Floor Statements

Mr. President, 50 years ago today a young and dynamic woman was elected as a member of the Los Angeles City Council. She was just 22 years old, making her the youngest council member in the city's history.

The fact that such a record has been held for so long is in itself remarkable. But then again, we are talking about a truly remarkable woman, Rosalind Wyman.

For many years now, Roz has worked tirelessly, for her family and friends, for the city she loves, for the State of California, for the Democratic Party, and for women everywhere.

There is a wonderful photo of Roz when she was only 2 years old, smiling up at a portrait of Franklin Roosevelt. Her mother, Sarah, was a precinct captain for FDR's first Presidential campaign, running the operation out of the family's drugstore on 9th Street and Western Avenue in Los Angeles.

Roz's father, Oscar, worried that such a partisan stance would cost them customers, but Sarah believed that electing Roosevelt was much more important.

Small wonder, then, that Roz developed a deep and abiding passion for political activism and the Democratic Party. Her first campaign was working on behalf of Congresswoman Helen Gahagan Douglas, in her ill- fated 1950 Senate race against Richard Nixon, when he unfairly portrayed her as ``the Pink Lady.''

Then, 2 years later, Roz made history by becoming the youngest person ever elected to the L.A. City Council, and only its second woman member. She went on to serve in that body for the next 12 years, on the finance and budget committees, and eventually becoming president pro- tempore.

As another woman who entered California politics in the 1950s, I can assure you that it was quite a different world back then. It was still very much a male club. In both Los Angeles and San Francisco, one was hard-pressed to find a women's bathroom anywhere near the chambers.

Something else Roz inherited from her mother was a love for baseball. In fact, there is nowhere that Roz Wyman would rather be than at Dodger Stadium, at the home plate corner of the Dodger dugout, where she has had her seats for over 40 years now.

It is no exaggeration to say that the Dodgers would not have come to Los Angeles without the vision, fortitude, and sheer determination of Roz Wyman. Just ask Tommy Lasorda, who said: ``What this lady did for baseball in this city, they should erect a monument to her.''

Today, it is hard to believe how polarizing the effort was to bring the Dodgers from Brooklyn in the late 1950s. Yet Roz, believing that a professional sports team was just what L.A.

needed to cement its image as a major American city, braved death threats and earned many political enemies in order to see this come about.

One year after coming to L.A., however, the Dodgers went on to win the World Series, as they did again in 1963, 1965, 1981, and 1988, along with three National League Championships in the 1970s. No one today could imagine the city without one of baseball's greatest franchises.

One of the other defining moments in the modern history of Los Angeles, which placed the city firmly on the map as one of America's premier cities, was when it hosted the Democratic Convention in 1960.

And here, too, Roz Wyman played a vital, even pivotal role. She was an ardent Kennedy supporter, having supported him in 1956, in his unsuccessful bid for the Vice Presidential nomination.

She understood the natural connection between Hollywood and Washington, and before many others recognized Kennedy's enormous charisma and appeal, along with the growing importance of television to electoral politics.

And with her late husband, Eugene, who served as chairman of the California Democratic Party, they proved to be extraordinarily effective fundraisers and campaigners. They were responsible for enlisting the likes of Frank Sinatra to sing by the swimming pool, as Kennedy worked his political magic with the delegates.

It is easy to forget that back then, party conventions were not the largely scripted events that they are today. There was real drama-- nothing was inevitable--and delegates could change their vote at the last minute.

Such was Roz's influence with the Kennedy campaign, that she was able to convince Robert Kennedy to change the venue for JFK's fabled ``New Frontier'' speech from the Sports Arena to the grander Memorial Coliseum next door.

She went on, 8 years later, to work closely on Robert Kennedy's bid for the White House, which ended so tragically in Los Angeles.

During the 1970s, both with her husband Gene and after his unexpected passing, Roz was a highly effective advocate for the Democratic Party, raising awareness on a wide array of issues.

I first met Roz when I was mayor of San Francisco and she served as convention chair and chief executive officer of the 1984 Democratic National Convention, the first woman--Democrat or Republican--ever selected to run a Presidential Convention. In that position she oversaw the entire planning and management of the convention and its $13 million budget.

We soon became close friends, forming a bond that has grown ever stronger over the years. She was already a living legend, already a star of our party, and she did an absolutely stellar job, not just for the Democratic Party but for the city of San Francisco.

President Clinton recognized Roz's contribution, back in 2000, when he said: ``She reminds me of my ties to my roots. Her loyalty to our party and our candidates is something I hope I can emulate for the rest of my life.''

I share President Clinton's sentiments--and I, too, hope that I can emulate Roz Wyman. A pioneering force in American politics, she is my Field Marshall, my trusted adviser, and most importantly to me, my very dear friend.

Mr. President, I rise today to introduce a bill with Senator Ensign to ensure that Title I funds are directed towards instructional services to teach low-income students.

Title I provides assistance to virtually every school district in the country to serve children attending schools with high concentrations of low-income students, from preschool through high school.

It has been the ``anchor'' of Federal assistance to schools, since its origin in 1965. And while it has always been Congresses intent for Title I funds to be used for instruction and instructional services, the Federal Government has never provided a clear definition of what instructional services should entail.

This lack of Federal guidance has become especially clear now, as States scramble to comply with the new and expanded Title I accountability standards established in ``No Child Left Behind.''

While State Administrators of Title I are directed by law to meet these specific requirements, they have been given little guidance as to how to ensure that they are in compliance with the law.

I believe that the Federal Government is responsible for making this process as clear to States, as possible. In my own view, as it relates to Title I, we haven't lived up to our end of the bargain.

During consideration of ``No Child Left Behind,'' I worked hard to get my bill defining appropriate Title I uses included in the Senate version of the bill.

Unfortunately, during conference consideration, my bill was stripped out and in its place language directing the General Accounting Office, GAO, to report on how States use their Title I funds was inserted.

In April, GAO released the report that Congress directed them to submit on Title I Administrative Expenditures.

What GAO found is that while districts spent a relatively small amount--no more than 13 percent--of Title I funds on administration that ``because there is no common definition on what constitutes administrative, or indirect, expenditures'' the accounting office couldn't precisely measure how much of their Title I funds were used for administration.

Because Title I funds are not defined consistently throughout the States, the accounting office created their own definition by compiling aspects of State priorities to complete the report.

You see, the very reason I worked to define how Title I funds should be used--to create consistency and distribution priority nationwide-- became the definitive aspect preventing GAO from effectively drawing conclusions in their report.

My bill takes some strong steps by balancing the needs for States to retain Title I flexibility and providing them with the guidance needed to administer the program uniformly throughout the country.

My bill does two things: It defines Title I direct and indirect instructional services and sets a standard for the amount of Title I funds that can be used to achieve the academic and administrative objectives of this program.

It ensures that the majority of Title I funds are used to improve academic achievement by stipulating that ``a local educational agency may not use more than 10 percent of [Title I] funds received. . . . for indirect instructional services .''

By limiting the amount of funds that schools can spend on administrative or indirect services, school districts are restricted from shuffling the majority of Title I to pay for non-academic services, but it also gives the districts flexibility to use the remaining funds for the indirect costs of administering Title I distribution.

The second component of my bill defines direct and indirect services so that all States apply the same standards for Title I use nationwide.

Examples of permissible Direct Services are: Employing teachers and other instructional personnel (including employee benefits); intervening and taking corrective actions to improve student achievement; extending academic instruction beyond the normal school day and year, including summer school; providing instructional services to pre-kindergarten children for the transition to kindergarten; purchasing instructional resources such as books, materials, computers, and other instructional equipment and wiring to support instructional equipment; professional development; developing and administering curriculum, educational materials and assessments; transporting students to assist them in improving academic achievement.

Examples of indirect services limited to no more than 10 percent of Title I expenditures are: business services relating to administering the program; purchasing or providing facilities maintenance, janitorial, gardening, or landscaping services or the payment of utility costs; and paying for travel to and attendance at conferences or meetings, except for travel and attendance necessary for professional development.

Current law on Title I is much too vague.

It says, ``A State or local educational agency shall use funds received under this part only to supplement the amount of funds that would, in the absence of such Federal funds, be made available from non-Federal sources for the education of pupils participating in programs assisted under this part, and not to supplant such funds.''

Basically, it says that Title I funds are to be used for the ``education of pupils.'' That is just too nebulous.

The U.S. Department of Education has given States a guidance document that explains how Title I funds can be used.

Under this guidance document, only two uses are specifically prohibited: 1. Construction or acquisition of real property; and 2. payment to parents to attend a meeting or training session or to reimburse a parent for salary lost due to attendance at ``parental involvement'' meeting.

I believe we should give the Department, States and districts clearer guidance in law.

My reasons for introducing this bill are two-fold: First, I believe that States must use their limited Federal dollars for the fundamental purpose of providing academic instruction to help students learn.

Secondly, I believe that it is nearly impossible to do so without providing a clear definition of what is considered an instructional service.

I am not suggesting that it is the fault of the school districts for not focusing their Title I funds on academic instruction. They are simply exercising the flexibility that Congress has given them.

What I am saying is that if Congress also intended for those funds to educate our neediest children, Federal guidance must be given to ensure that it happens.

It is my view that Title I cannot do everything. Federal funding accounts for a small percentage of total funding for elementary and secondary education and Title I is even a smaller percentage of total support for public schools.

That is why I am trying to better focus Title I funds on academic instruction, teaching the fundamentals and helping disadvantaged children achieve success.

Schools must focus their general education budget to pay for expenses that fall outside of the realm of direct educational services and retain the majority of Federal funds to improve academic achievement for poor children.

It is time to better direct Title I funds to the true goal of education: to help students learn. This is one step toward that goal.

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

Mr. President, I rise today to introduce a bill with Senator Ensign to ensure that Title I funds are directed towards instructional services to teach low-income students.

Title I provides assistance to virtually every school district in the country to serve children attending schools with high concentrations of low-income students, from preschool through high school.

It has been the ``anchor'' of Federal assistance to schools, since its origin in 1965. And while it has always been Congresses intent for Title I funds to be used for instruction and instructional services, the Federal Government has never provided a clear definition of what instructional services should entail.

This lack of Federal guidance has become especially clear now, as States scramble to comply with the new and expanded Title I accountability standards established in ``No Child Left Behind.''

While State Administrators of Title I are directed by law to meet these specific requirements, they have been given little guidance as to how to ensure that they are in compliance with the law.

I believe that the Federal Government is responsible for making this process as clear to States, as possible. In my own view, as it relates to Title I, we haven't lived up to our end of the bargain.

During consideration of ``No Child Left Behind,'' I worked hard to get my bill defining appropriate Title I uses included in the Senate version of the bill.

Unfortunately, during conference consideration, my bill was stripped out and in its place language directing the General Accounting Office, GAO, to report on how States use their Title I funds was inserted.

In April, GAO released the report that Congress directed them to submit on Title I Administrative Expenditures.

What GAO found is that while districts spent a relatively small amount--no more than 13 percent--of Title I funds on administration that ``because there is no common definition on what constitutes administrative, or indirect, expenditures'' the accounting office couldn't precisely measure how much of their Title I funds were used for administration.

Because Title I funds are not defined consistently throughout the States, the accounting office created their own definition by compiling aspects of State priorities to complete the report.

You see, the very reason I worked to define how Title I funds should be used--to create consistency and distribution priority nationwide-- became the definitive aspect preventing GAO from effectively drawing conclusions in their report.

My bill takes some strong steps by balancing the needs for States to retain Title I flexibility and providing them with the guidance needed to administer the program uniformly throughout the country.

My bill does two things: It defines Title I direct and indirect instructional services and sets a standard for the amount of Title I funds that can be used to achieve the academic and administrative objectives of this program.

It ensures that the majority of Title I funds are used to improve academic achievement by stipulating that ``a local educational agency may not use more than 10 percent of [Title I] funds received. . . . for indirect instructional services .''

By limiting the amount of funds that schools can spend on administrative or indirect services, school districts are restricted from shuffling the majority of Title I to pay for non-academic services, but it also gives the districts flexibility to use the remaining funds for the indirect costs of administering Title I distribution.

The second component of my bill defines direct and indirect services so that all States apply the same standards for Title I use nationwide.

Examples of permissible Direct Services are: Employing teachers and other instructional personnel (including employee benefits); intervening and taking corrective actions to improve student achievement; extending academic instruction beyond the normal school day and year, including summer school; providing instructional services to pre-kindergarten children for the transition to kindergarten; purchasing instructional resources such as books, materials, computers, and other instructional equipment and wiring to support instructional equipment; professional development; developing and administering curriculum, educational materials and assessments; transporting students to assist them in improving academic achievement.

Examples of indirect services limited to no more than 10 percent of Title I expenditures are: business services relating to administering the program; purchasing or providing facilities maintenance, janitorial, gardening, or landscaping services or the payment of utility costs; and paying for travel to and attendance at conferences or meetings, except for travel and attendance necessary for professional development.

Current law on Title I is much too vague.

It says, ``A State or local educational agency shall use funds received under this part only to supplement the amount of funds that would, in the absence of such Federal funds, be made available from non-Federal sources for the education of pupils participating in programs assisted under this part, and not to supplant such funds.''

Basically, it says that Title I funds are to be used for the ``education of pupils.'' That is just too nebulous.

The U.S. Department of Education has given States a guidance document that explains how Title I funds can be used.

Under this guidance document, only two uses are specifically prohibited: 1. Construction or acquisition of real property; and 2. payment to parents to attend a meeting or training session or to reimburse a parent for salary lost due to attendance at ``parental involvement'' meeting.

I believe we should give the Department, States and districts clearer guidance in law.

My reasons for introducing this bill are two-fold: First, I believe that States must use their limited Federal dollars for the fundamental purpose of providing academic instruction to help students learn.

Secondly, I believe that it is nearly impossible to do so without providing a clear definition of what is considered an instructional service.

I am not suggesting that it is the fault of the school districts for not focusing their Title I funds on academic instruction. They are simply exercising the flexibility that Congress has given them.

What I am saying is that if Congress also intended for those funds to educate our neediest children, Federal guidance must be given to ensure that it happens.

It is my view that Title I cannot do everything. Federal funding accounts for a small percentage of total funding for elementary and secondary education and Title I is even a smaller percentage of total support for public schools.

That is why I am trying to better focus Title I funds on academic instruction, teaching the fundamentals and helping disadvantaged children achieve success.

Schools must focus their general education budget to pay for expenses that fall outside of the realm of direct educational services and retain the majority of Federal funds to improve academic achievement for poor children.

It is time to better direct Title I funds to the true goal of education: to help students learn. This is one step toward that goal.

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

Mr. President, I call up amendment No. 1060, as modified.

Mr. President, this amendment is presented on behalf of myself, Senators Nickles, Chafee, Lindsey Graham, Alexander, and McCain.

This amendment provides that Medicare beneficiaries with an annual adjusted gross income of over $200,000, or above, pay the full cost of the Medicare Part B premium. The amendment uses a sliding scale to ramp up the beneficiary's share of the Part B premium.

The amendment we are offering would hold Medicare beneficiaries with annual adjusted gross incomes between $100,000 and $150,000 a year responsible for 50 percent of the cost of the premium. In 2003, this amounts to $116.40 a month, or $1,396 annually, rather than $58.20 monthly, or $698 annually, which is what the beneficiary pays today for the benefit.

Medicare beneficiaries with incomes between $150,000 a year and $200,000 a year--that is $300,000 to $400,000 for a couple--would be responsible for 75 percent of the total cost of the Part B premium. In 2003, this amounts to $174 or $2,095 annually.

Medicare beneficiaries with annual incomes above $200,000--that is $400,000 for couples--would be responsible for 100 percent of the total cost of the premium. In 2003, this amounts to $232.80 a month, or $2,793 annually. Now, for a beneficiary with an annual income of $200,000, this amounts to less than 1.4 percent of their annual income. For the vast majority of Medicare beneficiaries, some 37 million of the 38 million beneficiaries, Part B premiums would remain the same as they are today.

According to the Census Bureau, about 98 percent of all Medicare beneficiaries have annual incomes below $100,000. So the amendment we are proposing will affect about 2 percent of the most affluent and well off Medicare beneficiaries.

Let me be clear. This amendment does not deprive any Medicare beneficiary of any benefit. What this amendment says is that if you can afford to pay the price for the Medicare Part B premium, you should. Those Medicare beneficiaries who have annual incomes below $100,000 a year will still be able to receive a 75-percent Government subsidy for their premium.

Now, I strongly believe the time has come to begin to income-relate some of these benefits. The Federal Government should not be subsidizing the Part B premiums of those beneficiaries who can afford to pay for the cost of the premiums themselves.

Much has changed since the creation of Medicare in 1965. People are living longer, due in large part to improved diagnostic tools and treatment. There is no way Congress could have predicted the number of people who would come to rely on Medicare or the rate at which medical expenses would grow. When Medicare was established in 1965, the Part B premium was set at a level to cover about 50 percent of program costs. With medical inflation, the dollar amount of the premium has declined to cover only 25 percent of program costs.

The Omnibus Budget Reconciliation Act of 1993 established the Medicare Part B premium to equal 25 percent of the program cost from 1996 to 1998. The Balanced Budget Act of 1997 permanently established the Part B premium at 25 percent. The bill to balance the budget in 1997 that passed out of the Senate Finance Committee included a provision to income relate the Medicare Part B premium. So this is nothing new.

The provision included in 1997 would have had beneficiaries with incomes over $50,000 for an individual and $75,000 for a couple paying a greater share of the premium. This provision was stripped out during conference.

Well, we were in a different financial situation when Congress made the decision to set the beneficiary's share of the Part B premium at 25 percent in 1997. At that time, we had only a $22 billion deficit. The next year the budget was in surplus to the tune of $69 billion.

With a Federal budget deficit of over $400 billion in the year 2003 and an increase in the Federal debt of $5.3 trillion, for a total of $12 trillion in debt expected by 2013, I believe that now is the time to rethink the premium structure of Medicare Part B.

As the baby boomers age, there will be an increasing reliance on and demand for the Medicare Program.

The number of people age 65 and older will more than double over the coming decades, rising from 37 million today to 70 million in 2030 and 82 million in 2050. Over the next 75 years, the Medicare program will cost 71 percent more than that provided under current law in order to meet its needs.

It is predicted the Medicare hospital trust fund will be insolvent by 2030. The CBO projects Medicare spending will nearly quadruple by 2075 in order to meet the growing need for the program, with budget outlays of $277 billion in 2003. This means spending for the program could reach $1.1 trillion by 2075.

With the legislation currently before the Senate, Congress is proposing some major changes to the Medicare Program. I am in full support of adding a drug benefit, but Congress should also rethink the financing mechanisms of the program, and this bill is short in that direction. High-income beneficiaries can afford to pay a larger share of Medicare's costs, at least of

the premium. They can afford to pay for the benefits they receive.

In light of the fact the Federal Government has just provided tax cuts in the range of $1,841 for people with incomes between $77,000 and $154,000 and up to $30,000 for people with incomes above $374,000, it seems to me people with annual incomes above $200,000 can afford to pay $2,793, which is the annual premium for Medicare Part B this year.

We should focus funding so that 98 percent of Medicare beneficiaries who have an annual adjusted gross income of less than $100,000 can continue to access benefits. I think it is reasonable to ask those who can afford it to pay a greater share of the premium. We are still waiting for an official cost savings score from CBO, but I believe this amendment could save billions of dollars.

Once again, Mr. President, this amendment affects less than 2 percent and only those with incomes of more than $200,000 a year adjusted gross income would pay the full premium of about $2,900 a year. We think this is a reasonable proposal. It is scaled up. It impacts no one below $100,000 adjusted gross income a year, and at the maximum for people of over $200,000 a year in adjusted gross income, the premium would be just $2,900.

The income limits would be indexed to medical inflation and, according to current population survey data from 2002, only 2 percent, or about 1 million people of the 38 million Medicare beneficiaries, have incomes of over $100,000 a year. This would protect the tax subsidy for people who need it by encouraging those who have the dollars simply to pay either a greater share of the premium cost or the full premium cost.

I thank the Chair. I yield the floor.

Mr. President, I rise today to introduce legislation to amend the Graton Rancheria Restoration Act to give the State of California and the local communities of Sonoma, Napa, and Marin counties the opportunity for input and review of the tribe's plan for a major casino in the Bay Area.

I am offering this legislation because the Boards of Supervisors of the local communities impacted by this planned casino have asked me to amend the Graton Rancheria Restoration Act. The Boards of Supervisors of Sonoma, Marin, and Napa counties have each unanimously passed resolutions seeking a change in Federal law to restore the Secretary of Interior's discretion in approving land into trust and allowing the State and local government to have a voice in the process.

Prior to today's introduction I have met with the Presidents of the Sonoma and Marin Boards of Supervisors, the Graton tribe, and Senators Campbell and Inouye the Chairman and Ranking Member of the Indian Affairs Committee.

This week I had a very spirited and frank conversation with Graton Tribal Chairman Greg Sarris and representatives from the casino investors. During the meeting Chairman Sarris committed to work with the local Boards of Supervisors and he committed to look at alternative sites for the casino. Chairman Sarris also said the Tribe and the casino investors would conduct an environmental review based on the criteria laid out in the National Environmental Policy Act, NEPA, before a site is selected. These are positive signs and I have told both the Boards of Supervisors and the Tribe that I would like to see them continue to work together.

This legislation guarantees that the local and State officials have a voice in the process. Without this change to the Graton Rancheria Restoration Act they do not have that voice.

In 2000, Congress passed the Graton Rancheria Restoration Act to restore Federal recognition to the 355 members of the Federated Indians of the Graton Rancheria.

The Graton Tribe's original Rancheria was in the northern Sonoma County town of Graton on land purchased by the Bureau of Indian Affairs, BIA, in 1920 for the ``village home'' of otherwise homeless Miwok and Pomo Indians. The Rancheria was terminated in 1958 when the BIA approved a plan to distribute the assets to resident Indians and remove the Rancheria from Federal trust.

The original version of the Graton restoration bill, H.R. 946, sponsored by Congresswoman Lynn Woolsey in the 106th Congress, passed the House of Representatives with a gaming restriction, to which the Tribe agreed.

In testimony before the House Resources Committee in May 2000, and in other public comments, Graton Chairman Greg Sarris stated that the Tribe had no intention of conducting gaming.

In fact, before the House Resources Committee, Chairman Sarris stated, ``Many may think our motives for restoration have been influenced by the opportunity gaming affords some other recognized tribes. Because our local political constituency, both democratic and republican has opposed any sort of development for environmental reasons, we agreed with these local political forces to not develop a gaming complex. So, as proof, we voted as a tribe to include a non- gaming clause in our bill, stipulating that we will not be a gaming tribe.''

Furthermore, in an article in the Marin Independent Journal on September 21, 2000, Chairman Sarris said, ``All we want is to be formally recognized as Indians and have the same rights that other Indians do for education and health care. We are not interested in gambling.'' I ask unanimous consent to print a copy of this article in the Record.

Senator Boxer sponsored legislation identical to Congresswoman Woolsey's in the Senate, but the gaming restriction was stricken when the bill was ultimately passed as part of the Omnibus Indian Advancement Act of 2000.

The day the legislation passed on December 11, 2000, Senator Boxer stated on the Senate Floor that dropping the gaming restriction was necessary because of opposition to the no-gaming clause by the Senate Committee on Indian Affairs and the Clinton Administration and because, according to Senator Boxer, ``Senator Inouye asserts that the no-gaming clause is unnecessary because the Graton Rancheria have no intention of conducting gaming.''

So what has changed one might ask?

Well, even though the Gratons voluntarily and repeatedly took a no- gaming pledge while their restoration bill was under consideration by Congress, on April 23, 2003, the Tribe and its partner, Stations Casinos of Las Vegas, announced plans to purchase approximately 2,000 acres of land in Southern Sonoma County near Sears Point for the development of a casino.

This site is located on environmentally sensative open space and San Francisco--North Bay tidelands which have been the subject of a decades-long conservation effort by environmentalists and local residents.

This site is roughly 30 miles from San Francisco--along the gateway to Sonoma that leads thousands of travelers into the beautiful wine country each day.

The Tribe's casino proposal has outraged local elected officials and residents who had sympathized with the Tribe's plight and supported their restoration on the condition that they not seek to develop a casino. The Sonoma and Marin County Boards of Supervisors have each passed unanimous resolutions objecting to the Graton casino proposal. In fact, even the Board of Supervisors of neighboring Napa has also passed a resolution against the casino proposal. I ask unanimous consent to print these resolutions and letters from the counties in the Record.

Let me just read one part of the Resolution from Marin County which will give you an idea of the opposition to the Graton tribe's proposed casino:

RESOLVED, that the Board of Supervisors of the County of Marin calls on its elected members of the United States Senate, Dianne Feinstein and Barbara Boxer, and its elected member of the House of Representatives, Lynn Woolsey, to assist the residents of Marin and the entire North Bay to preserve their environment by introducing legislation that would amend the Graton Rancheria Restoration Act and/ or the Indian Gaming Regulatory Act to stop the unregulated creation of tribal lands and to subject development of tribal lands in the Marin and Sonoma Counties at a minimum to the regulatory and approval processes applicable to newly acquired tribal lands by the Indian Gaming Regulatory Act.

While the counties acknowledge that the Graton have a right to be recognized, they object to the site selected by the tribe and they especially object to language in the Restoration Act

that precludes the local community, the Governor, or the Secretary of the Interior from providing input on the suitability of this location for land taken into trust for gaming purposes.

There is a problematic section of the Restoration Act that states, ``Upon application by the Tribe, the Secretary shall accept into trust for the benefit of the Tribe any real property located in Marin or Sonoma County . . .'' According to the Department of the Interior, this language removes any discretion by the Secretary as well as any tribal obligations for consultation with the surrounding community or environmental review, as required by the normal process under the Indian Gaming Regulatory Act for newly acquired land taken into trust for gaming purposes.

According to the Department of the Interior, the tribe must only conduct a hazardous materials review and show title to the land for land to be taken into trust. This could be completed in 9 months--and it is an inadequate review in my opinion.

Since the local communities are seeking a remedy which would restore the Secretary's discretion in approving its land trust application and allow local government to provide input in the process, I am introducing this legislation today that will change the ``shall take land into trust'' to ``may take land into trust.'' This legislation will also require the two-part test that is standard under the Indian Gaming Regulatory Act of 1988 to apply so that the State and local communities have input in the process.

There is precedent for this change. In 1994, legislation was passed restoring the United Auburn Tribe with the same directive to the Secretary of the Interior, requiring that land ``shall'' be taken into trust for the Tribe. One of the restoration act's sponsors, Congressman John Doolittle sponsored an amendment to change ``shall'' to ``may'' after it had been passed, thereby affording the Secretary of Interior discretion in accepting particular parcels of land into trust and local government officials an opportunity to weigh in on the Tribe's proposed site.

The result of that change was that the Auburn Tribe and Placer County officials successfully cooperated in not only identifying a mutually agreeable site, but they signed a Memorandum of Understanding to mitigate potential impacts from the proposed Thunder Valley Casino. And earlier this month, the tribe opened its casino.

Today California is home to 109 federally recognized tribes. 61 tribes have gaming compacts with the State and there are 54 tribal casinos. With more than 50 tribes seeking Federal recognition and approximately 23 recognized tribes seeking gaming compacts from the Governor, revenues from California's tribal gaming industry are expected to surpass Nevada's by the end of the decade.

The dramatic growth in tribal gaming in California has the potential to yield much needed benefits for tribal members in terms of healthcare, education and general welfare, as Congress and California voters intended. However, the question is not whether gaming should be permitted, but rather how and where. Those questions were asked and answered in the Indian Gaming Regulatory Act of 1988, IGRA. But without the modest change made by this legislation, the Graton tribe will be allowed to develop an off-reservation casino outside the requirements established in IGRA, the first time such an exception has ever been made for a California tribe. Allowing this to happen would set a dangerous precedent not only for California, but every State where tribal gaming is permitted.

The changes we are seeking today are extremely modest. We are not reversing any restoration of the tribe. We are not infringing on Native American sovereignty. We are not even blocking the casino proposal. We are only seeking to give the State and the local communities a voice in the process. They were promised the tribe would not open a casino. That promise was broken, so the least we can do is ensure a normal review will take place.

I hope my colleagues will support this legislation and I look forward to working with the Chairman and Ranking Member of the Indian Affairs Committee to pass this legislation quickly.

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

Mr. President, I rise to introduce the Notification of Risk to Personal Data Act of 2003. This legislation will require that individuals are notified when their most sensitive personal information is stolen from a corporate or government database.

Specifically, the bill would require government or private entities to notify individuals if a data breach has compromised their Social Security number, driver's license number, credit card number, debit card number, or financial account numbers.

In most cases, if authorities know that someone is a victim of a crime, the victim is notified. But that isn't the case if an individual's most sensitive personal information is stolen from an electronic database.

Unfortunately, data breaches are becoming all too common. Consider the following incidents which have compromised the records of hundreds of thousands of Americans.

On April 5, 2002, a hacker broke into the electronic records of Steven P. Teale Data Center, the payroll facility for California State employees. The hacker compromises files containing the first initials, middle initials, and last names, Social Security numbers, and payroll deduction information of approximately 265,000 people. Despite the breathtaking potential harm of the crime, the breach was not publicly acknowledged and State employees were not made aware of their vulnerability to identify theft until May 24, 2002--17 days later.

On December 14, 2002, TriWest Health Care Alliance, a company that provides health care coverage for military personnel and their families, was burglarized at its Phoenix, AZ offices. Thieves broke into a management suite and stole laptop computers and computer hard drives containing the names, addressed, telephone numbers, birth dates and Social Security numbers of 562,000 military service members, dependents and retirees, as well as medical claims records for people on active duty in the Persian Gulf.

In February 2003, a hacker gained access to 10 million Visa, MasterCard, American Express Card and Discovery Card numbers from the databases of a credit processor, DPI Merchant services of Omaha, NE. Company officials maintained that the intruder did not obtain any personal information for these card numbers such as the account holder's name, address, telephone number or Social Security number. However, at least one bank canceled and replaced 8,800 cards when it found out about the security breach.

And in March of this year, a University of Texas student was charged with hacking into the university's computer system and stealing 55,000 Social Security numbers.

These are just some examples of the types of breaches that are occurring today. Except for California, which as a notification law going into effect in July, no State of Federal law requires companies or agencies to tell individuals of the misappropriation of their personal data.

I strongly believe Americans should be notified if a hacker gets access to their most personal data. This is both a matter of principle and a practical measure to curb identity theft.

Let me take a moment to describe the proposed legislation.

The Notification of Risk to Personal Data Act will set a national standard for notification of consumers when a data breach occurs.

Specifically, the legislation requires a business or government entity to notify an individual when there is a reasonable basis to conclude that a hacker or other criminal has obtained unencrypted personal data maintained by the entity.

Personal data is defined by the bill as an individual's Social Security number, State identification number, driver's license number, financial account number, or credit card number.

The legislation's notification scheme minimizes the burdens on companies or agencies that must report a data breach.

In general, notice would have to be provided to each person whose data was compromised in writing or through e-mail. But there are important exceptions.

First, companies that have developed their own reasonable notification policies are given a safe harbor under the

bill and are exempted from its notification requirements.

Second, encrypted data is exempted.

Third, where it is too expensive or impractical, e.g., contact address information is incomplete, to notify every individual who is harmed, the bill allows entities to send out an alternative form of notice called ``substitute notice.'' Substitute notice includes posting notice on a website or notifying major media.

Substitute notice would be triggered if any of the following factors exist: 1. the agency or person demonstrates that the cost of providing direct notice would exceed $250,000; 2. the affected class of subject persons to be notified exceeds 500,000; or 3. the agency or person does not have sufficient contact information to notify people whose information is at risk.

The bill has a tough, but fair enforcement regime. Entities that fail to comply with the bill will be subject to fines by the Federal Trade Commission of $5,000 per violation or up to $25,000 per day while the violation persists. State Attorneys General can also file suit to enforce the statute.

Additionally, the bill would allow California's new law to remain in effect, but preempt conflicting State laws. It is my understanding that legislators in a number of States are developing bills modeled after the California law. Reportedly, some of these bills have requirements that are inconsistent with the California legislation. It is not fair to put companies in a situation that forces them to comply with database notification laws of 50 different States.

I strongly believe individuals have a right to be notified when their most sensitive information is compromised--because it is truly their information. Ask the ordinary person on the street if he or she would like to know if a criminal had illegally gained access to their personal information from a database--the answer will be a resounding yes.

Enabling consumers to be notified in a timely manner of security breaches involving their personal data will help combat the growth scourge of identity theft. According to the Identity Theft Resources Center, a typical identity theft victim takes six to 12 months to discover that a fraud has been perpetuated against them.

As Linda Foley, Executive Director of the Identity Theft Resources center puts it: ``Identity theft is a crime of opportunity and time is essential at every junction. Every minute that passes after the breach until detection and notification increases the damage done to the consumer victim, the commercial entities, and law enforcement's ability to track and catch the criminals. It takes less than a minute to fill out a credit application and to start an action that could permanently affect the victim's life. Multiply that times hundreds of minutes, hundreds of opportunities to use or sell the information stolen and you just begin to understand the enormity of the problem that the lack of notification can cause.''

If individuals are informed of the theft of their Social Security numbers or other sensitive information, they can take immediate preventative action.

They can place a fraud alert on their credit report to prevent crooks from obtaining credit cards in their name; they can monitor their credit reports to see if unauthorized activity has occurred; they can cancel any affected financial or consumer or utility accounts; they can change their phone numbers if necessary.

I look forward to working with my colleagues to pass this vitally needed legislation. This bill will give ordinary Americans more control and confidence about the safety of their personal information. Americans will have the security of knowing that should a breach occur, they will be notified and be able to take protective action.

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

I rise to introduce with Senator Wyden a bill to reduce the risk of catastrophic fire in our country's magnificent national forests.

No one who watched last week as Arizona's community of Summerhaven on Mount Lemmon burned can doubt the importance of this issue. My heart goes out to the residents of Summerhaven, and to the others who will be displaced by the fires yet to come this summer.

Americans know that there is something wrong with our national forests. For too long we have suppressed fires, gradually letting brush and small trees multiply until many of our forests are now choked by a dense thicket.

Today, there are 57 million acres of Federal lands at the highest risk of catastrophic forest fires. If we do not take action now, these forests could go up in smoke. This bill we are introducing today is balancing, and it will reduce the risk of catastrophic fire in our country's magnificent national forests.

This legislation would speed up the environmental review process-- without sacrificing the most important environmental protections. It also would protect the communities which face the highest risk and safeguard old growth stands and large trees. And it would include sensible provisions on judicial review that will help projects go forward quickly without compromising our independent judiciary. These are provisions that makes sense, and I hope that my colleagues will support the bill.

We have crafted our bill around three fundamental principles:

We should focus limited Federal resources on protecting communities and on the forest lands truly most at risk;

We should speed up the environmental review process, but without sacrificing the most important environmental protections; and

We should protect old growth stands and large trees.

Let me show how the bill achieves these three goals.

First, the bill prioritizes our efforts. Many people believe that we should protect communities first. The bill does so. Seventy percent of the funding is directed to the wildland-urban interface near communities.

Of course, conditions vary by State. The bill allows Governors to adjust the percentage of work that is to be done within the wildland-- urban interface for their State, up to a maximum of 75 percent, or down to a minimum of 50 percent.

By way of contrast, H.R. 1904, which passed the House, includes no focus on protecting communities. All the money can be spent far from communities under H.R. 1904, even if the Governor of a State wishes otherwise.

Senator Wyden and I believe that in addition to protecting communities, there are some forest lands that should be thinned to ensure that catastrophic fires do not devastate the forest and eliminate habitat for the species that have there.

In the last century, Americans have rigorously suppressed fires, stamping them out whenever they start. In certain forests like ponderosa pine, these fires would naturally have cleared out the brush and small trees every 10 or 20 years or so.

In the absence of these fires, brush has grown into ``doghair thickets'' with dangerous levels of fuel loadings. When fires burn now in these forests, they will be so hot that they won't just clear out the brush but will kill the large trees and often scorch the soil.

These are the forests where we need to focus our efforts. We thus target thinning projects to forests that are both Fire Regime I and Condition Class 3. Fire Regime I forests are those that used to have low-intensity, brush-clearing fires; and Condition Class 3 forests are the most altered from their natural condition. The combination of Fire Regime I and Condition Class 3 are the highest priority lands for treatment.

We also direct projects to municipal watersheds and diseased or windblown forests that are in Condition Class 3. If we don't protect the municipal watersheds, catastrophic fires could strip off the tree cover that prevents soils from eroding into creeks and lakes. Municipalities' water quality could suffer.

In contrast to our bill, H.R. 1904 fails to prioritize brush-clearing projects for the areas that need it the most. Instead, H.R. 1904 provides expedited processes for lands that are only moderately altered by fire suppression--Condition Class 2 lands in addition to Condition Class 3.

In many of the forests where H.R. 1904 would direct brush-clearing work, there naturally would have been severe fires that burned all the trees in the stand. After a thinning project, fires in these forests will still behave the same way, scorching and killing most of the trees. Thus, much of the thinning called for in H.R. 1904 would have little effect on the fire behavior or forest health.

Senator Wyden and I have worked very hard to develop a bill that speeds up the review process so important work can get done without sacrificing environmental protections.

Almost everyone agrees that we need to work quickly to protect the areas immediately around communities. There is little controversy or debate over these projects.

The Forest Service has proposed an analytical short-cut for these projects, which requires very little environmental analysis and no formal pubic comment process or administrative appeal.

There is some uncertainty, however, over the Forest Service's proposed approach. People can claim that laws Congress has previously passed will require some of these projects to be held up by more environmental analysis or administrative appeals.

Our bill eliminates this uncertainty. When the Forest Service works in the immediate vicinity of a community, the bill would make absolutely clear that there need to be no environmental analysis or administrative appeals. The only exception is where there might be extraordinary circumstances, such as a major threat to endangered species. We also prohibit the Forest Service from conducting clearcuts around communities, requiring them to focus on clearing out the brush.

By way of comparison, the House-passed bill does not provide any assistance to thinning projects in the immediate vicinity of communities, even though everyone agrees on the need for these projects.

Senator Wyden and I have also sped up the process for projects outside the immediate vicinity of communities. These projects are more controversial, so we want to make sure that the public has some opportunity for input.

In the past, the Forest Service and the Department of the Interior have been able to conduct the majority of brush-clearing mechanical treatment following a National Environmental Policy Act process known as environmental assessments. Our bill simplified these environmental assessments in several ways.

The bill provides one round of public comment--the administrative appeal process--rather than two.

The bill shortens the time frame for administrative appeals from 90 to 60 days.

Finally, the appeal deciding offer can make necessary changes rather than having to send the project back to the original decisionmaker for further time-consuming review.

Together, these changes will likely speed up the process by a few months or more. We do all this without eliminating public comment or gutting core parts of the environmental analysis.

In contrast, the House-passed bill would eliminate the requirement that the Forest Service consider alternatives to the proposed project as part of its environmental analysis. In other

words, the Forest Service doesn't have to study other, less damaging ways of undertaking the project--it can just do the project the way it wants.

Many people think that public debate over alternatives is the core of the National Environmental Policy Act. Our bill does not eliminate this important environmental protection.

Another important part of our bill is its protection of magnificent old growth stands. The remaining groves of these trees provide a connection to nature untrammeled by human activity, a connection that many of us cherish.

Our bill would require full protection of these old growth stands. In addition, outside old growth stands, the bill focuses on small-diameter trees and protects large trees that promote fire-resistant stands and species diversity.

By way of contrast, H.R. 1904 provides no protection for these magnificent resources.

Let me now talk about judicial review. No one wants court cases to go on too long. In addition, people should not be able to tie up projects by gaming the system and picking and choosing the friendliest courts to hear their lawsuits.

Our bill addresses these problems. The bill encourages courts, to the maximum extent practicable, to resolve lawsuits over brush-clearing projects quickly. These are important projects for the safety of our communities and our forests, and it is appropriate to give them some priority.

In addition, we require that potential litigants file suit in the same judicial district where a fuels reduction project takes place, No one can game the system by looking for a friendly judge somewhere else.

Finally, we limit temporary injunctions that are typically issued at the outset of a case to 60 days. They can be renewed if necessary--but the challengers to a projects must submit updates explaining why the injunctions should be extended. This provision prevents projects from being held up any longer than is strictly necessary.

These changes will expedite the process--but they still respect our court system's essential autonomy. As a member of the Judiciary Committee, I spend much of my time trying to make sure our court system is as fair as possible.

Americans count on a judiciary independent of the executive branch to preserve their liberties and to right any wrongs that their government commits. I think it is very important that we do not interfere with the independence of our judiciary.

The House-passed bill would require the courts to give weight to certain findings by the Forest Service and the Department of the Interior. Even if projects had been found to violate the environmental laws, courts would be told to give weight to the agencies' findings and allow many of the projects to go ahead anyway.

This is a dangerous provision for a bill to include, and I cannot support it. I believe our bill includes more sensible provisions on judicial review that will help projects go forward quickly without compromising the independence of our judiciary.

Our bill includes several provisions to address forest health problems on private and State lands.

We authorize $50 million annually in emergency grants to States and localities where lives are at risk. The last few years have seen vast insect epidemics killing millions of trees in Southern California, Arizona, and elsewhere.

In places like Lake Arrowhead, Big Bear and Idyllwild in Southern California, communities are surrounded by dead and dying trees that are perfect kindling for a catastrophic fire. There is a real threat to people's lives that we must address.

There is now no good funding source for clearing evacuation routes and clearing around schools and other emergency shelters that are on State and private lands. The emergency grants in the bill would authorize funds for these essential purposes.

The bill also includes two measures to encourage homeowners to clear brush around their houses and install non-flammable roofs. A study of Southern California fires by Forest Service researcher Jack Cohen has shown that these measures could reduce a blaze's threat to homes by as much as 85 to 95 percent.

Our bill would encourage these home-saving practices in two ways:

The bill would prioritize grants to those communities that encourage brush-clearing and use of non-flammable roofs or develop comprehensive fire plans.

The bill would record the Sense of Congress that insurers should offer lower premiums to homeowners who take steps to protect their homes.

Our bill would also include grants to encourage the use of woody material, or biomass, for energy production. Biomass-to-energy plants serve multiple beneficial purposes: one, they are a clean and renewable source of energy; and two, they make brush-clearing projects more cost- effective, so we can protect more with the finite Federal dollars available.

Finally, our bill would also include contracting provisions to benefit rural communities. The Forest Service and the Department of the Interior would be required to use ``best value contracting'' for brush- clearing projects under the Act.

This contracting approach requires the agencies to consider other factors besides the price of the bid in awarding contractors. Bidders would be rewarded for such factors as their commitment to hire local workers, and their past record of environmental stewardship.

I would like to close by saying that this is truly a bipartisan issue. All of us, Democrat and Republican, have an interest in clearing out dangerous accumulations of brush in our national forests. All of us have an interest as well in protecting the magnificent old growth stands and species habitat that Americans cherish, and in upholding our environmental laws.

I look forward to working with my colleagues on both sides of the aisle to pass a bill as soon as possible.

Mr. President, I rise today to introduce legislation to amend the Graton Rancheria Restoration Act to give the State of California and the local communities of Sonoma, Napa, and Marin counties the opportunity for input and review of the tribe's plan for a major casino in the Bay Area.

I am offering this legislation because the Boards of Supervisors of the local communities impacted by this planned casino have asked me to amend the Graton Rancheria Restoration Act. The Boards of Supervisors of Sonoma, Marin, and Napa counties have each unanimously passed resolutions seeking a change in Federal law to restore the Secretary of Interior's discretion in approving land into trust and allowing the State and local government to have a voice in the process.

Prior to today's introduction I have met with the Presidents of the Sonoma and Marin Boards of Supervisors, the Graton tribe, and Senators Campbell and Inouye the Chairman and Ranking Member of the Indian Affairs Committee.

This week I had a very spirited and frank conversation with Graton Tribal Chairman Greg Sarris and representatives from the casino investors. During the meeting Chairman Sarris committed to work with the local Boards of Supervisors and he committed to look at alternative sites for the casino. Chairman Sarris also said the Tribe and the casino investors would conduct an environmental review based on the criteria laid out in the National Environmental Policy Act, NEPA, before a site is selected. These are positive signs and I have told both the Boards of Supervisors and the Tribe that I would like to see them continue to work together.

This legislation guarantees that the local and State officials have a voice in the process. Without this change to the Graton Rancheria Restoration Act they do not have that voice.

In 2000, Congress passed the Graton Rancheria Restoration Act to restore Federal recognition to the 355 members of the Federated Indians of the Graton Rancheria.

The Graton Tribe's original Rancheria was in the northern Sonoma County town of Graton on land purchased by the Bureau of Indian Affairs, BIA, in 1920 for the ``village home'' of otherwise homeless Miwok and Pomo Indians. The Rancheria was terminated in 1958 when the BIA approved a plan to distribute the assets to resident Indians and remove the Rancheria from Federal trust.

The original version of the Graton restoration bill, H.R. 946, sponsored by Congresswoman Lynn Woolsey in the 106th Congress, passed the House of Representatives with a gaming restriction, to which the Tribe agreed.

In testimony before the House Resources Committee in May 2000, and in other public comments, Graton Chairman Greg Sarris stated that the Tribe had no intention of conducting gaming.

In fact, before the House Resources Committee, Chairman Sarris stated, ``Many may think our motives for restoration have been influenced by the opportunity gaming affords some other recognized tribes. Because our local political constituency, both democratic and republican has opposed any sort of development for environmental reasons, we agreed with these local political forces to not develop a gaming complex. So, as proof, we voted as a tribe to include a non- gaming clause in our bill, stipulating that we will not be a gaming tribe.''

Furthermore, in an article in the Marin Independent Journal on September 21, 2000, Chairman Sarris said, ``All we want is to be formally recognized as Indians and have the same rights that other Indians do for education and health care. We are not interested in gambling.'' I ask unanimous consent to print a copy of this article in the Record.

Senator Boxer sponsored legislation identical to Congresswoman Woolsey's in the Senate, but the gaming restriction was stricken when the bill was ultimately passed as part of the Omnibus Indian Advancement Act of 2000.

The day the legislation passed on December 11, 2000, Senator Boxer stated on the Senate Floor that dropping the gaming restriction was necessary because of opposition to the no-gaming clause by the Senate Committee on Indian Affairs and the Clinton Administration and because, according to Senator Boxer, ``Senator Inouye asserts that the no-gaming clause is unnecessary because the Graton Rancheria have no intention of conducting gaming.''

So what has changed one might ask?

Well, even though the Gratons voluntarily and repeatedly took a no- gaming pledge while their restoration bill was under consideration by Congress, on April 23, 2003, the Tribe and its partner, Stations Casinos of Las Vegas, announced plans to purchase approximately 2,000 acres of land in Southern Sonoma County near Sears Point for the development of a casino.

This site is located on environmentally sensative open space and San Francisco--North Bay tidelands which have been the subject of a decades-long conservation effort by environmentalists and local residents.

This site is roughly 30 miles from San Francisco--along the gateway to Sonoma that leads thousands of travelers into the beautiful wine country each day.

The Tribe's casino proposal has outraged local elected officials and residents who had sympathized with the Tribe's plight and supported their restoration on the condition that they not seek to develop a casino. The Sonoma and Marin County Boards of Supervisors have each passed unanimous resolutions objecting to the Graton casino proposal. In fact, even the Board of Supervisors of neighboring Napa has also passed a resolution against the casino proposal. I ask unanimous consent to print these resolutions and letters from the counties in the Record.

Let me just read one part of the Resolution from Marin County which will give you an idea of the opposition to the Graton tribe's proposed casino:

RESOLVED, that the Board of Supervisors of the County of Marin calls on its elected members of the United States Senate, Dianne Feinstein and Barbara Boxer, and its elected member of the House of Representatives, Lynn Woolsey, to assist the residents of Marin and the entire North Bay to preserve their environment by introducing legislation that would amend the Graton Rancheria Restoration Act and/ or the Indian Gaming Regulatory Act to stop the unregulated creation of tribal lands and to subject development of tribal lands in the Marin and Sonoma Counties at a minimum to the regulatory and approval processes applicable to newly acquired tribal lands by the Indian Gaming Regulatory Act.

While the counties acknowledge that the Graton have a right to be recognized, they object to the site selected by the tribe and they especially object to language in the Restoration Act

that precludes the local community, the Governor, or the Secretary of the Interior from providing input on the suitability of this location for land taken into trust for gaming purposes.

There is a problematic section of the Restoration Act that states, ``Upon application by the Tribe, the Secretary shall accept into trust for the benefit of the Tribe any real property located in Marin or Sonoma County . . .'' According to the Department of the Interior, this language removes any discretion by the Secretary as well as any tribal obligations for consultation with the surrounding community or environmental review, as required by the normal process under the Indian Gaming Regulatory Act for newly acquired land taken into trust for gaming purposes.

According to the Department of the Interior, the tribe must only conduct a hazardous materials review and show title to the land for land to be taken into trust. This could be completed in 9 months--and it is an inadequate review in my opinion.

Since the local communities are seeking a remedy which would restore the Secretary's discretion in approving its land trust application and allow local government to provide input in the process, I am introducing this legislation today that will change the ``shall take land into trust'' to ``may take land into trust.'' This legislation will also require the two-part test that is standard under the Indian Gaming Regulatory Act of 1988 to apply so that the State and local communities have input in the process.

There is precedent for this change. In 1994, legislation was passed restoring the United Auburn Tribe with the same directive to the Secretary of the Interior, requiring that land ``shall'' be taken into trust for the Tribe. One of the restoration act's sponsors, Congressman John Doolittle sponsored an amendment to change ``shall'' to ``may'' after it had been passed, thereby affording the Secretary of Interior discretion in accepting particular parcels of land into trust and local government officials an opportunity to weigh in on the Tribe's proposed site.

The result of that change was that the Auburn Tribe and Placer County officials successfully cooperated in not only identifying a mutually agreeable site, but they signed a Memorandum of Understanding to mitigate potential impacts from the proposed Thunder Valley Casino. And earlier this month, the tribe opened its casino.

Today California is home to 109 federally recognized tribes. 61 tribes have gaming compacts with the State and there are 54 tribal casinos. With more than 50 tribes seeking Federal recognition and approximately 23 recognized tribes seeking gaming compacts from the Governor, revenues from California's tribal gaming industry are expected to surpass Nevada's by the end of the decade.

The dramatic growth in tribal gaming in California has the potential to yield much needed benefits for tribal members in terms of healthcare, education and general welfare, as Congress and California voters intended. However, the question is not whether gaming should be permitted, but rather how and where. Those questions were asked and answered in the Indian Gaming Regulatory Act of 1988, IGRA. But without the modest change made by this legislation, the Graton tribe will be allowed to develop an off-reservation casino outside the requirements established in IGRA, the first time such an exception has ever been made for a California tribe. Allowing this to happen would set a dangerous precedent not only for California, but every State where tribal gaming is permitted.

The changes we are seeking today are extremely modest. We are not reversing any restoration of the tribe. We are not infringing on Native American sovereignty. We are not even blocking the casino proposal. We are only seeking to give the State and the local communities a voice in the process. They were promised the tribe would not open a casino. That promise was broken, so the least we can do is ensure a normal review will take place.

I hope my colleagues will support this legislation and I look forward to working with the Chairman and Ranking Member of the Indian Affairs Committee to pass this legislation quickly.

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

Mr. President, I rise to introduce the Notification of Risk to Personal Data Act of 2003. This legislation will require that individuals are notified when their most sensitive personal information is stolen from a corporate or government database.

Specifically, the bill would require government or private entities to notify individuals if a data breach has compromised their Social Security number, driver's license number, credit card number, debit card number, or financial account numbers.

In most cases, if authorities know that someone is a victim of a crime, the victim is notified. But that isn't the case if an individual's most sensitive personal information is stolen from an electronic database.

Unfortunately, data breaches are becoming all too common. Consider the following incidents which have compromised the records of hundreds of thousands of Americans.

On April 5, 2002, a hacker broke into the electronic records of Steven P. Teale Data Center, the payroll facility for California State employees. The hacker compromises files containing the first initials, middle initials, and last names, Social Security numbers, and payroll deduction information of approximately 265,000 people. Despite the breathtaking potential harm of the crime, the breach was not publicly acknowledged and State employees were not made aware of their vulnerability to identify theft until May 24, 2002--17 days later.

On December 14, 2002, TriWest Health Care Alliance, a company that provides health care coverage for military personnel and their families, was burglarized at its Phoenix, AZ offices. Thieves broke into a management suite and stole laptop computers and computer hard drives containing the names, addressed, telephone numbers, birth dates and Social Security numbers of 562,000 military service members, dependents and retirees, as well as medical claims records for people on active duty in the Persian Gulf.

In February 2003, a hacker gained access to 10 million Visa, MasterCard, American Express Card and Discovery Card numbers from the databases of a credit processor, DPI Merchant services of Omaha, NE. Company officials maintained that the intruder did not obtain any personal information for these card numbers such as the account holder's name, address, telephone number or Social Security number. However, at least one bank canceled and replaced 8,800 cards when it found out about the security breach.

And in March of this year, a University of Texas student was charged with hacking into the university's computer system and stealing 55,000 Social Security numbers.

These are just some examples of the types of breaches that are occurring today. Except for California, which as a notification law going into effect in July, no State of Federal law requires companies or agencies to tell individuals of the misappropriation of their personal data.

I strongly believe Americans should be notified if a hacker gets access to their most personal data. This is both a matter of principle and a practical measure to curb identity theft.

Let me take a moment to describe the proposed legislation.

The Notification of Risk to Personal Data Act will set a national standard for notification of consumers when a data breach occurs.

Specifically, the legislation requires a business or government entity to notify an individual when there is a reasonable basis to conclude that a hacker or other criminal has obtained unencrypted personal data maintained by the entity.

Personal data is defined by the bill as an individual's Social Security number, State identification number, driver's license number, financial account number, or credit card number.

The legislation's notification scheme minimizes the burdens on companies or agencies that must report a data breach.

In general, notice would have to be provided to each person whose data was compromised in writing or through e-mail. But there are important exceptions.

First, companies that have developed their own reasonable notification policies are given a safe harbor under the

bill and are exempted from its notification requirements.

Second, encrypted data is exempted.

Third, where it is too expensive or impractical, e.g., contact address information is incomplete, to notify every individual who is harmed, the bill allows entities to send out an alternative form of notice called ``substitute notice.'' Substitute notice includes posting notice on a website or notifying major media.

Substitute notice would be triggered if any of the following factors exist: 1. the agency or person demonstrates that the cost of providing direct notice would exceed $250,000; 2. the affected class of subject persons to be notified exceeds 500,000; or 3. the agency or person does not have sufficient contact information to notify people whose information is at risk.

The bill has a tough, but fair enforcement regime. Entities that fail to comply with the bill will be subject to fines by the Federal Trade Commission of $5,000 per violation or up to $25,000 per day while the violation persists. State Attorneys General can also file suit to enforce the statute.

Additionally, the bill would allow California's new law to remain in effect, but preempt conflicting State laws. It is my understanding that legislators in a number of States are developing bills modeled after the California law. Reportedly, some of these bills have requirements that are inconsistent with the California legislation. It is not fair to put companies in a situation that forces them to comply with database notification laws of 50 different States.

I strongly believe individuals have a right to be notified when their most sensitive information is compromised--because it is truly their information. Ask the ordinary person on the street if he or she would like to know if a criminal had illegally gained access to their personal information from a database--the answer will be a resounding yes.

Enabling consumers to be notified in a timely manner of security breaches involving their personal data will help combat the growth scourge of identity theft. According to the Identity Theft Resources Center, a typical identity theft victim takes six to 12 months to discover that a fraud has been perpetuated against them.

As Linda Foley, Executive Director of the Identity Theft Resources center puts it: ``Identity theft is a crime of opportunity and time is essential at every junction. Every minute that passes after the breach until detection and notification increases the damage done to the consumer victim, the commercial entities, and law enforcement's ability to track and catch the criminals. It takes less than a minute to fill out a credit application and to start an action that could permanently affect the victim's life. Multiply that times hundreds of minutes, hundreds of opportunities to use or sell the information stolen and you just begin to understand the enormity of the problem that the lack of notification can cause.''

If individuals are informed of the theft of their Social Security numbers or other sensitive information, they can take immediate preventative action.

They can place a fraud alert on their credit report to prevent crooks from obtaining credit cards in their name; they can monitor their credit reports to see if unauthorized activity has occurred; they can cancel any affected financial or consumer or utility accounts; they can change their phone numbers if necessary.

I look forward to working with my colleagues to pass this vitally needed legislation. This bill will give ordinary Americans more control and confidence about the safety of their personal information. Americans will have the security of knowing that should a breach occur, they will be notified and be able to take protective action.

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

I rise to introduce with Senator Wyden a bill to reduce the risk of catastrophic fire in our country's magnificent national forests.

No one who watched last week as Arizona's community of Summerhaven on Mount Lemmon burned can doubt the importance of this issue. My heart goes out to the residents of Summerhaven, and to the others who will be displaced by the fires yet to come this summer.

Americans know that there is something wrong with our national forests. For too long we have suppressed fires, gradually letting brush and small trees multiply until many of our forests are now choked by a dense thicket.

Today, there are 57 million acres of Federal lands at the highest risk of catastrophic forest fires. If we do not take action now, these forests could go up in smoke. This bill we are introducing today is balancing, and it will reduce the risk of catastrophic fire in our country's magnificent national forests.

This legislation would speed up the environmental review process-- without sacrificing the most important environmental protections. It also would protect the communities which face the highest risk and safeguard old growth stands and large trees. And it would include sensible provisions on judicial review that will help projects go forward quickly without compromising our independent judiciary. These are provisions that makes sense, and I hope that my colleagues will support the bill.

We have crafted our bill around three fundamental principles:

We should focus limited Federal resources on protecting communities and on the forest lands truly most at risk;

We should speed up the environmental review process, but without sacrificing the most important environmental protections; and

We should protect old growth stands and large trees.

Let me show how the bill achieves these three goals.

First, the bill prioritizes our efforts. Many people believe that we should protect communities first. The bill does so. Seventy percent of the funding is directed to the wildland-urban interface near communities.

Of course, conditions vary by State. The bill allows Governors to adjust the percentage of work that is to be done within the wildland-- urban interface for their State, up to a maximum of 75 percent, or down to a minimum of 50 percent.

By way of contrast, H.R. 1904, which passed the House, includes no focus on protecting communities. All the money can be spent far from communities under H.R. 1904, even if the Governor of a State wishes otherwise.

Senator Wyden and I believe that in addition to protecting communities, there are some forest lands that should be thinned to ensure that catastrophic fires do not devastate the forest and eliminate habitat for the species that have there.

In the last century, Americans have rigorously suppressed fires, stamping them out whenever they start. In certain forests like ponderosa pine, these fires would naturally have cleared out the brush and small trees every 10 or 20 years or so.

In the absence of these fires, brush has grown into ``doghair thickets'' with dangerous levels of fuel loadings. When fires burn now in these forests, they will be so hot that they won't just clear out the brush but will kill the large trees and often scorch the soil.

These are the forests where we need to focus our efforts. We thus target thinning projects to forests that are both Fire Regime I and Condition Class 3. Fire Regime I forests are those that used to have low-intensity, brush-clearing fires; and Condition Class 3 forests are the most altered from their natural condition. The combination of Fire Regime I and Condition Class 3 are the highest priority lands for treatment.

We also direct projects to municipal watersheds and diseased or windblown forests that are in Condition Class 3. If we don't protect the municipal watersheds, catastrophic fires could strip off the tree cover that prevents soils from eroding into creeks and lakes. Municipalities' water quality could suffer.

In contrast to our bill, H.R. 1904 fails to prioritize brush-clearing projects for the areas that need it the most. Instead, H.R. 1904 provides expedited processes for lands that are only moderately altered by fire suppression--Condition Class 2 lands in addition to Condition Class 3.

In many of the forests where H.R. 1904 would direct brush-clearing work, there naturally would have been severe fires that burned all the trees in the stand. After a thinning project, fires in these forests will still behave the same way, scorching and killing most of the trees. Thus, much of the thinning called for in H.R. 1904 would have little effect on the fire behavior or forest health.

Senator Wyden and I have worked very hard to develop a bill that speeds up the review process so important work can get done without sacrificing environmental protections.

Almost everyone agrees that we need to work quickly to protect the areas immediately around communities. There is little controversy or debate over these projects.

The Forest Service has proposed an analytical short-cut for these projects, which requires very little environmental analysis and no formal pubic comment process or administrative appeal.

There is some uncertainty, however, over the Forest Service's proposed approach. People can claim that laws Congress has previously passed will require some of these projects to be held up by more environmental analysis or administrative appeals.

Our bill eliminates this uncertainty. When the Forest Service works in the immediate vicinity of a community, the bill would make absolutely clear that there need to be no environmental analysis or administrative appeals. The only exception is where there might be extraordinary circumstances, such as a major threat to endangered species. We also prohibit the Forest Service from conducting clearcuts around communities, requiring them to focus on clearing out the brush.

By way of comparison, the House-passed bill does not provide any assistance to thinning projects in the immediate vicinity of communities, even though everyone agrees on the need for these projects.

Senator Wyden and I have also sped up the process for projects outside the immediate vicinity of communities. These projects are more controversial, so we want to make sure that the public has some opportunity for input.

In the past, the Forest Service and the Department of the Interior have been able to conduct the majority of brush-clearing mechanical treatment following a National Environmental Policy Act process known as environmental assessments. Our bill simplified these environmental assessments in several ways.

The bill provides one round of public comment--the administrative appeal process--rather than two.

The bill shortens the time frame for administrative appeals from 90 to 60 days.

Finally, the appeal deciding offer can make necessary changes rather than having to send the project back to the original decisionmaker for further time-consuming review.

Together, these changes will likely speed up the process by a few months or more. We do all this without eliminating public comment or gutting core parts of the environmental analysis.

In contrast, the House-passed bill would eliminate the requirement that the Forest Service consider alternatives to the proposed project as part of its environmental analysis. In other

words, the Forest Service doesn't have to study other, less damaging ways of undertaking the project--it can just do the project the way it wants.

Many people think that public debate over alternatives is the core of the National Environmental Policy Act. Our bill does not eliminate this important environmental protection.

Another important part of our bill is its protection of magnificent old growth stands. The remaining groves of these trees provide a connection to nature untrammeled by human activity, a connection that many of us cherish.

Our bill would require full protection of these old growth stands. In addition, outside old growth stands, the bill focuses on small-diameter trees and protects large trees that promote fire-resistant stands and species diversity.

By way of contrast, H.R. 1904 provides no protection for these magnificent resources.

Let me now talk about judicial review. No one wants court cases to go on too long. In addition, people should not be able to tie up projects by gaming the system and picking and choosing the friendliest courts to hear their lawsuits.

Our bill addresses these problems. The bill encourages courts, to the maximum extent practicable, to resolve lawsuits over brush-clearing projects quickly. These are important projects for the safety of our communities and our forests, and it is appropriate to give them some priority.

In addition, we require that potential litigants file suit in the same judicial district where a fuels reduction project takes place, No one can game the system by looking for a friendly judge somewhere else.

Finally, we limit temporary injunctions that are typically issued at the outset of a case to 60 days. They can be renewed if necessary--but the challengers to a projects must submit updates explaining why the injunctions should be extended. This provision prevents projects from being held up any longer than is strictly necessary.

These changes will expedite the process--but they still respect our court system's essential autonomy. As a member of the Judiciary Committee, I spend much of my time trying to make sure our court system is as fair as possible.

Americans count on a judiciary independent of the executive branch to preserve their liberties and to right any wrongs that their government commits. I think it is very important that we do not interfere with the independence of our judiciary.

The House-passed bill would require the courts to give weight to certain findings by the Forest Service and the Department of the Interior. Even if projects had been found to violate the environmental laws, courts would be told to give weight to the agencies' findings and allow many of the projects to go ahead anyway.

This is a dangerous provision for a bill to include, and I cannot support it. I believe our bill includes more sensible provisions on judicial review that will help projects go forward quickly without compromising the independence of our judiciary.

Our bill includes several provisions to address forest health problems on private and State lands.

We authorize $50 million annually in emergency grants to States and localities where lives are at risk. The last few years have seen vast insect epidemics killing millions of trees in Southern California, Arizona, and elsewhere.

In places like Lake Arrowhead, Big Bear and Idyllwild in Southern California, communities are surrounded by dead and dying trees that are perfect kindling for a catastrophic fire. There is a real threat to people's lives that we must address.

There is now no good funding source for clearing evacuation routes and clearing around schools and other emergency shelters that are on State and private lands. The emergency grants in the bill would authorize funds for these essential purposes.

The bill also includes two measures to encourage homeowners to clear brush around their houses and install non-flammable roofs. A study of Southern California fires by Forest Service researcher Jack Cohen has shown that these measures could reduce a blaze's threat to homes by as much as 85 to 95 percent.

Our bill would encourage these home-saving practices in two ways:

The bill would prioritize grants to those communities that encourage brush-clearing and use of non-flammable roofs or develop comprehensive fire plans.

The bill would record the Sense of Congress that insurers should offer lower premiums to homeowners who take steps to protect their homes.

Our bill would also include grants to encourage the use of woody material, or biomass, for energy production. Biomass-to-energy plants serve multiple beneficial purposes: one, they are a clean and renewable source of energy; and two, they make brush-clearing projects more cost- effective, so we can protect more with the finite Federal dollars available.

Finally, our bill would also include contracting provisions to benefit rural communities. The Forest Service and the Department of the Interior would be required to use ``best value contracting'' for brush- clearing projects under the Act.

This contracting approach requires the agencies to consider other factors besides the price of the bid in awarding contractors. Bidders would be rewarded for such factors as their commitment to hire local workers, and their past record of environmental stewardship.

I would like to close by saying that this is truly a bipartisan issue. All of us, Democrat and Republican, have an interest in clearing out dangerous accumulations of brush in our national forests. All of us have an interest as well in protecting the magnificent old growth stands and species habitat that Americans cherish, and in upholding our environmental laws.

I look forward to working with my colleagues on both sides of the aisle to pass a bill as soon as possible.

Mr. President, I wish to acknowledge the efforts of my colleagues and many others participating in the Rally Against Hate on Capitol Hill today.

The rally has been organized by Senators Edward Kennedy and Gordon Smith, along with the Human Rights Campaign and its coalition partners, to show support and build momentum for passage of Federal hate crimes legislation, ``The Local Law Enforcement Enhancement Act.''

Also participating in the rally today is a very brave and amazing constituent of mine, Trev Broudy. Trev is a handsome 34-year old actor from West Hollywood, CA, and he is also the victim of a hate crime motivated by his sexual orientation.

On September 1, 2003, Trev was hugging and saying goodbye to his friend, Teddy Ulett, on the street in West Hollywood when two men jumped out of a car without warning and began swinging at Trev's head with a baseball bat and an iron pipe.

After the attack, Trev was rushed to Cedars-Sinai Medical Center where doctors cleaned away pieces of skull from the back of his head and pieced together other parts of skull that had been crushed. He was then placed in an induced coma for over a week to guard against swelling of his brain.

Today, Trev looks and sounds fine, although he will never fully recover from the attack. He has said, ``People assume because I look all right and I'm healthy and I'm walking and I'm talking, I'm all better, but I'm not.''

When Trev finally left the hospital--10 weeks after the attack--he thought his injuries would eventually heal and he would soon return to work. However, Trev belatedly learned that a major part of his brain had to be removed, leaving him with only half the vision in both of his eyes.

Once having a good career as a voice-over artist, Trev now struggles with the results of his injuries every day and finds it difficult to read even the simplest sentence. He has returned home to his old apartment, but he will never be able to return to his old life.

Yet Trev is an inspiration and a hero to his family and friends back home, and particularly to other gay men and lesbians who see this heinous crime as a personal attack on their community.

Los Angeles' gay and lesbian community even came together and protested the county district attorney's decision not to file hate crime charges against the men suspected of beating Trev. Although the West Hollywood sheriff's station, which investigated the case, initially filed State hate crime charges, the district attorney's office chose not to file hate crimes enhancements in the case.

And, unfortunately, the limitations of current Federal hate crimes law prevent it from helping Trev because it does not extend basic civil rights protections to every American--only to a few and under certain circumstances.

Congress should expand the ability of the Federal Government to investigate hate crimes, and it should expand the ability to prosecute anyone who would target victims because of hate.

We can, and must, do more to prevent these types of hateful threats and acts of violence, and passing The Local Law Enforcement Enhancement Act would do just that.

The Local Law Enforcement Enhancement Act would: expand current Federal protections against hate crimes based on race, religion, and national origin; amend the criminal code to cover hate crimes based on gender, sexual orientation, and disability; authorize grants for State and local programs designed to combat and prevent hate crimes; and enable the Federal Government to assist State and local law enforcement in investigating and prosecuting hate crimes.

Enacting the Local Law Enforcement Enhancement Act is long overdue. It is necessary for the safety and well-being of millions of Americans. Until it is enacted, many hate crime victims and their families may not receive the justice they deserve.

Efforts to enact this legislation have received strong bipartisan support in the past, and the Local Law Enforcement Enhancement Act now has 48 cosponsors in the Senate. We just have not been able to get it to the President's desk for consideration.

Today, I ask all of my colleagues to rally against hate by working to ensure that this legislation is not simply supported but actually passed and signed into law. Let us send a message to all Americans that we will no longer turn a blind eye to hate crimes in this country.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

I may need another 5 minutes.

Mr. President, I thank Senator Reid.

I wish to speak as cosponsor of the Graham-Feinstein amendment to remove the inventory of Outer Continental Shelf oil and gas resources from the Energy bill. I deeply believe that this proposed inventory threatens our coasts and should not be part of this Energy bill. The House already stripped the studies out of the Energy bill. The Senate should do the same.

The Energy bill's current language requires a new inventory of all the Outer Continental Shelf resources and a study of impediments to production. We oppose these studies because the purpose of the studies is really meant to undermine the moratoria which is in place. Many of these moratoria have been in place with bipartisan support on both coasts for 20 years.

Proponents of the inventory argue that it is meant to provide information and nothing more. However, the real intent is clear: The Minerals Management Service is specifically directed to inventory moratorium areas that are not available for development. Inventorying these areas does not make sense unless you want to overturn the moratoria.

The provision's second study on impediments to production makes the intent of the studies even clearer. In section 105, the popular moratorium that now protects our States' coastal resources is disparaged as ``an impediment to production.'' An impediment is something to be removed. So this is a hint as to the intention of these studies.

Perspective is important in this debate. The moratorium is there to protect our coast, not just to impede production of oil and gas. Facts are that

we do not need the information these studies would provide to make an informed decision. We have inventoried the Outer Continental Shelf's resources before. In fact, the Minerals Management Service already publishes an update of this inventory every 5 years. We have a good idea what resources are out there, and we do not need additional studies.

Californians are also too familiar with the consequences of offshore drilling. An oilspill in 1969 off the coast of Santa Barbara killed thousands of birds, as well as dolphins, seals, and other animals. We know this could happen again, and how well I remember that cleanup effort on those beaches.

A healthy coast is also vital to California's economy and our quality of life. One of our major economic areas is the visitor industry-- conventions, tourists. People do not want to see oil rigs off the coast of California, and they do not come there for that purpose. The ocean- dependent industry is estimated to contribute $17 billion to our State each year. So the economics of what the ocean produces in its pristine state are critical to our State.

In 1991, the California Department of Parks and Recreation found that almost 70 percent of Californians participated in beach activities and 25 percent of our population did some saltwater fishing. So Californians know what is at stake, and we made an informed decision: We do not want drilling off our coast.

As Mike Reilly, chairman of the California Coastal Commission, said to me in a letter:

The energy bill's provision is directly contrary to

California's strong interest in safeguarding its precious

coastal resources from offshore oil and gas-drilling related

activities, and for that reason we oppose this study.

The California Coastal Commission is the State governmental agency in charge of the coastline. I myself served on one of the regional boards of the Coastal Commission, so I know it well.

Even without the threat of future drilling, we would oppose conducting these studies in moratorium areas. We have moratoria to protect our coasts. The studies would harm resources we want to protect.

I wish to focus for a moment on the destructive studies required by this provision. The provision's original language would have allowed for exploratory drilling. I appreciate that the current version no longer allows for exploratory drilling. However, the bill still requires invasive study methods that will harm our coastal resources.

The provision specifically calls for 3-D seismic testing. One might ask, What is that? This technology requires a sparker or air gun and loud repeated pulses of underwater sound. These sounds can be heard for miles under water.

Seismic surveys harm marine mammals and have been linked to strandings of whales on beaches on multiple occasions. Seismic testing also hurts fish. Recent studies show these surveys damage the ears of at least some fish species, and that the damage may well be permanent. Fish rely on their hearing for survival. Additional seismic testing would threaten our fishery resources and our commercial fishing industries. This is a $17 billion industry in California, so we cannot afford threats to our fisheries and our fishing industry.

The inventory would also likely include something called dart core sampling. Dart cores are collected by dropping large metal tubes from ships. The tubes sink fast enough to penetrate the sea floor to a substantial depth, remove a column of rock, and then are retrieved to the ship. This is suspiciously similar to drilling. So that is what is going to go on. This is not just a benign study of people sitting at their desks on land studying something. They are sinking these tubes down to some depth, obviously to examine core samples to determine the presence of natural gas or oil.

Dart core sampling also damages organisms and habitat on the ocean floor. The dart cores also create silt plumes that smother nearby organisms.

Protecting our coastlines is not a partisan issue. The Governors of both Florida and California oppose these studies. Furthermore, the successful effort to defeat the studies in the House was a bipartisan effort. A broad coalition of Senators, including the distinguished Senators from Florida and North Carolina, opposes the studies in this provision. We should not override the wishes of the most affected States and people to protect their own coastlines.

So I ask my colleagues to vote for our amendment to strike the Outer Continental Shelf study from the Energy bill. Directly following my remarks, I ask unanimous consent that a letter from the League of Conservation Voters dated June 10 be printed in the Record.

That letter, of course, on behalf of the League, which has stood fast in defending and advocating important environmental issues solidly is in support of the Graham-Feinstein amendment.

I yield the floor, and I suggest the absence of a quorum.

Mr. President, I rise today to introduce an amendment to improve the air quality on commercial aircraft.

In 1986, in response to a National Research Council Report, the FAA took several actions to improve aircraft cabin air quality on flights, including banning smoking on nearly all domestic flights. However, over 15 years later, many cabin air quality issues remain and new health questions have been raised by passengers and crew.

More recently, the National Research Council released a study of the air quality on commercial airline flights

that was funded by the Federal Aviation Administration. The National Research Council found that:

There is no operational standard for the ventilation of an aircraft cabin, but that such an operation standard should be established to ensure that passenger aircraft are properly ventilated;

Passengers have been exposed to airborne contaminants while onboard aircraft, and that such contaminants can originate outside and inside the aircraft, and within the aircraft's environmental control system itself;

The environmental control system on a passenger aircraft can become contaminated with engine oils, hydraulic fluids, or deicing fluids and those fluid contaminants can enter the passenger cabin through the air supply system;

Contaminants in the air of a passenger aircraft may be responsible for acute and chronic health effects in crew and passengers;

Reduced partial oxygen levels in aircraft air may adversely affect health-compromised passengers, particularly those with cardiopulmonary disease;

Aircraft passengers may be exposed to ozone during flight, and studies suggest that ozone concentrations on some flights can exceed the Federal Aviation Administration and Environmental Protection Agency ozone levels;

Air that contains elevated ozone concentrations is associated with airway irritation, decreased lung function, exacerbation of asthma, and impairments of the immune system;

Since carbon monoxide is an indicator of mechanical fluids contaminating the air supply, the FAA should require aircraft to install monitors and establish procedures for responding to elevated levels of carbon monoxide; and

The FAA should establish a passenger aircraft air quality and health surveillance program to determine compliance with existing FAA regulations and document health effects and complaints so that data is collected in a way that allows analysis of the relationship between health effects and aircraft air quality.

The amendment I rise to introduce today addresses several findings on cabin air quality. It incorporates the original House language plus two additional provisions.

The House language is as follows:

(a) In General.--The Administrator of the Federal Aviation

Administration shall undertake the studies and analysis

called for in the report of the National Research Council

entitled ``The Airliner Cabin Environment and the Health of

Passengers and Crew.''

(b) Required Activities.--In carrying out this section, the

Administrator, at a minimum, shall--

(1) conduct surveillance to monitor ozone in the cabin on a

representative number of flights and aircraft to determine

compliance with existing Federal Aviation Regulations for

ozone;

(2) collect pesticide exposure data to determine exposures

of passengers and crew; and

(3) analyze samples of residue from aircraft ventilation

ducts and filters after air quality incidents to identify the

contaminants to which passengers and crew were exposed.

(c) Report.--Not later than 30 months after the date of

enactment of this Act, the Administrator shall transmit to

Congress a report on the findings of the Administrator under

this section.

My amendment builds on the above language by adding the following two provisions:

Authorizes an FAA study to analyze cabin air pressure and altitude; and

Requires the FAA to establish an air quality incident reporting system.

Poor air quality in flight cabins poses a health risk for the flying public and crew members who spend most of their working hours onboard commercial aircraft. Passengers should feel confident that they are not endangering their health when they fly, and airline industry workers should not feel their health is threatened as they earn a living. I hope you will join me in supporting this legislation. And finally I want to thank Senator McCain and Senator Hollings for allowing me to introduce this amendment.

Madam President, I would like to use this time to respond to some of the comments that have been made.

It is really a misconception to think this is an amendment against derivatives. This isn't an amendment against derivatives. I have never said derivatives caused the western energy crisis. What I said was that there is a loophole in the law: Where all other finite commodities, except for energy and metals, have certain regulations with respect to transparency, these particular finite commodities do not; and that certain traders use this loophole to practice, if you will, a kind of fraud in their trading. The fraud was to artificially find ways to boost their products. I wish to respond to that.

Let's go into one of the ways they proceeded to do this--through what is called a round trip or a wash trade. Yesterday on the floor, Senator Fitzgerald and I, as well, very clearly pointed out what a wash trade is: I sell you a finite commodity, and you sell that same commodity back to me. On our balance sheets, we both carry a sale. Yet nothing ever changes hands. What we are saying is that this should be an illegal practice. What we are saying is that, at the very least, it ought to have transparency to it. We ought to be required to keep a record, to have an audit trail, and to have anti-fraud and anti- manipulation oversight of these practices by the Commodity Futures Trading Commission.

What we more fundamentally say is that a great deal of this was done in the western energy crisis through electronic trading.

Madam President, I understand I have the right to modify the amendment. Is that not correct?

Madam President, I would like to send a modified amendment to the desk. That modified amendment contains an additional cosponsor, Senator Kennedy. The modified amendment makes two changes to the amendment which I submitted before. The first change is to be absolutely crystal clear that this does not affect financial derivatives. I said that in my comments yesterday. I say it again today. To make it crystal clear, because some are concerned, and say, ``Oh, well, this will upset the financial derivatives marketplace,'' this is not the intent. It would only apply to finite commodities.

Right upfront, we are clearly saying that this title shall not apply to financial derivatives trading.

The other change to this amendment simply takes Senator Reid's amendment to exclude metals and adds this to this bill.

If I may, I send that amendment, as a modified, to the desk at this time.

I thank the Chair.

Madam President, once again, what we are seeking to do is close a loophole that was created in 2000 when this Congress passed the Commodity Futures Modernization Act. That act exempted just energy and metals. It was not the intention actually to do that. The Senate part of that bill did not exempt them. What happened was Enron went to the House and Enron secured an exemption of energy and metals in the House. That exemption was handled in the conference, and the Senate language was not in the bill.

The exemption was effectively created. The loophole was created. We are just trying to eliminate that loophole. We are not attacking derivatives. All we are saying is: If you do this kind of trading, you must keep a record just as anybody else does. You must be transparent. You must have an audit trail, and you are subject to any fraud or manipulation oversight by the Commodity Futures Trading Commission.

This is where it gets a little complicated. If I sell energy to you and you deliver, then that is covered by the Federal Energy Regulatory Commission. If I sell energy to you and you sell it to a third person or entity that sells it to a fourth entity that sells it to a fifth entity and then it goes into the field, those interim trades are not covered.

That is what we seek to cover because that is where the games exist. It is a rather subtle point, but it is also an important point.

I heard people say that this will stifle the market. I will tell you what has been happening out there. Without transparency and without record keeping stifles the market.

When Mr. Fortney was arrested last week for creating schemes such as Ricochet, Death Star, and Get Shorty, you don't think that stifles the market when you have other traders pleading guilty to fraud and wire fraud?

Does that not stifle the market? And does that not give the average consumer the belief that they cannot trust this marketplace as being fair and transparent? I believe it does. More fundamentally, I believe the rules that govern the marketplace should be rules to protect the average consumer, not the big boys; they can take care of themselves. But the average consumer has to have confidence in the marketplace that it is fair and that it is transparent.

I would like to correct the idea that this amendment has not gone through regular order. I moved this amendment last year to the Energy bill. Senator Gramm of Texas, who, incidentally, subsequently went to work for EnronOnline in its new life with UBS Warburg--which is fine-- argued against my amendment. We tried to settle our differences. It took quite some time. We could not settle our differences on this amendment, and we did have a vote.

Another reason for the vote is there were people who believed this had not had enough committee hearing. So we had a vote, and I think we got 48 votes. The amendment went to the Agriculture Committee. The Agriculture Committee held hearings. The staff of both sides reviewed the legislation. Senator Harkin, who was chairman, and Senator Lugar, who was ranking member, are both cosponsors of this amendment.

The problem is, the end of the session came without a markup, so this is really the opportunity we have to place this amendment into some form of law, and so we take this opportunity.

I also wish to say that the President's working group in 1999, in their report--this was before the Commodity Futures Modernization Act of 2000--very specifically said, on page 2 of their report, that:

An exclusion from the CEA [Commodities Exchange Act] for

electronic trading systems for derivatives, provided that the

systems limit participation to sophisticated counterparties

trading for their own accounts and are not used to trade

contracts that involve non-financial commodities with finite

supplies. . . .

In other words, they are saying that commodities with finite supplies should be included in the bill, but they are recommending that those that do not have finite supplies, such as financials derivatives, not be included in the bill. Now, apparently, they are changing their position. But I want to make very clear that was the position of the ``Over-the-Counter Derivatives Markets and the Commodity Exchange Act, Report of The President's Working Group on Financial Markets'' dated November 1999. And the Senate version of the Commodity Futures Modernization Act actually did just what this working group stated.

Again, to refute the allegation that I am in some way blaming derivatives for the western energy crisis--I am not--I am blaming this loophole which allows all this secret trading, which we have seen result in fraudulent schemes, to try to close that loophole. And the way to close it is to bring the light of day to it. That is what we are trying to do.

I pointed out yesterday, because some people said, well, we need to study this more, that it has been studied more and that the ``Final Report On Price Manipulation In Western Markets, Fact-Finding Investigation Of Potential Manipulation Of Electric And Natural Gas Prices,'' which was prepared by the staff of the Federal Energy Regulatory Commission, and dated March 2003, says the following as one of their recommendations:

Recommend that Congress consider giving direct authority to

a Federal agency to ensure that electronic trading platforms

for wholesale sales of electric energy and natural gas in

interstate commerce are monitored--

That is what we do--

and provide market information that is necessary for price

discovery in competitive energy markets.

That is exactly what this does, as recommended by this report of the Federal Energy Regulatory Commission.

With the modification I made, metals will have the same level of oversight as exists under current law today.

Now, let me go back again to 2000. I mentioned the change that was made to accommodate Enron lobbying to the Commodity Futures Modernization Act. It also did not take long for EnronOnline and others in the energy sector to take advantage of this new freedom by trading energy derivatives absent any transparency or regulatory oversight. Thus, after the 2000 legislation--and really right away--EnronOnline began to trade energy derivatives bilaterally without being subject to proper regulatory oversight.

It should not surprise anyone that without this transparency, prices soared. In 2000, if Enron's derivatives business had been a stand-alone company, it would have been the 256th largest company in America. That year, Enron claimed it made more money from its derivatives business-- $7.23 billion--than Tyson Foods made from selling chicken. That is according to author Robert Bryce, who wrote a book on Enron called ``Pipe Dreams.''

EnronOnline rapidly became the biggest platform for electronic energy trading. But unlike regulated exchanges, such as the New York Mercantile Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade, EnronOnline was not registered

with the CFTC, the Commodity Futures Trading Commission, so it set its own standards. And that is the problem. 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 large.

As this same author, Robert Bryce, describes--and let me quote--

Enron didn't just own the casino. On any given deal, Enron

could be the house, the dealer, the oddsmaker, and the guy

across the table you're trying to beat in diesel fuel

futures, gas futures, or the California electricity market.

The Electric Power Supply Association, EPSA, has sent a letter to all Senators asking them to oppose our oversight amendment. This should not be strange to anybody because its members are exactly the same companies that are being investigated and have been investigated by FERC for wrongdoing in the western energy crisis. It is AES Corporation; it is BP Energy; it is Duke Energy; it is Mirant Energy; it is Reliant Energy; it is UBS Warburg, which purchased Enron's trading unit; and it is Williams Energy. Now, with others, they are all members of EPSA, not companies that Westerners trust very much these days in light of what we have been through.

Now, I want to just document some of this.

Let me quickly run through these again because, again, a lot of these round-trip trades were done on the Internet.

Other schemes were carried out on the Internet. Let's just go through this. Duke Energy disclosed that $1.1 billion worth of trades were round trip since 1999. Roughly two-thirds of these were done on the Intercontinental Exchange, which is an online trading platform owned by the banks, again, where there is no transparency, no net capital requirements, and no recordkeeping whatsoever. Now, this also meant that thousands of subscribers would have seen false price signals.

Why would they see false price signals? That is because of the nature of a wash or round-trip trade. Again, a wash or round-trip trade would be that I am going to sell you energy at a certain price and you are going to sell me energy at a certain price, but no energy ever changes hands; yet we both post sales. That is what a wash trade or a round- trip trade is.

A class action suit accused the El Paso Corporation of engaging in dozens of round-trip energy trades that artificially bolstered its revenues and trading volumes over the last 2 years.

CMS Energy admitted conducting wash energy trades that artificially inflated its revenue by more than $4.4 billion. These round-trip trades accounted for 80 percent of their trade in 2001. So 80 percent of this company's trades in 2001--in the heart of the energy crisis--were not trades at all. No energy ever traded hands. They just boosted their sales--artificially.

This is another facet of artificially filing false reports: reporting fictitious natural gas transactions to an industry publication. You can read it for yourself. The overwhelming figure in this is, if you look at what was done with energy and you look at California, where one year the total cost of energy was $7 billion and the next year it was $28 billion, which is a 400 percent increase, there is no way that could be legitimate. There is no way the energy need of a State could increase 400 percent in 1 year. Demand didn't increase 400 percent.

So without this type of legislation, there really is insufficient authority to investigate and prevent fraud and price manipulations since parties making the trade are not required to keep a record. What we would require them to do is keep a record. Therefore, the Commodity Futures Trading Commission, in the event of many of these interim trades, and the FERC, where energy is directly delivered as a product of a trade, has the ability to do the investigation based on records. If you don't keep records, it is very hard to prove that.

I would like to repeat that this amendment does not ban trades. This amendment does not affect financial derivatives. This amendment would only require oversight and transparency for those energy trades that are now taking place within this loophole, and it would provide oversight, as recommended in the FERC report.

We are very proud to have the support of the National Rural Electric Cooperative Association, the Derivative Study Center, the American Public Gas Association, American Public Power Association, California Municipal Utilities Association, Southern California Public Power Authority, Transmission Excess Policy Study Group, U.S. Public Interest Research Group, Consumers Union, Consumers Federation of America, Calpine, Southern California Edison, Pacific Gas and Electric, and FERC Chairman Patrick Wood.

Again, this amendment is not going to do anything to change what happened in California and the West. But it does provide the necessary authority for the CFTC and the FERC to help protect against another energy crisis.

I might say I am very suspicious of people who want to do trading in the dark. I am very suspicious when they say, oh, we are so sophisticated you cannot possibly know how this is done and you are going to stifle trade, because they don't want to keep a record of that trade, they don't want transparency, they don't want to keep an audit on trade, and they don't want any Government agency assuring there isn't fraud or manipulation. I am doubly suspicious of them, particularly because of the fraud and manipulation we now know took place.

So, please, don't tell me I am not sophisticated enough to understand. I understand plenty. I understand, when the price goes from $7 billion to $28 billion in a very short period of time, that you have to begin to look. I understand now that these arrests are occurring and the manipulations of Ricochet and Death Star and Get Shorty and wash trades are all becoming well known. I understand. The point is it is wrong. The point is, you cannot prove it is wrong if there are no records of those trades.

So what we are saying is these trades can go on, but you keep records. We give the CFTC the responsibility to set net capital requirements commensurate with risk. That is good oversight for the public and that is good oversight for anybody who is going to invest, because when net capital is not available and the house begins to collapse, as it did with Enron, the company goes bankrupt.

I think I have made my case. We have gone over this. I sent this legislation to the head of Goldman Sachs. They run an electronic exchange. I said, please, if you have problems with it, let me know. I did not hear. We have vetted it and talked over the past year and a half, 2 years, with virtually anyone who wanted to come in and talk with us about it.

Mr. President, I am absolutely determined and I am going to come back and back and back until this loophole is closed. Nobody can tell me I am not sophisticated enough to know that sunshine and records and transparency are critical to the effective functioning of a free marketplace, because I believe that just as much as I believe in the Pledge of Allegiance--and I do believe in the Pledge of Allegiance. When you allow hiding and you allow these trades to take place surreptitiously, that is when there are problems.

I am afraid I have said this over and over again, but we went through it and we saw it. We read the 3,000 pages California has sent to the FERC. This is another intrigue. Can you imagine that no State has the right today to present evidence to the FERC of fraud or manipulation?

California had to go to the Supreme Court to get that right, and then when we got that right, we were told it had to be in in 100 days. California submitted 3,000 pages within the 100 days, and it is loaded with examples of fraud and manipulation.

We know there is fraud, we know there is manipulation, and we know that was present in the western energy crisis, and all we are trying to do is bring light of day to one loophole that was in the Commodity Futures Modernization Act because a major offender lobbied for it in the laws. It was not in the Senate bill. The Senate bill originally covered this, but they lobbied in the House. It was taken out in conference, and the loophole was created.

If the past 3 years have not been evidence enough, if the arrests are not evidence enough, if we do not want a transparent marketplace, if we want people to be able to do this trading--

and we can tell you the language of some of these trades; if they knew they were being recorded, I do not think they would do it in the way they did it--if we want to allow those procedures to continue to happen, that is what a motion to table and a tabling vote will do.

I am very hopeful and I am asking my colleagues to vote nay on the motion to table and vote yea on the modified amendment which is now at the desk.

I thank the Chair, and I yield the floor. Mr. President, I suggest the absence of a quorum.

I yield our time to the Senator from Iowa.

I thank the Chair, and I also thank the distinguished Senator from Kentucky for his leadership on this issue. I am very proud to join with him.

Madam President, in 1996, Senator William Cohen and I introduced a sanctions bill on Bumra. It passed in 1996, and was signed by the President. In 1997, the sanctions were exercised.

We had a brief period of hope during that time, and the ASEAN nations were going to be helpful. It looked like the military junta was going to be receptive. Then, recently, for a brief period, Aung San Suu Kyi, the democratic leader of Burma, was released, and discussions took place. Well, that was short lived and this diabolical attack took place on Aung San Suu Kyi.

According to reports, her motorcade was met by 100 to 200 people at a bridge near Mandalay in northern Burma. Most of these people were disguised as monks. Another 400 people--convicts and other militia recruits who were also disguised as monks--blocked the convoy from the rear. Both groups then discarded their costumes and attacked the entourage with bamboo sticks and wooden clubs, smashing vehicles and beating up their targets. Officially, four people were killed and 50 injured. Witnesses contend that as many as 70 may have been killed and many more injured.

This is outrageous. The level of coordination, the deception, and the brutality of the crimes cannot go unanswered. They really demand a forceful and a substantive response that makes clear the United States will not deal with this junta and will not tolerate such blatant disregard for common human decency.

This legislation sends a message. It says: We will not import their products. And those Burmese exports to the United States are about 25 percent of what Burma exports. So it is a considerable message. It has to be remembered, Aung San Suu Kyi is the democratic leader of Burma. She has never been permitted to serve. Her people have been arrested. Members of the Parliament have been arrested and held in custody. Over 1,300 political prisoners are still in jail, many of them elected parliamentarians. The practice of rape as a form of repression has been sanctioned by the Burmese military. The use of forced labor is widespread. Trafficking in young boys and girls as sex slaves is rampant, and the government engages in the production and distribution of opium and methamphetamine. So the United States must act. Now, in general, I do not support trade embargoes as an effective instrument of foreign policy. However, there are certain circumstances--South Africa was one of them, largely because of the world response, and the world saying enough is enough--where there must be change, and where we are prepared to carry out these sanctions together to effect that change. I hope in this sense the United States will lead the way to enact these sanctions in a meaningful way in which other nations will follow.

Our legislation imposes a complete ban on all imports until the President determines and certifies to Congress that Burma has made substantial and measurable progress on a number of democracy and human rights issues.

As Senator McConnell will indicate, there is a provision in the legislation, similar to the most favored nation status for China, that will allow an annual review of this to assess progress. It allows the President to waive the ban should he determine and notify Congress that it is in the national security interest of the United States to do this. It would freeze the assets of the Burmese regime in the United States. It directs United States executive directors at international financial institutions to vote against loans to Burma. It expands the visa ban against past and present leadership of the junta, and it encourages the Secretary of State to highlight the abysmal record of the junta in the international community.

Now, Senator McConnell mentioned that both business and labor are united in support of this legislation. He said the American Apparel and Footware Association, which represents apparel, footware, and sewn products companies and their suppliers, has called for this ban. The president and CEO has stated--and I think this is worth being in the Record--``The government of Burma continues to abuse its citizens through force and intimidation, and refuses to respect the basic human rights of its people. AAFA believes this unacceptable behavior should be met with condemnation from not only the international public community, but from private industry as well.''

So well said.

A number of stores, including Saks, Macy's, Bloomingdales, Ames, and The Gap have already voluntarily stopped importing or selling goods from Burma. The AFL-CIO and other labor groups also support this legislation.

In addition, the International Labor Organization, for the first time in its history, called on all ILO members to impose sanctions on Burma.

Such diversity in support of this legislation speaks volumes about the brutality of this military junta and its single-minded unwillingness to take even a modest step toward democracy and national reconciliation.

And to add to it, Aung San Suu Kyi, the democratic leader, is once again being held in custody. This is unacceptable.

The military junta knows full well they do not enjoy the popular support of the Burmese people. That is why they resort to such actions.

As Aung San Suu Kyi traveled the country, and thousands turned out to hear her speak, the junta realized that after years of house arrest and repression, they had failed to curb the power of her message of democracy, of human rights, and the rule of law. They realized that the Burmese people were determined to see the democratic elections of 1990 fully implemented without delay. So in a cowardly and despicable manner they took this action.

Now we must take action. We must take a stand on the side of the people of Burma and on the side of the values we cherish the most.

I urge support and I hope it will be unanimous.

Thank you very much, Madam President. I yield the floor.

I certainly agree, I say to the Senator through the Chair. I think it would be very useful. And I think when the recalcitrance, the repression, is on the floor of this Senate every year, hopefully it will be helpful in changing the minds of this military junta.

Madam President, I will just use a quick minute. I mentioned some of the retail establishments supporting this but I left out a couple. I mentioned Saks Fifth Avenue, and there is also Macy's, the Gap, Bloomingdale's, Ames, Williams Sonoma, IKEA, Wal-Mart, Nautica, and Pottery Barn. I am very proud of these retail establishments for standing up and joining us. I wanted to recognize that on the floor.

Mr. President, I rise to support the amendment offered by Senators Wyden, Bingaman, Sununu, and Enzi to strike the section of the energy bill providing Federal subsidies for the construction of new nuclear plants.

Title IV of the energy bill includes loans, loan guarantees, and other forms of financial assistance to subsidize the construction of new nuclear powerplants.

In the past 50 years, California has built 5 commercial nuclear powerplants and one experimental reactor. Today, just two of these nuclear powerplants are still operating in the State. The plants at San Onofre and Diablo Canyon are running at diminished capacity but still provide 4,400 megawatts of power in California--close to a fifth of California's energy supply.

Impressive as these numbers may be in terms of the power-generating capacity of nuclear energy, they tell only part of the story of California's experiment with nuclear power. Of six nuclear powerplants built in California, four have been decommissioned due to high operating costs and excessive risk.

In the late 1950s, an experimental reactor at the Rocketdyne site in Ventura County was shut down after a severe meltdown.

In 1967, the Vallecitos plant closed its doors after 20 years of operating because its owner, General Electric, was unable to obtain accident insurance due to the high risk of operating a nuclear power plant.

In 1976, the Plant at Humboldt Bay shut its doors after 13 years of operation as a result of the discovery of a fault line near the plant that would have required millions of dollars in seismic retrofits.

And in 1989, the Rancho Seco plant near Sacramento was closed by public referendum after 14 years of operation plagued by mismanagement that resulted in cost overruns.

Nuclear power is expensive and risky. Yet I believe that if private investors are not willing to put their own money on the line to support new nuclear plants, then the Federal Government should not put taxpayers' money at risk either. However, under the nuclear subsidy provision in this energy bill, taxpayers would be required to subsidize up to 50 percent of construction costs of new nuclear plants--costs that CRS estimates to be in the range of $14-16 billion. CRS also estimates the risk of default on these loan guarantees to be ``very high--well above 50 percent.''

I strongly believe it is not in the public interest for our Nation to subsidize

costly nuclear plants. Instead we should devote more resources to the development of renewable energy.

I strongly believe we should be doing more to encourage the development of renewable power such as, wind, geothermal, and biomass, instead of providing subsidies to an industry that has not built a new powerplant since the 1970s.

Unfortunately, this Energy bill currently has an over-reliance on promoting traditional energy resources, such as nuclear power.

The U.S. nuclear power industry, while currently generating about 20 percent of the Nation's electricity, faces an uncertain long-term future. No nuclear plants have been ordered since 1978 and more than 100 reactors have been canceled, including all those ordered after 1973. No units are currently under construction.

The nuclear power industry's troubles include high nuclear powerplant construction costs, public concern about nuclear safety and waste disposal, and regulatory compliance costs.

Controversies over safety have dogged nuclear power throughout its development, particularly following the March 1979 Three Mile Island accident in Pennsylvania and the April 1986 Chernobyl disaster in the former Soviet Union. These events shaped much of our opinions about nuclear power.

Safety continues to raise concerns today. In a recent example, it was discovered in March 2002 that leaking boric acid had eaten a large cavity in the top of the reactor vessel in Ohio's Davis-Besse nuclear plant. The corrosion left only the vessel's quarter-inch-thick stainless steel inner liner to prevent a potentially catastrophic release of reactor cooling water.

Furthermore, nuclear powerplants have long been recognized as potential targets of terrorist attacks, and I remain skeptical that there are enough safeguards in place to defend against potential terrorist attacks on our nuclear plants.

Concern about nuclear safety and waste disposal makes Californians apprehensive about nuclear power. California has shifted away from nuclear power over the years and activists in the communities surrounding the Diablo Canyon and San Onofre plants continue to express concerns about the safety of the remaining reactors in California.

The construction of new nuclear reactors would also exacerbate the nuclear waste problem. Since the volume of nuclear waste in the United States is expected to exceed capacity at the controversial Yucca Mountain repository by 2010, any new plants will create even more waste storage problems.

I voted with Senator Bingaman to strike these nuclear subsidies in committee and today I will vote with Senator Wyden to do the same.

Mr. President, I inquire as to what the order is.

Mr. President, I send an amendment to the desk on behalf of Senators Fitzgerald, Harkin, Lugar, Cantwell, Wyden, Boxer, and Leahy.

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

Mr. President, I heard the comments of the distinguished ranking member that they had not had an opportunity to see the amendment. Of course, we will allow that opportunity to take place. This amendment closes a major loophole which allows energy trades to take place electronically, in private, with no transparency, no record, no audit trail, or any oversight to guard against fraud and manipulation.

This amendment will close a loophole created in 2000 when Congress passed the Commodity Futures Modernization Act which exempted energy and metals trading from regulatory oversight and excluded them completely if the trade was done electronically.

This amendment was presented by me before. Senator Fitzgerald spoke, Senator Wyden spoke, Senator Cantwell spoke. We got just about a majority. Senator Gramm of Texas argued against it. It did go back to the Agriculture Committee. The Agriculture Committee held hearings and both Senators Harkin and Lugar participated in making changes, which I think has made this a better amendment.

We were hoping for a markup, but the Congress ended without that markup having taken place. Now the Energy bill is before us, and it seems to me this is the time to present this.

This bill has had floor discussion. It has had a committee hearing. It has been modified by the chairman and the ranking member of the Agriculture Committee and is now before us.

Today, if there is no delivery of physical energy, there is no price transparency. By that I mean, if I buy natural gas from you and you deliver it to me, the Federal Energy Regulatory Commission has the authority to ensure that the transaction is transparent--meaning it is available to look at--and that it is reasonably priced. However, many energy transactions no longer result in delivery. In other words, if I sell to you and you sell to Senator Craig who sells to Senator Domenici who sells to somebody else who then delivers it, none of these trades is covered if done electronically. That means there is no record; there is no audit trail; there are no capital requirements; there is no transparency; there is no antifraud or antimanipulation oversight today. It is a huge loophole permitted in the Commodity Futures Modernization Act of 2000.

This lack of transparency and oversight applies to energy and metals trading. It does not apply if you are selling wheat or pork bellies or any other tangible commodity. Why do we include metals? Fraud and manipulation have not been confined to the energy trading sector. For example, in 1996 U.S. consumers were overcharged $2.5 billion from Sumitomo's manipulation of the copper markets.

Furthermore, in 1999 the President's Working Group on Financial Markets recommended excluding only financial derivatives, not energy and metals derivatives, from the CFTC's jurisdiction.

After intense lobbying by, of all people, Enron, a change was made to the Commodity Futures Modernization Act to exempt energy and metals trading from CFTC oversight in 2000. It did not take long for EnronOnline and others in the energy sector to take advantage of this new freedom by trading energy derivatives absent any transparency and regulatory oversight. In other words, a whole new niche was found where you could avoid any scrutiny and do this trading.

After the 2000 legislation was enacted, EnronOnline began to trade energy derivatives bilaterally, without being subject to proper regulatory oversight. It should not surprise anyone that without the transparency, prices soared and games were played.

Three years ago this summer, California's energy market began to spiral out of control. In May of 2000, families and businesses in San Diego saw their energy bills soar. The western energy crisis forced every family and business in California and many of the other States to pay more for energy. The crisis forced the State of California into a severe budget shortfall. It forced the State's largest utility into bankruptcy and nearly bankrupted the second largest publicly owned utility.

Now, 3 years and $45 billion in costs later, we have learned how the energy markets in California were gamed and abused. Originally everyone around here said: Oh, it's the problem of the 1996 deregulation law. I will admit that law is a faulty law. However, you cannot have the price of energy 1 year being $7 billion throughout the whole State and the next year it is $28 billion and say that is supply and demand. You cannot have a 400 percent increase just based on supply and demand. Clearly, you do not have a 400 percent increase in demand in a 1-year period of time. Nor did that happen in a 1-year period of time.

In March of this year, the Federal Energy Regulatory Commission issued a report titled ``Price Manipulation In Western Markets,'' which confirmed that there was widespread and pervasive fraud and manipulation during the western energy crisis. According to the FERC report, the abuse in our energy markets was pervasive and unlawful. Yet this Energy bill does not prevent another energy crisis from occurring nor does it curb illegal Enron-type manipulation.

Just last week, the FBI arrested former Enron trader John M. Forney, saying he was a key architect of Enron's well-known trading schemes blamed for worsening California's energy crisis in 2000 and 2001.

Mr. Forney was charged with a single count each of wire fraud and conspiracy. He is the third Enron trader accused by the Justice Department of criminal manipulation of western energy markets but the first who did not reach a plea agreement, leading to his arrest last Tuesday. According to the criminal complaint, Forney is allegedly the architect of the Enron trading strategies with the now infamous names of Ricochet, Death Star, Get Shorty, Fat Boy, and others.

These Enron strategies were first revealed on Monday, May 6, 2002, when the Federal Energy Regulatory Commission posted a series of documents on their Web site that revealed Enron manipulated the western energy market by engaging in these suspect trading strategies.

Under one such trading strategy called Death Star, which was also called Forney's Perpetual Loop, for John Forney, Enron would ``get paid for moving energy to relieve congestion without actually moving energy or relieving any congestion,'' according to an internal memo. It was a fraud.

It was a fraud. A was a trading strategy which was clearly and simply fraudulent and manipulative.

In another strategy detailed in these memos, Enron would ``create the appearance of congestion through the deliberate overstatement of loads'' to drive up prices.

The above-mentioned strategies reveal an intentional and coordinated attempt to manipulate the Western energy market for profit.

This is an important piece of the puzzle that has been uncovered. Some former Enron traders helped fill in the blanks.

CBS News reported in May 2002 that former Enron traders admitted the company was directly responsible for local blackouts in California. Yet, interestingly enough, no one has followed up on this report.

According to CBS News reporter Jason Leopold, the traders said Enron's former president Jeff Skilling pushed them to trade aggressively in California and told them, ``If you can't do that, then you need to find a job at another company or go trade pork bellies.''

The CBS article mentions that Enron traders played a disturbing role in blackouts that hit California. The report mentions specific manipulative behavior by Enron on June 14 and 15 in the summer of 2000 when traders said they intentionally clogged Path 26--a key transmission path connecting Northern and Central California.

Here is what one trader said about the event:

What we did was overbook the line we had the rights on

during a shortage or in a heat wave. We did this in June 2000

when the Bay Area was going through a heat wave and the ISO

couldn't send power to the North. The ISO has to pay Enron to

free up the line in order to send power to San Francisco to

keep the lights on. But by the time they agreed to pay us,

rolling blackouts had already hit California and the price

for electricity went through the roof.

In other words, they waited for the weather. They calculatedly overbooked the line to clog the lines so that power could not be transmitted to the north. Therefore, what power was transmitted went sky high in terms of price. Second, a blackout resulted.

California lost billions. Yet according to the traders, Enron made millions of dollars by employing this strategy alone.

On top of all this, traders disclosed that Enron's manipulative trading strategies helped force California to sign expensive long-term contracts. It is no surprise that Enron and others were able to profit so handsomely during the crisis.

Now, after 3 years, the FBI and the Justice Department are beginning to

bring these traders to justice. In February, Jeffrey Richter, the former head of Enron's Short-Term California energy trading desk, pled guilty to conspiracy to commit fraud as part of Enron's well known schemes to manipulate Western energy markets.

Richter's plea followed that of head Enron trader Tim Belden in the fall of 2002. Belden admitted that he schemed to defraud California during the Western energy crisis and also plead guilty to conspiracy to commit wire fraud.

Nobody can believe this didn't happen, because it did. Two people have pled guilty, and a third was just arrested for doing just what we hope to prevent happening with this amendment.

The plea by Jeff Richter came on the heels of FERC's release of transcripts from Reliant Energy in January of this year that reveal how their traders intentionally withheld power from the California market in an attempt to increase prices. This is one of the most egregious examples of manipulation and it is clear and convincing evidence of coordinated schemes to defraud consumers.

Let me read just one part of the transcript to demonstrate the greed behind the market abuse by Reliant and its traders.

On June 20, 2000 two Reliant employees had the following conversation that reveals the company withheld power from the California market to drive prices up:

Reliant Operations Manager 1. I don't necessarily foresee

those units being run the remainder of this week. In fact you

will probably see, in fact I know, tomorrow we have all the

units at Coolwater off.

The Coolwater plant is a 526 Megawatt plant.

Reliant Plant Operator 2. Really?

Reliant Operations Manager 1. Potentially. Even number

four. More due to some market manipulation attempts on our

part. And so, on number four it probably wouldn't last long.

It would probably be back on the next day, if not the day

after that. Trying to uh . . .

Reliant Plant Operator 2. Trying to shorten supply, uh?

That way the price on demand goes up.

Reliant Operations Manager 1. Well, we'll see.

Reliant Plant Operator 2. I can understand. That's cool.

Reliant Operations Manager 1. ``We've got some term

positions that, you know, that would benefit.

That is what existed. That is the kind of thing that went on, and it has to stop. It has to be made illegal and it has to have heavy penalties.

Let's turn to some other examples.

On January 27, 2003, Michelle Marie Valencia, a 32-year-old former senior energy trader for Dynegy, was arrested on charges that she reported fictitious natural gas transactions to an industry publication.

On December 5, 2002, Todd Geiger, a former vice president on the Canadian natural gas trading desk for El Paso Merchant Energy, was charged with wire fraud and filing a false report after allegedly telling a trade publication about the prices for 48 natural gas trades that he never made in an effort to boost prices and company profit.

In other words, he is telling an energy trade publication about 48 gas trades that were never made. It was bogus information which was given out. Why? Simply to boost the market.

These indictments are just a few examples of how energy firms reported inaccurate prices to trade publications to drive energy prices higher.

Industry publications claimed they could not be fooled by false prices because deviant prices are rejected, but this claim was predicated on the fact that everyone was reporting honestly which we now know they weren't doing.

CMS Energy, Williams, American Electric Power Company, and Dynegy have each acknowledged that its employees gave inaccurate price data to industry participants. On December 19 Dynegy agreed to pay a $5 million fine for its actions.

Let us turn to other types of fraudulent trades that many energy firms have admitted to.

Dynegy, Duke Energy, El Paso, Reliant Resources Inc., CMS Energy Corp., and Williams Cos. all admitted engaging in false ``round-trip'' or ``wash trades.''

What is a ``round-trip'' trade, one might ask?

``Round-trip'' trades occur when one firm sells energy to another and then the second firm simultaneously sells the same amount of energy back to the first company at exactly the same price. No commodity ever actually changes hands, but when done on an exchange, these transactions send a price signal to the market and they artificially boost revenue for the company.

How widespread are ``round-trip'' trades? Well, the Congressional Research Service looked at trading patterns in the energy sector over the last few years and reported, ``this pattern of trading suggests a market environment in which a significant volume of fictitious trading could have taken place.''

Yet since most of the energy trading market is unregulated by the government, we have only a slim idea of the illusions being perpetrated in the energy sector.

Consider the following confessions from energy firms about ``round- trip'' trades:

Reliant admitted 10 percent of its trading revenues came from ``round-trip'' trades. The announcement forced the company's President and head of wholesale trading to both step down.

These are bogus traders.

CMS Energy announced 80 percent of its trades in 2001 were ``round- trip'' trades.

Eighty percent of all of the trading this company did was bogus.

Remember, these trades are sham deals where nothing was exchanged, yet the company booked revenues from the trades. This is exactly what our legislation aims to stop.

Duke Energy disclosed that $1.1 billion worth of trades were ``round- trip'' since 1999. Roughly two-thirds of these were done on the InterContinental Exchange owned by banks that oppose this legislation.

Let me repeat that. Duke Energy disclosed that $1.1 billion worth of trades were bogus ``round-trip'' trades since 1991. And two-thirds of those were done on the InterContinental Exchange, which is an electronic exchange. That means that thousands of subscribers would have seen false price signals.

A lawyer for J.P. Morgan Chase admitted the bank engineered a series of ``round-trip'' trades with Enron. Dynegy and Williams have also admitted to this ``round-trip'' trading. And although those trades mostly occurred with electricity, there is evidence to suggest that ``round-trip'' trades were made in natural gas and even broadband.

By exchanging the same amount of a commodity at the same price, these companies have not engaged in meaningful transactions but in deceptive practices to fool investors and drive up energy prices for consumers. It is, therefore, imperative that the Department of Justice, the Federal Energy Regulatory Commission, the Securities and Exchange Commission, the Commodity Futures Trading Commission, and every other oversight agency conduct an aggressive and vigorous investigation into all of the energy companies that may have committed fraud and abuse in the western energy market.

Beyond that, I believe strongly that Congress must reexamine what tools the Government needs to keep a better watch over these volatile markets that, frankly, are little understood. In the absence of vigilant Government oversight of the energy sector, firms have the incentive to create the appearance of a mature liquid and well functioning market, but it is unclear whether such a market exists. And I don't believe, for a minute, that such a market exists.

The ``round-trip'' trades, the Enron memos, the FERC report on ``Price Manipulation in the Western Markets'' raise questions about the energy markets of our country. To this end, I believe it is critical for the Senate to approve this amendment, which would provide more regulatory oversight of online energy trading.

When the Senate Energy Committee marked up the Energy bill in April, there was a consensus to include some provisions of the Energy Market Oversight Act, S. 509, I introduced earlier this year. The Energy bill, S. 14, does include higher criminal and civil penalties for violations of the Federal Power Act and the Natural Gas Act.

Under section 1173 of the bill now on the floor, fines will be $1 million instead of the current $5,000 for a one-time violation of the statutes. I thank

the chairman of the committee for this. Jail time will be raised to 5 years instead of the current 2 years. And I thank the chairman of the committee for this. Fines will be $50,000 per violation per day instead of the current $500 per violation per day for violations of the statutes. And I thank the chairman of the committee for this.

Furthermore, section 1174 of the Energy bill will eliminate the unnecessary 60-day waiting period for FERC to grant refunds. I thank both Senator Domenici and Senator Bingaman, the chairman and the ranking member of the Energy Committee, for their efforts to include provisions of S. 509, the Energy Market Oversight Act, in this Energy bill.

Now let me turn to the specifics of the amendment.

I am offering this amendment--and I am hopeful that Senator Fitzgerald will come to the floor; I know he intends to speak on this amendment, and I hope he does--I am offering this amendment to subject electronic exchanges, such as EnronOnline, the InterContinental Exchange, and any other electronic exchange, to the same oversight, reporting, and capital requirements of other commodity exchanges, such as the Chicago Mercantile Exchange, the New York Mercantile Exchange, and the Chicago Board of Trade.

Why should there be one secret trading venue where fraud and manipulation can take place abbondanza? I do not think there should be. I do not think it is in the interests of our citizens to have that happen. And the western energy market should be a major case in point.

I am very pleased that Senators Fitzgerald, Harkin, Lugar, Cantwell, Wyden, Leahy, Durbin, and Boxer have again signed on to this amendment. I was very proud of the work we did in the 107th Congress, and I hope we can adopt this amendment on this Energy bill because without this type of legislation, there is insufficient authority to investigate and prevent fraud and price manipulation since parties making the trades are not required to keep a record. That is the problem.

The CFTC will say: Oh, we are already doing that. But in the law there is no requirement to keep a record. There is a specific exemption in the law. So I do not see how the CFTC has the adequate tools to do what they need to do without this amendment because this amendment closes that loophole which exists just for energy and just for metals and, because of its existence, has allowed EnronOnline and a number of other exchanges--Dynegy had one; InterContinental Exchange had one as well--to do all these things in secret with no audit trail, no record, no capital requirements. Nobody has a responsibility to set any capital requirements. There is no audit trail and no antifraud and antimanipulation oversight. Clear and simple, it is a travesty.

Right now, energy transactions are regulated by FERC. When there is actual delivery, that is taken care of. If Senator Reid sells me energy and I deliver it, that is covered by FERC. But interim trades are not covered by anybody. They are on their own in secret.

Many energy transactions no longer result in delivery, so this giant loophole where there is no government oversight--when these transactions are done on electronic exchanges--is major. I think it is mega. I think a number of companies have jumped into this void simply because they thought they could make a quick buck by gaming the system, and in fact they have done just that.

As I mentioned, in 2000 Congress passed the Commodity Futures Modernization Act, which exempted energy and metals from regulatory oversight, and excluded it completely if the trade was done electronically. So today, as long as there is no delivery, there is no price transparency, there is no record, there is no audit trail, there is no capital requirement, there is no antifraud, antimanipulation oversight.

This lack of transparency and oversight only applies to energy. It does not apply if you are selling wheat or pork bellies or any other tangible commodity. And financial derivatives are not included in this amendment.

It did not take long for Enron and others to take advantage of this new freedom by trading derivatives absent any regulatory oversight. Thus, after the 2000 legislation was enacted, EnronOnline, as I said, began to trade energy derivatives bilaterally without being subject to regulatory oversight. It should not be a surprise to anyone that prices soared.

In March, Warren Buffett published a warning in Fortune magazine saying:

Derivatives are financial weapons of mass destruction.

In his annual warning letter to shareholders about what worries him about the financial markets, Warren Buffett called derivatives and the trading activities that go with them ``time bombs.''

In the letter, Mr. Buffett states:

In recent years some huge-scale frauds and near-frauds have

been facilitated by derivatives trades. In the energy and

electric utility sectors, for example, companies used

derivatives and trading activities to report great

``earnings''--until the roof fell in when they actually

tried to convert the derivatives-related receivables on

their balance sheets into cash.

We clearly saw this with Enron. Was Enron and its energy derivative trading arm, Enron Online, the sole reason California and the West had an energy crisis? No. Was it a contributing factor to the crisis? I believe it was.

Unfortunately, because of the energy exemptions in the 2000 Commodities Futures Modernization Act, which took away the CFTC's authority to investigate, we may never know for sure. In the 107th Congress, this legislation was debated during consideration of the Senate Energy bill, and it was a subject of a hearing in the Senate Agriculture Committee. As I said, time ran out before it could be marked up and passed. Since that time, both Senators Lugar and Harkin have made significant improvements to the legislation.

So today I am pleased to note that the following companies and organizations are supporting this legislation: the National Rural Electric Cooperative Association; the Derivatives Study Center; the American Public Gas Association; the American Public Power Association; the California Municipal Utilities Association; Southern California Public Power Authority; the Transmission Access Policy Study Group; U.S. Public Interest Research Group; the Consumers Union; the Consumers Federation of America; Calpine; Southern California Edison; Pacific Gas and Electric; and the FERC Chairman Pat Wood.

Here is a quick explanation of what this amendment does. It applies antifraud and antimanipulation authority to all exempt commodity transactions. An exempt commodity is a commodity which is not financial and not agricultural and mainly includes energy and metals. The bill sets up two classes of swaps for those made between sophisticated persons, basically institutions and wealthy individuals, that are not entered into on a trading facility, for example, an exchange. Antifraud and antimanipulation provisions apply and wash trades are prohibited. The following regulations would apply to all swaps made on an electronic trading facility and a ``dealer market'' which includes dealers who buy and sell swaps in exempt commodities and the entity on which the swap takes place. Antifraud and antimanipulation provisions and the prohibition of wash trades apply.

If the entity on which the swap takes place serves a pricing or price discovery function, increased notice, reporting, bookkeeping, and other transparency requirements are provided. The requirement to maintain sufficient capital is commensurate with the risk associated with the swap. We don't determine that in this legislation. The Commodities Futures Trading Commission would determine that. In other words, they would determine what kind of net capital requirement there will be, and that would be commensurate with the degree of risk involved in the transaction.

Except for the antifraud and antimanipulation provisions, the CFTC has the discretion to tailor the above requirements to fit the character and financial risk involved with the swap or entity. While the CFTC could require daily public disclosure of trading data, such as opening and closing prices, similar to the requirement of futures exchanges, it could not require real-time publication of proprietary trading information or prohibit an entity from selling their data. So proprietary information is protected.

The CFTC may allow entities to meet certain self-regulatory responsibilities as provided in a list of core principles. If an entity chooses to become a self regulator, these core principles would obligate the entity to monitor trading to prevent fraud and manipulation, as well as assure that its other regulatory obligations are met.

The penalties for manipulation are greatly increased. The civil monetary penalty for manipulation is increased from $100,000 to $1 million. Wash trades are subject to the monetary civil penalty for each violation and imprisonment of up to 10 years.

The FERC is required to improve communications with other Federal regulatory agencies. A shortcoming in the main antifraud provision of the CEA is also corrected by allowing CFTC enforcement of fraud to apply to instances of either defrauding a person for oneself or on behalf of others.

This would also require the FERC and the CFTC to meet quarterly and discuss how energy derivative markets are functioning and affecting energy deliveries. So they are required to look at this, to monitor it closely, and to sit quarterly and see how these markets are, in fact, functioning.

This would grant the FERC the authority to use monetary penalties on companies that don't comply with requests for information. This is essentially the same authority the SEC has today.

It would make it easier for FERC to hire the necessary outside help they need, including accountants, lawyers, and investigators for investigative purposes. And it would eliminate the requirement that FERC receive approval from the Office of Management and Budget before launching an investigation or price discovery of electricity or natural gas markets involving more than 10 companies.

This amendment is not going to do anything to change what happened in California and the West. But it does provide the necessary authority for the CFTC and the FERC which will help protect against another energy crisis. No one is immune from this kind of thing. The gaming, the fraud, the manipulation has been extraordinary.

Just the chutzpah to do Death Star, Get Shorty, Ricochet, just the chutzpah to do these kinds of trades in secret, it is a bunco operation. It is nothing else but. And who is buncoed? The consumer is buncoed. That is why consumer organizations feel strongly about this.

When regulatory agencies have the will but not the authority to regulate, Congress must step in and ensure that our regulators have the necessary tools. Unfortunately, sometimes an agency has neither. In this case, I am glad to have the support of FERC, and I hope the CFTC will reconsider its position and support this amendment.

I note that Senator Fitzgerald is on the floor. I would like to yield to him. But before I do, may I just say one quick thing.

Pardon me?

I am not?

I thank the Chair for the clarification.

I wish to make one comment about this amendment. This amendment has been in the Agriculture Committee. It has had a hearing. It has been reviewed by both staffs, Republican and Democratic. The Democratic chairman of the committee, Senator Harkin, worked on this. The ranking member at the time, Senator Lugar, worked on this. They have both concurred. They are supporting this legislation. The staffs have reviewed it.

We believe it is bona fide, that it is solid, and that it will stand the test of time.

I thank the Chair. I yield the floor.

Mr. President, I ask unanimous consent the order for the quorum call be rescinded.

Madam President, I rise to thank the Senator from Illinois. We have worked on this now through two Congresses. It was very clear to me that he has a great deal of knowledge in this area. His advice, his support, his efforts have been very helpful. I think he has very clearly stated the facts of this legislation.

There are those who, for purposes I do not understand, want to make this legislation out to be much more than it is, some heavy requirement of Government. Really, all we are saying is, if you are going to trade online, energy and metals and broadband, those trades are subject to recordkeeping, to an audit trail, and to antifraud and antimanipulation oversight.

That is the same as any other finite commodity. Anywhere else does this same thing. But this loophole, at the request, as the Senator from Illinois said, of Enron--by the House, and then in a conference in 2000 they dropped the requirement for coverage from the Commodity Futures Modernization Act. Therefore, this loophole was created into which these companies jumped and began to set up these online trading exchanges.

I couldn't believe my eyes when I saw that one company announced that 80 percent of the trades they did in 2001 were round trip or wash trades.

Senator Fitzgerald just explained that very clearly, what a round trip or a wash trade is.

I certainly will.

Yes, it was CMS Energy. The year was 2001. They announced that.

Additionally, Duke Energy disclosed that $1.1 billion worth of trades were round trip, wash trades, since 1999; roughly two-thirds of these were done on the InterContinental Exchange, which means that thousands of subscribers would have seen these false price signals.

I could finish this, if you like? A class action suit accused the El Paso Corporation of engaging in dozens of round trip energy wash trades that artificially bolstered its revenues and trading volumes over the last 2 years.

CMS Energy Corp. has admitted conducting wash energy trades that artificially inflated its revenue by more than $4.4 billion.

So this is important. I have a hard time, I think, as you do, that if I sell something to you and you just sell it back to me and we both boost sales and yet nothing is really sold, that that is a legitimate way of doing business.

That is absolutely correct. That is what we are trying to do. For the life of me, I don't understand why people are against it.

The only thing I can figure is they want to do it. They want the unabashed ability to conduct the bogus trades. That would be the only reason they would want this little, dark, hidden place through electronic trading because there is no oversight for fraud or manipulation. There is no record kept. There is no audit trail.

That is right.

That is exactly right. That is why we suspect it. It is hard to prove.

Again, there have been three arrests of Enron traders who devised these schemes. Actually two were plea-bargained. There was a recent arrest last week of this fellow who apparently set these trading schemes up for Enron.

To have a transparent marketplace, I think, gives confidence to the 50 percent of the people who are small investors who would want to participate in the market. You have to show there is oversight. You have to show it is up and up, that it is a legitimate bona fide marketplace with trades that mean something.

In my heart of hearts, I believe that a lot of this kind of activity is what amounted to a 400-percent increase in the cost of power in 1 year in California alone.

I was not at the hearing. I do not recall that. But I think whomever that was, they are certainly correct because that would give confidence to their company and to people to invest in that company which is on the up and up, which is regulated and which has transparency.

I think particularly now after what we know has transpired over the past that this is one of the reasons why our economy has had problems in that people have lost confidence. They have seen these companies go down.

The Senator mentioned some of the big companies that have gone down that have done just this kind of thing. At some point, Peter has to pay Paul. If they don't have the capital to handle it, there is a problem.

The Senator is asking me to hypothesize. I sure wouldn't do it. I can only assume that some sophisticated trader has worked out some scheme and was utilizing it in this venue and knew that he or she was safe because there was no way to pin it on them. There were no records kept.

That is correct.

The Senator is absolutely correct. When we had this vote in the last Congress, if I recall correctly, we got 48 votes. It wasn't really crystal clear what the excesses were at that time. Now we have documentation of the excesses. We have literally billions of dollars of fraudulent trades, wash trades, round-trip trades, whatever you call them, but fraudulent trades. So we know. We also know that Mr. Fortney was arrested and two others have plead guilty to creating these schemes. To continue to allow that kind of thing to exist would be a real dereliction of this Congress.

CMS Energy admitted to conducting wash energy trades that artificially inflated its revenue by $4.4 billion.

Right. May I ask the Senator a question? Some, I understand, may come to the floor and want a study. The study has already been done, and it is the ``Final Report On Price Manipulation in Western Energy Markets, Fact-Finding Investigation of Potential Manipulation of Electric and Natural Gas Prices.'' It was prepared by the staff of the Federal Energy Regulatory Commission. It was put out in March of this year.

I would like to read one section of it to the Senator and see if he is aware of this. It reads:

Recommend that Congress consider giving direct authority to

a Federal agency to ensure that electronic trading platforms

for wholesale sales of electric energy and natural gas in

interstate commerce are monitored and provide market

information that is necessary for price discovery in

competitive energy markets.

That is correct. This is the report. It is a final report. It was done in March 2003, so it has been circulated for a few months.

Additionally, our legislation has the support of the chairman of the Federal Energy Regulatory Commission. We have kept in touch with him so he is aware of what is in the report, and, of course, the former chairman of the Agriculture Committee, Senator Harkin, and former ranking member of the Agriculture Committee, Senator Lugar.

Madam President, I would also like to point out another study that has been done in a CRS report for Congress, and that was dated January 28 of this year, pointing out that this bill was presented in the last Congress and probably would be presented in this Congress. One of the points it makes is that if over-the-counter derivatives dealers were required to keep and make available for inspection records of all trades and to disclose information about trading volume and prices, abuses like the ones we have been talking about would be easier to detect and, thus, presumably less likely to occur.

That is really the purpose of this: not to allow sort of a secret niche in the trading arena where people could go to hide and trade, but to bring the sunshine into that niche and to provide--and it is very conservative--regulation of what they must do.

I know my friend and senior Senator from Nevada has proposed an amendment. Regrettably, I have to vote against the amendment. This bill had been worked out with Senator Harkin

and Senator Lugar. My understanding is they believe we should close the loophole entirely, not leave one area sort of in the dark, so to speak.

I am troubled by the amendment because our reading of the amendment indicates that it effectively exempts metals entirely without any oversight or regulation by the CFTC, even less than under current law. In good conscience, I cannot do that.

So I think we made the arguments, Madam President. And with what has happened--and now that we know the extent of the fraud that has taken place online--not to close that loophole, I think, would be a terrible blot on this Congress.

So I am hopeful we will have a positive vote.

I thank the Chair for your indulgence and yield the floor.