January 6, 2009 CONGRESSIONAL RECORD — SENATE S19 

Rich’s fugitive status and the charges for 

arms trading. 

In the FALN commutations matter, press 

accounts indicate the Mr. Holder submitted 

a recommendation in favor of those clemency requests even though the initial recommendation by Pardon Attorney Margaret 

Love opposed the commutations and the 

grants were opposed by the FBI, the Federal 

Bureau of Prisons, the Fraternal Order of 

Police, victims of the FALN bombings, and 

two United States Attorneys. 

Finally, while the record is unclear as to 

Mr. Holder’s precise role in the campaign finance investigation, it is clear that Attorney 

General Reno consulted Mr. Holder on these 

matters and that the recommendations of 

the heads of the campaign finance special 

task force, Charles LaBella and Robert 

Conrad, as well as the recommendation of 

FBI Director Louis Freeh, for the appointment of Independent Counsel were overruled. 

These matters require further questioning. 

In two of them, Mr. Holder appears to be 

serving the interests of his superiors. There 

is an underlying issue about Mr. Holder not 

following the recommendations of career attorneys. As Senator Leahy and I noted in our 

op-ed ‘‘the attorney general must be someone who deeply appreciates and respects the 

work and commitment of the thousands of 

men and women who work in the branches 

and divisions of the Justice Department day 

in and day out, without regard to politics or 

ideology, doing their best to enforce the law 

and promote justice.’’ It is to be expected 

that politically appointed federal officers 

will not always follow the advice of career 

staff, but this pattern is troubling. 

In raising these concerns, I am not passing 

judgment on the nominee. I am prepared to 

give Mr. Holder a full opportunity to explain 

his past actions and convince the Committee 

and the Senate that his record warrants confirmation. Indeed, it may be helpful for him 

to have advance notice of these specific concerns of mine to give him notice so he can 

prepare for the hearing. With considerable 

experience in confirmation hearings, including eleven Supreme Court nominations, I 

have learned to keep an open mind without 

prejudgment until the nominees have had 

their ‘‘day in court’’—that is in the Judiciary Committee hearing. 

f 

SEC INVESTIGATION INTO PEQUOT 

CAPITAL MANAGEMENT TRADING 

Mr. SPECTER. Mr. President, the Finance Committee, under the chairmanship of Senator GRASSLEY in the 109th 

Congress, and the Judiciary Committee, under my chairmanship in the 

109th Congress, conducted an extensive 

inquiry into allegations of insider trading. The issue is succinctly framed in a 

letter which I wrote to Christopher 

Cox, Chairman of the Securities and 

Exchange Commission, in a letter 

dated December 24, 2008. I ask unanimous consent that the full text of this 

letter be printed in the RECORD at the 

conclusion of my statement. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

(See Exhibit 1.) 

Mr. SPECTER. The matter could be 

most succinctly articulated by quoting 

from parts of this letter as follows: 

Dear Chairman Cox: 

Senator Charles Grassley and I have already issued public findings concerning the 

Securities and Exchange Commission’s . . . 

investigation into Pequot Capital Management’s . . . suspicious trading. 

Referring to insider trading. 

These findings also criticized the original 

Office of Inspector General’s report, which 

essentially ignored former SEC investigator 

Gary Aguirre’s complaints of political influence in the Pequot investigation . . . after 

the new SEC Inspector General, David Kotz, 

largely agreed with our findings and recommended disciplinary action against Mr. 

Aguirre’s supervisors up to the Director of 

Enforcement, the SEC selected an initiating 

official who, in a matter of days, found that 

disciplinary action was unwarranted. That 

official was described in press accounts as an 

Administrative Law Judge, and it was not 

until further inquiry that the SEC admitted 

she was not acting in a judicial capacity in 

issuing her decision. I am now writing because recent events provide the SEC with an 

opportunity to make good on its Pequot investigation, despite having . . . closed the 

case in November 2006. 

. . . The investigation centered, in part, on 

evidence that David Zilkha, a Microsoft employee who joined Pequot in April 2001 and 

separated from Pequot in November 2001, 

may have given Arthur Samberg, Pequot’s 

CEO, inside information regarding Microsoft. 

Documents recently filed in a Connecticut 

divorce case (Zilkha v. Zilkha) disclose that 

Pequot has made or promised to make payments of $2.1 million to Mr. David Zilkha. On 

December 1, 2008, and December 16, 2008, 

Pequot and Pequot CEO Arthur Samberg 

filed motions for protective orders, and the 

state court has scheduled the hearing on 

those motions for January 16, 2009. 

On December 10, 2008, Senator GRASSLEY

and I requested from Pequot and Mr. 

Samberg all records related to the payments 

to Mr. Zilkha, as well as an explanation of 

the payments. On December 17, 2008, Mr. 

Samberg responded that the payments to Mr. 

Zilkha were for the purpose of ‘‘settling a 

civil claim related to his employment and 

termination by Pequot.’’ Mr. Samberg enclosed a few documents, but we have requested additional records, and have asked 

for a complete production. 

Given the troubled history of this case, the 

SEC should also be seeking answers as to 

any payments made to Mr. Zilkha by 

Pequot. I therefore write to strongly urge 

the SEC to consider filing pleadings in the 

Connecticut action, so that the court will 

have all relevant information when it considers the Pequot and Samberg motions for 

protective orders. 

In essence, we have serious allegations of insider trading. We have the 

Inspector General of the SEC recommending serious disciplinary action. 

We have the matter being papered over 

by the SEC on what purported to be 

new conclusions reached by the administrative law judge where, in fact, the 

individual was not an administrative 

law judge. And now we find $2.1 million 

in payments or promised payments to 

an individual who may have been in 

the position to provide insider information. The matter is coming before a 

court in a domestic relations case, but 

that provides an opportunity to find 

those facts. 

This letter has not been answered, 

and I am taking this occasion to put it 

into the CONGRESSIONAL RECORD in the 

hopes that we may have some action 

by the SEC which will be calculated to 

get to the bottom of this matter. Certainly, this is something that ought to 

be of major concern to the Securities 

and Exchange Commissioners, to the 

Chairman, and to the SEC, generally. 

The Finance Committee and the Judiciary Committee, through the efforts 

of Senator GRASSLEY and myself, have 

gone to very substantial lengths to 

deal with this issue. Oversight by the 

Congress is very hard to pick up these 

complex matters and get into them, 

but a lot of work has been done, and we 

are still undertaking to try to get to 

the bottom of the allegations of insider 

trading. The issue now has turned to be 

greater than insider trading on one 

specific matter, but to the integrity of 

the SEC itself, in pursuing these kinds 

of allegations and in following the 

facts wherever they may lead. 

Chairman Cox has limited additional 

tenure, but there is sufficient time for 

him to act if he will, and if he will not, 

Senator GRASSLEY and I may seek to 

intervene ourselves. This is something 

which is the primary responsibility of 

the SEC, and it would be my hope that 

Chairman Cox would act on this matter 

to intervene, file an amicus brief, find 

out what the facts are on that $2.1 million to get to the bottom of these serious allegations of insider trading. 

EXHIBIT 1 

U.S. SENATE, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC, December 24, 2008. 

Hon. CHRISTOPHER COX, 

Chairman, U.S. Securities and Exchange Commission, 100 F. Street, N.E., Washington, 

DC. 

DEAR CHAIRMAN COX: Senator Charles 

Grassley and I have already issued public 

findings concerning the Securities and Exchange Commission’s (‘‘SEC’’) bungled investigation into Pequot Capital Management’s 

(‘‘Pequot’’) suspicious trading. These findings also criticized the original Office of Inspector General’s report, which essentially 

ignored former SEC investigator Gary 

Aguirre’s complaints of political influence in 

the Pequot investigation. You welcomed our 

findings and worked to implement our recommendations. Nonetheless, after the new 

SEC Inspector General, David Kotz, largely 

agreed with our findings and recommended 

disciplinary action against Mr. Aguirre’s supervisors up to the Director of Enforcement, 

the SEC selected an initiating official who, 

in a matter of days, found that disciplinary 

action was unwarranted. That official was 

described in press accounts as an Administrative Law Judge, and it was not until further inquiry that the SEC admitted she was 

not acting in a judicial capacity in issuing 

her decision. I am now writing because recent events provide the SEC with an opportunity to make good on its Pequot investigation, despite having precipitously and 

unjustifiably closed the case in November 

2006. 

In 2006, the SEC closed its investigation of 

April 2001 trading by Pequot in Microsoft 

stock. The investigation centered, in part, 

on evidence that David Zilkha, a Microsoft 

employee who joined Pequot in April 2001 

and separated from Pequot in November 2001, 

may have given Arthur Samberg, Pequot’s 

CEO, inside information regarding Microsoft. 

Documents recently filed in a Connecticut 

divorce case (Zilkha v. Zilkha) disclose that 

Pequot has made or promised to make payments of $2.1 million to David Zilkha. On December 1, 2008, and December 16, 2008, Pequot 

and Pequot CEO Arthur Samberg filed motions for protective orders, and the state 

court has scheduled the hearing on those motions for January 16, 2009. 

On December 10, 2008, Senator Grassley and 

I requested from Pequot and Mr. Samberg all 


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S20 CONGRESSIONAL RECORD — SENATE January 6, 2009 

records related to the payments to Mr. 

Zilkha, as well as an explanation of the payments. On December 17, 2008, Mr. Samberg 

responded that the payments to Mr. Zilkha 

were for the purpose of ‘‘settling a civil 

claim related to his employment and termination by Pequot.’’ Mr. Samberg enclosed a 

few documents, but we have requested additional records, and have asked for a complete 

production. 

Given the troubled history of this case, the 

SEC should also be seeking answers as to 

any payments made to Mr. Zilkha by 

Pequot. I therefore write to strongly urge 

the SEC to consider filing pleadings in the 

Connecticut action, so that the court will 

have all relevant information when it considers the Pequot and Samberg motions for 

protective orders. Please respond as to 

whether the SEC will take such an action. I 

also ask that you notify me immediately if 

the SEC reopens its investigation or takes 

any enforcement action in light of this new 

evidence. 

Sincerely, 

ARLEN SPECTER. 

Mr. SPECTER. Madam President, in 

the absence of any other Senator on 

the floor seeking recognition, I suggest 

the absence of a quorum. 

The PRESIDING OFFICER (Mrs. 

MCCASKILL). The clerk will call the 

roll. 

The assistant legislative clerk proceeded to call the roll. 

Mr. ISAKSON. Mr. President, I ask 

unanimous consent that the order for 

the quorum call be rescinded. 

The PRESIDING OFFICER (Mr. 

SALAZAR.) Without objection, it is so 

ordered. 

f 

ISRAEL AND GRIFFIN BELL 

Mr. ISAKSON. Mr. President, I rise 

for a few moments to address two subjects, the first will be about Israel and 

the second about the passing of Griffin 

Bell. 

All of us are deeply concerned with 

the conditions in the Middle East, most 

recently in the last 12 days, the actions 

in Gaza, the loss of human life and the 

conflict. 

But there is a necessary perspective 

we all must understand. In November 

of 2007, I stood at the last Israeli outpost overlooking Gaza. In fact, if you 

watch Fox or CNN or NBC or ABC tonight, where you will see those reports 

coming from, I stood on that very spot 

just a little over a year ago. 

Also, I went to Sderot, the Israeli 

settlement outside Gaza, that since 

mid year last year has received 1, 2, 3, 

10, 15 missile attacks, random attacks 

coming out of Gaza dropping on this 

Israeli settlement for no reason at all 

but the absolute ability or desire to 

terrorize the Israeli people and destroy 

that settlement. 

What Israel has done by moving into 

Gaza is a major military operation. In 

some reports that you see on television 

or you read about in the papers, you 

would think it was unprovoked and unnecessary. The opposite is true. It has 

been provoked for 15 months by Hamas 

in Gaza. The Israelis have finally 

drawn a line in the sand and they have 

moved in to try to protect the best interests of their citizens. 

For perspective, Gaza and Sderot are 

a little bit like Arlington and Washington. You are not talking about a 

large land mass, you are talking about 

a very narrow, tight area. It would be 

similar to South Carolina and Georgia 

lobbing missiles back and forth. 

What would happen if one of those 

States did it? We would immediately 

react to protect our citizens and protect their lives and their livelihoods. 

That is what Israel is doing. 

I pray every night that somehow and 

some way we can be a catalyst for ultimately a lasting peace in the Middle 

East. But surrendering to terrorism or 

the acts of terrorism such as Hamas 

has been taking out on the Israeli people is no way to go. I support the Nation of Israel. I believe they are doing 

the right thing to confront head-on the 

terror that has been imposed on them. 

It should not be lost on any of us 

that the supplies that have gotten into 

Gaza through what is known as the Eisenhower Passageway, which is from 

Egypt into Gaza, have been military 

materials being flown in and then 

taken in through tunnels basically by 

operatives of Iran. Just as what happened in Lebanon a year ago with 

Hezbollah and the Lebanese, the same 

thing is happening today between Gaza 

and the Palestinians and the Israelis. 

The catalyst for the conflict is another nation, Iran. It wants to diffuse 

the focus on its producing of nuclear 

weapons and instead keep turmoil in 

the Middle East to use it to its benefit. 

As a member of the Foreign Relations Committee, I take very seriously 

my responsibility to look upon every 

nation in this world as a nation we 

should respect, as a nation we should 

dialogue with, and as a nation we 

should work with. But we cannot and 

we must not turn our head away from 

a nation that is causing terror to be invoked against innocent people such as 

Iran is doing against Israel through the 

Palestinians in Gaza. 

So I hope and pray these difficulties 

end tonight. I hope and pray there is 

not another loss of life. But as long as 

Hamas is unwilling to enter into a 

meaningful peace, a meaningful effort 

to stop the terror, one that can be 

trusted and verified, then Israel is 

doing precisely what it should be doing 

in the best interests of its people. It is 

doing no less than we in this Congress 

and America would do were we attacked in the same way in the same 

time. In the first part of my remarks, 

I stand in solidarity with the people of 

Israel in hope and prayer that the hostilities end but not because of surrender; because ultimately we confront 

terror and get people to lay down their 

arms, not for a day, not for a cease-fire 

but for generations to come. 

The second subject is, for me, a very 

sad subject but also a subject that 

brings a lot of joy to my heart. There 

is a great American by the name of 

Griffin Bell, known to many people in 

this room. I know you, Mr. President, 

being a former Attorney General in the 

State of Colorado, are familiar with 

Griffin Bell’s record and jurisprudence 

in the United States for the last 75 

years. 

Griffin Bell first rose to prominence 

in America when Jimmy Carter 

brought him from Georgia to become 

the Attorney General of the United 

States of America. He brought him in 

at a critical time in our country’s history because Griffin Bell had done unbelievable things as a lawyer during 

difficult times in the South. 

Griffin Bell was the man whom Andy 

Young and the civil rights leadership of 

Atlanta and Ivan Allen, the mayor of 

Atlanta, turned to to write the plan for 

the desegregation of the Atlanta public 

schools. It was Griffin Bell who, as a 

lawyer but more so as a human being, 

worked through the difficult stress of 

those times of integration and the enforcement of the Brown v. Board of 

Education ruling, to see to it that separate but equal ended and equal access 

to education prevailed for all. 

He did it in a way where Atlanta was 

one of the few major cities in America 

that had no violence, no conflict, and 

no academic loss because of the imposition of the desegregation guidelines 

that were imposed by the courts. 

Griffin Bell did something no one 

thought could be done. It was because 

of his ability to do that and find common ground and find understanding 

that Jimmy Carter brought him to 

Washington, DC, and appointed him 

Attorney General. 

When Griffin left and went back to 

his law firm of King & Spalding in Atlanta, there was not a single thing that 

happened in our major capital city and 

our State for four decades that Griffin 

Bell was not a major player and a 

major part of. 

During Olympics, when they came to 

Atlanta in 1996 and there were difficulties, to whom did the Olympic committee go to weed through the minefield of Washington to get the security 

assistance necessary for the Olympics 

and Atlanta? It was Griffin Bell. 

When there was a company that was 

in need of a forensic audit by a legal 

man who would come in and clean up a 

problem in their company, such as E.F. 

Hutton did, whom did they call? They 

called Griffin Bell. For the better part 

of the last six decades, Griffin Bell has 

been the most prominent lawyer in the 

State of Georgia and I would suggest 

one of the most prominent lawyers in 

the United States of America. His 

mark has been left on countless hundreds of thousands of lives in our country. Sadly, at 9:45 a.m. yesterday morning in Piedmont Hospital, Griffin Bell 

passed away. I know where he is now. 

He is in heaven and he is looking down. 

He would be the last person to want 

anybody in the Senate or the House or 

anywhere else bragging about him. But 

I sing his praise for the greatness he 

did for our State and the greatness he 

did for his country. 


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