Floor Statements

Mr. President, I wish to ask the Senator from Delaware and the Senator from Indiana some questions about one of the issues that was raised during the hearings conducted by his committee on this treaty, and one of the questions not addressed by this treaty that I believe to be critical to reducing the danger of accidental or unauthorized nuclear war: the alert status of U.S. and Russian nuclear forces.

Like me, I know that they are concerned that the current alert status of

U.S. and Russian nuclear forces leaves open the possibility that, by continuing to maintain those nuclear forces that will not be operationally deployed under the Moscow Treaty on so-called hair trigger alert status, we increase the chances of an accidental or mistaken launch of nuclear weapons or, worse still, provide additional vulnerability to terrorist who might seek to hack into our nuclear command and control system and launch weapons.

I was pleased to note that the report of the Foreign Relations Committee on this treaty addresses the concerns that the alert status issue creates for crisis stability raised by former Senator Nunn, and the suggestion made by Gen. Eugene Habiger, the former Commander in Chief of U.S. Strategic Command that ``We may have to find a way to move more weapons off alert status''.

What are the views of the Senator from Delaware and the Senator from Indiana on this issue, and the desirability of moving nuclear weapons off alert status?

In addition to recommending an ``immediate standdown'' in the alert status of the nuclear forces reduced under this treaty, it is my understanding that in his testimony, General Habiger also suggested that a system to take weapons off alert status in ways that make sense, are transparent, and do not compromise our security be designed by teams by people who actually build the weapons.

Given this commonsense recommendation--and the failure of the treaty to address this question--I would like to ask the Senator what action he would recommend the Senate take to make General Habiger's suggestion a reality? What measures, if any, does he plan to address this issue in an appropriate manner this Congress?

I thank the Senator from the Delaware and the Senator from Indiana for their leadership and hard work on this issue, and I look forward to continuing to work with him, on additional legislation, if need be, to pursue this initiative.

Mr. President, I rise today to express my support for ratification of the Moscow Treaty which will require the United States and Russia to reduce the number of strategic nuclear warheads to 1,700 and 2,200 each by December 31, 2012. This treaty marks an important step forward in the relationship between the United States and Russia and reduces the dangers posed by strategic nuclear weapons. Nevertheless, I am concerned that the treaty does not go far enough and I believe its flaws must be addressed if we truly want to make the threat of nuclear war a thing of the past.

It should be pointed out that at one time the administration did not even want a treaty, preferring to reach a ``gentleman's agreement'' with Russia instead. I am pleased that President Bush changed course and recognized the value in committing the reduction of strategic nuclear warheads to a binding, legal document.

That document now before us is welcome but its brevity--all of three pages--indicates that certain issues were left out or swept aside.

First, the treaty does not actually require the United States or Russia to destroy any nuclear warhead. Either side may comply with the provisions of the treaty simply by ``deactivating'' the warhead and placing it in storage for possible redeployment. And, each side reserves the right to decide what exactly ``deactivation'' means.

This runs counter to the whole point of reducing the dangers of nuclear weapons by eliminating them once and for all. Have we really made a step forward in securing a better world for ourselves and future generations if both sides can re-arm at a moment's notice? And have we really made progress if the actual number of warheads destroyed is rather small?

Russia, for one, simply can not afford to maintain its current number of strategic nuclear warheads. But I am concerned that if we do not actively destroy more of our strategic nuclear warheads, Russia may feel compelled to keep more of its own, thus diverting valuable resources away from more pressing needs. And, I think everyone recognizes that Russia's ability to safely and securely store any warheads is far less than our own and the potential that they may fall into the wrong heads much higher.

Second, the treaty does not contain a detailed verification regime to judge compliance with its provisions. The treaty only mentions the creation of a Bilateral Implementation Commission that will meet twice a year. No more. The START Treaty, in contrast, contained provisions on detailed notifications, regular data exchanges, onsite inspections, and continuous monitoring of select facilities.

President Reagan was found telling his Soviet counterparts that when it came to reducing the number of nuclear weapons, his motto was ``Trust, but verify.'' Though the Soviet Union is no more and Russia and the United States have a new relationship based on friendship and cooperation, I believe President Reagan's words still ring true.

Eliminating nuclear warheads is serious business and it is beneficial and, necessary, even for friends, to closely monitor, and verify, the progress of each side. We will enhance and deepen the trust and cooperation between Russia and the United States by doing so. So, I would urge the administration to use the Bilateral Implementation Commission as a forum for negotiating a detailed verification regime.

Third, there is no timetable for implementation and no mileposts to judge progress before the Treaty expires. The only date and milepost mentioned is the deadline to reach 1,700 to 2,200 strategic nuclear warheads by December 31, 2012.

Thus, over a 10-year period, with no verification regime, we will have no indication on how Russia is achieving the goals of the treaty until the very day it is bound to reach those goals. And then the treaty expires unless both sides agree at some point to extend it.

Again, trust and cooperation are built on verification and openness. I urge the administration to press for detailed timetables and mileposts to ensure that both sides are actively complying with the provisions of the treaty and will reach the final marker at the stated time.

Fourth, the treaty does not address tactical nuclear weapons. As my colleagues know, there is a great deal of uncertainty about the number, location, and secure storage of Russian tactical nuclear weapons. Smaller and more portable than strategic nuclear weapons, they are vulnerable to theft or sale to terrorist groups. Yet, the treaty does not even mention them.

This is a glaring oversight and the dangers posed by tactical nuclear weapons--especially now in the post-September 11 world of global terrorism--warrants the immediate attention and action by both Russia and the United States. I urge the administration to press for an accurate accounting of and adequate safeguards for tactical nuclear warheads and to work towards reducing their number.

Finally, the treaty does not address the alert status of our nuclear forces. I offered, and withdrew, an amendment to address this issue earlier. Suffice to say that I am very concerned that in this era of a new relationship between the United States and Russia, we still keep our nuclear weapons on high alert or hair trigger status. This greatly increases the chances of an accidental or unauthorized launch or miscalculation which would result in unthinkable devastation.

Clearly there are problems with this treaty but I will vote for ratification because it is a step forward towards the goal of reducing the dangers posed by strategic nuclear weapons.

But there is a lot of work to be done to make this Treaty truly worthwhile. As our former colleague Senator Sam Nunn stated in hearing held by the Senate Foreign Relations Committee on the Moscow Treaty:

If [the Treaty] is not followed with other substantive

actions it will become irrelevant at best and

counterproductive at worst.

I hope the administration will take these words to heart and get to work on the important issues left out of the treaty so that we will be able to leave a world for future generations safer from the horror of nuclear war.

Mr. President, I rise today to submit a resolution to prohibit employment discrimination in the Senate based on sexual orientation.

I would like to thank the Senator from Oregon, Mr. Smith, as well as my other colleagues who join me in introducing this resolution.

The resolution would amend the Standing Rules of the Senate by adding ``sexual orientation'' to ``race, color, religion, sex, national origin, age, or state of physical handicap'' in the antidiscrimination provision of rule 42, which governs the Senate's employment practices.

By amending the current rule, it would forbid any Senate Member, officer, or employee from terminating, refusing to hire, or otherwise discriminating against an individual with respect to promotion, compensation, or any other privilege of employment, on the basis of that individual's sexual orientation.

Senate employees currently have no recourse available to them should they become a victim of this type of employment discrimination.

If the rules are amended, any Senate employee that encountered discrimination based on their sexual orientation would have the option of reporting it to the Senate Ethics Committee. The Ethics Committee could then investigate the claim and recommend discipline for any Senate Member, officer, or employee found to have violated the rule.

Unfortunately, the Senate is already well behind other establishments of the U.S. Government in this area of antidiscrimination.

By 1996, at least 13 Cabinet level agencies, including the Departments of Justice, Agriculture, Transportation, Health and Human Services, Interior, Housing and Urban Development, Labor, and Energy, in addition to the General Accounting Office, General Services Administration, Internal Revenue Service, the Federal Reserve System, Office of Personnel Management, and the White House had already issued policy statements forbidding sexual orientation discrimination.

In 1998, Executive Order 13087 was issued to prohibit sexual orientation discrimination in the Federal executive branch, including civilian employees of the military departments and sundry other governmental entities.

That Executive order now covers approximately 2 million Federal civilian

workers. Yet more than 4 years later, there are still employees of the Senate that are unprotected.

In taking this step toward addressing discrimination, the Senate would join not only the executive branch, but also 308 Fortune 500 companies, 23 State governments and 262 local governments that have already prohibited workplace discrimination based on sexual orientation.

Currently, 65 Senators have already adopted written policies for their congressional offices indicating that sexual orientation is not a factor in their employment decisions.

Now, I urge my colleagues to join me by making this policy universal for the Senate, rather than relying on a patchwork of protection that only covers some of the Senate's employees.

Madam President, I rise in support of the Efficient Energy through Certified Technologies Act which I have cosponsored along with Senator Olympia Snowe of Maine.

The EFFECT Act will provide tax incentives to encourage homeowners and businesses to improve the energy efficiency of their buildings and equipment. This legislation will stimulate the economy, cut energy bills, reduce energy usage, and reduce pollution.

This bill was originally introduced in the 107th Congress to address the Western energy crisis which, as we all know, created exorbitantly high prices for power and rolling blackouts. This legislation incorporates improvements based on last year's Senate energy tax bill.

While conditions in the West have improved because there are more plants coming online and families and businesses have reduced their energy usage, it is important to take steps to continue to increase our energy efficiency and reduce energy consumption.

Simply put, there are only two things one can do when there is not enough power to go around: increase supply or decrease demand.

Without a doubt, the quickest way to address future demand and supply imbalances is to provide incentives to increase energy efficiency to reduce demand.

This bill creates economic incentives for Americans to increase energy efficiency by establishing the following tax deductions and tax credits for commercial and residential properties using specific energy efficient technologies:

A tax deduction of $2.25 per square foot for newly constructed or remodeled commercial buildings, including schools and other public buildings as well as rental housing, that achieve a 50-percent reduction in total annual energy costs, compared to existing national standards.

A $2,000 tax credit to builders of new homes that use 50 percent less energy than a national model standard.

A performance-based tax credit of as much as $6,000 for installing solar technology.

A tax credit of as much as $300 if businesses install a super- efficient, new electric heat pump, a new central air-conditioner, or a new gas or electric water heater.

A tax credit of as much as $500 if homeowners, tenants, or landlords retrofit their homes to achieve a 30 percent or 50 percent reduction in annual energy costs.

The benefits of increasing energy efficiency are immense.

First, increasing energy efficiency will cut heating, cooling, and electricity costs. Homeowners and businesses spend over $250 billion each year on heat, air-conditioning, and related energy costs for their businesses and homes. If we can reduce energy costs by increasing energy efficiency, money will be freed to fuel the economy in other areas and create new jobs. Furthermore, increasing energy efficiency will reduce the impact of future energy price spikes that harm families and businesses. And the incentives will cause businesses to invest in producing more efficient equipment and services beginning immediately after the bill is enacted.

Second, increasing energy efficiency will reduce air pollution. Energy generation to heat, cool, and light our homes and offices produces 35 percent of the air pollution emitted nationwide. If we increase efficiency, then less energy will be needed to power our buildings, and consequently, we will be able to reduce emissions from powerplants.

Third, increasing energy efficiency will help maintain the reliability of our Nation's electricity supply. Since most of our peak electricity demand comes from heating, cooling, or lighting needs, increasing energy efficiency will lower the probability of blackouts or brownouts.

In fact, with this legislation in place, peak electricity demand in the summer would be reduced by tens of thousands of negawatts nationwide after a decade--or the equivalent output produced by hundreds of large powerplants.

This could result in over 10,000 MW of savings over the summer just in our State and much more on the Western grid that California shares with neighboring States.

Meanwhile, this legislation will also create a market for firms to develop more energy-efficient products, such as air-conditioners, heat pumps, lighting equipment, windows, insulation, water heaters, and solar panels.

Just think how conditions could have improved in California during the Western energy crisis if we had been able to reduce our energy consumption instead of purchasing power at exorbitant rates from out- of-State suppliers.

According to the Department of Energy, California is already one of the most energy-efficient States in the Nation--ranking fourth in overall energy efficiency and second in electricity efficiency.

Nevertheless, Californians responded to the crisis and further increased their energy efficiency. This legislation will take energy efficiency to the next level and create the opportunity for all families and businesses nationwide to make energy efficient improvements.

Instead of waiting for the next energy emergency to occur, we should take steps now to reduce energy consumption across the board.

The bill introduced in the 107th Congress had the support of California Governor Gray Davis, the California Energy Commission, the Sacramento Municipal Utility District, the Natural Resources Defense Council, Union of Concerned Scientists, the California Building Industry Association, most California utilities and many other organizations and businesses. We expect similar widespread support for the bill we are reintroducing today.

This bill is an important step to help reduce demand. It provides financial incentives to offset some of the costs of building new energy-efficient buildings and homes, and improving existing structures to make them more energy efficient.

I urge my colleagues to support this important legislation.

Madam President, yesterday the State of California submitted a filing to the Federal Energy Regulatory Commission which provides a wholesale indictment of energy companies and shows how a number of energy firms engaged in deceptive trading practices to drive up prices in the Western Energy Market. I have called on FERC to make this evidence public

and I want to reiterate my request again.

I am also introducing a bill with Senators Fitzgerald, Harkin, Lugar, Cantwell, Wyden, and Leahy to close a loophole which allows energy trades to take place electronically, in private, with no transparency, record, audit trail or any oversight to guard against fraud and manipulation.

But before I reintroduce this bill, I want to reiterate the important revelations that have been uncovered in the past year and detail what we know about yesterday's filing at FERC.

Last week I came to the floor to update the Senate on recent evidence of fraud and manipulation in the energy sector. Today I want to pick up where I left off and introduce the Energy Market Oversight Act.

Mr. President, I draw my colleagues' attention to a filing made at FERC. This ``Public Version'' is a 27-page summary of the filing with confidential information removed, but it provides a detailed overview of the fraud and manipulation carried out by energy companies during the Western energy crisis.

In addition to testimony by expert witnesses, 348 exhibits, transcripts of depositions, tapes of trader telephone conversations, emails, and other data, the California parties submitted a 161-page brief to FERC. The document I have inserted into the Record includes the Table of Contents, the Introduction and Overview, and the Conclusion of this 161-page document. To be clear, it is part, but not all of the brief filed by the State of California.

Mr. President, the filing submitted by the State of California yesterday shows that there was an extensive and coordinated attempt by energy companies to engage in the following schemes to drive up prices in the Western Energy Market:

1. Withholding of Power--driving up prices by creating

false shortages;

2. Bidding to Exercise Market Power--suppliers bid higher

after the California ISO declared emergencies, knowing the

State would need power and be willing to pay any price to get

it;

3. Scheduling of Bogus Load, aka ``Fat Boy'' or ``Inc-

ing''--suppliers submitted false load schedules to increase

prices;

4. Export-Import Games, aka ``Ricochet or ``Megawatt

Laundering''--suppliers exported power out of California and

imported it back into the State in an attempt to sell power

at inflated prices;

5. Congestion Games, aka ``Death Star''--suppliers created

false congestion and were then paid for relieving congestion

without moving any power;

6. Double-Selling--suppliers sold reserves, but then failed

to keep those reserves available for the ISO;

7. Selling of Non-Existent Ancillary Services, aka ``Get

Shorty''--suppliers sold resources that were either already

committed to other sales or incapable of being provided;

8. Sharing of Non-Public Generation Outage Information--the

largest suppliers in California shared information from a

company called Industrial Information Resources that provided

sellers detailed, non-public information on daily plant

outages;

9. Collusion Among Sellers--sellers were jointly

implementing or facilitating Enron-type trading strategies;

10. Manipulation of the Nitrous Oxide (NOX)

Emission Market--sellers manipulated the market for

NOX emissions in the South Coast Air Quality

Management District through a series of wash trades that

created the appearance of a dramatic price increase that may

have been fabricated. For example, Dynegy, together with AES

and others, entered into a series of trades of NOx

credits in July and August of 2000 by which Dynegy would sell

a large quality of credits and then simultaneously buy back a

smaller quantity of credits at a higher per credit price.

We can assume that the thousands of pages filed by the California parties at FERC detail these examples of market abuse. At this point we cannot know all of the instances because the specifics remain confidential, but we have plenty to go on.

Yesterday I wrote another letter to FERC Chairman Pat Wood asking the Commission to lift its ``Protective Order'' to make this information public so that families and businesses harmed during the Western Energy Crisis can know the extent of fraud and manipulation that occurred.

I believe the filing yesterday presents a key decision for FERC. Clearly the Commission cannot ignore this mountain of new evidence submitted--especially since it comes at a time when other disclosures have been made to show pervasive fraud and manipulation in the Western Energy Market.

Last month 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 follows 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.

The Enron plea came on the heels of FERC's release of transcripts from Reliant Energy 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.''

Six months after this incident, as the Senate Energy Committee was attempting to get to the bottom of why energy prices were soaring in the West, the President and CEO of Reliant testified before Congress that the State of California ``has focused on an inaccurate perception of market manipulation.''

Reliant's President and CEO went on to say, ``We are proud of our contributions to keep generation running to try to meet the demand for power in California. Reliant Energy's plant and technical staffs have worked hard to maximize the performance of our generation.''

These transcripts prove otherwise and reveal the truth about market manipulation in the energy sector.

Despite this clear and convincing evidence of fraud, on January 31 of this year, the Federal Energy Regulatory Commission chose to only give Reliant a slap on the wrist for this behavior. The company paid only $13.8 million to sweep this criminal behavior under the rug and settle with FERC.

Let me turn to some other recent examples that demonstrate how other energy companies manipulated the Western Energy Market as Reliant did. On December 11th, FERC finally released audio tapes that show how traders at Williams conspired with AES Energy plant operators to keep power offline and drive prices up.

The tapes depict how on April 27, 2000, Williams outage coordinator Rhonda Morgan encouraged an AES operator at the company's Alamitos plant to extend a plant outage because the California grid operator was paying ``a premium'' for power at the time. The Williams employee stated, ``that's one reason it wouldn't hurt Williams' feelings if the outage ran long.''

Later that day, Eric Pendergraft, a high-ranking AES employee called to confirm with Ms. Morgan that Williams wanted the plant to stay offline by saying, ``you guys were saying that it might not be such a bad thing if it took us a little while longer to do our work?'' ``I don't want to do something underhanded,'' Ms. Morgan responded, ``but if there is work you can continue to do . . .'' At this point Mr. Pendergraft interrupted to cut off their suspicious conversation, saying, ``I understand. You don't have to talk anymore.''

Clearly, this is evidence of a calculated intent to withhold power to raise prices. I find it unconscionable.

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.

These indictments are just the latest 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 19th Dynegy agreed to pay a $5 million fine for its actions.

In September an Administrative Law Judge at FERC issued a landmark ruling concluding that El Paso Corporation withheld natural gas from California and recommended penalty proceedings against the company. Since the El Paso Pipeline carries most of the natural gas to Southern California, this ruling has tremendous implications. The FERC Commissioners are expected to take up this case for a final judgement soon.

These have been the latest revelations in a series of energy disclosure bombshells that began on Monday, May 6th when the Federal Energy Regulatory Commission posted a series of documents on their website that revealed Enron manipulated the Western Energy Market by engaging in a number of suspect trading strategies.

These memos revealed for the first time how Enron used schemes called ``Death Star,'' ``Get Shorty,'' ``Fat Boy,'' and ``Ricochet'' to fleece families and businesses in the West.

The filing made yesterday to FERC shows how other companies did engage in these Enron-type trading strategies. The brief submitted by the State of California and others states that suppliers ``were jointly implementing or facilitating Enron-type trading strategies.''

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 recent 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.

CMS Energy announced 80 percent of its trades in 2001 were

``round-trip'' trades.

Remember, these trades are sham deals where nothing was exchanged, yet the company booked revenues from the trades.

Duke Energy disclosed that 1.1 billion dollars-worth of

trades were ``round-trip'' since 1999--roughly two-thirds of

these were done on InterContinental Exchange, which means

that thousands of subscribes would have seen these 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 these 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, I believe these companies have not engaged in meaningful transactions, but deceptive practices to fool investors and possibly drive energy prices up for consumers.

It is therefore imperative that the Department of Justice, FERC, the SEC, the Commodities Futures Trading Commission and every other oversight agency conduct an aggressive and vigorous investigation into all of the energy companies who participated in Western Energy Market.

Beyond that I believe Congress must re-examine what tools the government needs to keep a better watch over these volatile markets that 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.

The ``round-trip'' trades, the Enron memos, and the filing at FERC raise questions about illusions in the energy market.

To this end, I believe it is critical for the Senate to act soon on the legislation I offered last April to regulate online energy trading.

I am re-introducing this legislation to subject electronic exchanges like Enron On-Line to the same oversight, reporting and capital requirements as other commodity exchanges like the Chicago Mercantile Exchange, the New York Mercantile Exchange and the Chicago Board of Trade.

I am pleased Senator Fitzgerald, Senator Harkin, Senator Lugar, Senator Cantwell, Senator Wyden, and Senator Leahy have again signed on to this legislation. I am proud of the work we did in the 107th Congress and I hope we can complete action on this bill soon.

Without this type of legislation, there is insufficient authority to investigate and prevent fraud and price manipulation since parties making the trade are not required to keep a record.

Right now, energy transactions are regulated by the Federal Energy Regulatory Commission (FERC) when there is actual delivery.

For example, if I buy natural gas from you, and you deliver that natural gas to me, FERC has the authority to ensure that this transaction is transparent and reasonably priced.

However, many energy transactions no longer result in delivery. A giant loophole has opened where there is no government oversight when these transactions are done on internet exchanges.

In 2000, Congress passed the Commodity Futures Modernization Act in 2000 which exempted energy and metals trading 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. Again, 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 it did not take long for Enron Online, and others in the energy sector, to take advantage of this new freedom by trading energy derivatives absent any regulatory oversight.

Thus, after the 2000 legislation was enacted, Enron OnLine began to trade energy derivatives bilaterally without being subject to proper regulatory oversight. It should not surprise anyone that without the transparency, prices soared.

Just yesterday Warren Buffett published a warning in Fortune Magazine saying that ``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, Warren 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-On-Line the sole reason California and the West had an energy crisis? No.

Was it a contributing factor to the crisis? I certainly believe that it was. Unfortunately, because of the energy exemptions in the 2000 CFMA, 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 the subject of a hearing in the Agriculture Committee, but time ran out before the legislation could be marked up and passed.

Since that time, Senators Lugar and Harkin have made significant improvements to the legislation and we have added stronger penalties for market abuse and wrongdoing.

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,

The Southern California Public Power Authority,

The Transmission Access Policy Study Group,

The U.S. Public Interest Research Group,

The Consumers Union,

The Consumers Federation of America,

Calpine,

Southern California Edison,

Pacific Gas and Electric, and

FERC Chairman Pat Wood.

I ask unanimous consent that the letters of support from these organizations and companies be printed in the Record.

Mr. President, here is an explanation of what this bill does: It applies anti-fraud and anti-manipulation 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--anti-fraud and anti-manipulation 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: anti-fraud and anti-manipulation 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; and the requirement to maintain sufficient capital commensurate with the risk associated with the swap;

Except for the anti-fraud and anti-manipulation 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 like open and closing prices, similar to the requirements of futures exchanges, it could not require real-time publication of proprietary trading information or prohibit an entity from selling their data.

The CFTC may allow entities to meet certain self-regulatory responsibilities- as provided in a list of ``core principles.'' If an entity chose 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 up to 10 years.

The FERC is required to improve communications with other Federal regulatory agencies. A shortcoming in the main anti-fraud 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.

It requires the FERC and the CFTC to meet quarterly and discuss how energy derivative markets are functioning and affecting energy deliveries.

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

It makes it easier for FERC to hire the necessary outside help they need including accountants, lawyers, and investigators for investigative purposes.

It eliminates 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.

It increases the penalty amounts to $1 million instead of the current $5,000 for violations of the Federal Power Act and the Natural Gas Act; five years instead of the current two for violations of the statute; and, $50,000 per violation per day instead of the current $500 for violations of rules or orders under the Federal Power Act and Natural Gas Act.

The Commission's authority to impose civil penalties is broadened to all sections of Part II of the Federal Power Act and the penalty amount is increased from $10,000 to $50,000 per violation per day.

It modifies Section 206 of the Federal Power Act to allow for an earlier refund effective date to increase the opportunity for refunds as a deterrent to fraudulent and manipulative behavior in the energy markets.

This legislation 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 FERC which will help protect against another energy crisis.

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 that the CFTC will reconsider and support this legislation.

Madam President, I rise in support of the Efficient Energy through Certified Technologies Act which I have cosponsored along with Senator Olympia Snowe of Maine.

The EFFECT Act will provide tax incentives to encourage homeowners and businesses to improve the energy efficiency of their buildings and equipment. This legislation will stimulate the economy, cut energy bills, reduce energy usage, and reduce pollution.

This bill was originally introduced in the 107th Congress to address the Western energy crisis which, as we all know, created exorbitantly high prices for power and rolling blackouts. This legislation incorporates improvements based on last year's Senate energy tax bill.

While conditions in the West have improved because there are more plants coming online and families and businesses have reduced their energy usage, it is important to take steps to continue to increase our energy efficiency and reduce energy consumption.

Simply put, there are only two things one can do when there is not enough power to go around: increase supply or decrease demand.

Without a doubt, the quickest way to address future demand and supply imbalances is to provide incentives to increase energy efficiency to reduce demand.

This bill creates economic incentives for Americans to increase energy efficiency by establishing the following tax deductions and tax credits for commercial and residential properties using specific energy efficient technologies:

A tax deduction of $2.25 per square foot for newly constructed or remodeled commercial buildings, including schools and other public buildings as well as rental housing, that achieve a 50-percent reduction in total annual energy costs, compared to existing national standards.

A $2,000 tax credit to builders of new homes that use 50 percent less energy than a national model standard.

A performance-based tax credit of as much as $6,000 for installing solar technology.

A tax credit of as much as $300 if businesses install a super- efficient, new electric heat pump, a new central air-conditioner, or a new gas or electric water heater.

A tax credit of as much as $500 if homeowners, tenants, or landlords retrofit their homes to achieve a 30 percent or 50 percent reduction in annual energy costs.

The benefits of increasing energy efficiency are immense.

First, increasing energy efficiency will cut heating, cooling, and electricity costs. Homeowners and businesses spend over $250 billion each year on heat, air-conditioning, and related energy costs for their businesses and homes. If we can reduce energy costs by increasing energy efficiency, money will be freed to fuel the economy in other areas and create new jobs. Furthermore, increasing energy efficiency will reduce the impact of future energy price spikes that harm families and businesses. And the incentives will cause businesses to invest in producing more efficient equipment and services beginning immediately after the bill is enacted.

Second, increasing energy efficiency will reduce air pollution. Energy generation to heat, cool, and light our homes and offices produces 35 percent of the air pollution emitted nationwide. If we increase efficiency, then less energy will be needed to power our buildings, and consequently, we will be able to reduce emissions from powerplants.

Third, increasing energy efficiency will help maintain the reliability of our Nation's electricity supply. Since most of our peak electricity demand comes from heating, cooling, or lighting needs, increasing energy efficiency will lower the probability of blackouts or brownouts.

In fact, with this legislation in place, peak electricity demand in the summer would be reduced by tens of thousands of negawatts nationwide after a decade--or the equivalent output produced by hundreds of large powerplants.

This could result in over 10,000 MW of savings over the summer just in our State and much more on the Western grid that California shares with neighboring States.

Meanwhile, this legislation will also create a market for firms to develop more energy-efficient products, such as air-conditioners, heat pumps, lighting equipment, windows, insulation, water heaters, and solar panels.

Just think how conditions could have improved in California during the Western energy crisis if we had been able to reduce our energy consumption instead of purchasing power at exorbitant rates from out- of-State suppliers.

According to the Department of Energy, California is already one of the most energy-efficient States in the Nation--ranking fourth in overall energy efficiency and second in electricity efficiency.

Nevertheless, Californians responded to the crisis and further increased their energy efficiency. This legislation will take energy efficiency to the next level and create the opportunity for all families and businesses nationwide to make energy efficient improvements.

Instead of waiting for the next energy emergency to occur, we should take steps now to reduce energy consumption across the board.

The bill introduced in the 107th Congress had the support of California Governor Gray Davis, the California Energy Commission, the Sacramento Municipal Utility District, the Natural Resources Defense Council, Union of Concerned Scientists, the California Building Industry Association, most California utilities and many other organizations and businesses. We expect similar widespread support for the bill we are reintroducing today.

This bill is an important step to help reduce demand. It provides financial incentives to offset some of the costs of building new energy-efficient buildings and homes, and improving existing structures to make them more energy efficient.

I urge my colleagues to support this important legislation.

Madam President, yesterday the State of California submitted a filing to the Federal Energy Regulatory Commission which provides a wholesale indictment of energy companies and shows how a number of energy firms engaged in deceptive trading practices to drive up prices in the Western Energy Market. I have called on FERC to make this evidence public

and I want to reiterate my request again.

I am also introducing a bill with Senators Fitzgerald, Harkin, Lugar, Cantwell, Wyden, and Leahy to close a loophole which allows energy trades to take place electronically, in private, with no transparency, record, audit trail or any oversight to guard against fraud and manipulation.

But before I reintroduce this bill, I want to reiterate the important revelations that have been uncovered in the past year and detail what we know about yesterday's filing at FERC.

Last week I came to the floor to update the Senate on recent evidence of fraud and manipulation in the energy sector. Today I want to pick up where I left off and introduce the Energy Market Oversight Act.

Mr. President, I draw my colleagues' attention to a filing made at FERC. This ``Public Version'' is a 27-page summary of the filing with confidential information removed, but it provides a detailed overview of the fraud and manipulation carried out by energy companies during the Western energy crisis.

In addition to testimony by expert witnesses, 348 exhibits, transcripts of depositions, tapes of trader telephone conversations, emails, and other data, the California parties submitted a 161-page brief to FERC. The document I have inserted into the Record includes the Table of Contents, the Introduction and Overview, and the Conclusion of this 161-page document. To be clear, it is part, but not all of the brief filed by the State of California.

Mr. President, the filing submitted by the State of California yesterday shows that there was an extensive and coordinated attempt by energy companies to engage in the following schemes to drive up prices in the Western Energy Market:

1. Withholding of Power--driving up prices by creating

false shortages;

2. Bidding to Exercise Market Power--suppliers bid higher

after the California ISO declared emergencies, knowing the

State would need power and be willing to pay any price to get

it;

3. Scheduling of Bogus Load, aka ``Fat Boy'' or ``Inc-

ing''--suppliers submitted false load schedules to increase

prices;

4. Export-Import Games, aka ``Ricochet or ``Megawatt

Laundering''--suppliers exported power out of California and

imported it back into the State in an attempt to sell power

at inflated prices;

5. Congestion Games, aka ``Death Star''--suppliers created

false congestion and were then paid for relieving congestion

without moving any power;

6. Double-Selling--suppliers sold reserves, but then failed

to keep those reserves available for the ISO;

7. Selling of Non-Existent Ancillary Services, aka ``Get

Shorty''--suppliers sold resources that were either already

committed to other sales or incapable of being provided;

8. Sharing of Non-Public Generation Outage Information--the

largest suppliers in California shared information from a

company called Industrial Information Resources that provided

sellers detailed, non-public information on daily plant

outages;

9. Collusion Among Sellers--sellers were jointly

implementing or facilitating Enron-type trading strategies;

10. Manipulation of the Nitrous Oxide (NOX)

Emission Market--sellers manipulated the market for

NOX emissions in the South Coast Air Quality

Management District through a series of wash trades that

created the appearance of a dramatic price increase that may

have been fabricated. For example, Dynegy, together with AES

and others, entered into a series of trades of NOx

credits in July and August of 2000 by which Dynegy would sell

a large quality of credits and then simultaneously buy back a

smaller quantity of credits at a higher per credit price.

We can assume that the thousands of pages filed by the California parties at FERC detail these examples of market abuse. At this point we cannot know all of the instances because the specifics remain confidential, but we have plenty to go on.

Yesterday I wrote another letter to FERC Chairman Pat Wood asking the Commission to lift its ``Protective Order'' to make this information public so that families and businesses harmed during the Western Energy Crisis can know the extent of fraud and manipulation that occurred.

I believe the filing yesterday presents a key decision for FERC. Clearly the Commission cannot ignore this mountain of new evidence submitted--especially since it comes at a time when other disclosures have been made to show pervasive fraud and manipulation in the Western Energy Market.

Last month 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 follows 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.

The Enron plea came on the heels of FERC's release of transcripts from Reliant Energy 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.''

Six months after this incident, as the Senate Energy Committee was attempting to get to the bottom of why energy prices were soaring in the West, the President and CEO of Reliant testified before Congress that the State of California ``has focused on an inaccurate perception of market manipulation.''

Reliant's President and CEO went on to say, ``We are proud of our contributions to keep generation running to try to meet the demand for power in California. Reliant Energy's plant and technical staffs have worked hard to maximize the performance of our generation.''

These transcripts prove otherwise and reveal the truth about market manipulation in the energy sector.

Despite this clear and convincing evidence of fraud, on January 31 of this year, the Federal Energy Regulatory Commission chose to only give Reliant a slap on the wrist for this behavior. The company paid only $13.8 million to sweep this criminal behavior under the rug and settle with FERC.

Let me turn to some other recent examples that demonstrate how other energy companies manipulated the Western Energy Market as Reliant did. On December 11th, FERC finally released audio tapes that show how traders at Williams conspired with AES Energy plant operators to keep power offline and drive prices up.

The tapes depict how on April 27, 2000, Williams outage coordinator Rhonda Morgan encouraged an AES operator at the company's Alamitos plant to extend a plant outage because the California grid operator was paying ``a premium'' for power at the time. The Williams employee stated, ``that's one reason it wouldn't hurt Williams' feelings if the outage ran long.''

Later that day, Eric Pendergraft, a high-ranking AES employee called to confirm with Ms. Morgan that Williams wanted the plant to stay offline by saying, ``you guys were saying that it might not be such a bad thing if it took us a little while longer to do our work?'' ``I don't want to do something underhanded,'' Ms. Morgan responded, ``but if there is work you can continue to do . . .'' At this point Mr. Pendergraft interrupted to cut off their suspicious conversation, saying, ``I understand. You don't have to talk anymore.''

Clearly, this is evidence of a calculated intent to withhold power to raise prices. I find it unconscionable.

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.

These indictments are just the latest 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 19th Dynegy agreed to pay a $5 million fine for its actions.

In September an Administrative Law Judge at FERC issued a landmark ruling concluding that El Paso Corporation withheld natural gas from California and recommended penalty proceedings against the company. Since the El Paso Pipeline carries most of the natural gas to Southern California, this ruling has tremendous implications. The FERC Commissioners are expected to take up this case for a final judgement soon.

These have been the latest revelations in a series of energy disclosure bombshells that began on Monday, May 6th when the Federal Energy Regulatory Commission posted a series of documents on their website that revealed Enron manipulated the Western Energy Market by engaging in a number of suspect trading strategies.

These memos revealed for the first time how Enron used schemes called ``Death Star,'' ``Get Shorty,'' ``Fat Boy,'' and ``Ricochet'' to fleece families and businesses in the West.

The filing made yesterday to FERC shows how other companies did engage in these Enron-type trading strategies. The brief submitted by the State of California and others states that suppliers ``were jointly implementing or facilitating Enron-type trading strategies.''

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 recent 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.

CMS Energy announced 80 percent of its trades in 2001 were

``round-trip'' trades.

Remember, these trades are sham deals where nothing was exchanged, yet the company booked revenues from the trades.

Duke Energy disclosed that 1.1 billion dollars-worth of

trades were ``round-trip'' since 1999--roughly two-thirds of

these were done on InterContinental Exchange, which means

that thousands of subscribes would have seen these 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 these 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, I believe these companies have not engaged in meaningful transactions, but deceptive practices to fool investors and possibly drive energy prices up for consumers.

It is therefore imperative that the Department of Justice, FERC, the SEC, the Commodities Futures Trading Commission and every other oversight agency conduct an aggressive and vigorous investigation into all of the energy companies who participated in Western Energy Market.

Beyond that I believe Congress must re-examine what tools the government needs to keep a better watch over these volatile markets that 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.

The ``round-trip'' trades, the Enron memos, and the filing at FERC raise questions about illusions in the energy market.

To this end, I believe it is critical for the Senate to act soon on the legislation I offered last April to regulate online energy trading.

I am re-introducing this legislation to subject electronic exchanges like Enron On-Line to the same oversight, reporting and capital requirements as other commodity exchanges like the Chicago Mercantile Exchange, the New York Mercantile Exchange and the Chicago Board of Trade.

I am pleased Senator Fitzgerald, Senator Harkin, Senator Lugar, Senator Cantwell, Senator Wyden, and Senator Leahy have again signed on to this legislation. I am proud of the work we did in the 107th Congress and I hope we can complete action on this bill soon.

Without this type of legislation, there is insufficient authority to investigate and prevent fraud and price manipulation since parties making the trade are not required to keep a record.

Right now, energy transactions are regulated by the Federal Energy Regulatory Commission (FERC) when there is actual delivery.

For example, if I buy natural gas from you, and you deliver that natural gas to me, FERC has the authority to ensure that this transaction is transparent and reasonably priced.

However, many energy transactions no longer result in delivery. A giant loophole has opened where there is no government oversight when these transactions are done on internet exchanges.

In 2000, Congress passed the Commodity Futures Modernization Act in 2000 which exempted energy and metals trading 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. Again, 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 it did not take long for Enron Online, and others in the energy sector, to take advantage of this new freedom by trading energy derivatives absent any regulatory oversight.

Thus, after the 2000 legislation was enacted, Enron OnLine began to trade energy derivatives bilaterally without being subject to proper regulatory oversight. It should not surprise anyone that without the transparency, prices soared.

Just yesterday Warren Buffett published a warning in Fortune Magazine saying that ``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, Warren 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-On-Line the sole reason California and the West had an energy crisis? No.

Was it a contributing factor to the crisis? I certainly believe that it was. Unfortunately, because of the energy exemptions in the 2000 CFMA, 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 the subject of a hearing in the Agriculture Committee, but time ran out before the legislation could be marked up and passed.

Since that time, Senators Lugar and Harkin have made significant improvements to the legislation and we have added stronger penalties for market abuse and wrongdoing.

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,

The Southern California Public Power Authority,

The Transmission Access Policy Study Group,

The U.S. Public Interest Research Group,

The Consumers Union,

The Consumers Federation of America,

Calpine,

Southern California Edison,

Pacific Gas and Electric, and

FERC Chairman Pat Wood.

I ask unanimous consent that the letters of support from these organizations and companies be printed in the Record.

Mr. President, here is an explanation of what this bill does: It applies anti-fraud and anti-manipulation 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--anti-fraud and anti-manipulation 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: anti-fraud and anti-manipulation 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; and the requirement to maintain sufficient capital commensurate with the risk associated with the swap;

Except for the anti-fraud and anti-manipulation 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 like open and closing prices, similar to the requirements of futures exchanges, it could not require real-time publication of proprietary trading information or prohibit an entity from selling their data.

The CFTC may allow entities to meet certain self-regulatory responsibilities- as provided in a list of ``core principles.'' If an entity chose 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 up to 10 years.

The FERC is required to improve communications with other Federal regulatory agencies. A shortcoming in the main anti-fraud 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.

It requires the FERC and the CFTC to meet quarterly and discuss how energy derivative markets are functioning and affecting energy deliveries.

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

It makes it easier for FERC to hire the necessary outside help they need including accountants, lawyers, and investigators for investigative purposes.

It eliminates 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.

It increases the penalty amounts to $1 million instead of the current $5,000 for violations of the Federal Power Act and the Natural Gas Act; five years instead of the current two for violations of the statute; and, $50,000 per violation per day instead of the current $500 for violations of rules or orders under the Federal Power Act and Natural Gas Act.

The Commission's authority to impose civil penalties is broadened to all sections of Part II of the Federal Power Act and the penalty amount is increased from $10,000 to $50,000 per violation per day.

It modifies Section 206 of the Federal Power Act to allow for an earlier refund effective date to increase the opportunity for refunds as a deterrent to fraudulent and manipulative behavior in the energy markets.

This legislation 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 FERC which will help protect against another energy crisis.

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 that the CFTC will reconsider and support this legislation.

Mr. President, I thank the distinguished Senator from Texas for her remarks. I think, indeed, they were very interesting. I had no idea about her family lineage and her interest in the particular day. I salute her for her comments on the floor.

I also indicate that as the senior Senator from California and as a member of the Energy Committee, I have a specific obligation to render oversight to see that FERC is doing its job. How can anyone possibly render due diligence and oversight if they don't know what is being presented nor have access to what is being presented to the Commission on which they make their judgments?

I have spoken four times now about Miguel Estrada and the general state of the nominations process. I regret where these weeks have taken us, frankly. I hope we can come together to overcome what is increasingly separating the two sides of this great body, marring judgments and actions relating to the Judiciary Committee's hearing process and that process through which we advise and consent on nominees by the President to Federal judgeships.

In order to understand this filibuster over Miguel Estrada, we also have to understand what has led us to this point.

I would like to speak specifically to the nominations debate because this is a key area where the administration has, with few exceptions, acted in many ways as if the Senate simply doesn't matter. If this debate were only about whether or not we should vote on Miguel Estrada, that would be enough. Make no mistake about it.

There are serious questions about this nominee that we can't answer without more information, information that this nominee and the administration have essentially refused to provide.

My colleagues and I have outlined these concerns over and over again over the past few weeks. I have pointed out that the District of Columbia Circuit is a very critical circuit. Every Member of this body knows that and accepts it. It is a circuit that presides over many of the areas of appeal that are of extraordinary concern because they involve laws we have passed in areas such as worker rights, OSHA, Superfund, wetlands, all environmental concerns, and so on and so forth. It has assumed a particular role, if you will, because of the fact that two of President Clinton's nominees to this circuit never had a committee vote--one did not even have a hearing--this is a different kind of filibuster. So there are a number of vacancies on this circuit. And the circuit as it stands is equally divided, Republicans and Democrats equally divided. Therefore, who breaks this equal division is really important because it will swing the court one way or another.

Into this mix comes a very young man, 41 years old. When his nomination came over, it came over with substantial concerns. The Hispanic delegation of the House had sat down and met with Mr. Estrada for an hour and a half. They sent out alerts that they did not believe this was a nominee who really represented the concerns of Hispanic citizens. That in itself is not dispositive. I am the first one to admit that.

This is a young man. He spent a lot of time on his education. It is not necessarily a requirement that someone serve on a number of civic groups. But it was a point.

Immediately, the Hispanic-American community indicated that there was a great and serious split over this nominee. That in itself is not, again, dispositive.

Then we note that he had never been a professor. He had never been a judge. He has no writings and no speeches. So when one turned to look for the due diligence, there was very little to see. We have none of his work product or other memos that would give us an idea of what kind of thinker he is or what kind of judge he would be. And he refused to answer in the public hearing a number of simple, basic questions that go to the heart of whether he could be a truly impartial judge and set aside his advocacy. I mentioned on the floor of the Senate that my office had spoken with Professor Paul Bender, who had been his direct supervisor in the Solicitor General's Office. Mr. Bender told my staff, ``Well, I could not give him certain assignments because I could not be assured that he was impartial.''

This, again, in itself is not dispositive, but it is a danger signal.

I talked to individuals who had been interviewed by him in a screening capacity when he was a clerk for Justice Kennedy, and each I talked to indicated that in fact there was a kind of litmus test and that they were told they were too liberal.

Again, that is not dispositive. But what all this points out is that we needed--some of us--to find out whether this was a man who could put aside his advocacy, his strong feelings about certain issues, and follow the law with impartial and wise judgments.

I came to the conclusion--and some have faulted me for it--after listening to Jeffrey Sutton, that here was a man who had strong views and beliefs, but who was willing to be very fulsome in his answers to the committee, very forthright in his views, and sent a very clear signal--at least to me--that he would, in fact, separate his personal views and the law that he would be charged and constitutionally pledged to uphold. So I voted for him.

There has been substantial dismay expressed by many of my constituents in California, and I heard them loud and clear when they picketed virtually every one of my offices. Nonetheless, I made that judgment after listening in a public hearing to questions and answers and, at least for myself, came to a conclusion. Only history will tell whether I am right or wrong.

Then, several weeks ago, in a markup in committee, I think another aspect of this situation that perhaps was caused by the strain and the raw nerve endings in the Senate came upon the scene.

The Judiciary Committee rules contain a clause providing ``on the request of any member, a nomination or a bill on the agenda of a committee will be held over until the next meeting of the committee, or for one week, whichever occurs later.'' That appears in the rules of the committee.

I ask unanimous consent that those rules be printed in the Record, and I particularly call attention to the rule I have just quoted.

Mr. President, this rule is designed to protect Members who need more time to examine an issue, to discuss it with their colleagues, or to prepare amendments. A very relevant factor.

My own office was alerted to the presence of Mr. Roberts and of Mrs. Cook on their hearing agenda the day before the actual hearing. In other words, we learned at 4:46 p.m., Tuesday, January 28, that the next day they would be up for hearing along with Mr. Sutton. I ask unanimous consent that that e-mail be printed in the Record.

Now, for those of us on this side, that notice--or lack of it--presents a very real problem. Now we knew that Mr. Sutton, Mrs. Cook, and Mr. Roberts had been pending for some time. But the way things actually work is that the real due diligence is done in preparation for the hearing--it is done when the notice comes out. So we truly need time. And I believe the time to study and do our individual due diligence on each nominee would ease a lot of the raw nerve endings and scar tissue, which is now very evident on this committee.

Because it is the chairman who schedules matters for a vote, it is inevitably members of the minority party who most often need this extra time. As a result, this holdover rule is a rule that is viewed as a protection of minority rights in the Judiciary Committee.

After all, a chairman does not need to hold over a bill. If he doesn't want the committee to consider an issue, he can simply refuse to add the issue to the agenda, or he can pull it off the agenda, if necessary. Many Clinton nominees suffered this fate, and Members have made that clear, I think, time after time in the past couple of weeks.

In any event, this rule has always been interpreted to mean that if a Senator asked for a matter to be held over, the earliest it would come up again was in 1 week. That week comprises 7 days from the meeting at which the rule is invoked.

Now, we have an exchange from 24 years ago between Senators Thurmond and Kennedy about this rule. I want to read from the transcript of that Judiciary Committee meeting that occurred on January 24, 1979. Let me quote from Senator Thurmond:

There is one other matter. We have a custom, I guess since

the committee was founded, that any Senator can carry over

any matter for 1 week, any nomination for 1 week. I assume

there is no objection to continuing that.

Chairman Kennedy: I think that is a reasonable request. I

think that if it is on a Tuesday to a Tuesday--why don't we

just have it on a Tuesday to a Tuesday, so it is 7 days?

Seven days, Mr. President. Now, in my 10 years on the Judiciary Committee, this rule has always been interpreted to mean 7 days. Any matter held over must be held over for 7 days, or until the next markup, whichever occurs later. Obviously, there have been many occasions where a chairman of a committee would have preferred to schedule another markup immediately to move a nominee or a bill forward. After all, a chairman does not schedule a matter for consideration unless he or she is ready to move forward. But regardless of the will of the chairman to move more quickly, there has always been a recognition that rules are rules, and this one has always been followed--until this year.

At the Judiciary Committee markup on Miguel Estrada several weeks ago, the chairman of the committee attempted to interpret the 1-week rule as allowing an issue to be held over for just 6 days rather than 7. Essentially, he decided to interpret 1 week as being 6 days.

Now, before I go into this further, let me say that Senator Hatch is one of my dearest friends in the Senate. He is a fair chairman. I have watched him for a long time. We have worked together on many important issues for the past 10 years. I hold him in the very highest regard. Even on the issue of judicial nominations, I know he did his very best in a very difficult position over the years, when President Clinton was President, to balance the strong will of many of his own caucus against his desire to be fair to President Clinton's judicial nominees, and I believe that very strongly.

If anything, this is an indication of how raw nerve endings really are. That is all at this point in time.

I certainly understand how any chairman might be frustrated by some of us and by perhaps all of us who might attempt to thwart his timetable. But this frustration, again, should not be allowed to manifest itself in circumvention of a clear, defined, and decades-old committee rule. If we allow 1 week to become 6 days, it becomes an hour tomorrow, maybe cloture only requires 20 rather than 60 votes or 40 percent constitute a majority. This is a bit of an exaggeration.

As a matter of fact, it is a major exaggeration, but the Senate and its committees have rules for a reason, and we really cannot function if we do not follow them.

When this 6-day week concept was verbalized, our ranking member, Senator Leahy, made it clear that 6 days is not a week. The minority would allow the rule to be waived and a markup to occur in 6 days as a matter of cooperation. And so we waived the rule, partially to avoid a confrontation over this interpretation of the longstanding 7-day rule. But although we avoided a crisis that week, the 6-day concept was sort of a foreshadowing of what now seems to be increasingly a plan to ignore committee rules and move forward over the objections of the minority, and people feel very strongly about that.

Last week, we saw this plan come to fruition as two nominees were moved out of the Judiciary Committee over the strong objections of members who wished to continue debate, and despite the clear invocation of a decades-old rule, protecting the right of the minority to continue to debate until at least one of their own agrees it is time to vote.

Senator Daschle spoke on this issue last week, and I want to expand briefly on his comments. The judiciary rule in question contains the following language:

The chairman shall entertain a nondebatable motion to bring

a matter before the committee to a vote. If there is

objection to bringing the matter to a vote without further

debate, a rollcall vote of the committee shall be taken and

debate shall be terminated if the motion to bring the matter

to a vote without further debate passes, with 10 votes in the

affirmative, one of which must be cast by the minority.

What does this rule mean? Over the last few decades, it has clearly meant that unless at least one member of the minority agrees to cut off debate and move straight to a vote, no vote can occur. This is what happened and what came up last Thursday.

This is one of the only protections the minority has in our committee. Without it, there could conceivably never be a debate at all. A chairman could convene a markup, demand a vote, and the entire process would take 2 minutes. That is one of the reasons we feel so strongly about this particular rule. We believe this is not how the Judiciary Committee should function, and it is contrary to the rules of the committee.

As I understand it, this rule was first instituted in 1979, again, and it has been followed ever since by all of our chairmen.

I believe only two committees have something like it--Finance and Judiciary. The reason for it, as I understand it, goes back to Senator Kennedy's days as chair, when it was determined they didn't want to be like other committees, where with Appropriations you will often have a committee in the majority just go off on its own, mark up something, and everybody is forced to accept it.

Let me give you an instance.

During the markup of Bill Lann Lee to be Assistant Attorney General for the Civil Rights Division, there was some fear on our side that Republicans who had the votes to defeat the nomination would move directly to a vote and prevent any debate on the issue at the markup. Democrats, on the other hand, wanted the chance to explain their position and maybe even change some minds on the other side.

During that markup, there was significant discussion about what rule IV, the rule about cutting off debate, really means. At one point, it is interesting to note, Chairman Hatch himself commented that:

At the appropriate time, I will move to proceed to a vote

on the Lee nomination. I assume there will be no objection.

It seems to me that he deserves a vote. People deserve to

know where we stand on this issue. Then we will, pursuant to

rule IV, vote on whether to bring the Lee nomination to a

vote. In order to vote on the nomination, we need at least

one Democrat to vote to do so.

This is precisely what we are discussing, Mr. President. In order to vote on the nomination, we need at least one Democrat to do so.

Last week, we did not have such a vote. No Democrat was prepared to cut off debate. I know this because it was discussed ahead of time. Even though Senator Kennedy, who has substantial seniority and was chairman at the time the rule was put forward in 1979, objected and informed the chairman that no Democrat was ready to stop debating, the chairman moved ahead anyway.

I had an opportunity to speak to the chairman after this hearing, as a matter of fact, in the garage of the Hart Office Building. I think he has a very good understanding of the sensitivities and the nerve endings that are scratched raw right at this present time. It is my hope the chairman will take steps so we can restore to the committee the consideration that has always been extended.

Let me say something about Chairman Hatch. I understand how things can get to one in this committee, and I understand on both sides how-- and the Chair is smiling--how we can be extraordinarily difficult to preside over. I would never make an adverse personal comment about this chairman because I respect him, I like him, he is a friend, we work together. I just want to see the two sides come together, and I want to see this stop. I want to give the assurance, at least from this Senator, that what I want is ample time to do my due diligence on a given nominee.

Very often letters do not come in until almost the date of hearing. As the hearing date grows close, it seems people begin to know that something is happening. But if you get the official notice for a hearing the day before--and in this case at 4:46 p.m. the day before-- for three appellate court nominees, it is extraordinarily difficult.

Yes, I will.

(Mr. SMITH assumed the chair.)

Well, the Senator is correct.

That is correct.

I say through the Chair to the distinguished ranking member, yes, that is correct. I have the rule before me, and that is what it says. The Senator is correct that someone objected, yes.

Through the Chair to the ranking member, yes, that is correct.

Through the Chair to the ranking member, that is correct.

I do not take any pleasure in this. When I became a Member of this body, I ran as an independent voice, and I want to be that way. I want to work with both sides, and I have tried to do that. I think we are at a point, though, where some action has to be taken to restore the consideration that has usually been offered to members of this committee, that when they have a problem, a little more time is provided.

I believe very strongly--I have never used my blue slip. I have said I would never use my blue slip prior to a hearing; that I believe everybody is entitled to a hearing, and then we should vote the individual up or down, and that is my view. I do not push my view on anybody else, but that is how I decided I was going to handle my spot on this committee. But if the minority gets rolled, we go into a defensive posture and everybody is compelled then to unify and hold together. I think my colleagues see a lot of this in this filibuster.

I am hopeful in the future there can be a precise time when an official notice is sent out prior to the hearing being scheduled, so that every member of this committee has an opportunity to do their due diligence.

It is interesting to note that the votes in the committee--and I have them. On Mrs. Cook, there were 12 yeas, two nays and five present. The present, or pass, votes submitted by the ranking member, myself, Senators Feingold, Durbin and Schumer, were really, I think, on this point, that we did not have an ample opportunity to do our due diligence and to ask the questions we needed to ask.

On Mr. Roberts, there were 13 yeas, two nays and two present, Senator Leahy and Senator Feingold, which probably came from the same venue. In other words, they did not feel they had sufficient information to vote.

So I am hopeful that in the future we would be able to settle some of these issues in the committee and just bend over backwards. I remember the day when if a Member had a problem with a judge who had been recommended to the President by a specific Senator, that Member picked up the phone and called that Senator and said: I just want you to know, I have these concerns, and there was this kind of convivial relationship. That is all but gone now.

So the process is extraordinarily formal now, and the formality is carried out, for the most part, in the public hearing. So having notice to that public hearing becomes really all important.

I have pretty much summed up my position and my hope on this. I see the distinguished Senator from Alabama on his feet so I yield the floor.

May I respond to that?

Through the Chair, to answer the distinguished Senator from Alabama, I asked my counsels when did they first know, and they said, well, informally there was discussion, but the notice--and I said, well, get me a copy of the notice then. I want to see the notice. And it was 4:58 the day before.

That is the problem. I do not know exactly how all the counsels work, but I can tell the Senator that on our side time is important. Giving a little bit of time, I think, could go a very long way to solving the problem we are in, officially. so there are no excuses then. The official notice goes out. Who is on the calendar occurs a substantial period before the hearing so we have time to do what we need to do, particularly when I think there were seven judges on this particular calendar, three of them appellate judges, meaning it is a very big and heavy calendar on which to do your work.

I wanted to make one point, so I will defer.

Mr. President, last night I introduced the ``State Criminal Alien Assistance Program Reauthorization Act of 2003,'' bipartisan legislation to authorize funds to relieve State and county governments of the some of the fiscal burdens associated with the incarceration of undocumented criminal aliens.

I am pleased that Senators McCain, Kyl, Schumer, Boxer, Hutchison, Bingaman and Domenici have joined me in introducing this important measure.

The broad principle on which this bill is based is simple: the control of illegal immigration is a Federal responsibility. When the Federal Government falls short in its efforts to control illegal immigration, it must bear the responsibility for the financial and human consequences of this failure.

More and more, however, the fiscal consequences of illegal immigration are being borne by the States and local counties.

The State Criminal Alien Assistant Program, SCAAP, Reauthorization Act of 2003 would properly vest the fiscal burden of incarcerating illegal immigrants, who are convicted of felonies or multiple misdemeanors, with the Federal Government.

The legislation would do so by authorizing up to $750 million in Fiscal Year 2004 for Federal reimbursement to the States and county governments for the direct costs associated with incarcerating undocumented criminal aliens. It would authorize an additional $850 million in Fiscal Year 2005, and $950 million for the program in Fiscal Years 2006 through 2010.

The number of State and local governments seeking SCAAP funding has jumped 25 percent from the previous year. The combination of the increase, and the fact that all 50 States and the District of Columbia receive some funding from the program, suggests that no State is immune from the fiscal costs associated with crimes committed by illegal aliens.

Therefore, I urge all of my colleagues to work with me to not only ensure that the SCAAP program survives, but also that it is adequately funded.

At a time when the administration is asking State and local governments to do even more with their local funds to enforce the nation's immigration laws, it is at the same time recommending the elimination of a vital source of funding that already falls far short of what states spend to incarcerate criminal illegal aliens.

High impact States, like California, continue to shoulder extraordinary costs for housing illegal aliens in its criminal justice system. The State prisons had an estimated 22,565 criminal aliens it its system out of a total population of 160,728.

In just a 3-month period last year, the State's county jails housed just under 10,000 criminal aliens. Overall, California taxpayers paid more than $2.28 billion in 2001 to cover these costs.

In 2002, California received a SCAAP payment of $220 million--less than 10 percent of the total costs to the State. This year, California taxpayers can expect to spend even more.

The SCAAP reauthorization bill would help California and all other States that are experiencing increasing costs from incarcerating undocumented felons--both low-impact and high-impact states.

Last year, the State of Wisconsin and its counties, for example, received more than $3.5 million in funding; Massachusetts received over $13 million; Pennsylvania received lose over $2.6 million; Virginia received more than $6.4 million; North Carolina received $5.2 million; Michigan received $2.9 million; Minnesota received $1.8 million.

Thus, even states that have not traditionally had to confront the growth in illegal immigration are now bearing the costs of this Federal responsibility.

The administration's opposition to this program is puzzling.

I am particularly disappointed that an Administration headed by a former governor of a State highly impacted by the Federal Government's inability to control illegal immigration, would recommend the elimination of this important program.

Who pays when these costs go uncovered?

In California, the burden will fall on our law enforcement agencies-- including sheriffs, officers on the beat, anti-gang violence units, district attorneys offices. At a time when the nation is focused on enhancing security within our borders, within our States and within our local communities, a vital program like SCAAP should not be vulnerable to being short-changed or eliminated.

I note that when the current president was governor of Texas, he was a strong supporter of Federal funding for SCAAP he, too, recognized that controlling illegal immigration was a federal responsibility and that States cannot and should not be expected to handle the national burden on their own.

Certainly, the problems that were faced by Texas then with respect to the incarceration of criminal aliens have grown since then-Governor Bush wrote that letter. In 1997, the year in which the letter was written, the State of Texas incurred more than $129 million in incarceration costs. In fiscal year 2002, those costs soared to more than $1.17 billion.

It is inexplicable to me that this administration would now call for the elimination for the program. I will include the letter then- Governor Bush wrote to Representative Hal Rogers, chairman of the House Appropriations Subcommittee on Commerce, Justice, State, the Judiciary and Related Agencies, for the Record.

After years of strongly supporting funding for the SCAAP program, President Bush's recent opposition to the program prompted Congress to cut the program by 56 percent this year, from $565 million to $250 million.

I urge my colleagues to reverse that course in Fiscal Year 2004 and consider restoring the cuts that were made when Congress considers the FY2003 supplemental appropriations request the administration is likely to submit in the next several weeks.

I thank my colleagues who joined me yesterday for their tireless efforts in ensuring that States and local counties receive some compensation for they do their part in securing their communities from criminal aliens who are in the country illegally.

I join them in introducing the SCAAP reauthorization legislation in hopes that it will go further to alleviate some of the fiscal hardships States and local governments incur when they must take on this Federal responsibility.

I ask unanimous consent to print the letter to which I referred in the Record.

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

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

Mr. President, ``Success is to be measured not so much by the position one has reached in life, as by the obstacles which he has overcome while trying to succeed.'' This statement, made over 100 years ago by Booker T. Washington, rings true today.

Twenty-seven years ago, February was designated ``Black History Month.'' Today, I am pleased to join in the celebration of the many achievements and contributions African Americans have made to our history. I encourage all of you to celebrate this rich history of achievement year-round.

America's history has been shaped by the courage, talent, and ingenuity of African-Americans. Each February we rediscover familiar stories of those who triumphed over bigotry and hatred to help move our Nation closer to living up to its greatest potential. In the lives of Frederick Douglass, Harriet Tubman, Sojourner Truth, Rosa Parks, and Thurgood Marshall we find heroes who dedicated their lives to liberty, freedom, and equality. During this month we also celebrate the achievements and vision of civil rights leaders such as Martin Luther King, Jr. and Medgar Evers and are reminded that we must continue the important work they started.

A look through our own State's history reveals a rich portrait of African American achievement in California.

In science, George Edward Alcorn, Jr. is a brilliant physicist and inventor who has made considerable contributions to semiconductor technology and other scientific fields. He graduated from Occidental College in Los Angeles with a B.A. in Physics, and received an M.S. and Ph.D. in Nuclear, Atomic and Molecular Physics from Howard University. He has been issued more than 25 patents for his groundbreaking work and is most well-known for inventing the Imaging X-ray Spectrometer used for detecting life on other planets.

Dr. Alcorn has also been extensively involved in community service. He was awarded a NASA-EEO medal for his contributions in recruiting minority and women scientists and engineers and for his assistance to minority businesses in establishing research programs. He is a founder of Saturday Academy, which is a weekend honors program designed to supplement and extend math-science training for inner-city students in grades 6 to 8.

Mae Jemison, an African American physician, scientist and engineer, was the first woman of color to go into space more than 10 years ago. Dr. Jemison was only 16 when she entered Stanford University; she graduated in 1977 at age 20 with degrees in both chemical engineering and African American studies. A few years later, she received a medical degree from Cornell University. Dr. Jemison was selected by NASA in 1988 for Astronaut training and in 1992 became a mission specialist aboard the space shuttle Endeavor.

Throughout her career, Dr. Jemison remained undaunted by the lack of role models in her area of expertise and instead paved the way as a hero for women and minorities interested in the science and technology fields. She once said, ``I saw a world that was changing and I wanted to be a part of that.''

Last year, she was honored by the Mentoring Center in Oakland during a ceremony where she stressed the need for caring adults to reach out for young people in these troubled times. Just recently, Dr. Jemison encouraged a young audience at the Modesto Community College to shoot for the stars and realize their capacity to dream. She said, ``We have to have a vision of what we want the world to be in the future. We must combine lessons from the past with our responsibility for the present. It's the only way to have hope for the future.''

Politics: African Americans in the political arena have worked tirelessly to advance the civil rights of all people in California. Largely as a result of their efforts, African Americans are well represented in California local, State and Federal Governments.

Below is a short list of other African-American Californians who have made similar contributions to our State and communities across the Nation:

Yvonne Brathwaite Burke was the first black woman to be elected to the California General Assembly and the first to be elected to represent California in the United States Congress.

Congressman Ronald V. Dellums was elected to Congress in 1970. He was the first African-American to serve on the Armed Services Committee and was its first black chairman.

Herb J. Wesson, Jr. is only the second African American in California history to be elected the 65th Speaker of the California State Assembly, one of the most powerful positions in the State. As a student at Lincoln University, a historically black college, Mr. Wesson was inspired to pursue a political career while listening to a speech by then Congressman Ron Dellums of California.

During his career, Mr. Wesson has introduced bills that protected labor rights for immigrant workers, ensured pay equity across gender lines, increased funding for low performing schools, and promoted job training for at-risk teens. He has earned a reputation as a natural born leader, mediator

and bridge-builder, someone other Assembly members turned to when seeking to resolve a conflict.

Sports: African Americans have played an extremely influential role in the development of professional sports. Among the most prominent, Tony Gwynn has demonstrated excellence on and off the field. A native of Long Beach, Gwynn played baseball for the San Diego Padres for 20 years.

In addition to his incredible skill on the diamond, Gwynn became a sports hero for youth across the nation. Demonstrating sportsmanship, community service, and athleticism, Gwynn has won numerous community awards for his dedication and activism. He was inducted into the World Sports Humanitarian Hall of Fame in 1999.

California can also be very proud of its local African American heroes--those who often go unrecognized by the national community.

Improving the community relations in her native neighborhood of Watts, in Los Angeles, has been a lifelong commitment for ``Sweet'' Alice Harris. ``Sweet Alice,'' as she is affectionately called, is the founder of Parents of Watts, a program designed to encourage children to stay in school and away from drugs.

Today, Parents of Watts has grown into numerous organizations that provide emergency food and shelter for the homeless, offer health seminars, provide legal and drug counseling, and operate a program for unwed mothers.

Sweet Alice is truly one of the best known and most influential community leaders of her generation. Her lifetime of service and commitment to disadvantaged youth stems from her early years as a homeless teenage parent at age 16. In March of 2002, Lt. Governor Cruz Bustamante honored Sweet Alice with the Lt. Governor's Woman of the Year award for her tireless efforts for providing Los Angeles youth with a fighting chance in their community, a dedication that has spanned nearly 40 years.

This Black History Month, I would like to applaud all African American heroes who have overcome great adversity and risen to incredible heights of success. Many of these heroes have come from humble beginnings, making their successes and contributions to their communities all the more remarkable.

I look forward to the coming year in which we will, without a doubt, continue to see African Americans succeed and make a difference, both in their communities and in our country.

Mr. President, I rise in support of the legislation being introduced by my colleague from California the Sacramento Public Safety Act.

This Bill would authorize flood control protection and ecosystem restoration through a Mini-Raise of the Folsom Dam as well as authorize the design and construction of a permanent bridge to replace the road that currently runs on top of the Dam.

Providing Sacramento with flood protection is a critical public safety need. Further delays only serve to expand opportunities for a catastrophic flood.

No urban area in the United States is at higher risk of flooding than Sacramento, CA.

Located at the confluence of two major rivers, the American and Sacramento, the floodplain is home to half-a-million residents, $40 billion in property, 5,000 businesses and the necessary supporting infrastructure, all of which has less than 100-year flood protection.

With more than $30 billion in damageable property in the floodplain, the Corps of Engineers has estimated the damage from a flood would range from a minimum of $7 billion to as much as $15 billion.

As one of the largest economic engines in the world, a flood in California's capital city would effectively shut down the State's government and seriously disrupt regional commerce and transportation.

The Mini-Raise will provide Sacramento with a 213-year level of protection. It will allow the system to safely handle a storm 50 percent larger than anything ever recorded in the 3,000-year history of the American River Watershed; it will add 95,000 acre-feet of new emergency flood storage capacity to allow operators to control dam outflows in accordance to what the downstream levees can safely carry; it will bring Folsom Dam into compliance with Federal Dam safety standards; it will restore wildlife habitat along the Lower American River; and it will improve conditions for naturally spawning Steelhead and Salmon by mechanizing temperature control shutters.

The project has wide support at Federal, State, and local level. It is supported by the Army Corp of Engineers and funded in the Bush administration's budget request.

The project has bi-partisan support in Congress including Republican Congressman Pombo, as well as Democrats: Robert Matsui, George Miller, Mike Thompson, and Ellen Tauscher.

It has the local support of Heather Fargo, Mayor of Sacramento; Deborah Ortiz, California State Senator; Darrell Steinberg, California Assemblyman; Illa Collin, Chairman of the Sacramento County Board of Supervisors; Butch Hodkins, Executive Director of the Sacramento Area Flood Control Agency; Karolyn W. Simon, President of American River Flood Control Alliance; Donald Gerth, California State University, Sacramento; and Vicki Lee, Conservation Chair of the Sierra Club.

The bill also calls for a permanent bridge to replace the road that currently runs atop Folsom Dam. Given the recent announcement by the Bureau of Reclamation and the Department of the Interior to close the road over the Dam, the need for such a bridge has become doubly important. This bridge will serve the needs of nearly 20,000 commuters who use the Folsom Dam Road every day.

I want to thank my colleague from California for introducing this critical piece of legislation and I ask for support from the rest of the Senate.

Mr. President, I rise in support of the legislation being introduced by my colleague from California the Sacramento Public Safety Act.

This Bill would authorize flood control protection and ecosystem restoration through a Mini-Raise of the Folsom Dam as well as authorize the design and construction of a permanent bridge to replace the road that currently runs on top of the Dam.

Providing Sacramento with flood protection is a critical public safety need. Further delays only serve to expand opportunities for a catastrophic flood.

No urban area in the United States is at higher risk of flooding than Sacramento, CA.

Located at the confluence of two major rivers, the American and Sacramento, the floodplain is home to half-a-million residents, $40 billion in property, 5,000 businesses and the necessary supporting infrastructure, all of which has less than 100-year flood protection.

With more than $30 billion in damageable property in the floodplain, the Corps of Engineers has estimated the damage from a flood would range from a minimum of $7 billion to as much as $15 billion.

As one of the largest economic engines in the world, a flood in California's capital city would effectively shut down the State's government and seriously disrupt regional commerce and transportation.

The Mini-Raise will provide Sacramento with a 213-year level of protection. It will allow the system to safely handle a storm 50 percent larger than anything ever recorded in the 3,000-year history of the American River Watershed; it will add 95,000 acre-feet of new emergency flood storage capacity to allow operators to control dam outflows in accordance to what the downstream levees can safely carry; it will bring Folsom Dam into compliance with Federal Dam safety standards; it will restore wildlife habitat along the Lower American River; and it will improve conditions for naturally spawning Steelhead and Salmon by mechanizing temperature control shutters.

The project has wide support at Federal, State, and local level. It is supported by the Army Corp of Engineers and funded in the Bush administration's budget request.

The project has bi-partisan support in Congress including Republican Congressman Pombo, as well as Democrats: Robert Matsui, George Miller, Mike Thompson, and Ellen Tauscher.

It has the local support of Heather Fargo, Mayor of Sacramento; Deborah Ortiz, California State Senator; Darrell Steinberg, California Assemblyman; Illa Collin, Chairman of the Sacramento County Board of Supervisors; Butch Hodkins, Executive Director of the Sacramento Area Flood Control Agency; Karolyn W. Simon, President of American River Flood Control Alliance; Donald Gerth, California State University, Sacramento; and Vicki Lee, Conservation Chair of the Sierra Club.

The bill also calls for a permanent bridge to replace the road that currently runs atop Folsom Dam. Given the recent announcement by the Bureau of Reclamation and the Department of the Interior to close the road over the Dam, the need for such a bridge has become doubly important. This bridge will serve the needs of nearly 20,000 commuters who use the Folsom Dam Road every day.

I want to thank my colleague from California for introducing this critical piece of legislation and I ask for support from the rest of the Senate.

Mr. President, I rise on behalf of myself and Senators Kennedy, Schumer, Corzine, Lautenberg, Durbin, and Levin to introduce the ``Anti-Terrorism Military Sniper Weapon Reclassification Act of 2003.''

This bill, identical to legislation I have introduced in the last two Congresses, will reclassify powerful fifty-caliber military sniper rifles under the National Firearms Act, thus making it much more difficult for terrorists, doomsday cults, and criminals to obtain these guns for illegitimate use.

Fifty-caliber sniper rifles, manufactured by a small handful of companies and individuals, are deadly, military style assault weapons, designed for armed combat with wartime enemies. They weight up to 28 pounds and are capable of piercing light armor at more than 4 miles. The guns enable a single shooter to destroy enemy aircraft, jeeps, tanks, personnel carriers, bunkers, fuel stations, and even communication centers. As a result, their use by military organizations worldwide has been spreading rapidly.

But along with the increasing military use of the gun, we have also seen increased use of the weapon by violent criminals and terrorists around the world.

These weapons are deadly accurate up to 2,000 yards. This means that a shooter using a 50-caliber weapon can reliably hit a target more than a mile away. In fact, according to a training manual for military and police snipers published in 1993, a bullet from this gun ``even at one and a half miles crashes into a target with more energy than Dirty Harry's famous .44 magnum at point-blank'' range.

And the gun is ``effective'' up to 7,500 yards. In other words, although it may be hard to aim at this distance, the gun will have its desired destructive effect at that distance--more than 4 miles from the target.

The weapon can penetrate several inches of steel, concrete, or even light armor. In fact, many ranges used for target practice do not even have enough safety features to accommodate these guns--they are just too powerful.

Recent advances in weapons technology allow this gun to be used by civilians against armored limousines, bunkers, individuals, and even aircraft--in fact, one advertisement for the gun apparently promoted the weapon as able to ``wreck several million dollars' worth of jet aircraft with one or two dollars worth of cartridge.''

This gun is so powerful that one dealer told undercover GAO investigators ``You'd better buy one soon. It's only a matter of time before someone lets go a round on a range that travels so far, it hits a school bus full of kids. The government will definitely ban .50- calibers. This gun is just too powerful.''

When I first introduced this bill, I commented that a study by the General Accounting Office revealed some eye-opening facts about how and where this gun is used, and how easily it is obtained. The GAO reports that many of these guns wind up in the hands of domestic and international terrorists, religious cults, outlaw motorcycle gangs, drug traffickers, and violent criminals.

According to a special agent at ATF's Atlanta Field Division, the Barrett .50-caliber rifle is ``a devastatingly powerful weapon against which most troops, most law enforcement and no civilians have any means of defense.'' He added that the rifle is ``a tremendous threat'' for ``those most shocking and horrifying crimes, assassinations, murders, assaults on law enforcement officers.''

In 1998, Federal law enforcement apprehended three men belonging to a radical Michigan militia group. The three were charged with plotting to bomb Federal office buildings, destroy highways and utilities. They were also charged with plotting to assassinate the State's Governor, a U.S. Senator and Federal judges. A .50-caliber sniper rifle was found in their possession along with a cache of weapons that included three illegal machine guns.

One doomsday cult headquartered in Montana purchased 10 of these guns and stockpiled them in an underground bunker, along with thousands of rounds of ammunition and other guns.

At least one .50-caliber gun was recovered by Mexican authorities after a shoot-out with an international drug cartel in that country. The gun was originally purchased in Wyoming, so it is clear that the guns are making their way into the hands of criminals worldwide.

Another .50-caliber sniper rifle, smuggled out of the United States, was used by the Irish Republican Army to kill a large number of British soldiers.

Even more recently we have learned that Al Qaeda has received .50- caliber sniper rifles--rifles that were manufactured right here in the United States. Nearly 2 years ago today, Essam al Ridi, a U.S. agent for Al Qaeda, testified that he acquired 25 Barrett .50-caliber sniper rifles and shipped them to Al Qaeda members in Afghanistan. We have no way of knowing whether Al Qaeda has obtained more or who has supplied them with these weapons, but we can be sure that any .50-caliber weapon in the hands of Al Qaeda will almost certainly be used against Americans or American interests.

Ammunition for these guns is also readily available, even over the Internet. Bullets for these guns include ``armor piercing incendiary'' ammunition that explodes on impact, and even ``armor piercing tracing'' ammunition reminiscent of the ammunition that lit up the skies over Baghdad during the Persian Gulf war.

Several ammunition dealers were willing to sell armor piercing ammunition to an undercover GAO investigator even after the investigator said he wanted the ammunition to pierce an armored limousine or maybe to ``take down'' a helicopter. In fact, our own military helps to provide thousands of rounds of .50-caliber ammunition, by essentially giving away tons of spent cartridges, many of which are then refurbished and sold on the civilian market.

This bill will begin the process of making these guns harder to get and easier to track.

Current law classifies .50-caliber guns as ``long guns,'' subject to the least government regulation for any firearm. Sawed-off shotguns, machine guns, and even handguns are more highly regulated than this military sniper rifle. In fact, many States allow possession of .50- caliber guns by those as young as 14 years old, and there is no regulation on second-hand sales.

Essentially, this bill would reclassify .50-caliber guns under the National Firearms Act, which imposes far stricter standards on powerful and destruction weapons. For instance: NFA guns may only be purchased from a licensed dealer, and not second-hand. This will prevent the sale of these guns at gun shows and in other venues that make it hard for law enforcement to track the weapons.

Second, purchasers of NFA guns must fill out license transfer applications and provide fingerprints to be processed by the FBI in detailed criminal background checks. By reclassifying the .50-caliber, Congress will be making a determination that sellers should be more careful about to whom they give these powerful, military guns.

ATF reports that this background check process takes about 60 days, so prospective gun buyers will face some delay. However, legitimate purchasers of this $7,000 gun can certainly wait that long.

Clearly, placing a few more restrictions on who can get these guns and how is simply common sense. This bill will not ban the sale, use or possession of .50-caliber weapons. The .50-caliber shooting club will not face extinction, and ``legitimate'' purchasers of these guns will not lose their access--even though that, too, might be a reasonable step, since I cannot imagine a legitimate use of this gun.

I do not view the reclassification of .50-caliber weapons so much as an issue of firearm safety, but rather as a matter of national security. And I can say for a fact that I am not alone in that view.

Indeed the U.S. Air Force has studied the scenario of a potential terrorist attack with a .50-caliber weapon. According to a November 2001 article in the Air Force's official magazine, Airman, an antisniper assessment claimed that planes parked on a fully protected U.S. airbase are as vulnerable as ``ducks on a pond'' because the weapons can shoot from beyond most airbase perimeters. The Air Force has addressed the issue and the effectiveness of specially trained countersnipers to respond to a .50-caliber weapon attack on aircraft, fuel tanks, control towers, and personnel.

While I am glad to know our military has given due consideration to the threats posed by .50-caliber weapons, I have real concerns over the threats posed to civilian aviation.

Our Nation's airports in no way match the security measures at air force bases. These commercial facilities handle millions of passengers and tons of cargo each day and are especially vulnerable to the threats posed by .50-caliber weapons.

The threats to civilian aviation have been made abundantly clear over the last year and a half. The events of September 11 certainly showed the ability of terrorists to find loopholes in aviation security.

The recent attack on an Israeli airliner last November in Kenya serves as an example of the threat these weapons pose. Less than 4 months ago, an Israeli airliner, loaded with hundreds of innocent civilians, became the target of a terrorist attack. Two heat-seeking, Russian-made missiles known as SA-7s were launched at Arkia Flight 582 a few minutes after it took off from the Mombasa airport bound for Israel.

Fortunately, the two missiles passed by the jet, and the flight, with 271 people on board, was able to land safely in Tel Aviv a few hours later. A shoulder-fire missile launcher was found on the ground near the airport.

A previously unknown group calling itself the Army of Palestine claimed responsibility for the attacks, but government officials in Kenya and Israel, along with terrorism experts, said the operation was well coordinated and bore the trademarks of Al Qaeda or an affiliated group.

This type of attack, one on civilian aircraft, is exactly the sort that a .50-caliber weapon is capable of. Experts have agreed that .50- caliber weapons aimed at a plane while stationary, or

taking off or arriving could be just as disastrous as a hit from a missile launcher. Gal Luft, co-Director of the Institute for the Analysis of Global Security has described .50-caliber weapons as ``lethal to slow moving planes.''

For further assurance of the potential destruction of these weapons, simply listen to the manufacturers themselves. According to a Barrett Firearms Manufacturing Model 82A1 .50 caliber sniper rifle brochure.

``The cost effectiveness of the Model 82A1 cannot be overemphasized when a round of ammunition purchased for less than 10 U.S. dollars can be used to destroy or disable a modern jet aircraft. The compressor sections of jet engines or the transmissions of helicopters are likely targets for the weapon, making it capable of destroying multimillion dollar aircraft with a single hit delivered to a vital area.''

The Nordic Ammunition Company is the developer of the Raufoss multipurpose ammunition for .50-caliber weapons that combines armor- piercing, incendiary, and explosive features and was used by U.S. forces during the gulf war. According to the company, the ammunition can ignite military jet fuel and has ``the equivalent firing power of a 20-mm projectile to include such targets as helicopters, aircrafts, light armor vehicles, ships, and light fortifications.''

The bill will simply place stricter requirements on the way in which these guns can be sold, and to whom. The measure is meant to offer a reasoned solution to making it harder for terrorists, assassins, and other criminals to obtain these powerful weapons. If we are to continue to allow private citizens to own and use guns of this caliber, range, and destructive power, we should at the very least take greater care in making sure that these guns do no fall into the wrong hands.

I urge my colleagues to support this bill.

Mr. President, I rise on behalf of myself and Senators Kennedy, Schumer, Corzine, Lautenberg, Durbin, and Levin to introduce the ``Anti-Terrorism Military Sniper Weapon Reclassification Act of 2003.''

This bill, identical to legislation I have introduced in the last two Congresses, will reclassify powerful fifty-caliber military sniper rifles under the National Firearms Act, thus making it much more difficult for terrorists, doomsday cults, and criminals to obtain these guns for illegitimate use.

Fifty-caliber sniper rifles, manufactured by a small handful of companies and individuals, are deadly, military style assault weapons, designed for armed combat with wartime enemies. They weight up to 28 pounds and are capable of piercing light armor at more than 4 miles. The guns enable a single shooter to destroy enemy aircraft, jeeps, tanks, personnel carriers, bunkers, fuel stations, and even communication centers. As a result, their use by military organizations worldwide has been spreading rapidly.

But along with the increasing military use of the gun, we have also seen increased use of the weapon by violent criminals and terrorists around the world.

These weapons are deadly accurate up to 2,000 yards. This means that a shooter using a 50-caliber weapon can reliably hit a target more than a mile away. In fact, according to a training manual for military and police snipers published in 1993, a bullet from this gun ``even at one and a half miles crashes into a target with more energy than Dirty Harry's famous .44 magnum at point-blank'' range.

And the gun is ``effective'' up to 7,500 yards. In other words, although it may be hard to aim at this distance, the gun will have its desired destructive effect at that distance--more than 4 miles from the target.

The weapon can penetrate several inches of steel, concrete, or even light armor. In fact, many ranges used for target practice do not even have enough safety features to accommodate these guns--they are just too powerful.

Recent advances in weapons technology allow this gun to be used by civilians against armored limousines, bunkers, individuals, and even aircraft--in fact, one advertisement for the gun apparently promoted the weapon as able to ``wreck several million dollars' worth of jet aircraft with one or two dollars worth of cartridge.''

This gun is so powerful that one dealer told undercover GAO investigators ``You'd better buy one soon. It's only a matter of time before someone lets go a round on a range that travels so far, it hits a school bus full of kids. The government will definitely ban .50- calibers. This gun is just too powerful.''

When I first introduced this bill, I commented that a study by the General Accounting Office revealed some eye-opening facts about how and where this gun is used, and how easily it is obtained. The GAO reports that many of these guns wind up in the hands of domestic and international terrorists, religious cults, outlaw motorcycle gangs, drug traffickers, and violent criminals.

According to a special agent at ATF's Atlanta Field Division, the Barrett .50-caliber rifle is ``a devastatingly powerful weapon against which most troops, most law enforcement and no civilians have any means of defense.'' He added that the rifle is ``a tremendous threat'' for ``those most shocking and horrifying crimes, assassinations, murders, assaults on law enforcement officers.''

In 1998, Federal law enforcement apprehended three men belonging to a radical Michigan militia group. The three were charged with plotting to bomb Federal office buildings, destroy highways and utilities. They were also charged with plotting to assassinate the State's Governor, a U.S. Senator and Federal judges. A .50-caliber sniper rifle was found in their possession along with a cache of weapons that included three illegal machine guns.

One doomsday cult headquartered in Montana purchased 10 of these guns and stockpiled them in an underground bunker, along with thousands of rounds of ammunition and other guns.

At least one .50-caliber gun was recovered by Mexican authorities after a shoot-out with an international drug cartel in that country. The gun was originally purchased in Wyoming, so it is clear that the guns are making their way into the hands of criminals worldwide.

Another .50-caliber sniper rifle, smuggled out of the United States, was used by the Irish Republican Army to kill a large number of British soldiers.

Even more recently we have learned that Al Qaeda has received .50- caliber sniper rifles--rifles that were manufactured right here in the United States. Nearly 2 years ago today, Essam al Ridi, a U.S. agent for Al Qaeda, testified that he acquired 25 Barrett .50-caliber sniper rifles and shipped them to Al Qaeda members in Afghanistan. We have no way of knowing whether Al Qaeda has obtained more or who has supplied them with these weapons, but we can be sure that any .50-caliber weapon in the hands of Al Qaeda will almost certainly be used against Americans or American interests.

Ammunition for these guns is also readily available, even over the Internet. Bullets for these guns include ``armor piercing incendiary'' ammunition that explodes on impact, and even ``armor piercing tracing'' ammunition reminiscent of the ammunition that lit up the skies over Baghdad during the Persian Gulf war.

Several ammunition dealers were willing to sell armor piercing ammunition to an undercover GAO investigator even after the investigator said he wanted the ammunition to pierce an armored limousine or maybe to ``take down'' a helicopter. In fact, our own military helps to provide thousands of rounds of .50-caliber ammunition, by essentially giving away tons of spent cartridges, many of which are then refurbished and sold on the civilian market.

This bill will begin the process of making these guns harder to get and easier to track.

Current law classifies .50-caliber guns as ``long guns,'' subject to the least government regulation for any firearm. Sawed-off shotguns, machine guns, and even handguns are more highly regulated than this military sniper rifle. In fact, many States allow possession of .50- caliber guns by those as young as 14 years old, and there is no regulation on second-hand sales.

Essentially, this bill would reclassify .50-caliber guns under the National Firearms Act, which imposes far stricter standards on powerful and destruction weapons. For instance: NFA guns may only be purchased from a licensed dealer, and not second-hand. This will prevent the sale of these guns at gun shows and in other venues that make it hard for law enforcement to track the weapons.

Second, purchasers of NFA guns must fill out license transfer applications and provide fingerprints to be processed by the FBI in detailed criminal background checks. By reclassifying the .50-caliber, Congress will be making a determination that sellers should be more careful about to whom they give these powerful, military guns.

ATF reports that this background check process takes about 60 days, so prospective gun buyers will face some delay. However, legitimate purchasers of this $7,000 gun can certainly wait that long.

Clearly, placing a few more restrictions on who can get these guns and how is simply common sense. This bill will not ban the sale, use or possession of .50-caliber weapons. The .50-caliber shooting club will not face extinction, and ``legitimate'' purchasers of these guns will not lose their access--even though that, too, might be a reasonable step, since I cannot imagine a legitimate use of this gun.

I do not view the reclassification of .50-caliber weapons so much as an issue of firearm safety, but rather as a matter of national security. And I can say for a fact that I am not alone in that view.

Indeed the U.S. Air Force has studied the scenario of a potential terrorist attack with a .50-caliber weapon. According to a November 2001 article in the Air Force's official magazine, Airman, an antisniper assessment claimed that planes parked on a fully protected U.S. airbase are as vulnerable as ``ducks on a pond'' because the weapons can shoot from beyond most airbase perimeters. The Air Force has addressed the issue and the effectiveness of specially trained countersnipers to respond to a .50-caliber weapon attack on aircraft, fuel tanks, control towers, and personnel.

While I am glad to know our military has given due consideration to the threats posed by .50-caliber weapons, I have real concerns over the threats posed to civilian aviation.

Our Nation's airports in no way match the security measures at air force bases. These commercial facilities handle millions of passengers and tons of cargo each day and are especially vulnerable to the threats posed by .50-caliber weapons.

The threats to civilian aviation have been made abundantly clear over the last year and a half. The events of September 11 certainly showed the ability of terrorists to find loopholes in aviation security.

The recent attack on an Israeli airliner last November in Kenya serves as an example of the threat these weapons pose. Less than 4 months ago, an Israeli airliner, loaded with hundreds of innocent civilians, became the target of a terrorist attack. Two heat-seeking, Russian-made missiles known as SA-7s were launched at Arkia Flight 582 a few minutes after it took off from the Mombasa airport bound for Israel.

Fortunately, the two missiles passed by the jet, and the flight, with 271 people on board, was able to land safely in Tel Aviv a few hours later. A shoulder-fire missile launcher was found on the ground near the airport.

A previously unknown group calling itself the Army of Palestine claimed responsibility for the attacks, but government officials in Kenya and Israel, along with terrorism experts, said the operation was well coordinated and bore the trademarks of Al Qaeda or an affiliated group.

This type of attack, one on civilian aircraft, is exactly the sort that a .50-caliber weapon is capable of. Experts have agreed that .50- caliber weapons aimed at a plane while stationary, or

taking off or arriving could be just as disastrous as a hit from a missile launcher. Gal Luft, co-Director of the Institute for the Analysis of Global Security has described .50-caliber weapons as ``lethal to slow moving planes.''

For further assurance of the potential destruction of these weapons, simply listen to the manufacturers themselves. According to a Barrett Firearms Manufacturing Model 82A1 .50 caliber sniper rifle brochure.

``The cost effectiveness of the Model 82A1 cannot be overemphasized when a round of ammunition purchased for less than 10 U.S. dollars can be used to destroy or disable a modern jet aircraft. The compressor sections of jet engines or the transmissions of helicopters are likely targets for the weapon, making it capable of destroying multimillion dollar aircraft with a single hit delivered to a vital area.''

The Nordic Ammunition Company is the developer of the Raufoss multipurpose ammunition for .50-caliber weapons that combines armor- piercing, incendiary, and explosive features and was used by U.S. forces during the gulf war. According to the company, the ammunition can ignite military jet fuel and has ``the equivalent firing power of a 20-mm projectile to include such targets as helicopters, aircrafts, light armor vehicles, ships, and light fortifications.''

The bill will simply place stricter requirements on the way in which these guns can be sold, and to whom. The measure is meant to offer a reasoned solution to making it harder for terrorists, assassins, and other criminals to obtain these powerful weapons. If we are to continue to allow private citizens to own and use guns of this caliber, range, and destructive power, we should at the very least take greater care in making sure that these guns do no fall into the wrong hands.

I urge my colleagues to support this bill.