Government Executive - Authors - Pamela Barnett

House panel acts to speed SEC hiring

Pamela Barnett — Thu, 20 Mar 2003 00:00:00 -0500

A House Financial Services subcommittee approved legislation Thursday addressing a staffing crisis at the Securities and Exchange Commission.

The Capital Markets Subcommittee approved the measure (H.R. 658) by a voice vote after just minutes of discussion, and encompassed a managers' amendment agreed to by Chairman, Rep. Richard Baker, R-La., and ranking member Paul Kanjorski, D-Pa.

That measure, and the underlying legislation unveiled in February by Baker and Financial Services Chairman Michael Oxley, R-Ohio, is designed to help the SEC quickly hire the professionals it needs to police Wall Street. SEC Chairman William Donaldson recently expressed his support for this new authority in testimony before a House subcommittee.

The legislation would give the SEC the authority to exempt accountants, economists and securities compliance examiners from civil service hiring requirements. The SEC has long had this expedited authority for hiring agency attorneys, and lawmakers have argued that this special authority also is needed to speed the hiring process for accountants, economists and securities compliance examiners.

The SEC recently said it has hired nearly all of the new lawyers the agency was authorized to bring on board in the wake of the recent corporate scandals, but has managed to fill less than 40 percent of the accountant positions. This problem could be exacerbated in the coming year when it is expected that the commission will hire more than 800 new professionals as a result of a funding increase in the SEC's fiscal 2004 budget.

The subcommittee briefly entertained an amendment by Kanjorski, which would have required this new authority to sunset after five years-as opposed to it being made permanent under the legislation. Kanjorski immediately withdrew the amendment, however, and Baker predicted the amendment would be debated "with great enthusiasm" when the legislation goes to the full committee for markup.

Senate Banking Chairman Richard Shelby, R-Ala., and Banking Securities Subcommittee Chairman Michael Enzi, R-Wyo have introduced similar legislation.

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SEC chief applauds budget increase, promises to beef up staff

Pamela Barnett — Fri, 14 Mar 2003 00:00:00 -0500

Testifying before the House Commerce-Justice-State Appropriations Subcommittee, Donaldson said President Bush's request for $841.5 million in fiscal 2004 "recognizes that the commission's needs are growing and ongoing."

"This is the largest amount the commission has ever received," Donaldson said, adding that the funds would "allow us to focus further on financial frauds-and the ongoing requirements of the Sarbanes-Oxley Act."

Donaldson also sought to put the commission's 2004 budget request in the context of the agency's 2003 funding level, including funds earmarked for hiring new staff.

That funding, which was provided to SEC under the recent omnibus appropriation, "will enable us to meet the remaining fast-approaching deadlines of the Sarbanes-Oxley Act, hire over 800 new staff [and] advance initial start-up funds to the Public Company Accounting Oversight Board," among other goals, Donaldson said.

Speaking of the oversight board, Donaldson said his "hope and expectation" was that it would move "expeditiously" to select a new chairman.

Donaldson asserted that new agency staff would "focus equally" on the issues of full disclosure, transparency and investor protection. And he said the SEC will "hire aggressively, but thoughtfully, not just to increase head count."

Donaldson said his initial review of the budget numbers with respect to the specific staffing increases suggest, "that overall, this level of increase is warranted."

However, noting that the 2003 budget with respect to the specific staffing increases was prepared before his arrival, Donaldson said he intends "to delve more deeply into each program area to verify personally that this is the best and most effective and efficient use of our new staffing."

"I would therefore like to reserve my option to make changes," he said.

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Senators seek coordination in tracking terrorist funding

Pamela Barnett — Wed, 09 Oct 2002 00:00:00 -0400

At a hearing, which Baucus promised would be the first of several on terrorist financing networks, he remarked, "Shutting down terrorism depends on having a coherent, strategic plan."

Noting that both the Treasury and Justice departments have established special units to track down terrorist assets, Baucus said he was interested in learning about plans "for improving coordination among the departments and various interagency task forces to make sure we do have an effective task force going forward."

He added, "It is important the federal government have a strategy that makes the best use of our law enforcement resources."

While emphasizing that he was not seeking to minimize the efforts undertaken by the Bush administration to identify those who provided the funds for the Sept. 11 terrorist attacks, Grassley said he hoped to hear "what steps being taken to move beyond targeting individual terrorists... to shut down funding mechanisms that make terrorism possible before they strike again."

Grassley said he has observed "signs of bureaucratic infighting, one-upmanship and duplication of effort that too often plagued laws enforcement in past." He added, "Two task forces, with predominantly the same mission, working the same type of cases, asking for the same type information from identical sources of information demonstrates an old school of thought."

Grassley noted he and Baucus introduced legislation Tuesday to suspend tax-exempt status of designated terrorist organizations. Jimmy Gurule, the Treasury undersecretary for enforcement, said today the administration "fully supports the intent" of the proposal.

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Bush steps up demand for action on homeland security bill

Keith Koffler and Pamela Barnett — Thu, 03 Oct 2002 00:00:00 -0400

Bush issued the call before a meeting with Hispanic leaders at the White House, calling for Congress to finish the bill before leaving to campaign.

The president's statement appears to equate the homeland security bill with the fiscal 2003 Defense appropriations bill, which Bush also wants to sign before Congress goes home to campaign.

Office of Management and Budget Director Mitch Daniels last month indicated the president might not sign a long-term continuing resolution if a Defense spending bill is not on his desk. Bush today also demanded Congress pass the Defense appropriations bill before it leaves town for the elections.

Legislation to establish a Homeland Security Department has passed the House, but stalled in the Senate over the issue of personnel rules.

"The Senate is still struggling with the bill," Bush said today. "They need to get it done before they go home."

Bush gave no ground to his Senate opponents, but he tipped his hat to their effort to preserve certain rights for agency employees.

"Collective bargaining is important-I support the idea of workers being able to have collective bargaining," Bush said. "But we need to be able to manage the new agency, so that we can best protect the American people. And I call upon the Senate to understand the importance of what I just said."

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Treasury official calls for global moves against terror

Pamela Barnett — Fri, 31 May 2002 00:00:00 -0400

Gurule, in an address to the D.C. Bar Association, called the fight against terrorist financing "a complex problem that will involve years of careful diplomacy and innovative thinking."

The reasons why the fight is international in nature "are obvious," Gurule said. "First, terrorism is a global problem. Second, money is a fluid commodity that can be wired around the world in seconds. Third, because of the strict federal bank reporting requirements and aggressive forfeiture laws, terrorist funds are not likely to be held in U.S. banks," he said.

Gurule noted that development of an international strategy to deplete terrorist funding poses "enormous challenges" not only because foreign governments have different legal regimes, but also because some countries have not enacted anti-terrorist financing, money laundering, or asset forfeiture laws.

"Our strategy, both domestically and internationally, is designed to be a preventative approach," Gurule continued. "Our challenge is to harness the international interest in the terrorist financing issue into worldwide action. We believe that we have made some important steps in the right direction but I want to point out that this fight will be a marathon and not a sprint. We are just beginning."

One critical component of the United States' long-term effort to dismantle terrorist financing lies in "the development of personal relationships with our counterparts abroad," Gurule said, noting that Treasury Secretary Paul O'Neill has traveled to Europe, Asia and the Middle East in an effort to enlist cooperation there.

"Close relations and regular communication with our global partners is critical to our success in combating terrorism now and in the future," Gurule added.

Gurule delivered these remarks as U.S. and Chinese officials remained in the midst of meetings this week at the Treasury Department to exchange views on how to prevent and combat terrorist financing. The meeting is the first of other semi-annual meetings planned to deal with the issue, at which the United States and China will alternate as hosts.

On a related note, Senate Banking International Trade and Finance Subcommittee Chairman Evan Bayh, D-Ind., announced Friday he will hold a hearing Tuesday on the role of foreign and U.S.-based Islamic charities and non- governmental organizations in the financing of terrorist activities.

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Ridge briefs small group of senators on homeland security

Pamela Barnett and Geoff Earle — Thu, 02 May 2002 00:00:00 -0400

Ridge, who told senators his aim was to create a "smart, 21st century border," offered broad and unremarkable responses to the senators' questions--many of which focused on state-specific interests and concerns.

Senate Judiciary ranking member Orrin Hatch, R-Utah, who organized the meeting, asked Ridge whether the administration had any "preference" with respect to border agency reorganization. Ridge said "a full range of options" was under discussion internally, including "everything from completely revamping the technological infrastructure" for better information sharing to putting in place "a very muscular border control agency." Ridge added that, "No final recommendation has been made to the president."

The bottom line, Ridge added, is "will it affect the safety of America?" He acknowledged that a "broad reorganization" would necessitate Congress' cooperation, not only legislatively, but because such changes are likely to affect committee jurisdictions, Ridge noted.

Sen. Debbie Stabenow, D-Mich., who described the meeting as a "press conference," admonished Ridge that "it doesn't take the place of coming before our committees."

Senate Appropriations Committee Chairman Robert Byrd, D-W.Va., who did not attend because he was chairing another hearing at the time, criticized Ridge's decision to brief senators in a private meeting rather than testifying before the Appropriations Committee on "the very same day" that Byrd and Appropriations ranking member Ted Stevens, R-Alaska, had asked him to testify.

"It's obvious that this is a stunt," he said.

Byrd said the committee was trying to help the administration with its supplemental appropriations request, but that "the very person who is the president's point man--Mr. Ridge--is the person that we want before the committee … and we don't have the benefit of the knowledge of Mr. Ridge's plans."

Byrd continued: "I think it's tacky, and the only thing we can do is just move right ahead. The American people are the people who are being treated as fools, and they are not fools."

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House votes to replace INS with two new agencies

Pamela Barnett — Thu, 25 Apr 2002 00:00:00 -0400

The bill (H.R. 3231) passed on a 405-9 vote.

Before the vote, Attorney General John Ashcroft ventured to Capitol Hill to anounce the Bush administration's support for the measure, while saying the White House still has some concerns about it.

Appearing at a joint news conference with House Judiciary Committee Chairman James Sensenbrenner, R-Wis., who sponsored the IRS overhaul bill, Ashcroft said he planned to work with Senate sponsors of similar legislation, and with House members, "to reach an accommodation on the bill. This is not the end of the journey, but an important set of first steps."

A statement of administration policy released Wednesday evening said the administration is concerned with provisions of the bill "that weaken the authority of the new associate attorney general for immigration affairs position in comparison with the existing INS commissioner position."

Ashcroft sidestepped those questions, saying the bill "puts us on the road to real achievement." Ashcroft also said he "would be delighted for [INS Commissioner] James Ziglar to continue to lead our efforts" in whatever form the agency is restructured.

Asked if he was satisfied with Ashcroft's endorsement, Sensenbrenner replied, "Very satisfied."

Rep. Jim Kolbe, R-Ariz., who has introduced his own more radical INS restructuring plan, said the House Judiciary bill does not go far enough.

"This effort falls seriously short of real reform that is needed," Kolbe said. "The bill brought to us today simply rearranges the boxes on the existing organization chart of INS."

Before approving the bill, the House rejected, on a 272-145 vote, an amendment offered by Rep. Darrel Issa, R-Calif., that would have made all jobs in the two new immigration bureaus "excepted service" positions, meaning they would not be included in the competitive civil service or the Senior Executive Service.

Meanwhile, Senate Judiciary Immigration Subcommittee Chairman Edward Kennedy, D-Mass., said Wednesday evening he was "surprised" by the administration's support of the House bill, "since I know the administration shares my view that significant problems continue to exist with that bill. The House bill significantly reduces the authority of the agency's head and diminishes coordination within the agency. In reforming the INS, we need to maintain strong overall leadership to ensure uniformity, efficiency and decisive action in a crisis. Now is not the time to diminish the power of the person running the nation's immigration agency."

Kennedy said he would soon unveil his own INS restructuring bill, and Thursday announced a May 2 hearing on the legislation. Ziglar is expected to testify.

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Lawmaker offers to broker deal with OMB on SEC pay raises

Pamela Barnett — Wed, 17 Apr 2002 00:00:00 -0400

At a hearing, Wolf told SEC Chairman Harvey Pitt he could arrange for "you and the OMB to meet with us," on the subject of pay parity--which Pitt called his top budget priority.

Pitt said he welcomed any assistance the committee could provide.

One third of the agency's staff have left in recent years for better paying jobs with other federal regulators, self-regulatory organizations overseen by the SEC, or private sector jobs, Pitt said. "At this critical time for the nation's financial markets, the SEC must be able to keep our most experienced … and talented employees," he added.

While saying he was sympathetic to the Bush administration's desire to avoid deficit spending, Wolf said he "strongly" supports pay parity for SEC professionals. At the same time, however, Wolf also noted that the excitement and fulfillment of public service had to be weighed against the lower pay.

"The SEC is not an agency of boredom or irrelevancy," Wolf said. "My sense is, if you are not there for the dollar, you can make up [for it] in some respects."

Nevertheless, Wolf said he was perplexed that the administration agreed to fund partial SEC pay parity for the remainder of this year, but had failed to budget for the raises in fiscal 2003. Pitt estimates it will cost an additional $76 million to fully fund pay parity for the agency next year.

Pitt emphasized, however, that he understood the need for his agency to try to conform to national priorities. Pitt also said he was "very grateful" for the administration's supplemental fiscal 2002 budget request of $20 million to allow the SEC to immediately hire 100 new professionals to deal with fallout from Enron Corp.'s collapse, including 35 new accountants and lawyers for the agency's enforcement division.

In the long term, however, "My impression is that 100 is not going to prove sufficient," Pitt said.

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Senator to testify on his objections to border security bill

Pamela Barnett — Mon, 08 Apr 2002 00:00:00 -0400

Byrd lodged an objection late last year to a request to approve the legislation, crafted jointly by Senate Judiciary Immigration Subcommittee Chairman Edward Kennedy, D-Mass., Immigration Subcommittee ranking member Sam Brownback, R-Kan., and Sens. Dianne Feinstein, D-Calif., and Jon Kyl, R-Ariz., arguing it must first be subject to debate or amendment on the floor.

The measure, which was preconferenced among lawmakers of both chambers, was approved unanimously in the House in December.

Byrd's objection, which appears to be the only obstacle to approving the measure through unanimous consent in the Senate, centers on a provision of the House-passed bill extending the 245(i) visa program, his aides said. That program allows already qualified aliens to pay a fine to stay in the United States while they apply for their legal permanent residency. The House approved a modest extension of that program.

Byrd has not articulated his concerns in depth. However, the 245(i) provisions have come under fire from groups advocating a moratorium on U.S. immigration, such as the Federation for American Immigration Reform, as encouraging illegal immigration and providing a loophole for terrorists to reside permanently in the country.

Advocates with the American Immigration Lawyers Association and the National Immigration Forum fired back last week, saying Section 245(i) "does not operate independently of the long- standing provisions of our immigration laws that make known terrorists inadmissible to, and deportable from, our country."

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Senate pushes back border security legislation

Pamela Barnett — Wed, 20 Mar 2002 00:00:00 -0500

Daschle said the bill, which has been blocked in the Senate since the end of last year, would be "high on the list" of legislative priorities "after the break."

Daschle's comments appear to dash hopes immigration advocates had expressed earlier Tuesday that the Senate would try to reconsider the bipartisan legislation--which also contains an extension of the 245(i) visa program--in time for President Bush's trip to Mexico this week to discuss migration and other issues.

"The Senate's passage of the border security bill before President Bush goes to Mexico ... would indicate our seriousness in tackling important security concerns," Jeanne Butterfield, executive director of the American Immigration Lawyers Association, said in a conference call with reporters.

Bush appealed Tuesday to the Senate to show the "leadership" necessary to pass the measure.

Daschle and Senate Minority Leader Trent Lott, R-Miss., support the bill, but Sen. Robert Byrd, D-W.Va., has indicated he has substantive concerns about aspects of the measure dealing with the 245(i) program, which enables certain immigrants already in the United States to remain in the country while awaiting citizenship.

However, the House already has approved the Senate bill, both with and without the 245(i) extensions, so Daschle could bring up either version for amendment, a chief Senate cosponsor said.

"It's up to Sen. Daschle," said the cosponsor, Senate Judiciary Immigration Subcommittee ranking member Sam Brownback, R-Kan.

As for a Bush administration proposal to merge the U.S. Customs Service and the Immigration and Naturalization Service, which includes the Border Patrol, and place enforcement activities under the aegis of the Justice Department, Brownback said he did not know enough details of the plan to comment.

A spokesman for House Judiciary Chairman Sensenbrenner, whose committee is scheduled to mark up the chairman's INS restructuring legislation shortly after the spring recess, indicated likewise. But "from what details are available of Bush's plan, it would not negatively impact our legislation," he added.

However, Butterfield criticized the new homeland security plan as one "that has not been carefully or thoughtfully considered, and we're gravely concerned ...that stakeholders have not been consulted," Butterfield said.

Added Frank Sharry, executive director of the National Immigration Forum: "This would [cause immigration] enforcement to be completely divorced from adjudications, which we think would likely make a bad situation worse. It seems to us to be going in exactly the wrong direction."

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Report: SEC resources, staffing don't match workload

Pamela Barnett — Tue, 05 Mar 2002 00:00:00 -0500

Walker told the committee at a hearing on accounting standards that a number of important an "interrelated systemic issues" had been raised by Enron's collapse and by other recent earnings misstatements and business failures.

In report released Tuesday, "SEC Operations: Increased Workload Creates Challenges" (GAO-02-302), GAO concluded that there was "a growing mismatch between the SEC's responsibilities and resources."

Those resources are not just financial, but are "human as well as technological capabilities" as well, Walker said.

Walker recommended a "comprehensive and integrated plan to address these matters, focusing on value and risk."

GAO determined that the SEC's personnel challenges are of particular importance, he added, given the high turnover rates at the agency.

Walker also said it was "critically important" that the SEC have "a strong and effective and credible enforcement function," which includes criminal as well as the civil penalties on which the program is now largely based.

President Bush's fiscal 2003 budget calls for a 6.6 percent funding increase at the SEC, to $466.9 million, but would not provide enough funding for additional staff. It would allocate enough for a modest raise to boost SEC salaries to be more aligned with salaries at other government agencies.

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Lawmaker urges Bush to boost SEC staff, fund pay raise

Pamela Barnett — Fri, 01 Feb 2002 00:00:00 -0500

In a letter Thursday, LaFalce urged that the pay parity provisions, enacted as part of the recently signed Investor and Capital Markets Fee Relief Act, be fully implemented.

"I believe that the pay parity provisions included in the legislation can help the SEC to attract and retain high quality staff at a time when the issues faced by the SEC are more complex than ever," LaFalce wrote. But he added, "Pay parity authority cannot help, however, if it is not funded."

LaFalce also urged that the number of SEC staff be increased by a minimum of 25 percent overall, with the additional staff to be allocated primarily to the corporate finance and enforcement areas.

According to LaFalce, taking these steps would require a budget increase for the SEC of at least $200 million over its fiscal 2002 budget of $438 million.

"While costly, it is much cheaper than the losses to investors and our economy of continued financial scandals, failures, and lack of confidence in our markets," he wrote.

LaFalce told the president he was "very disappointed" Bush did not use his State of the Union address this week "to provide greater leadership on the serious problems facing our public securities markets, which play a crucial role in the sound functioning of our economy. While we do not yet know all of the facts that led to the collapse of Enron, it is already clear that the oversight of our public securities markets and the enforcement of our securities laws have not been adequate to stem the abuses that have occurred in companies of all sizes."

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Senator vows strict oversight of Treasury on money laundering initiatives

Pamela Barnett — Tue, 29 Jan 2002 00:00:00 -0500

"It is a matter we intend to follow very closely ... and review its workings once in place," Sarbanes told a panel of administration officials.

Pivotal rules implementing the statute, which are to be issued by the Treasury Department this April, "need to be carefully drawn to carry through the intent of Congress," Sarbanes said.

In that vein, Sarbanes said he is concerned about "aspects" of some interim Treasury guidance relating to U.S. institutions maintaining accounts for foreign "shell" banks.

Sarbanes said his reading was that the guidance still would allow U.S. banks to rely "without any due diligence, solely on the certification information of foreign customers, even if a bank has reason to doubt certification. That is not consistent with the statutory language."

Deputy Treasury Secretary Kenneth Dam, the leadoff witness for the administration, assured Sarbanes the money laundering legislation remained a top priority for his department and said he expected the regulatory framework to be in place "certainly by the end of the year. We are committed to an aggressive and thorough implementation of the statute."

However, Dam noted the administration was exploring whether some of the bill's exemptions ought to be "broadened," and said there were concerns that the regulations not be overly burdensome.

Treasury will be guided, "not only by the express statutory language, but also by certain core principles that reflect our vision of what this legislation should accomplish and the manner in which it should be implemented," Dam said in his written testimony. That includes "requiring only the degree of reporting that results in action by the government. If the information is not going to be used, it should not be requested," he added.

House Financial Services ranking member John LaFalce, D-N.Y., who also offered testimony, criticized the administration for failing so far to invoke its powers to impose "special measures" against areas of primary money laundering concern around the world.

Those measures can range from prohibiting certain transactions with countries or regions, or requiring the collection of certain information.

Under questioning by Sarbanes about whether the agency planned to invoke those powers, Dam acknowledged the department "need[s] to do some work" in that area. He said Treasury wants to make certain the definitions in that section of the law "are broad enough to do the job, and [do] not ... impose burdens that are not necessary."

LaFalce also urged the rulemaking process with respect to money laundering be kept as transparent as possible. While noting the financial industry had been "forthcoming and cooperative" in helping craft the law, "I'm concerned about a possible collapse back to a pre-Sept. 11 attitude," LaFalce said.

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House chair readies bill to split INS

Pamela Barnett — Fri, 02 Nov 2001 00:00:00 -0500

As envisioned, the measure would effectively split the agency in two parts, separated by its enforcement and administrative functions. Moreover, the bill would establish a "new chain of command" within the agency, said the spokesman.

The two branches of the agency would report to a newly created associate attorney general for immigration affairs provided for by the bill. The new structure is designed to enhance the agency's accountability and effectiveness, the spokesman said.

Separately, Rep. Tom Tancredo, R-Colo., said the Congressional Immigration Reform Caucus, which he heads, has seen its membership soar since the Sept. 11 terrorist attacks. Tancredo said 15 new members joined this week alone, raising the total membership to 50 legislators representing 26 different states.

Included among the new recruits are Reps. Henry Hyde, R-Ill., and Steve Largent, R-Okla. The caucus, formed last year by Tancredo, has focused on reforming U.S. immigration laws and securing America's borders.

Last month, the caucus released a 14-point proposal for immigration reform, and this week reiterated its call for the creation of a new Border Security Agency to take over the INS' enforcement responsibilities.

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Move underway to authorize Homeland Security Office

Pamela Barnett and Brody Mullins — Fri, 05 Oct 2001 00:00:00 -0400

The move comes as the White House and several congressional Republicans signaled that Congress should not rush to authorize the new office.

"The President just does not see the need for it," White House Press Secretary Ari Fleischer said today, he said, comparing the Homeland Security Council to the National Security Council, a White House office whose director needs no confirmation.

Fleischer declined to comment on whether outgoing Pennsylvania Gov. Tom Ridge should have control over other agencies' anti-terrorism budgets, indicating the White House view on that would become clear next week when Ridge assumes his post.

Still, a growing body in Congress believes legislation is needed to give Ridge the authority he needs - and Congress the oversight it craves.

"If he is not granted a certain amount of authority, he is not going to be very effective," said a spokeswoman for Rep. Jane Harman, D-Calif., the latest legislator to introduce a bill on the topic. Reps. Mac Thornberry, R-Texas, Wayne Gilchrest, R-Md., and Ike Skelton, D- Mo., also have advanced proposals. Senate Governmental Affairs Committee Chairman Joseph Lieberman, D-Conn., who plans to introduce legislation on the topic, will hold a hearing on the issue next week.

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House members urge action on SEC salaries, fees

Pamela Barnett — Thu, 27 Sep 2001 00:00:00 -0400

It is estimated the legislation would reduce government receipts by $14 billion over 10 years.

The SEC supports the legislation, which would bring the salaries of top-level agency employees up to a level commensurate with those paid to other federal financial regulatory employees. The House overwhelmingly approved the legislation earlier this year but the Senate has yet to act on it.

"The tragic events of Sept. 11 have altered the face of our economy," Fossella said in a statement. "While the Federal Reserve and the [SEC] have coordinated with the industry to keep the money supply fluid and to minimize the negative impact on the equity markets, more needs to be done to ensure our economy does not continue to decline."

House Financial Services ranking member John LaFalce, D-N.Y., who voted against the House bill on the grounds it is a cost-shifting measure that would end up burdening general taxpayers, has strongly reiterated his opposition to the fee-reduction aspect of the measure in the aftermath of the Sept. 11 attacks and because of the weakened economy. However, LaFalce said he believes the current pressures on the securities industry makes an even stronger case for more and experienced agency personnel.

SEC Chairman Harvey Pitt said Wednesday his agency had the tools it needed to restore the financial markets after the recent terrorist attacks, but Congress could take a couple of steps to help the agency do its job, according to National Journal's Technology Daily.

Pitt told the House Financial Services Committee that the SEC needs increased funding both to hire "infinitely more economists of the highest caliber" and to buy technology. As the SEC tracks purchases and sales of securities to determine whether any traders knew of the terrorist attacks before Sept. 11, the agency needs the best resources at its disposal, he said.

Pitt also said Congress could help the agency by giving it the ability to extend emergency rules now in place in the stock markets beyond 10 business days. Those rules, which include an easing of restrictions on when companies and their directors can repurchase their companies' shares, are set to expire Friday.

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Concerns force delay in anti-terrorism bill

Pamela Barnett — Tue, 25 Sep 2001 00:00:00 -0400

However, concerns on both sides of the aisle forced postponement of a markup that Judiciary Committee Chairman Jim Sensenbrenner, R-Wis., tentatively had scheduled for today.

Sensenbrenner implied he was being pressured within his own Caucus to buck regular order, and warned the committee that next week is the absolute deadline.

"If this bill is put on a slow [track], we as a committee will lose our right to make improvements, and we will have a bill written by the bipartisan and bicameral leaderships and presented for an up-or-down vote," he said.

Monday's Judiciary hearing, hastily scheduled late Friday in the wake of the Bush administration's release of draft anti- terrorism legislation, was punctuated by irritated exchanges between Sensenbrenner and Judiciary ranking member John Conyers, D-Mich., who sparred over how to divide the time allotted for questioning.

Ashcroft was available to the committee for one hour, a portion of which was consumed by his opening remarks and those of panel leadership.

"Today, we seek ... new laws [to prosecute] American enemies, both foreign and domestic," Ashcroft said in strongly worded testimony before the House Judiciary Committee. "We cannot wait for the terrorists to strike.... we must prevent first and prosecute second."

Both Republicans and Democrats raised questions about the bill's impact on civil liberties and privacy. Democrats railed against provisions they said would allow the government to indefinitely jail illegal aliens--and Sensenbrenner agreed that a few more days' negotiations were in order.

Ashcroft presented the administration's anti-terrorism measures as balanced and long overdue. "This is not a wish list," he said.

Ashcroft said current law fails "to make terrorism a national priority" and noted that technology has dramatically outpaced surveillance statutes, which were crafted when rotary phones--not cell phones--were the norm.

"We're sending our troops into the modern field of battle with antiquated weapons," Ashcroft said. "We're not asking for the law to expand, just to grow as technology grows."

Under questioning by Rep. Howard Coble, R-N.C., Ashcroft noted that "computer crimes" that could be classified as terrorist activity under the bill include such things as disrupting air traffic control or meddling with computer systems, such as those that control the power grid, of vital national interest.

While Ashcroft conceded he could not guarantee whether such provisions would help prevent future terrorist attacks, "[they] can be the difference between life and death for Americans," he said.

In the Senate, Judiciary Committee Chairman Patrick Leahy, D-Vt., said he was continuing to negotiate with the administration on the anti-terrorism measures.

"If we could find some areas where there really is an immediate problem--sure, we'll pass that," Leahy said. But he warned: "This is not a time to create whole new worries on people. A consensus, pared-down bill that takes care of the immediate problems is the best way to go."

Leahy said broader proposals to reorganize FBI and CIA functions were "not the thing to do here."

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Tighter airline security legislation seen by end of year

Pamela Barnett — Tue, 18 Sep 2001 00:00:00 -0400

Several sources agreed that, in the aftermath of the attacks, security issues would dominate the aviation landscape indefinitely.

"My sense is that it's all about security now," one aviation lobbyist said. "It's really going to suck the oxygen out of the system."

The prediction is borne out by committee schedules for the coming weeks, which sources said would include several aviation security hearings.

Sources said the Senate Commerce Committee was aiming for a hearing on aviation security Thursday, while the House Transportation and Infrastructure Committee is trying to coordinate two days of hearings, one Friday and another next Tuesday.

A GOP committee source said the House Transportation and Infrastructure panel would be coming at the issue in a two- pronged fashion: aircraft security and the financial viability of the airline industry, which has been threatened in the aftermath of the terrorist strike and Federal Aviation Administration's order grounding all flights in its wake.

Sources said it is feasible to expect there will be legislation resulting from these hearings, possibly by the end of the year.

Asked about the timeline, the Republican committee source said: "We want to do the right thing and we want to do it quickly. Hopefully we can do something quick and smart, and the earlier, the better."

Several aviation industry watchers say they expect a vigorous debate over whether airlines, airports or the federal government should oversee passenger security screening. Sources said airline officials have been interested in federalizing airline security for some time. Congressional hearings are expected to be held regardless what more immediate actions the FAA might take.

Last week's events also mean some pending aviation measures are off the table for now, sources predicted. Those likely include passengers' rights legislation and measures designed to expedite runway construction.

However, with congestion and delay already high in air travel, "another hour [of delay] and aggravation" associated with increased security screenings could send "the economics of short haul flights right down the tubes," said Kevin Mitchell, chairman of the Business Travel Coalition.

The Republican committee source admitted the terrorist attack will force most panels to reshuffle priorities, but noted that putting certain issues like airport infrastructure improvements on the back burner "does not mean we won't do them ... this Congress. [We have to] address the most pressing and urgent matters before us."

The committee's previous legislative priorities "remain undiminished. It's just that we have to take care of business on a first-things-first basis," the committee source said.

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SEC pay bill may be on fast track

Pamela Barnett — Thu, 14 Jun 2001 00:00:00 -0400

Speaking with reporters, Oxley and House Republican leaders said the bill is definitely slated for debate and a vote Thursday morning.

Asked afterward about the prospects for a conference, Oxley said Sen. Charles Schumer, D-N.Y., who is a cosponsor of similar SEC legislation already approved in the Senate, has expressed "his desire" to take up the House-passed bill. Oxley said the chances of that happening are better, if there is "a good vote" on the measure in the House chamber Thursday.

Avoiding a conference would allow bill proponents to bypass objections raised by House Government Reform Chairman Dan Burton, R-Ind., who is opposed to the bill on the grounds it would raise pay for SEC employees across the board.

Burton has argued that allowing such a pay hike will lead to an avalanche of requests by other agencies for similar increases, and he plans to express his displeasure in a floor speech Thursday.

Asked about Burton's concerns about a possible domino effect, House Majority Leader Dick Armey, R-Texas, told CongressDaily that the Republican leadership understands "that impulse is out there. But we think we have it contained."

He indicated that the main thrust of the bill, which is estimated to save large investors $14 billion over the next decade by reducing fees they must pay, is too tempting to resist. "You bring $14 billion to the table and we'll look at you," he quipped.

If there is a conference on the measure, Armey said he expected it would be House Speaker Dennis Hastert's, R-Ill., disposition to include Burton.

House Financial Services ranking member John LaFalce, D-N.Y., has been granted permission to offer a substitute on the floor. That substitute would offer a savings of $4 billion over 10 years, and is not expected to pass.

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House leaders must resolve SEC pay raise issue

Pamela Barnett — Wed, 30 May 2001 00:00:00 -0400

"We're looking at leadership to coordinate [it] at this point," an Oxley spokeswoman said, adding, "I think it looks good." House GOP leaders previously indicated they wanted Oxley and Burton to work out their differences on the pay provision, so that the underlying bill--which would reduce the fees investors pay to the SEC--could move quickly.

But several weeks of negotiations between the two offices appear to have yielded little more than a series of curt communications between the SEC, which strongly backs the raise, and the Office of Personnel Management, which supports Burton's position that the pay increase request is too broad in scope.

On Friday, Burton sent a three-page letter to House Speaker Dennis Hastert, R-Ill., alerting him to "a number of adverse policy and budgetary implications" of the SEC pay provision.

Burton said the provision would exempt the workers in question from Title V of the Civil Service Code, which specifies pay rates for classes of federal employees.

"I wanted to make sure you are aware what pay parity means as a practical matter. It means permitting collective bargaining over pay rates for this very narrow, specific group of federal employees without any pay cap whatsoever," Burton wrote.

"Mr. Speaker, I simply do not believe it is fair or just to single these federal employees out. Beyond the fact that the SEC has not adequately proven a verifiable agency-wide recruitment and retention problem, exempting the agency from Title V presents a terrible precedent. As a result of the debate involving the SEC a number of other agencies have already made known their desire to be taken out of Title V. These include the Department of Veterans Affairs, Commodity Futures Trading Commission, Export-Import Bank and the Patent Trademark Office."

Burton added: "Unfortunately, opening the floodgates and allowing a multitude of agencies to pay their employees unlimited salaries will bust the budget wide open. If [the bill] comes to the floor of the House in its present form, I intend to strenuously oppose its passage."

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INS may charge fees to cruise ships

Pamela Barnett — Wed, 16 May 2001 00:00:00 -0400

INS inspections are a security measure designed to prevent illegal entry into the United States. INS inspectors perform them at land, air and seaports.

But while all cruise ship passengers entering the United States are required to undergo inspection upon entry, most are exempt from paying the INS inspection user fee.

That is a sore point for airline and airport interests. All airline passengers--U.S. and non-U.S. citizens alike--leaving from a foreign country and traveling to a U.S. port of entry are required to pay a $6 user fee as part of their fare.

Airport officials argue that the fees assessed to their customers are being used to "subsidize" INS cruise ship inspections, and the diversion of resources from airports has contributed to long lines, congested runways, missed connections and general gridlock.

"Equity arguments make sense here, and you shouldn't allow for this revenue diversion from air passengers to ships--we don't think that's right, fair or equitable," said Todd Hauptli, senior vice president for legislative affairs for the American Association of Airport Executives/Airports Council International of North America.

It is unclear why cruise passengers were exempted from payment when the immigration user fees law passed in 1986. Justice Department inspectors surmised two years ago that Congress might have approved the exemption in an attempt to reverse financial hardships experienced by the cruise industry during the 1980s.

While the INS has sought unsuccessfully for years to remove the cruise ship exemption, some observers believe the tide could turn this session, as a result of a reinvigorated lobbying campaign by airport interests and a new crew of congressional leaders.

For instance, House Commerce-Justice-State Appropriations Subcommittee Chairman Frank Wolf, R-Va., whose panel oversees INS funding, previously chaired the House Transportation Appropriations Subcommittee. At a hearing last week before Wolf's panel, Acting INS Commissioner Kevin Rooney said the agency was seeking to replace the cruise line exemption with a $3 per customer fee.

Concurrently, the agency is requesting an increase from $6 to $7 in the current airport inspections fee. By the agency's estimates, these actions would add an additional $50 million annually in user fees, which would be funneled back into its inspection program.

Cruise line industry representatives are expected to vigorously defend their safe harbor from the user fee. But observers said the request by the INS that sea passengers be charged only $3 for their inspections may prove politically more saleable than previous efforts to achieve parity between air and sea port-of-entry fees.

Officials with the International Council of Cruiselines, comprising the 16 largest passenger cruise lines that call on major ports in the United States and abroad, were unavailable for comment.

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FAA gets kudos, boos at Senate hearing

Pamela Barnett — Fri, 11 May 2001 00:00:00 -0400

"It's bad out there; passengers are fed up," Hutchison said at a hearing.

On May 24, the full committee is set to mark up a bill introduced by Hutchison to provide limited antitrust immunity for airports to coordinate flight schedules, boost the salary cap for the FAA's chief operating officer and streamline environmental reviews in order to make infrastructure improvements at airports.

"My bill ... is a clear solution that will move the ball forward. Air traffic control is not a political issue, it's a technical issue," Hutchison said. "My hope is we will get this bill out of committee and be able to go to the floor very quickly."

Noting that her bill's "most important objective" is to build more capacity, Hutchison urged the FAA and the airlines to partner in finding more efficient uses of airspace, and applauded FAA Administrator Jane Garvey for her efforts in that area.

But Sen. Conrad Burns, R-Mont., was less congenial, and fumed at Garvey over what he described as a culture of complacency on FAA's part with respect to updating air traffic control technologies.

"Nobody seems to be accountable to anyone," Burns said. "They just don't seem to give a damn."

Garvey defended her agency, but said she "take[s] seriously comments about accountability." Burns nonetheless warned that Congress might have "to step in and organize [things]. Them foot draggers just have to go--how you get rid of them, I don't know--but we'll find a way."

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INS seeks to hire more border control agents

Pamela Barnett — Thu, 10 May 2001 00:00:00 -0400

SEC pay raise deal collapses

Pamela Barnett — Fri, 04 May 2001 00:00:00 -0400

As a result, plans by the House Rules Committee to issue a floor rule for the measure--which was slated for a vote Thursday-- were abandoned.

The decision by Oxley to pull the legislation was the latest twist in a series of controversies surrounding both the bill and an agreement reached late Tuesday between Oxley and House Government Reform Committee Chairman Dan Burton, R-Ind.

The agreement pertained to the portion of the legislation seeking a pay raise for SEC staff to make their compensation commensurate with the salaries paid at other financial regulatory agencies. The House Financial Services Committee had approved legislation that would have raised SEC salaries across the board, something to which Burton--whose panel oversees civil service pay--objected.

With House GOP leadership growing increasingly concerned about the highly visible dispute between two of its chairmen, Oxley and Burton struck a deal in which only a portion of the SEC workforce would be eligible for the increase.

However, no sooner had both House chairmen declared satisfaction with the arrangement than Senate Republican and Democratic sponsors of a similar securities bill came out swinging.

The Senate measure, already approved in that chamber, provides pay parity for all SEC employees. Senate officials made it clear Wednesday they had no intention of backing off their demands.

SEC officials Wednesday insisted the agency was "neutral" on the Oxley-Burton agreement, but also pledged to continue to work "toward the goal of pay parity."

Although he did not elaborate, Oxley in his statement hinted at other pressures, noting that the "agreement with the Government Reform Committee ... no longer holds."

A committee spokeswoman added, "Chairman Oxley is hopeful we might be able to do this [bill] this Congress, but it became clear that some [individuals] were completely opposed to pay parity."

On Thursday, Oxley indicated negotiations on the legislation would continue, and expressed confidence the measure would be signed into law in the near future.

"We're on the verge, on the doorstep of getting that completed," Oxley said at a conference hosted by the Securities Traders Association. "We are in a very strong position.... [T]here will be some disappointment, some time lost, but that's just the nature of politics."

Gramm, who spoke before Oxley at the conference, told reporters he was hoping for a resolution to the matter, and indicated he was sticking to his guns on complete pay parity for all SEC employees. Oxley said any negotiations with the Senate on the matter would take place in the context of a conference committee, and said the current talks were between himself, Burton and House leadership.

"Nothing in this town is easy," Oxley said.

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SEC pay raise proposal limited to certain employees

Pamela Barnett — Thu, 03 May 2001 00:00:00 -0400

"We will continue our effort to work toward the goal of pay parity," an SEC spokesman told CongressDaily.

The agreement between House Financial Services Committee Chairman Michael Oxley, R-Ohio, and Government Reform Committee Chairman Dan Burton, R-Ind., marked the conclusion of week-long negotiations between the two offices, which had squared off over a provision in pending securities legislation providing a pay raise for SEC employees commensurate with those of other financial regulatory agencies.

The legislation is scheduled for floor action Thursday.

The SEC had endorsed the bill as reported by the Financial Services Committee, as well as a Senate-passed bill that providing pay increases for all SEC employees.

However, the House compromise provides targeted relief for some categories of SEC employees, including accountants, lawyers and securities examiners. Moreover, it does not apply to anyone employed with the agency for less than two years.

Burton had argued that the blanket pay raise advocated in the original House was not justified. A Government Reform spokesman today said Burton is "satisfied" with the compromise, which also gives the SEC authority to petition the Office of Personnel Management for pay raises for the balance of employees not covered by the agreement.

However, the proposal has angered other members, including Senate Banking Committee Chairman Phil Gramm, R-Texas, whose committee approved more comprehensive relief.

"Members of the Senate Banking Committee think there should be top-to-bottom pay parity for SEC employees," a Gramm spokeswoman said today. "There shouldn't be this attempt to peel out certain professions and classes of employees."

An Oxley spokeswoman defended the agreement, saying it was targeted to address the SEC's concern that it is losing its top personnel to better paying jobs.

A Democratic source criticized the deal, saying: "There were ... solutions out there that made sense. What Oxley came up with is completely unworkable."

Sources on both sides of the aisle said the changes to the House bill likely would require a conference committee be convened to reconcile the differences.

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