October 2, 2008 CONGRESSIONAL RECORD — SENATE S10459 

working well when he assumed the 

chairmanship of the Energy Committee 

in 2003. 

PETE DOMENICI’s legacy has inspired 

so many of us and his retirement will 

leave some pretty big shoes for us all 

to fill. I will miss the Senator’s smile, 

as well as his lighthearted and joyful 

presence. He is known as a man, who is 

firm in his convictions, but gracious in 

his negotiations. He is an example of a 

true statesman who has served his 

country well. 

I will truly miss him. I could say a 

lot more, but I clearly am out of time. 

f 

GULF COAST HOSPITAL 

APPROPRIATIONS 

Mr. COCHRAN. Mr. President, as I 

mentioned earlier this week, I have serious concerns about the way the appropriations process was handled this 

year. One of my greatest concerns was 

the removal from the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act of $350 million to aid Mississippi and Louisiana 

hospitals with problems they continue 

to face from the devastation of Hurricane Katrina. This funding was extremely important to these hospitals 

to be able to retain the workforce needed to address the health concerns of 

the area. I was pleased, however, to 

learn that the majority had increased 

the amount of funding available under 

the Social Service block grant program 

specifically for this purpose. It is my 

understanding that the House Appropriations Committee included an additional $288 million under the program 

to help assist these hospitals. It is my 

hope that when the Department of 

Health and Human Services awards 

these funds that they consider this intent. 

f 

TAX TREATMENT OF EMPLOYERPROVIDED CELL PHONES 

Mr. KERRY. Mr. President, Senator 

ENSIGN and I would like to engage in a 

brief colloquy with the distinguished 

chairman and ranking member of the 

Finance Committee, Senators BAUCUS

and GRASSLEY, regarding legislation we 

have sponsored to fix an archaic provision in the Tax Code that adversely affects employees and businesses across 

the country. Under a little-noticed provision added in 1989, cell phones, blackberries, and similar devices are treated 

as ‘‘listed property.’’ As a result, employees must keep detailed records of 

all calls made on their employer-issued 

cell phones—indicating whether they 

are personal or business-related—or 

have the value of the phone and phone 

service included as taxable income. 

The current law provision was added 

at a time when cell phones were considered a luxury item. Now, they are a 

common and necessary part of conducting everyday business. Imposing 

strict substantiation requirements on 

the business use of cell phones and 

blackberries is burdensome and highly 

impractical given their frequent use in 

a fast-paced global environment. To 

protect tens of thousands of employees 

and their employers from potential audits and tax liability, we should pass 

legislation as soon as possible next 

year to fix this problem. 

Mr. ENSIGN. I want to join my distinguished colleague from Massachusetts and express my hope that legislation can be passed early next year to 

fix the out-dated tax treatment of employer-provided cell phones. The bill he 

and I have introduced has broad bipartisan support with over 60 cosponsors. 

Similar legislation has already passed 

the House. And both Treasury and the 

IRS are supportive of the fix. Thus, 

Senator KERRY and I would like to ask 

the distinguished chairman and ranking member of the Finance Committee, 

for their help in passing this legislation early next year. 

Mr. BAUCUS. I want to thank my 

distinguished colleagues from Massachusetts and Nevada for raising this 

issue with us. I want to assure them 

that we are aware of this problem and 

we will work with our colleagues to 

consider legislation to eliminate the 

burden for employees and employers as 

early as possible. 

Mr. GRASSLEY. I also want to join 

the chairman and express my intent to 

have the committee consider legislation that addresses this problem as 

soon as we can. We should not be imposing unreasonable rules on employees’ use of cell phones and blackberries. 

Mr. KERRY. Senator ENSIGN and I 

want to thank the distinguished chairman and ranking member of the Finance Committee for their willingness 

to work with us to address this important problem. 

f 

OFFSHORE TAX HAVENS 

Mr. LEVIN. Mr. President, I will ask 

to have printed in the RECORD a timely 

opinion piece that was written by Mr. 

Robert M. Morgenthau, the District 

Attorney of the County of New York, 

and appeared in the Wall Street Journal on Tuesday, September 30. Since 

the 1960s, Mr. Morgenthau has been a 

leader in the fight against the abuse of 

offshore havens for fraud, money laundering, tax evasion and a host of other 

illicit activities. 

As Congress votes on a plan to restore the soundness and credibility of 

our financial system, Mr. Morgenthau’s 

column correctly reminds us of a factor 

that contributed significantly to this 

financial crisis—the activities of financial institutions that have hidden away 

trillions of dollars in offshore tax havens and that claim to be domiciled in 

those offshore havens, when all of their 

key personnel and operations are here 

in the United States. Mr. Morgenthau 

points out that this charade places 

these trillions of dollars, and the activities of the entities that control 

them, outside the oversight and supervisory control of the U.S. financial regulatory system. As the hearings held 

by the Permanent Subcommittee on 

Investigations, which I chair, have 

demonstrated, this charade is also a 

breeding ground for tax abuse, draining 

our system of billions of dollars in 

needed tax revenues. 

In his article, Mr. Morgenthau reminds us that the supervisory and safety mechanisms that have been established to protect our citizens and their 

savings are dependent on transparency 

and strong regulatory vigilance. So is 

our tax system. When funds are hidden 

in offshore jurisdictions that promote 

secrecy and weak regulatory standards, 

and the funds are controlled by entities 

that claim they are not subject to our 

regulatory system, the safety net that 

we have established cannot function to 

provide our citizens the security it was 

designed to offer. 

While we have voted on a plan to alleviate the current crisis, we have a lot 

more work to do to rectify the root 

causes of this problem. As Mr. Morgenthau points out, the abuse of offshore 

jurisdictions by financial institutions 

must be high on that agenda, and I 

look forward to addressing this matter 

in the next Congress. 

Mr. President, I ask unanimous consent to have the opinion piece to which 

I referred printed in the RECORD. 

There being no objection, the material was ordered to be printed in the 

RECORD, as follows: 

[From the Wall Street Journal, Sept. 30, 

2008] 

TOO MUCH MONEY IS BEYOND LEGAL REACH’ 

(By Robert M. Morgenthau) 

A major factor in the current financial crisis is the lack of transparency in the activities of the principal players in the financial 

markets. This opaqueness is compounded by 

vast sums of money that lie outside the jurisdiction of U.S. regulators and other supervisory authorities. 

The $700 billion in Treasury Secretary 

Henry Paulson’s current proposed rescue 

plan pales in comparison to the volume of 

dollars that now escape the watchful eye, 

not only of U.S. regulators, but from the 

media and the general public as well. 

There is $1.9 trillion, almost all of it run 

out of the New York metropolitan area, that 

sits in the Cayman Islands, a secrecy jurisdiction. Another $1.5 trillion is lodged in four 

other secrecy jurisdictions. 

Following the Great Depression, we 

bragged about a newly installed safety net 

that was suppose to save us from such a hard 

economic fall in the future. However, the Securities and Exchange Commission, the Federal Reserve System, the Comptroller of the 

Currency and others have ignored trillions of 

dollars that have migrated to offshore jurisdictions that are secretive in nature and outside the safety net—beyond the reach of U.S. 

regulators. 

We should have learned a long time ago 

that totally unsupervised markets, whether 

trading in tulips or subprime mortgages, will 

sooner rather than later get into trouble. We 

don’t have to look back very far in history 

to understand this. 

Long Term Capital Management, a hedge 

fund ‘‘based’’ in Greenwich, Conn., but composed of eight partnerships chartered in the 

Caymans, was supposed to be the wunderkind of the financial world. At its peak in 

the late 1990s, its gross holdings were valued 


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