S10850 CONGRESSIONAL RECORD — SENATE December 10, 2008 

report, eight of us voted no. I was one 

of the eight who voted no. Here is what 

I said in a speech on the floor of the 

Senate: ‘‘This bill will also in my judgment raise the likelihood of future 

massive taxpayer bailouts.’’ 

I am not prescient. I am not someone 

who can see the future. But I believed 

what we were doing in 1999 was unbelievably ignorant of the lessons we 

should have learned from the Great Depression. 

‘‘The bill will also in my judgment 

raise the likelihood of future massive 

taxpayer bailouts,’’ I said in May of 

1999. I wish I was wrong. Nine years 

later, here we are on the floor of the 

Senate, and we are seeing bailouts in 

every direction from the Federal Reserve Board, the Treasury, and others. 

I also said during that same debate: ‘‘I 

say to the people who own banks, if 

you want to gamble, go to Las Vegas.’’ 

But that wasn’t enough. We had a lot 

of folks who decided, you know what, 

we need to get banking, once again, involved in some of the more profitable 

enterprises such as real estate and securities. We ought to be able, they 

said, to pass a financial modernization 

act that allows the creation of big financial holding companies with a homogenization of all kinds of different 

enterprises under one roof. They said 

we will put up firewalls, apparently 

firewalls made of balsa wood or paper, 

but we will put up firewalls, and things 

will be great, and so it passed. Only 

eight of us voted no in the Senate when 

that conference report left. 

Yesterday, I described what happened 

as a result. It was similar to hogs in a 

corncrib, grunting and shoving and 

snorting. You heard it for a decade, especially in recent years. The most 

egregious part of it started with the 

subprime loans, but it was also with 

derivatives and credit default swaps. I 

said this back in 1999: 

If you want to trade in derivatives, God 

bless you. Do it with your own money. Do 

not do it through the deposits that are guaranteed by the American people. 

There were four pieces of legislation 

I introduced during the interim going 

back to 1995 to try to prohibit banks 

from trading in derivatives. Let me put 

up a chart that shows what has happened with derivatives. The top five 

bailed-out banks: JPMorgan Chase got 

$25 billion in bailout funds from the 

U.S. Government. They have a notional 

value of derivatives of $91.3 trillion. 

The Bank of America got $15 billion in 

bailout funds. They have a $39.7 trillion 

notional value of derivatives. The list 

goes on. Citigroup, $45 billion in bailout funds, $37 trillion in notional value 

of derivatives. 

This sort of mixes the terms. There is 

something called credit default swaps 

out there, something over $50 trillion 

of credit default swaps. If someone 

wants to know what they are, look at 

the AIG story. You will understand 

what brought them down. It was run by 

a little operation over in London with 

several hundred people. All this represented an unbelievable amount of 

reckless speculation that should never 

have been allowed to happen. That bill 

passed the Congress. President Clinton 

signed it. We have people—some of 

whom will come into this new administration—who were supportive of it. I 

think it was a horrible mistake. If we 

do not recognize it now, even as we are 

trying to dig out of this hole, we are 

going to head right back to the next 

hole. We need to have the Financial 

Reform Commission that develops the 

recommendations similar to what happened post-depression that will allow 

us to put together the kind of protections, once again, to make sure this 

will never again happen. 

Let me also say I am going to introduce legislation calling for a National 

Financial Crimes Task Force. There 

needs to be accountability. I am not 

suggesting all of it is criminal or even 

a major part of it is criminal, but some 

of it undoubtedly represents criminal 

behavior. Yet there is virtually no investigation going on, on these issues. It 

is so unbelievable. I chaired the hearings in the Senate on the Enron Corporation. You remember Enron. That 

was a criminal enterprise that bilked 

particularly the west coast taxpayers 

and ratepayers for electricity out of 

billions of dollars. I chaired the hearing when Ken Lay, the chairman of 

Enron, came and lifted his hand to tell 

the truth and then took the fifth 

amendment. 

Think of this, Enron was a big deal, 

a big scam and, in part, a criminal enterprise. In retrospect, the amount of 

money involved there is minuscule 

compared to the trillions of dollars we 

are talking about here that resulted 

from reckless business management 

and reckless practices. 

I talked about derivatives and credit 

default swaps. I’ll just mention, once 

again, the issue of subprime loans, 

when companies were advertising to 

the American people they should come 

to their company to get a loan, because 

if you were bankrupt, if you had slow 

pay, if you had bad credit, they wanted 

you to get a loan with them. In fact, 

they would encourage you to get a loan 

with them, and you wouldn’t have to 

document it. That is called a no doc 

loan. You don’t have to document your 

loan. Come to us, Zoom Credit said, 

come to us and get a loan. Slow pay? 

Bankruptcy? Troubles? It doesn’t matter—come to us. That is just an example. 

In fact, yesterday I showed that the 

largest mortgage banker in the country was engaged in the same sort of 

thing and that has already collapsed as 

well and the guy who ran it got off 

with a couple hundred million dollars, 

at least as I understand it. 

My time is about up. My interest is 

in protecting the economy and protecting this country and protecting 

American taxpayers. We need to try to 

give some protection to American jobs 

and to protect taxpayers and that 

means strong conditions, strong oversight, transparency, and accountability. I am for taking emergency action. I am for doing what we can to 

pull this country out of this hole. But 

we ought not decide we are going to 

impose very strict conditions on this 

tiny little piece and on all the rest of 

trillions of dollars, it is Katy bar the 

door; whatever happens, happens; and 

don’t complain. 

That is not what the role of the Congress should be. This Congress should 

insist on every dollar that is committed on behalf of the American taxpayers that we have accountability, responsibility and transparency and 

strong conditions. That has not been 

the case to this point and I intend to 

introduce legislation that requires it. 

I yield the floor. 

f 

RECESS 

The PRESIDING OFFICER. Under 

the previous order, the Senate stands 

in recess until 2:15 p.m. 

Thereupon, the Senate, at 12:30 p.m., 

recessed until 2:15 p.m. and reassembled when called to order by the Presiding Officer (Mr. LIEBERMAN). 

The PRESIDING OFFICER. In my 

capacity as a Senator from the State of 

Connecticut, I suggest the absence of a 

quorum. 

The clerk will call the roll. 

The assistant legislative clerk proceeded to call the roll. 

Mr. BROWN. Mr. President, I ask 

unanimous consent that the order for 

the quorum call be rescinded. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

f 

EXTENSION OF MORNING 

BUSINESS 

Mr. BROWN. Mr. President, I ask 

unanimous consent that morning business be extended until 3:30. 

The PRESIDING OFFICER. Is there 

objection? Hearing none, so ordered. 

f 

AUTOMOBILE INDUSTRY 

Mr. BROWN. Mr. President, almost a 

quarter million Ohioans are employed, 

directly or indirectly, by the automobile industry. The compromise bill 

we have negotiated—which I hope will 

pass tonight—means much more than 

just bridge loans for auto companies. 

This legislation means hundreds of 

thousands of middle-class workers in 

Ohio, in Missouri, in Indiana, in Pennsylvania, in Michigan, and all over this 

country; hundreds of thousands of middle-class workers in my State will be 

able to keep their jobs—jobs for car 

dealerships in all 50 States, jobs for 

suppliers in all 50 States. It means jobs 

at auto assembly plants and it means 

jobs at auto-stamping plants and engine plants in all those States I mentioned. It means communities would 

not suffer yet another blow from massive job loss. It means Ohio’s economy 

and our Nation’s economy will have a 

fighting chance to get back on track.