A bill to establish the Temporary Economic Recovery Adjustment Panel to curb excessive executive compensation at firms receiving emergency economic assistance.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Economic Recovery Adjustment Act of 
2009''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) the deterioration of financial firms in 2008 and the 
        resulting crisis of confidence in the financial markets have 
        required broad intervention by the Federal Government in the 
        financial sector;
            (2) the Emergency Economic Stabilization Act of 2008, 
        signed by President Bush on October 3, 2008, included a 
        $700,000,000,000 Troubled Asset Relief Program (or ``TARP'') 
        for the express purpose of ``providing stability to and 
        preventing disruption in the economy and financial system'';
            (3) the investment and commercial banks and other financial 
        institutions that have received taxpayer-funded bailouts 
        perform public functions supporting the operation of the 
        economy, in addition to their private profit-making functions;
            (4) reports of billions of dollars in compensation and 
        obligations to executives have eroded public confidence in the 
        TARP, and have caused increasing opposition to other bailout 
        proposals, thereby impeding the Government's ability to address 
        the financial crisis;
            (5) participation in the TARP and any other Federal 
        Government bailout program should be conditioned on a fair 
        restructuring of executive compensation obligations;
            (6) taxpayer dollars should not support unreasonable 
        compensation to executives, particularly when in the absence of 
        taxpayer support, such compensation would be reduced as part of 
        a bankruptcy restructuring or liquidation; and
            (7) establishing a due process forum will allow the 
        Government to ensure that executive compensation relying on 
        taxpayer funds is fair and reasonable, and that all sides enjoy 
        an opportunity to be heard.

SEC. 3. DEFINITIONS.

    In this Act, the following definitions shall apply:
            (1) Assisted entity.--The term ``assisted entity'' means 
        any recipient or applicant for assistance under the TARP.
            (2) Panel.--The term ``Panel'' means the Temporary Economic 
        Recovery Oversight Panel established under section 7.
            (3) Executive compensation.--The term ``executive 
        compensation'' means wages, salary, deferred compensation, 
        benefits, retirement arrangements, options, bonuses, office 
        fixtures, goods, or other property, travel, or entertainment, 
        vacation expenses, and any other form of compensation, 
        obligation, or expense that is not routinely provided to all 
        other employees of the assisted entity.
            (4) Office.--The term ``Office'' means the Office of the 
        Taxpayer Advocate, established under section 4.
            (5) TARP.--The terms ``TARP'' and ``TARP funds'' mean the 
        Troubled Asset Relief Program established under section 101 of 
        the Emergency Economic Stabilization Act of 2008 and funds 
        received thereunder, respectively, or pursuant to any successor 
        program.
            (6) Secretary.--The term ``Secretary'' means Secretary of 
        the Treasury.

SEC. 4. TAXPAYER ADVOCATE.

    (a) Establishment.--There is established within the Department of 
Justice, the Office of the Taxpayer Advocate.
    (b) Advocate.--The Office shall be headed by an Advocate, to be 
appointed by the Attorney General of the United States for such 
purpose.
    (c) Duties.--The Advocate is authorized to conduct ongoing audits 
and oversight of the recipients of TARP funds with respect to 
compensation of the officers and directors of such entities.
    (d) Access to Records.--
            (1) In general.--To the extent otherwise consistent with 
        law, the Advocate and the Office shall have access, upon 
        request, to any information, data, schedules, books, accounts, 
        financial records, reports, files, electronic communications, 
        or other papers, things, or property belonging to or in use by 
        the assisted entity and to the officers, directors, employees, 
        independent public accountants, financial advisors, and other 
        agents and representatives thereof (as related to the agent or 
        representative's activities on behalf of or under the authority 
        of the assisted entity) at such reasonable time as Office may 
        request.
            (2) Copies.--The Advocate may make and retain copies of 
        such books, accounts, and other records as the Advocate deems 
        appropriate for the purposes of this Act.
    (e) Reporting.--The Advocate shall submit quarterly reports of 
findings under this Act to the appropriate committees of Congress, the 
Secretary and the Special Inspector General for the TARP established 
under the Emergency Economic Stabilization Act of 2008 on the 
activities and performance of the Office.
    (f) Audits.--The Office is authorized to conduct an audit of any 
assisted entity for purposes of this Act.

SEC. 5. POWERS OF THE OFFICE.

    (a) Investigations and Evidence.--The Office may, for purposes of 
carrying out this Act--
            (1) take depositions or other testimony, receive evidence, 
        and administer oaths; and
            (2) require, by subpoena or otherwise, the attendance and 
        testimony of witnesses and the production of books, records, 
        correspondence, memoranda, papers, and documents.
    (b) Subpoenas.--
            (1) Service.--Subpoenas issued under subsection (a)(2) may 
        be served by any person designated by the Office.
            (2) Enforcement.--
                    (A) In general.--In the case of contumacy or 
                failure to obey a subpoena issued under subsection 
                (a)(2), the United States district court for the 
                judicial district in which the subpoenaed person 
                resides, is served, or may be found, or where the 
                subpoena is returnable, may issue an order requiring 
                such person to appear at any designated place to 
                testify or to produce documentary or other evidence. 
                Any failure to obey the order of the court may be 
                punished by the court as a contempt of that court.
                    (B) Additional enforcement.--Sections 102 through 
                104 of the Revised Statutes of the United States (2 
                U.S.C. 192 through 194) shall apply in the case of any 
                failure of any witness to comply with any subpoena or 
                to testify when summoned under the authority of this 
                section.
    (c) Information From Federal Agencies.--The Office may secure 
directly from any department, agency, or instrumentality of the United 
States any information related to any inquiry of the Office conducted 
under this Act. Each such department, agency, or instrumentality shall, 
to the extent authorized by law, furnish such information directly to 
the Office, upon request.

SEC. 6. EXECUTIVE COMPENSATION AUTHORITY.

    (a) Negotiated Reductions Authorized.--The Advocate is authorized 
to assist the Secretary in the negotiation of assistance under the 
TARP, in order to assure that fair and reasonable executive 
compensation is paid by entities receiving TARP funds, and to defend 
any such agreements in the event of any challenge to the adjustments to 
compensation obligations. If, after an audit authorized by this Act, 
the Advocate finds reason to believe that any assisted entity would 
have become insolvent if not for the receipt of assistance under the 
TARP, the Advocate shall negotiate a reduction in the executive 
compensation obligations of the assisted entity as a condition of the 
continuing use or future receipt of such TARP assistance.
    (b) Form.--Negotiated reductions in compensation under subsection 
(a)--
            (1) may include vested deferred compensation; and
            (2) shall be in an amount that is fair and reasonable in 
        light of the taxpayers' assistance, but not less than the 
        estimated value of the compensation obligations that would face 
        the estate or debtor-in-possession if the TARP funds had not 
        been granted and the entity had filed for bankruptcy 
        protection.
    (c) Certification to Adjustment Panel.--The Advocate shall certify 
the findings of the Office under this section to the Panel.

SEC. 7. TEMPORARY ECONOMIC RECOVERY OVERSIGHT PANEL.

    (a) Establishment.--There is established the Temporary Economic 
Recovery Oversight Panel.
    (b) Makeup of Panel.--The Panel shall be comprised of 5 members, 
appointed by the President for such purpose from among United States 
bankruptcy court judges. The Secretary shall provide for appropriate 
space and staff to support the functioning of the Panel.
    (c) Duties.--The Panel shall--
            (1) promptly evaluate each proposed settlement reached 
        under section 6;
            (2) approve or deny such proposed settlement; and
            (3) if no settlement is reached under section 6, upon 
        petition of the Advocate or any individual subject to the 
        actions of the Advocate under section 6, issue an order 
        establishing an executive compensation program for such 
        individuals in accordance with this section.
    (d) Notice and Hearing Required.--The Advocate shall provide 
adequate notice to all affected persons of its intention to seek an 
order from the Panel in accordance with this section, and the Panel 
shall hold an evidentiary hearing on any proposed settlement or 
petition of the Advocate.
    (e) Standing.--Under any proceeding before the Panel, any 
individual whose compensation might be adversely affected by Panel 
action shall be a party in interest, having full procedural rights, 
including the right to challenge a settlement between the assisted 
entity and the Advocate, to challenge the certified findings of the 
Advocate, or to appeal any order of the Panel.
    (f) Appeals.--The Advocate and any party having standing before the 
Panel shall have the right to appeal an order under this Act directly 
to the United States Court of Appeals for the District of Columbia 
Circuit.
    (g) Effective Period.--Any order of the Panel setting forth a 
reduction in compensation shall be effective 6 months after 
confirmation, and shall remain in effect while any obligation arising 
from assistance provided under the TARP remains outstanding.

Summary: Economic Recovery Adjustment Act of 2009 - Establishes within the Department of Justice the Office of the Taxpayer Advocate to conduct audits and oversight of the compensation of the officers and directors of entities assisted under the Troubled Asset Relief Program (TARP).

Authorizes the Advocate to assist the Secretary of the Treasury in the negotiation of TARP assistance in order to: (1) assure that fair and reasonable executive compensation is paid by entities receiving TARP funds; and (2) defend such agreements in the event of any challenge to the adjustments to compensation obligations.

States that negotiated reductions in compensation under this Act: (1) may include vested deferred compensation; and (2) shall be in an amount that is fair and reasonable in light of the taxpayers' assistance, but not less than the estimated value of the compensation obligations that would face the estate or debtor-in-possession if the TARP funds had not been granted, and the entity had filed for bankruptcy protection.

Requires the Advocate to negotiate a reduction in executive compensation obligations as a prerequisite to TARP assistance if, after an audit, the Advocate finds reason to believe that the assisted entity would have become insolvent if not for the receipt of TARP assistance.

Establishes the Temporary Economic Recovery Oversight Panel to: (1) either approve or deny a proposed settlement; or (2) upon petition of the Advocate (or of any individual subject to the Advocate's actions), issue an order establishing an executive compensation program if no settlement is reached.