified and would give them, I hope, a choice of whether their most personal information is shared among affiliates.

This amendment would also allow closely related affiliates in the same line of business to share information with each other. Specifically, companies would not need to provide an opt-out choice if one, the affiliate is regulated by the same functional regulator--an example of that is institutions that regulate financial service institutions such as the Office of Thrift Supervision and the Office of the Comptroller of the Currency would be considered the same functional regulator; two, the affiliate engages in the same line of business. An example of that is the selling of securities, banking services, and insurance would all be considered independent lines of business; three, the affiliate shares a common brand identification; and four, the affiliate is a wholly owned subsidiary of the same company.

The amendment also has numerous other exceptions that were ironed out after 4 years of negotiation in California to meet the practical needs of business. The exceptions include the following: No. 1, information maintained in common databases. This is another false rumor that is being spread on this bill. This amendment allows employees of an affiliate to have access to information maintained in a common information system or database so long as the information is not accessed, disclosed, or used.

That is the key. It doesn't require new databases. It doesn't mess up their database. It just says you can't access it if the individual opts out.

This exception is necessary because we don't want to disadvantage companies that have streamlined operations by combining databases and other information technology resources. On the other hand, this amendment still permits consumers to have a choice over whether information in the database can be used for secondary purposes.

This amendment, as the Gramm-Leach-Bliley and California law, has an exception for transactional uses of information.

Information sharing ``necessary to affect, administer or enforce a transaction requested or authored by the consumer'' or ``with the consent or at the direction of the consumer'' is excluded from the opt- out.

Our amendment has exceptions for affiliate sharing of personal information that is necessary for companies to effectively manage their operations. For example, for security purposes, institutional risk control, and to respond to customer disputes or inquiries.

Proponents for unrestricted sharing of affiliate information argue that it is needed to solve identity theft. They correctly point out that companies can track unlawful purchases or suspicious activity by monitoring unusual account activity, change of address requests, and other suspicious behavior.

This amendment explicitly allows for affiliates to share information ``to protect against or prevent actual or potential fraud, identify theft,'' et cetera.

In addition, the amendment has exceptions relating to a business, a merger, a sale, a transfer; to comply with Federal, State, or local laws; for outsourcing functions with vendors such as data processing or billing; and, to identify or locate missing and abducted children, witnesses, criminals and fugitives, parties to lawsuits, parents delinquent in child support payments, organ and bone marrow donors, pension fund beneficiaries, and missing heirs, or to report known or suspected instance of elder or dependent adult financial abuses; and an exception is also carved out for the United States of America PATRIOT Act.

I deeply believe that without this opt-out the National Consumer Credit Reporting System Improvement Act would create a permanent and unworkable Federal standard that would set back the privacy of personal information and allow sensitive personal data to be moved through dozens, hundreds, and, in some cases, thousands of other companies.

This amendment is quite simple. It is about consumer choice.

I am puzzled at the ferocity with which the financial institutions and the banks are lobbying against this amendment. They serve people. That is what they are there to do--serve people. Shouldn't someone know if this information is being marketed within the loophole? Shouldn't someone have the opportunity to say, I don't want you to use my information? In fact, I think I am going to change banks, if they do this. Find a bank that won't do it. That would be my advice to everybody.

I think consumers should be given the opportunity to tell a bank they don't want their information shared with other companies. This is America. We should have that freedom. We should have that right. If you vote for this amendment, Americans will.

Do I have a few more minutes? If I could quickly set aside this amendment and send one other amendment to the desk, I will not speak to it.

I am happy to wait. I will yield the floor at this time and do it later.

Thank you very much.

No. That is all right.

Mr. President, I send an amendment to the desk on behalf myself, Senator Boxer, and Senator Kennedy.

Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. President, this amendment essentially updates the definition of ``medical information.'' It takes a medical definition submitted by the National Association of Insurance Commissioners. It is the definition that is used by a majority of our States. I ask unanimous consent that a letter in support of this definition from the American Medical Association, the American Cancer Society, the California Medical Association, the Community Clinic Consortium, the San Francisco AIDS Foundation, and the AIDS Health Care Foundation be printed in the Record.

I believe both sides will accept the definition, and I would be happy to take a voice vote.

Mr. President, I rise today to express my support for the $87 billion supplemental conference report, and I want to take a few minutes to explain why I support this conference report, even though I have serious misgivings about some of its provisions.

I support this conference report because I believe the United States now has an inescapable responsibility in Iraq.

We must stay the course and to do that, we must provide our troops in the field with the resources necessary to complete their mission. The defense title of this conference report provides nearly $65 billion for that purpose, including important funding to improve the safety of our troops by securing Iraqi small arms caches which are the source of much of the munitions used to attack U.S. forces.

We must rebuild Iraq's infrastructure and assist in resurrecting a viable Iraqi economy. We must see that a stable government is put in place. We must prevent civil war. And we must see to it that Iraq does not become a base for terror and instability throughout the region.

Nothing could be more disastrous for U.S. national security than, after bringing about regime change, if our nation were to turn tail and run and not accomplish the mission.

We would send precisely the wrong message to both our friends and our foes around the world.

If the United States were to pull out without completing the job, I believe that we would see civil war and a return of the Baathist regime, perhaps headed by someone as bad or worse than Saddam.

For many of us, the challenges that we now face in Iraq illustrate the shortcomings of a doctrine of unilateral preemption and preventive war.

When we use force against a state and seek regime change we are left with an inescapable role: Nation building.

This conference report is not perfect. Far from it. But it is critical that we do not leave the hard work of post-war reconstruction undone.

When the supplemental bill was before the Senate, I did what I could to see if it was possible to structure at least some of this package as loans--and the Senate adopted an amendment which would have made $10 billion of the reconstruction loans.

That provision, unfortunately, was dropped in Conference over my objections and those of many of my colleagues.

I also worked with Senator Domenici to include additional reporting language in this bill. This amendment, which was adopted by the Senate, provided Congress and the American people real oversight over what the administration's plans were in Iraq and how the money in this supplemental was being spent.

Unfortunately, many of these reporting requirements were also stripped out in conference.

I also supported efforts to include provisions in this bill so that there would be greater international contributions to the reconstruction effort, to see if Iraqi oil could be quickly bought on- line to underwrite costs, to earmark some of the funds to be spent in Iraq on domestic priorities instead, and to try to pay for this supplemental by deferring the large tax cut for those Americans earning more than $340,000 a year.

So if I had my way in putting this package together we would have before us a very different conference report.

Unfortunately, all these options were either debated and voted down by the Senate when we considered this bill earlier or, in the case of the loan provision, stripped out by the Republican majority in conference.

I would also like to note a provision of this bill that strikes close to home

for me and my constituents. I am pleased that the conference report provides $500 million for FEMA disaster relief activities associated with recently declared disasters, such as the wildfires in California. Representative Jerry Lewis and I sponsored this funding as a downpayment on what we all can expect to be a costly reconstruction effort in southern California. We in California are resilient, and I hope that this funding will help us to bounce back quickly from the catastrophic fires still burning in California.

So in the final analysis, even without the inclusion of many of the Iraq provisions I would have liked to have seen in this bill, I have come to the conclusion that the United States must step up to the plate and meet its obligations in Iraq. The United States must win the peace in Iraq.

The United States must also seek to repair the breach that exists between our nation and some of our friends and allies in the international community.

As I stated on the floor earlier when the Senate considered this supplemental, it is my sincere hope that in the reconstruction of Iraq, the United States can repair some of this damage by working with our allies, the United Nations, and the international community.

The United States has lost a great deal of good will throughout the world in the past year due to the perception that the American attitude has become ``our way or the highway.''

We must signal clearly and unambiguously that our attitude has changed and that we welcome the full partnership of others in the international community in Iraq.

On balance I find that I must support this conference report. Our national security and the safety and well-being of our troops demand it.

Indeed, how the United States approaches the reconstruction of Iraq may well prove to be one of the greatest tests of American leadership since World War II.

To fail in this endeavor could well escalate chaos in the Middle East and Gulf region, lead to civil war in Iraq, and allow Iraq to become a base for terror. I believe that it is important that Congress supports this conference report and that we stay the course in Iraq.

I yield the floor.

Mr. President, I rise in support of the McCain- Lieberman amendment. I would like to begin by thanking the distinguished Senators from Arizona and Connecticut for their work on this bill. Their efforts are moving the Senate and the country forward on this very important issue.

I strongly believe that it is time for the United States to take real action against climate change. The science is solid. It is time to stop debating whether to do something and start discussing how to do it.

This modest bill is an affordable and crucial step forward. It is time to act.

The McCain-Lieberman amendment would create the infrastructure needed to track and trade greenhouse gas emissions and require the U.S. to return to year 2000 emissions levels by 2010.

The amendment would give us 7 years to reach year 2000 level emissions. Because of the recession, our national emissions actually went down in 2001. So we are actually at about year 2000 levels right now.

So we have 7 years just to get back to our current level of emissions. This is a modest step but it is a step forward.

As the world's largest greenhouse gas emitter, the U.S. has a duty to act.

With only 4 percent of the world's population, we produce 20 percent of the world's greenhouse gas emissions. Much of the world is already reducing their greenhouse gas emissions. The world is counting on us to do the same.

If we continue to ignore the problem, it will only get worse. If we wait, we will need to make bigger cuts in our emissions and we will have less time. Action will become more expensive rather than less.

I understand that many people are concerned about the costs of any efforts to reduce emissions. I also want to make sure that whatever program we wind up with is a good deal for the American people.

I strongly believe that the cap and trade program in this bill is a good deal for America.

Concerns about the cost of action are important.

But I want to ask my colleagues to consider very carefully the cost of doing nothing. The evidence is getting stronger and stronger that climate change will be very expensive.

According to the best available research, not acting will cost my State dearly. Our large population, our geography, and especially our reliance on snow runoff for water make California extremely vulnerable to global warming.

Frankly, the models predicting the impacts of global warming on California are frightening.

Climate change threatens the agricultural and natural resource industries that are central to California's economy and quality of life.

As the Senate knows, I am especially concerned about the future of California's water supply. More than 36 million people live in California right now, and we expect to have 50 million people by 2020.

Even without climate change, it would be a struggle to supply enough water for all of these people. But report after report indicates that climate change will further threaten a water supply that is already tight.

Models from NASA, Lawrence Livermore National Laboratories, and the Union of Concerned Scientists all indicate that climate change is likely to increase winter rain and decrease snowfall in California.

More winter rain means winter flooding. Less snow means less water for the rest of the year.

But California's natural environment as we know it depends on gradual runoff from snow.

Furthermore, we have spent billions of dollars on water infrastructure in California that depends on this runoff. And yet we already struggle to provide enough water for our farms, our cities, and our fish and wildlife.

As my colleagues know, I have worked hard to plan for the future of California's water supply. Climate change threatens even to make those plans insufficient.

We are already seeing alarming changes. According to scientists at Lawrence Livermore National Laboratory, the past century has seen a decline in spring and summer runoff in some California streams.

In 1910, half of the Sacramento River's annual runoff took place between April and July.

Today, that number is closer to 35 percent and is continuing to decline. We can no longer count on this runoff.

We are also already seeing a rise in sea level. Average sea level has risen considerably in San Francisco since 1850, with the most marked increase occuring since 1925. My colleagues from coastal states understand the potential cost of rising sea levels to coastal communities.

We are seeing other effects of climate change throughout the world:

The Union of Concerned Scientists has found that the global sea level has risen about three times faster over the past 100 years than the previous 3,000 years.

In July, the World Meteorological Organization released an unprecedented warning about extreme weather events. According to the organization's press release, ``recent scientific assessments

indicate that, as the global temperatures continue to warm due to climate change, the number and intensity of extreme events might increase.''

According to the World Meteorological Organization, the United States experienced 562 tornadoes in May of this year. The tornadoes killed 41 people. This was 163 more tornadoes than the United States had ever experienced in one month.

We are seeing similar record extremes around the world. These extreme weather events are a predicted result of climate change.

Climate change is also affecting some of our most treasured places. Last November, the Los Angeles Times published an article about the vanishing glaciers of Glacier National Park in Montana. Over a century ago, 150 of these magnificent glaciers could be seen on the high cliffs and jagged peaks of the surrounding mountains of the park. Today, there are only 35. And the 35 glaciers that remain today are disintegrating so quickly that scientists estimate the park will have no glaciers in 30 years.

Closer to home for me, on October 12 of this year, the Los Angeles Times reported that glaciers in the Sierra Nevada are disappearing. Many of these glaciers have been there for the last thousand years.

We are seeing similar melting around the world, from the snows of Mt. Kilimanjaro in Tanzania to the ice fields beneath Mt. Everest in the Himalayas.

Dwindling glaciers offer a clear and visible sign of climate change in America and the rest of the world.

We are already seeing some of these changes. The science tells us to expect even more. The evidence that climate change is real is overwhelming: including reports from the National Academies of Science, the Intergovernmental Panel on Climate Change, and even the Congressional Budget Office.

To quote a CBO report released in May, ``scientists generally agree that continued population growth and economic development over the next century will result in substantially more greenhouse gas emissions and further warming unless actions are taken to control those emissions.''

The Intergovernmental Panel on Climate Change estimates that the Earth's average temperature could rise by as much as 10 degrees in the next 100 years--the most rapid change in 10,000 years.

The latest evidence also indicates that climate change is likely to lead to more forest fires. Models indicate that warming will lead to dryer conditions in many places. Furthermore, warming is allowing bark beetles to spread farther north and to higher altitudes than ever before.

In parts of Alaska, bark beetles now have two generations per year instead of one, leading to drastic increases in population and destruction of our forests.

As we know too well, dry conditions and insect kill makes our forests into tinder boxes.

I strongly believe that we have the evidence that we need in order to act. Not addressing climate change will cost us dearly.

Yet, so far, the United States has not really taken action against climate change. Not only are we not part of the Kyoto Protocol, but the administration refuses to take part in shaping another solution. This is a big mistake.

We emit more greenhouse gases than any nation on Earth. The world is counting on us, and we have a responsibility to help.

We should be a leader--not an obstacle--when it comes to combating global warming. In his speech to the joint session of Congress--which many of us cited as among the best we have ever heard--British Prime Minister Tony Blair challenged the U.S. to take action now. Mr Blair said:

Climate change, deforestation, the voracious drain on

natural resources cannot be ignored. Unchecked, these forces

will hinder the economic development of the most vulnerable

nations first and ultimately all nations.

Mr. Blair went on to say:

We must show the world that we are willing to step up to

these challenges around the world and in our own backyards.

If this seems a long way from the threat of terror and

weapons of mass destruction, it is only to say again that the

world security cannot be protected without the world's heart

being won. So America must listen as well as lead.

Prime Minister Blair is right. If we fail to act now, we will face devastating consequences in the future. We will impose those same consequences on future Americans and the rest of the world.

Continued failure to act will also further strain our relationships with our allies. These relationships are already tense enough.

The administration has said that we need more research before acting. I agree that we should continue to study climate change. But we also need to start reducing our emissions of greenhouse gases now.

Prime Minister Blair has committed to a 60 percent cut in Britain's emissions by 2050. We need to make sure the U.S. is not left behind.

The McCain-Lieberman amendment is the right place to start.

This is a modest amendment. We would need to be back to our current level of emissions by 2010. In reality, much of the reduction in ``net emissions'' will come through increased carbon sequestration in forest and agricultural land. Emissions could actually increase as long as there is enough sequestration to offset the increases.

The amendment is comprehensive. The amendment covers six greenhouse gases and the vast majority of our greenhouse gas emissions.

The amendment is low cost. Repeated analyses have shown that cap-and- trade programs are the most cost effective way to reduce emissions. According to the Massachusetts Institute of Technology, this amendment would cost less than $20 per household over the life of the program--we can afford this cost.

The amendment would not lead to rapid fuel switching to natural gas. According to the Massachusetts Institute of Technology, coal use would actually continue to increase under this amendment. Natural gas use would decrease from business as usual because the bill would spur conservation measures.

During the latest energy crisis, California showed that conservation can make a huge difference. This bill will help us create better incentives for conservation.

Even the Energy Information Administration, EIA, says that this amendment would not result in fuel switching. EIA was concerned about the costs of the original Climate Stewardship Act. I believe that the agency's models are flawed and biased toward higher costs. But even those models indicate that this amendment will cost little and will not lead to price spikes.

There is a lot of misinformation floating around about this amendment. Some of the models were analyzing the Kyoto Protocol, which would have required a 20 percent emissions reduction by 2010. This amendment requires us to get back to our current emissions by 2010, an entirely different proposition.

Other models are based on an ``energy shock.'' Coming from California, I am quite familiar with energy crises. Shocks happen when businesses do not have time to prepare. This amendment is not a shock. We are giving industry 7 years' warning. According to the Massachusetts Institute of Technology, 7 years is enough time for the economy to adjust without job losses.

Businesses throughout the country have shown that efforts to reduce emissions can increase efficiency and actually save companies money.

Voluntary programs simply are not doing the job. We need to give incentives for all companies to increase efficiency and cut emissions.

We need to move forward with a national solution to climate change. So far, we have placed all of the burden on the states.

I am proud to say that California has been a leader. California has created a registry of greenhouse gas emissions that will be a model for the nation. Several other states are already looking to adopt the California Climate Action Registry's standards.

Similarly, California has a groundbreaking regulation affecting greenhouse gas emissions from automobiles.

Many states are moving forward, and they are now pressing harder for Federal action.

Local officials are also pressing for a national plan. My colleagues know that I am partial to mayors. Recently, 155 mayors, including 38 from my State alone, signed a statement calling for national action.

State and local programs are important and I applaud these efforts. But we need national leadership on this issue.

The McCain-Lieberman approach has widespread public support. According to a recent national poll, three-fourths of Americans support this approach to global warming--including solid majorities from both parties. We need to listen.

We know that agreement on climate change is possible in the Senate. The Senate has passed a modest provision in the Energy Bill 2 years in a row. The Foreign Relations Committee has recognized the urgency of the issue for our diplomatic relations.

It is time for the entire Senate to go on record on this important topic. We need to show Americans and the rest of the world that we are listening and that we are doing something about climate change.

I believe we can unite behind this bill and move the debate forward.

As Mr. Blair said, we have a responsibility to listen and to lead. I urge my colleagues to support this amendment.

Mr. President, I wanted to say a few words. Actually, Senator Craig was one of the earliest people with whom we began to work on these issues, from the California perspective, many years ago on the Quincy Library Group. That began to develop kind of an across-the-aisle bond.

Then when Senator Wyden became ranking member of the Subcommittee on Public Lands and Forests in the Senate Energy Committee, he really took a great interest in this subject as well. So it has been a terrific pleasure for me to work with him as well. He has carried this out in an absolutely superlative way.

I also want to thank Senator Daschle, Senator Lincoln and Senator Pryor, who have been a crucial part of this legislation, Senator McCain, Senator Cochran, Senators Crapo and Domenici. I am looking for people in the Chamber who have been part of this effort.

I hope the American people are proud of us tonight. I believe we have worked as the American people want us to work--not out of mean-spirited partisanship but rather, sitting together and working across the aisle to work out compromises. That is what this bill is. We had to cement certain compromises in order to see that the bill covered the United States fairly and also met the concerns of both sides of the aisle.

This bill is funded. It is about double the amount of money that we have had in the past to treat those lands that are at high risk of catastrophic fire. The House bill is not funded. Additionally, this bill leaves intact a collaborative citizen participation process in an administrative review procedure. It leaves intact the ability for judicial review, but it truncates it in a way that allows us to move more aggressively on the 20 million acres that are encompassed in this bill.

It is interesting to me to hear people say: Oh, they are just going to log all the forests. In fact, that has never been the case. There has always been a set number. In this bill, it is 20 million acres. We have 54 million acres across the United States that is at the highest risk of catastrophic fire. In my State alone, we have 8.5 million acres. It is going to take a new mindset for people if we are going to be able to do what we need to do.

Since Senator Craig mentioned the Old Fire, which is currently burning in California, I just wanted to give you all a brief update. Currently, I have my State director at the command center in San Bernardino. I just want to report that with respect to the Old Fire, which is the huge fire they thought would consume all of Lake Arrowhead and a number of other threatened mountain towns where there are 50,000 to 60,000 residential homes, they have had a good day today. It began to rain this morning, the fog is in, and the air remains moist. They couldn't see the smoke for the fog, and for the first time on the fire lines, there is a sense of optimism that these heroic crews are going to be able to get a hold on this fire. Most importantly, they were able to bulldoze a line ahead of that fire. Over five hundred homes have been lost in that particular fire so far. Hopefully, there will not be many more

lost, and, hopefully, within a matter of a few days that huge fire can be put under control.

As we know, the town of Julian, which is a gold mining town in the San Diego area, has eight firefighters. All eight firefighters fighting these fires have lost their homes. One distinguished firefighter, Steven Rucker, who came down on mutual aid from the city of Novato in northern California lost his life. I think we all salute him.

There is an enormous lesson in these devastating fires currently burning in my home State, and it is that the land has to be managed. The forests have to be managed. We have to do the right thing for our constituents. We are pushed and we are pulled by conflicting interests. I believe the Senate version of this bill is a good bill. It is a good bill from the interests of the public, and that is what has to count in this matter.

I thank the Chairman of the Agriculture Committee, Senator Cochran, who has been instrumental in leading this effort; Senator Domenici, my friend and colleague, and Senator Harkin, the ranking member on the Agriculture Committee. I hope my colleagues will join me in supporting this bill.

I thank the chair and I yield the floor.

Mr. President, I believe I have 5 minutes on my amendment.

Mr. President, I call up amendment No. 1977.

I thank the Chair.

I ask unanimous consent to add as cosponsors, in addition to Senators Snowe and Murray, Senators Clinton, Jeffords, and Durbin.

Mr. President, looking at the scope of the HIV/AIDS tragedy, 40 million people are infected with HIV worldwide and 30 million of these people are from sub-Saharan Africa, approximately 70 percent of the world's total. As of 2001, 21.5 million Africans had died of AIDS, and at least 50 million new cases are projected by 2010 in five countries alone: China, Ethiopia, India, Nigeria, and Russia.

It is estimated that two-thirds of the 45 million new HIV infections expected to occur during this period could be averted with effective prevention. That is where we must go. This amendment does not aim to change the one-third earmark for abstinence until marriage. This amendment aims to provide some flexibility so that the people on the ground have the opportunity of tailoring the most effective prevention program.

The way in which we do it is, first, we reserve at least one-third of funds for the prevention of the sexual transmission of HIV, rather than one-third of all prevention funds, for abstinence-until-marriage programs.

Secondly, our amendment defines an abstinence-until-marriage program as any program that places a priority emphasis on the public health benefits of refraining from sexual activity outside of marriage.

Our amendment gives the administration, local communities, and HIV/ AIDS workers on the ground maximum flexibility to design HIV/AIDS prevention strategies that are most effective in stopping the spread of

Mr. President, how much of my time do I have remaining?

Mr. President, with respect to Uganda, I would like to read testimony from a Ugandan HIV/AIDS director before the House regarding the promotion of prevention by the President of Uganda. Let me quote this:

For some, he promoted a message of delaying sexual debut.

For others, he urged them to be faithful to one partner and

to use a condom. It was his three-part message that was

effective in Uganda. In my personal experience, I believe

this three-part message is critical.

Currently, one-third of all prevention funds must be reserved for abstinence until marriage programs. This earmark limits the amount of funds available for other prevention programs, including preventing mother to child transmission. There are literally 5 million to 10 million orphans already from AIDS in Africa, and it is going to be much more.

All we are saying, is that the one-third earmark should not apply to programs that give a pregnant woman a 90 percent chance of preventing the transmission of AIDS to the unborn child. That is all we are doing in this amendment, providing some flexibility.

Remember this overwhelming statistic. The estimates are there will be

in excess of 20 million orphans by 2010 in Africa. There should be flexibility. Our amendment allows the people on the ground to design a HIV/AIDS prevention program that is most effective at stopping the spread of HIV/AIDS.

Mr. President, I rise today to give the Senate an update on the wildfires sweeping across Southern California--as the Senate continues to debate legislation to change our Nation's forest policy.

The situation in my State is at a critical juncture. If the weather continues to improve--as it is expected--then firefighters may be able to get a handle on the fires which continue to burn. This would be good news indeed.

I would also like to report that FEMA will shortly be announcing 6

permanent field sites where victims of the fire can go for assistance and 4 additional mobile sites.

It is critical that the FEMA centers get opened as soon as possible-- so that the help gets where it is needed most.

There are nine large fires currently raging in the State--all of which have caused considerable damage.

In total, these fires have burned over 650,000 acres--about the size of Rhode Island. Twenty people have been killed. This includes a firefighter from Marin County who was killed by a fast moving wall of fire associated with the Cedar fire. Twenty-four hundred homes have been lost in five counties, and thousands more structures have been burned.

There are some 13,000 firefighters waging a battle against the fires. True to form, these firefighters have given everything they have to put out the fires and are exhausted.

Our thoughts and our prayers go out to these men and women--and to the family of the firefighter who died--we know that these firefighters are doing everything possible to save lives, homes, and private property.

Let me now go through some of the fires to let you know what is happening.

The Cedar Fire in San Diego has become the largest wildfire in California history. It has burned 250,000 acres--and 6 days old, it is only 15 percent contained. Thus far, 22 injuries have been reported as a result of this fire, and 7 civilian fatalities confirmed by the San Diego Sheriff's Department. Additionally, 1,300 Structures have been destroyed.

The fire has destroyed 90 percent of the town of Cuyamaca, and today, it threatens the communities of Pine Hills, Mt. Laguna, Ramona and Julian. Plans to aggressively protect the historic town of Julian are in place. Overnight, 300 structures were destroyed in Cuyamaca and Harrison.

The Old Fire in San Bernardino is also burning out of control and continues to pose a major threat to Lake Arrowhead, Big Bear, and other mountain communities. This fire also began 6 days ago. It has consumed 60,000 acres thus far and is only 10 percent contained.

Massive resources have been expended to fight this fire, including 2,175 firefighters, 10 helicopters, 40 fire crews, 280 engines, and 7 air tankers.

There have been three injuries to date and two civilian deaths. Conservative estimates suggest that 550 residential structures and 10 commercial structures have been destroyed. But this is just the tip of the iceberg.

There are 50,000-60,000 homes and 2,000 commercial properties in the area threatened by this fire. More than 50,000 people have been evacuated from communities like Lake Arrowhead and Big Bear. Firefighters are doing what they can to protect these communities from going up in flames, but this is difficult because of the thousands of trees killed by the Bark Beetle, which have become kindling in this fire.

The Grand Prix fires also continues to rage in San Bernardino, near the community of Fontana. This fire has consumed 70,000 acres, destroyed 60 residences and 60 other structures, and has resulted in 27 injuries. This fire began 10 days ago, and is 40 percent contained. Today, 1,600 firefighters, 12 helicopters, 42 fire crews, 159 engines, and 30 bull dozers are committed to this fire.

It is hoped that weather conditions will allow firefighters to get better control of this fire today.

Moving North, the Simi fire threatens the community of Stevenson Ranch. The good news with this fire is that it did not move into the canyons and cut a path toward Malibu. But when the wind shifted, the fire turned toward a sub-development on the northern end of Los Angeles County.

This fire has consumed 105,560 acres and destroyed 16 structures and 64 other buildings. Thus far, there have been 5 injuries as a result of this fire, and the fire is only 35 percent contained.

Now, firefighters are trying to keep this fire away from homes and have thus far been successful. Today is a critical day for this fire. Cooler temperatures may allow a fire line to be completed along Potero Canyon, and this would go a long way toward bringing this fire under control.

Like the other fires, massive resources have been deployed to fight this fire, including: 1,389 firefighters, 9 helicopters, 236 engines, 6 air tankers, and 27 bulldozers.

The Piru fire continues to burn in Ventura county, near the community of Fillmore.

Thus far, 62,000 acres have been consumed, and the fire is only 30 percent contained.

The fire began a week ago, has caused 20 injures and destoyed 8 structures.

But this fire remains dangerous. The fire is moving towards fuel- laden areas in the Los Padres National Forest, and we have to watch this one closely.

The Padua fire--near Claremont, CA--is smaller than the other ones, but it has caused considerable damage nonetheless.

Latest reports show that it has burned almost 10,000 acres, and the good news is that it is 50 percent contained.

This fire has caused 15 injuries, destroyed 59 structures, and threatens 500 homes in the community of Mt. Baldy.

The resources directed at this fire include 691 firefighters, 17 fire crews, 80 engines, and 4 bulldozers.

Some good news from the Whitmore fire, near Shasta, CA.

This fire which has burned approximately 1,000 acres is 80 percent contained. There have been no injuries as a result of this fire, and it is expected to be contained today.

It is my great hope that this happens.

Good news also with the Tuk Fire, 10 miles east of Orick, CA, south of Crescent City.

This fire has burned only 315 acres and is 80 percent contained. Officals are hoping that this fire will be fully contained today as well.

The mountain fire, which burned just under 10,000 acres in Riverside, CA, has been 100 percent contained.

Fire officials will continue to complete burnout operation in near the fire edge, and pending favorable weather, should be completed soon.

This fire was serious--it caused 6 injuries and 61 structures.

Fire crews and equipment are coming in from other States. The governor of New Mexico has offered equipment, and I understand that other States have offered help as well.

As crews become weary and fatigued, it will be increasingly important to get reinforcements from other States--and I will do what I can to make sure this happens.

In terms of victim assistance, help is on its way. As I mentioned, FEMA will be establishing four permanent centers in affected communities, and four mobile centers.

Additionally, if any Californian needs help, they can call my San Diego or Los Angeles office, and we will do anything we can to ensure that they get the appropriate assistance.

This is a terrible time for Californians, but in times of crisis, people pull together and do what they can to help one another.

It is my hope that these fires can be quickly contained--with limited casualties and loss of property.

This event has truly been a wake up call, and I hope that we learn how critical it is to manage our lands, to ensure that catastrophic fires like these can be prevented.