S114 CONGRESSIONAL RECORD — SENATE January 6, 2009 

(1) TRAVEL EXPENSES.—The members of the 

Commission shall be allowed travel expenses, 

including per diem in lieu of subsistence, at 

rates authorized for employees of agencies 

under subchapter I of chapter 57 of title 5, 

United States Code, while away from their 

homes or regular places of business in the 

performance of service for the Commission. 

(2) COMPENSATION OF MEMBERS.—Members 

of the Commission shall serve without compensation. 

(3) STAFF.— 

(A) IN GENERAL.—The chairperson of the 

Commission may, without regard to the civil 

service laws and regulations, appoint and 

terminate an executive director and such 

other additional personnel as may be necessary to enable the Commission to perform 

its duties. The employment of an executive 

director shall be subject to confirmation by 

the Commission. 

(B) COMPENSATION.—The chairperson of the 

Commission may fix the compensation of the 

executive director and other personnel without regard to the provisions of chapter 51 and 

subchapter III of chapter 53 of title 5, United 

States Code, relating to classification of positions and General Schedule pay rates, except that the rate of pay for the executive director and other personnel may not exceed 

the rate payable for level V of the Executive 

Schedule under section 5316 of such title. 

(4) DETAIL OF FEDERAL EMPLOYEES.—With 

the affirmative vote of 2⁄3 of the members of 

the Commission, any Federal Government 

employee, with the approval of the head of 

the appropriate Federal agency, may be detailed to the Commission without reimbursement, and such detail shall be without interruption or loss of civil service status, benefits, or privileges. 

(i) CONTRACTS FOR RESEARCH.— 

(1) NATIONAL INSTITUTE OF JUSTICE.—With a 2⁄3 affirmative vote of the members of the 

Commission, the Commission may select 

nongovernmental researchers and experts to 

assist the Commission in carrying out its duties under this title. The National Institute 

of Justice shall contract with the researchers and experts selected by the Commission 

to provide funding in exchange for their services. 

(2) OTHER ORGANIZATIONS.—Nothing in this 

subsection shall be construed to limit the 

ability of the Commission to enter into contracts with other entities or organizations 

for research necessary to carry out the duties of the Commission under this section. 

(j) AUTHORIZATION OF APPROPRIATIONS.— 

There are authorized to be appropriated 

$5,000,000 to carry out this section. 

(k) TERMINATION.—The Commission shall 

terminate on the date that is 30 days after 

the date on which the Commission submits 

the last report required by this section. 

(l) EXEMPTION.—The Commission shall be 

exempt from the Federal Advisory Committee Act. 

SEC. 405. INNOVATIVE CRIME PREVENTION AND 

INTERVENTION STRATEGY GRANTS. 

(a) GRANTS AUTHORIZED.—The Director of 

the National Institute of Justice may make 

grants to public and private entities to fund 

the implementation and evaluation of innovative crime or delinquency prevention or 

intervention strategies. The purpose of 

grants under this section shall be to provide 

funds for all expenses related to the implementation of such a strategy and to conduct 

a rigorous study on the effectiveness of that 

strategy. 

(b) GRANT DISTRIBUTION.— 

(1) PERIOD.—A grant under this section 

shall be made for a period of not more than 

3 years. 

(2) AMOUNT.—The amount of each grant 

under this section— 

(A) shall be sufficient to ensure that rigorous evaluations may be performed; and 

(B) shall not exceed $2,000,000. 

(3) EVALUATION SET-ASIDE.— 

(A) IN GENERAL.—A grantee shall use not 

less than $300,000 and not more than $700,000 

of the funds from a grant under this section 

for a rigorous study of the effectiveness of 

the strategy during the 3-year period of the 

grant for that strategy. 

(B) METHODOLOGY OF STUDY.— 

(i) IN GENERAL.—Each study conducted 

under subparagraph (A) shall use an evaluator and a study design approved by the 

employee of the National Institute of Justice 

hired or assigned under subsection (c). 

(ii) CRITERIA.—The employee of the National Institute of Justice hired or assigned 

under subsection (c) shall approve— 

(I) an evaluator that has successfully carried out multiple studies producing rigorous 

evidence of effectiveness; and 

(II) a proposed study design that is likely 

to produce rigorous evidence of the effectiveness of the strategy. 

(iii) APPROVAL.—Before a grant is awarded 

under this section, the evaluator and study 

design of a grantee shall be approved by the 

employee of the National Institute of Justice 

hired or assigned under subsection (c). 

(4) DATE OF AWARD.—Not later than 6 

months after the date of receiving recommendations relating to a subcategory 

from the Commission under section 404(f), 

the Director of the National Institute of Justice shall award all grants under this section 

relating to that subcategory. 

(5) TYPE OF GRANTS.—One-third of the 

grants made under this section shall be made 

in each subcategory. In distributing grants, 

the recommendations of the Commission 

under section 404(f) shall be considered. 

(6) AUTHORIZATION OF APPROPRIATIONS.— 

There are authorized to be appropriated 

$18,000,000 to carry out this subsection. 

(c) DEDICATED STAFF.— 

(1) IN GENERAL.—The Director of the National Institute of Justice shall hire or assign a full-time employee to oversee the 

grants under this section. 

(2) STUDY OVERSIGHT.—The employee of the 

National Institute of Justice hired or assigned under paragraph (1) shall be responsible for ensuring that grantees adhere to 

the study design approved before the applicable grant was awarded. 

(3) LIAISON.—The employee of the National 

Institute of Justice hired or assigned under 

paragraph (1) may be used as a liaison between the Commission and the recipients of 

a grant under this section. That employee 

shall be responsible for ensuring timely cooperation with Commission requests. 

(4) AUTHORIZATION OF APPROPRIATIONS.— 

There are authorized to be appropriated 

$150,000 for each of fiscal years 2009 through 

2013 to carry out this subsection. 

(d) APPLICATIONS.—A public or private entity desiring a grant under this section shall 

submit an application at such time, in such 

manner, and accompanied by such information as the Director of the National Institute 

of Justice may reasonably require. 

(e) COOPERATION WITH THE COMMISSION.— 

Grant recipients shall cooperate with the 

Commission in providing them with full information on the progress of the strategy 

being carried out with a grant under this 

section, including— 

(1) hosting visits by the members of the 

Commission to the site where the activities 

under the strategy are being carried out; 

(2) providing pertinent information on the 

logistics of establishing the strategy for 

which the grant under this section was received, including details on partnerships, selection of participants, and any efforts to 

publicize the strategy; and 

(3) responding to any specific inquiries 

that may be made by the Commission. 

By Mrs. FEINSTEIN (for herself, 

Ms. SNOWE, Mr. LIEBERMAN, 

Mrs. BOXER, Mr. NELSON, of 

Florida, Mr. KERRY, and Mr. 

SPECTER): 

S. 133. A bill to prohibit any recipient 

of emergency Federal economic assistance from using such funds for lobbying expenditures or political contributions, to improve transparency, 

enhance accountability, encourage responsible corporate governance, and for 

other purposes; to the Committee on 

Banking, Housing, and Urban Affairs. 

Mrs. FEINSTEIN. Mr. President, I 

rise on behalf of myself and Senator 

SNOWE to introduce legislation that 

will increase transparency, strengthen 

oversight, and require firms receiving 

financial lifelines from the Federal 

Government to practice responsible 

corporate governance. 

Our bill—the Troubled Asset Relief 

Program Transparency Reporting 

Act—will achieve four essential objectives, prohibit firms receiving loans 

from the Federal Reserve or participating in the Troubled Asset Relief 

Program, TARP, from using this 

money for lobbying expenditures or political contributions; require that firms 

receiving government assistance provide detailed, publicly available quarterly reports to Treasury outlining 

how taxpayer dollars have been used; 

establish corporate governance standards to ensure that firms receiving 

Federal assistance do not waste money 

on unnecessary expenditures; and create penalties of at least $100,000 per 

violation for firms that fail to meet the 

corporate governance standards established in the bill. 

The need for such legislation has become very apparent in the 3 months 

since Congress approved the economic 

rescue plan. 

The economic rescue legislation 

passed in October includes several 

oversight boards and accountability 

provisions to ensure that public funds 

are effectively distributed. But, it does 

not include any reporting requirements 

for firms that receive Federal dollars. 

This is a significant omission, especially given the amount of Federal 

money that some firms are receiving. 

The Treasury Department has committed to purchasing $250 billion of 

preferred stock in financial institutions. More than 200 financial institutions have received roughly $188 billion. Of these funds, $125 billion was allocated to nine large national banks. 

In addition to injecting capital into 

banks, American Insurance Group, 

AIG, has received an additional $40 billion and CitiGroup has received $20 billion of TARP funds. 

Last month, GM received more than 

$10 billion in financing through the recently implemented Automotive Industry Financing Program. 

This effectively means that the entirety of the first $350 billion of rescue 

funds has been spent. 

When you add up all of the taxpayer 

dollars put on the line—from $30 billion 


wwoods2 on PRODPC68 with SENATE
January 6, 2009 CONGRESSIONAL RECORD — SENATE S115 

provided to Bear Stearns in March, $200 

billion available to Fannie Mae and 

Freddie Mac, $150 billion to AIG, $700 

billion for TARP, plus the direct lending programs at the Federal Reserve— 

we are talking about well over 1 trillion Federal dollars. 

I certainly don’t think it is unreasonable for the public to know how their 

money is being spent, and I am not the 

only Member of Congress or elected official who feels this way. 

In response to questions posed by the 

Congressional Oversight Panel for Economic Stabilization, the Treasury Department noted that it was committed 

to rigorous oversight of executive compensation packages. This may be the 

case, but executive compensation is 

only the beginning. 

While I am pleased that CEOs at 

some financial institutions that accepted Federal assistance did not accept their annual bonuses last year, we 

still do not have an official accounting 

of how Federal funds were used. 

Certainly Americans deserve assurances that struggling firms will not use 

public funds to pay exorbitant salaries 

or bonuses. 

The same can be said for these funds 

going towards dividend payments, or 

mergers and acquisitions. 

The Government Accountability Office, GAO, has reported that the Treasury Department had no strong accountability or oversight function to 

ensure that banks were using rescue 

assistance with the best interests of 

the public in mind. 

It noted that Treasury had little 

ability to ensure that participating 

firms complied with laws already limiting executive compensation and conflicts of interest. 

An investigation last month by the 

Associated Press found that many 

banks that have accepted Federal assistance are not able to say with certainty exactly how they have used the 

money. Some of these banks would not 

even discuss the issue. 

We cannot be sure that the rescue 

funds are being used to stabilize the 

economy if banks are not keeping proper accounting of their use, and those 

that do will not disclose it. 

Shining light on how firms use public 

dollars not only makes good sense, but 

it will also act as a deterrent to irresponsible behavior. 

On October 16, 2008, the Wall Street 

Journal reported that AIG, which received billions of dollars in Federal rescue funds, was continuing to lobby 

State regulators to delay implementation of strengthened licensing standards for mortgage brokers and lenders. 

AIG was lobbying against sensible 

standards created by the SAFE Mortgage Licensing Act. This bill, introduced by Senator MARTINEZ and myself, established basic minimum regulations for the mortgage industry to 

ensure consumers were adequately protected. 

Before this bill, in some States virtually anyone—even those with criminal records—could go out and get a 

mortgage broker’s license. 

Left unchecked, and with no regulations to stop them, unscrupulous mortgage brokers and lenders flooded the 

markets with subprime loans that they 

knew would never be paid back. 

Of course, this has served as one of 

the catalysts for our current economic 

predicament. 

And now AIG, propped up by billions 

in Government money after having 

succumbed to bad investments, was 

lobbying against the strong enforcement of State laws that might have 

helped prevent this catastrophe in the 

first place. 

Senator MARTINEZ and I wrote a letter to AIG and, to the company’s credit, CEO Edward Liddy immediately suspended the company’s lobbying operations. 

I find it completely unacceptable 

that taxpayer dollars intended to stabilize the economy could find their way 

into the bank accounts of lobbying 

firms. The legislation which I am reintroducing today will make sure that 

does not happen. 

I do not mean to pick on AIG, but 

they have also been the poster child for 

wasteful spending by rescued firms. 

In September 2008, just days after receiving an $85 billion Federal lifeline, 

the management of AIG treated itself 

to a $444,000 spa weekend at the St. 

Regis resort in Monarch Beach, California. This included $200,000 for rooms, 

$150,000 for fine dining and $23,000 in 

spa charges. 

AIG executives spent the last 2 days 

of September 2008 on a golf outing at 

Mandalay Bay in Las Vegas at a cost of 

up to $500,000. They were planning to 

follow this with a few days at the Ritz 

Carlton in Half Moon Bay, but cancelled after it hit the news and drew 

fire from congressional leaders. 

As news of these wasteful expenditures was making headlines, AIG received another $37.8 billion in emergency loans from the Federal Government. 

Shortly thereafter, the Associated 

Press reported that—even as AIG was 

asking Congress for these loans—AIG 

executives were spending $86,000 on a 

pheasant hunting expedition in England. During the trip, they stayed at a 

17th century manor. 

One AIG executive named Sebastian 

Preil was quoted as saying that: ‘‘The 

recession will go on until about 2011, 

but the shooting was great today and 

we are relaxing fine.’’ 

Once these lapses in judgment came 

to light, AIG chief executive Edward 

Liddy informed Congress that he was 

putting an end to all nonessential expenditures. Yet weeks later, an undercover news crew caught AIG executives 

at the Hilton Squaw Peak Resort in 

Phoenix, hosting a seminar for financial planners complete with cocktails 

and limousines. 

One would think that a brush with 

collapse and total failure might have a 

sobering effect on some of these firms. 

But this penchant for wasteful junkets in the face of complete failure was 

not unique to AIG. 

Following enactment of TARP, news 

reports have uncovered multiple instances in which rescued firms have 

been caught making unnecessary and 

outrageous expenditures, leading many 

taxpayers to question why these firms 

are receiving Federal assistance in the 

first place. 

In November, Treasury Secretary 

Paulson announced that the $700 billion approved by Congress to stabilize 

financial markets would not be used to 

purchase illiquid assets but rather to 

make direct capital injections into financial institutions. 

Given this new mission, the need for 

additional transparency and disclosure 

is striking. 

We have learned that we cannot necessarily count on these firms and their 

executives to act sensibly and do what 

is right. 

The public needs to know that their 

tax dollars are being put to good use. 

A simple ‘‘trust me’’ from the bank 

executives is not enough. 

Americans are struggling, and the 

pain in my State of California, where 

unemployment is 8.4 percent, and foreclosure filings exceeded 750,000 last 

year, is especially acute. 

This bill puts in place commonsense 

solutions to fix some of the deficiencies 

in the economic stabilization bill. 

This legislation is significant and 

sorely needed. 

We must act soon to help restore confidence in this effort and shed light on 

how public funds are used. We promised 

the American people transparency and 

oversight, and this legislation will 

make good on that promise. 

I hope my colleagues will join me to 

ensure that taxpayer dollars are spent 

efficiently and responsibly. 

By Mr. KERRY (for himself, Ms. 

SNOWE, and Mrs. LINCOLN): 

S. 138. A bill to amend the Internal 

Revenue Code of 1986 to repeal alternative minimum tax limitations on 

private activity bond interest, and for 

other purposes; to the Committee on 

Finance. 

Mr. KERRY. Mr. President, today 

Senator SNOWE and I are introduce legislation to exempt private activity 

bond interest from the alternative minimum tax, AMT. My colleague from 

Massachusetts, Representative RICHARD NEAL has introduced similar legislation. Under current law, interest paid 

on private activity bonds is subject to 

the alternative minimum tax. This results in the bonds not being very marketable in these difficult economic 

times. 

Making private activity bonds no 

longer subject to the AMT would help 

with the issuance of bonds. This legislation would assist in needed relief to 

State and local governments across the 

Nation. It would provide more buyers 

to the market, resulting in interest 

savings for issuers, and ultimately taxpayers. 


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