[Pages H6284-H6287]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

IMPROVED FINANCIAL AND COMMODITY MARKETS OVERSIGHT AND ACCOUNTABILITY
ACT

Mr. LYNCH. Madam Speaker, I move to suspend the rules and pass the
bill (H.R. 885) to elevate the Inspector General of certain Federal
entities to an Inspector General appointed pursuant to section 3 of the
Inspector General Act of 1978, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:

H.R. 885

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Improved
Financial and Commodity Markets Oversight and Accountability
Act''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Elevation of certain Inspectors General to appointment pursuant
to section 3 of the Inspector General Act of 1978.
Sec. 3. Continuation of provisions relating to personnel.
Sec. 4. Subpoena authority of certain Inspectors General.
Sec. 5. Corrective responses by heads of certain establishments to
deficiencies identified by Inspectors General.
Sec. 6. Effective date; transition rule.

SEC. 2. ELEVATION OF CERTAIN INSPECTORS GENERAL TO
APPOINTMENT PURSUANT TO SECTION 3 OF THE
INSPECTOR GENERAL ACT OF 1978.

(a) Inclusion in Certain Definitions.--Section 12 of the
Inspector General Act of 1978 (5 U.S.C. App.) is amended--
(1) in paragraph (1), by striking ``or the Federal
Cochairpersons of the Commissions established under section
15301 of title 40, United States Code;'' and inserting ``the
Federal Cochairpersons of the Commissions established under
section 15301 of title 40, United States Code; the Chairman
of the Board of Governors of the Federal Reserve System; the
Chairman of the Commodity Futures Trading Commission; the
Chairman of the National Credit Union Administration; the
Director of the Pension Benefit Guaranty Corporation; or the
Chairman of the Securities and Exchange Commission;''; and
(2) in paragraph (2), by striking ``or the Commissions
established under section 15301 of title 40, United States
Code,'' and inserting ``the Commissions established under
section 15301 of title 40, United States Code, the Board of
Governors of the Federal Reserve System, the Commodity
Futures Trading Commission, the National Credit Union
Administration, the Pension Benefit Guaranty Corporation, or
the Securities and Exchange Commission,''.
(b) Exclusion From Definition of Designated Federal
Entity.--Section 8G(a)(2) of the Inspector General Act of
1978 (5 U.S.C. App.) is amended--
(1) by striking ``the Board of Governors of the Federal
Reserve System,'';
(2) by striking ``the Commodity Futures Trading
Commission,'';
(3) by striking ``the National Credit Union
Administration,''; and
(4) by striking ``the Pension Benefit Guaranty Corporation,
the Securities and Exchange Commission,''.

SEC. 3. CONTINUATION OF PROVISIONS RELATING TO PERSONNEL.

(a) In General.--The Inspector General Act of 1978 (5
U.S.C. App.) is amended by inserting after section 8L the
following:

``SEC. 8M. SPECIAL PROVISIONS CONCERNING CERTAIN
ESTABLISHMENTS.

``(a) Definition.--For purposes of this section, the term
`covered establishment' means the Board of Governors of the
Federal Reserve System, the Commodity Futures Trading
Commission, the National Credit Union Administration, the
Pension Benefit Guaranty Corporation, and the Securities and
Exchange Commission.
``(b) Provisions Relating to All Covered Establishments.--
``(1) Provisions relating to inspectors general.--In the
case of the Inspector General of a covered establishment,
subsections (b) and (c) of section 4 of the Inspector General
Reform Act of 2008 (Public Law 110-409) shall apply in the
same manner as if such covered establishment were a
designated Federal entity under section 8G. An Inspector
General who is subject to the preceding sentence shall not be
subject to section 3(e).
``(2) Provisions relating to other personnel.--
Notwithstanding paragraphs (7) and (8) of section 6(a), the
Inspector General of a covered establishment may select,
appoint, and employ such officers and employees as may be
necessary for carrying out the functions, powers, and duties
of the Office of Inspector General of such establishment and
to obtain the temporary or intermittent services of experts
or consultants or an organization of experts or consultants,
subject to the applicable laws and regulations that govern
such selections, appointments, and employment, and the
obtaining of such services, within such establishment.
``(c) Provision Relating to the Board of Governors of the
Federal Reserve System.--The provisions of subsection (a) of
section 8D (other than the provisions of subparagraphs (A),
(B), (C), and (E) of paragraph (1) of such subsection (a))
shall apply to the Inspector General of the Board of
Governors of the Federal Reserve System and the Chairman of
the Board of Governors of the Federal Reserve System in the
same manner as such provisions apply to the Inspector General
of the Department of the Treasury and the Secretary of the
Treasury, respectively.''.
(b) Conforming Amendment.--Paragraph (3) of section 8G(g)
of the Inspector General Act of 1978 (5 U.S.C. App.) is
repealed.

SEC. 4. SUBPOENA AUTHORITY OF CERTAIN INSPECTORS GENERAL.

The Inspector General of the Board of Governors of the
Federal Reserve System, the Commodity Futures Trading
Commission, the National Credit Union Administration, the
Pension Benefit Guaranty Corporation, or the Securities and
Exchange Commission, in carrying out the provisions of the
Inspector General Act of 1978 (5 U.S.C. App), is authorized
to require by subpoena, from any officer or employee of a
contractor or grantee of the establishment, any officer or
employee of a subcontractor or subgrantee of such a
contractor or grantee, or any person or entity regulated by
the establishment, any records and testimony necessary in the
performance of functions assigned to the Inspector General
under such Act. Any such subpoena, in the case of contumacy
or refusal to obey, shall be enforceable by order of any
appropriate United States district court.

SEC. 5. CORRECTIVE RESPONSES BY HEADS OF CERTAIN
ESTABLISHMENTS TO DEFICIENCIES IDENTIFIED BY
INSPECTORS GENERAL.

The Chairman of the Board of Governors of the Federal
Reserve System, the Chairman of the Commodity Futures Trading
Commission, the Chairman of the National Credit Union
Administration, the Director of the Pension Benefit Guaranty
Corporation, and the Chairman of the Securities and Exchange
Commission shall each--
(1) take action to address deficiencies identified by a
report or investigation of the Inspector General of the
establishment concerned; or
(2) certify to both Houses of Congress that no action is
necessary or appropriate in connection with a deficiency
described in paragraph (1).

SEC. 6. EFFECTIVE DATE; TRANSITION RULE.

(a) Effective Date.--This Act and the amendments made by
this Act shall take effect 30 days after the date of the
enactment of this Act.
(b) Transition Rule.--An individual serving as Inspector
General of the Board of Governors of the Federal Reserve
System, the Commodity Futures Trading Commission, the
National Credit Union Administration, the Pension Benefit
Guaranty Corporation, or the Securities and Exchange
Commission on the effective date of this Act pursuant to an
appointment made under section 8G of the Inspector General
Act of 1978 (5 U.S.C. App.)--
(1) may continue so serving until the President makes an
appointment under section 3(a) of such Act with respect to
the Board of Governors of the Federal Reserve System, the
Commodity Futures Trading Commission, the National Credit
Union Administration, the Pension Benefit Guaranty
Corporation, or the Securities and Exchange Commission, as
the case may be, consistent with the amendments made by
section 2; and
(2) shall, while serving under paragraph (1), remain
subject to the provisions of section 8G of such Act which,
immediately before the effective date of this Act, applied
with respect to the Inspector General of the Board of
Governors of the Federal Reserve System, the Commodity
Futures Trading Commission, the National Credit Union
Administration, the Pension Benefit Guaranty Corporation, or
the Securities and Exchange Commission, as the case may be,
and suffer no reduction in pay.

The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Massachusetts (Mr. Lynch) and the gentleman from Utah (Mr. Chaffetz)
each will control 20 minutes.
The Chair recognizes the gentleman from Massachusetts.

General Leave

Mr. LYNCH. Madam Speaker, I ask that all Members may have 5
legislative days within which to revise and extend their remarks.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Massachusetts?
There was no objection.
Mr. LYNCH. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I rise in support of H.R. 885, the Improved Financial
and Commodity Markets Oversight and Accountability Act. This bill,
introduced by my friend Representative John Larson of Connecticut,
would enhance the independence of Inspectors General at key financial
regulatory agencies.
Right now we have an inconsistent system where some financial
agencies like the FDIC have an Inspector General appointed by the
President and

[[Page H6285]]

confirmed by the Senate, while other large and important agencies like
the SEC have an Inspector General who is appointed by and reports to
the head of the agency they are supposed to be investigating.
This bill would create a more consistent and independent structure by
elevating the Inspectors General at five financial regulatory agencies
to be Presidentially appointed and Senate confirmed. This will enhance
their independence from the agencies they are overseeing.
This committee has worked on Inspector General reform for the past
several years now, and one of our key findings is that the Inspectors
General have to be independent from the agency they are supervising if
they are going to be effective. The situation at some agencies, where
the head of the agency hires and fires the Inspector General and sets
the office budget for that Inspector General, does not give these IGs,
the Inspectors General, the independence they need.

{time} 1515

Making the Inspector General a Presidential appointee confirmed by
the Senate not only gives them independence from their agency
management but also gives them more stature to come directly to
Congress with any problems that they encounter.
Congresswoman Diane Watson, the chairwoman of the Oversight and
Government Reform Subcommittee on Government Management, held a hearing
on this bill where it had the support of the GAO. At the hearing, the
agency Inspectors General made some suggestions on improving the bill,
which has been incorporated in an amendment adopted at the committee
markup. The amendment specifically clarifies that the Inspector General
and the Inspector General staff retain their existing pay and personnel
structure. It also clarifies and strengthens the subpoena authority of
these Inspectors General, and it requires the heads of the agencies to
report to Congress on actions they have taken in response to Inspector
General recommendations.
Inspectors General have the unique responsibility of reporting both
to the President and to Congress. Congress has to make sure that the
Inspectors General have the legal authority and tools they need to
continue their roles as nonpartisan, professional, honest brokers; and
this bill, I believe, does that.
I urge all Members to support H.R. 885.
I reserve the balance of my time.
Mr. CHAFFETZ. Madam Speaker, I yield myself as much time as I may
consume.
As we all noted this year, oversight and accountability are vitally
important, and the Inspectors General are on the frontline of this
effort. This bill will enhance the independence and effectiveness of
the IGs at several critical institutions.
Currently the IGs at the Commodity Futures Trading Commission, the
National Credit Union Administration, the Securities and Exchange
Commission, the Pension Benefit Guaranty Corporation, and the Board of
Governors of the Federal Reserve System are appointed and can be
removed by the head of the institution. This structure could limit the
IG's independence. This bill will make these IGs Presidentially
appointed and Senate-confirmed, reducing the risk of undue influence by
the heads of these institutions. Although additional Senate-confirmed
positions are unnecessary in most cases, it is important that we
preserve and enhance their independence within these organizations. I
want to thank our colleagues for working with us to improve this bill
and making several important changes.
We now ensure that the positions covered by this bill will not suffer
a reduction in pay and the individuals will remain on par with
similarly situated senior individuals at the institution. More
importantly, we also provide IGs with subpoena authority, an important
tool for oversight and accountability, as we all know from our work on
the Oversight Committee. Finally, the bill requires the regulatory
agencies to take some action on the deficiencies identified by the IGs.
These agencies cannot simply ignore the findings.
Madam Speaker, given the enormous role these institutions play in our
Nation's financial sector, it is important that the IGs have the tools
and independence to ensure that these institutions operate above
reproach.
I urge my colleagues to support this measure.
I reserve the balance of my time.
Mr. LYNCH. Madam Speaker, I want to thank the gentleman from Utah for
his hard work on this bill and his ongoing commitment, and it has been
that case on much of the legislation that comes before our committee
for his bipartisanship and willingness to work very hard on these
issues. I consider it an honor to work with him.
I would like to submit for the Record an exchange of letters between
the Honorable Collin Peterson, chairman of the House Committee on
Agriculture, and the Honorable Edolphus Towns, chairman of our
Oversight Committee, with respect to their concerns regarding this
bill.

Committee on Agriculture,

Washington, DC, June 8, 2009.
Hon. Edolphus Towns,
Chairman, Committee on Oversight and Government Reform,
Washington, DC.
Dear Chairman Towns: I write to you regarding H.R. 885, the
Improved Financial and Commodity Markets Oversight and
Accountability Act.
H.R. 885 contains provisions that fall within the
jurisdiction of the Committee on Agriculture. I recognize and
appreciate your desire to bring this legislation before the
House in an expeditious manner and, accordingly, I will not
seek a sequential referral of the bill. However, agreeing to
waive consideration of this bill should not be construed as
the Committee on Agriculture waiving its jurisdiction over
H.R. 885.
Further, the Committee on Agriculture reserves the right to
seek the appointment of conferees during any House-Senate
conference convened on this legislation on provisions of the
bill that are within the Committee's jurisdiction.
I look forward to working with you as we prepare to pass
this important legislation.
Sincerely,
Collin C. Peterson,
Chairman.
____

Committee on Oversight

and Government Reform,

Washington, DC, June 8, 2009.
Hon. Collin C. Peterson,
Chairman, Committee on Agriculture,
House of Representatives, Washington, DC.
Dear Chairman Peterson: Thank you for your letter regarding
the Committee on Agriculture's jurisdictional interest in
H.R. 885, the ``Improved Financial and Commodity Markets
Oversight and Accountability Act''.
I appreciate your willingness to expedite this legislation
for House floor consideration, and agree that certain
provisions of the bill are of jurisdictional interest to the
Committee on Agriculture. I acknowledge that by forgoing a
sequential referral, your Committee is not relinquishing its
jurisdiction and I will fully support your request to be
represented in a House-Senate conference on those provisions
over which the Committee on Agriculture has jurisdiction in
H.R. 885.
I will submit a copy of your letter and this response as
part of the Congressional Record during consideration of the
legislation on the House floor. Thank you for your support of
H.R. 885 and your cooperation as we work towards enactment of
this important legislation.
Sincerely,
Edolphus Towns,
Chairman.

Madam Speaker, I would now like to yield such time as he may consume
to the lead sponsor of this measure, a very diligent Member of Congress
and a part of our leadership team, Mr. Larson of Connecticut.
Mr. LARSON of Connecticut. I thank the gentleman from Massachusetts
(Mr. Lynch). Chairman, you have done an outstanding job, along with the
gentleman from Utah (Mr. Chaffetz), in outlining what this bill does.
Before I begin, because this has been such a nonpartisan effort in so
many respects and a commitment, first and foremost, on the part of the
Oversight Committee to take a bill, whose genesis evolved out of the
last session, and make it a better bill and perfect it, to those ends,
along with Mr. Lynch and Mr. Chaffetz, I would especially like to thank
Chairman Ed Towns. Mr. Towns has done such a great job in marshaling
this bill forward, along with Diane Watson.
I would further like to thank, on their staff, Mike McCarthy, Adam
Bordes and Bert Hammond of the Oversight and Government Reform
Committee; Austin Burns of the majority leader's staff; and Barney
Frank, Mel Watt and Dennis Moore for their ongoing efforts to reform
the regulation of our markets and financial sectors and for their input
into this legislation; my good friend Todd Platts, who also assisted in
this; and Frank LoBiondo, who was a cosponsor of this

[[Page H6286]]

bill almost 2 years ago. I especially want to single out for their
efforts two reform-minded freshmen who have come to Congress, John
Boccieri of Ohio and Glenn Nye of Virginia, and especially to Amy
O'Donnell of my staff and Jackie Sheltry.
We refer to this bill in the short form, just frankly, as providing
an independent Inspector General for the financial services industries
that are in such desperate need of this oversight, and I think the
chairman outlined it well. The genesis of this bill actually took place
from conducting a public forum back in my district and listening to
former Republican mayor of South Windsor, Connecticut, John Mitchell,
and our attorney general of the State of Connecticut, Richard
Blumenthal. When we were looking at speculation in the market and what
was happening with the CFTC and oil commodities, when we realized that
the more and closer we looked at who was regulating these agencies, it
was somewhat a case of the foxes guarding the henhouse.
Many have asked when we went home over this break and since the
financial collapse on Wall Street, people have been astounded in trying
to answer the question of, how could it be that Bernie Madoff was
scamming thousands of innocent Americans into giving up their life
savings? Where were the regulators? Where were the agencies? Where were
they when speculators were wreaking havoc on the oil markets?
I can think of no sector where honesty, independence and transparency
are needed more right now than in our financial and commodity markets,
yet the regulators of these markets have been allowed to work with no
oversight of what they are doing and whether they are fulfilling their
mission to protect the American consumer. That's because the Inspectors
General, as the chairman outlined, who should be working on behalf of
average Americans, were working for the heads of the agencies they
should be overseeing. As I said earlier, this is a classic case of the
fox watching the henhouse, and it's having a profound impact on the
work of our regulatory agencies.
We have done a review, and this is something that we pointed out at
the committee. The review found that offices of the Inspector General,
that independent offices where they are appointed by the President and
approved by the Senate, completed over 117 investigations in 2008 while
their nonindependent counterparts completed just 12. That's 117 versus
12. The Inspector General of the Commodity Futures Trading Commission
released information, showing that despite the recent economic crisis
and the turbulence in the oil market, his office completed just two
investigations and updated one from October of last year through March.
Simply stated, an independent watchdog ensures better performance from
a government agency.
I commend the committee because what they've done is provide greater
accountability and transparency. I also commend United States Senator
Dodd, who will also be taking this bill up on the Senate side as well.
Again, I thank everybody on the committee and especially Ed Towns for
his hard work and dedication to make sure this bill got to the floor.
Mr. CHAFFETZ. Madam Speaker, I want to also echo my compliments to
Chairman Towns for his bringing this forward; Ranking Member Issa who
has a keen interest in this area for his work; and the Chair of the
subcommittee, Mr. Lynch, who is truly a gentleman and a great person to
work with.
I also want to put comments in for the good men and women throughout
our Federal Government that are working in all of these types of
functions. I was excited to participate on the Oversight and Government
Reform Committee because of the tremendous workload that they have.
There's a great expectation from the American people that we deal with
their money fairly and honesty, that we make sure that every dollar is
accounted for; and we've seen too many mishaps where dollars have been
overspent or overused. Certainly as we look at what is going to be,
surely, the single-largest tax increase in the history of the United
States with the so-called cap-and-trade, as the Democrats move this
bill forward, if it were to pass, literally hundreds of billions of
dollars taken out of the pockets of Americans all across the country
that will be spent on who knows what, we have got to make sure that
every single one of those dollars is accounted for.
Even though I voted ``no,'' this body passed a $1 trillion stimulus
package, again, pulling $1 trillion dollars out of our economy, pulling
$1 trillion out of Americans' pockets, handing it out to somebody else,
bailouts and the rest of it. We need to make sure that the independent
auditing, the people who are involved in oversight and government
reform at every agency across the Nation throughout our government are
doing their job, paying attention and making sure that every dollar is
accounted for.
Having no other speakers, I will yield back the balance of my time.
Mr. LYNCH. Madam Speaker, in closing, we would like to reiterate our
strong support for H.R. 885 and its lead sponsor and champion, Mr.
Larson. Again, we appreciate the great work being done by Ed Towns, the
full committee Chair; Mr. Issa, its ranking member; and the gentleman
from Utah, because this will increase the independence of these
Inspectors General at financial regulatory agencies at a time when we
need these internal watchdogs to be more effective than ever. We do
appreciate the work that is being done by our Inspectors General and
their staff, investigators and researchers. They work very hard for us.
They do work that is not often appreciated, I think, on behalf of the
American people; and this will, I think, allow them a greater level of
independence to do the job that needs to be done. So I urge my
colleagues to join Mr. Larson and all of us in supporting the passage
of this measure.
Mr. MOORE of Kansas. Madam Speaker, I rise today to express my
support for H.R. 885, the Improved Financial and Commodity Markets
Oversight and Accountability Act. The bill is sponsored by my friend
and colleague from Connecticut, Congressman Larson, and I commend his
leadership on strengthening oversight and accountability to our
government.
As I have told him personally, I appreciate the hard work Congressman
Larson put into crafting H.R. 885, a bill to reform several Offices of
Inspector General in an effort to bring a greater level of independence
and transparency to the agencies they oversee. And as the sponsor of
the bill knows, I initially raised a few concerns with the bill to make
sure we maximize the efforts of these Inspectors General to provide
strong and tough oversight.
As a former District Attorney, the focus of any investigation should
always be quality over quantity. Inspectors General should not focus on
meeting some meaningless quota of closed cases. Instead, we want our
Inspectors General to uncover waste, fraud and abuse wherever they find
it so the agency they supervise and Congress can promptly address those
abuses.
The House Financial Services Committee, under the leadership of
Chairman Barney Frank and of which I chair the Oversight and
Investigations Subcommittee, will soon be considering a comprehensive
regulatory reform package to overhaul our financial regulatory system.
In that effort, I will be working with Members on both sides of the
aisle to identify any additional oversight protections we need to
implement to ensure our financial system is transparent and protects
consumers, investors and taxpayers. For example, I personally would
like to see better coordination between Inspectors General on a regular
basis to identify waste, fraud and abuse by creating a ``Financial
Inspectors General Council'' where oversight concerns that may have a
broader reach can be identified and corrected quickly.
I appreciate Congressman Larson listening to me and discussing my
concerns. We both agree that we need to move quickly on all fronts to
strengthen oversight of our financial system, and it is in that spirit
that I support this bill that the House is considering now.
I look forward to working closely with Congressman Larson,
Republicans and Democrats to take the necessary, additional steps to
make certain we have an improved oversight structure in place so we
don't have a repeat of a financial crisis of this magnitude.
Mr. LYNCH. I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Massachusetts (Mr. Lynch) that the House suspend the
rules and pass the bill, H.R. 885, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.

[[Page H6287]]

____________________