captioning performed by vitac so that financial institutions can avoid becoming repositories for stolen patrimonies of the country.

that depends on the willingness of financial institutions to do that and to not be the places where the leaders who are stealing money from their own people can put their funds. and that's a -- that is an issue that is, frankly, a difficult diplomatic issue to deal with, to get to generate the agreement that this should not be allowed to take place. there are u.n. conventions in place that address this issue and we are, you know, we pursue the return of assets, as you noted when, you know, when we are asked to do so and when we have the information available to us to try and assist on that. so it remains something that we are focused on. you know, i am sometimes too

candid in acknowledging it's a hard problem. and it's a hard problem because it depends on the willingness of both financial institutions and the financial sectors in which they reside to say that they don't want to deal in these assets. >> it's good news as well. the world bank has a stolen asset recovery effort, the star initiative. there's attention to it but, you're right, this is a work in progress. >> yes, sir. up here in front. >> thank you. you probably have heard of jason sharman, who just published a study where he tried to very quickly do a database of several thousand -- opening several thousand corporate accounts around the world.

he discovered, his conclusion, that the united states was one of the easiest places to open shell companies. he pointed to states like delaware, wyoming, where 2,000 shell companies, i existed in o house alone. my question to you is we love to point the finger at a lot of nations around the world. what can we do about tightening some of the standards that make it so difficult to not only set up the companies but move funds in and out of them over here. >> no disrespect to mr. sharman. i'm not familiar with his study. your point is well taken. and the u.s. has been in our fad of mutual evaluation -- we are supportive of legislative

initiatives that are moving through congress. senator levin has a bill, for instance, that would require the identification of beneficial ownership during the company formation process. we're also working -- we've issued an advanced notice of proposed rule making where we have asked the question in the regulatory sphere of whether financial institutions ought to collect beneficial ownership information during the account formation process, account opening process. this is an issue that we're spending a lot of time focused on, we recognize it as a weakness in our current anti-money laundering, counterterrorist financing regulatory structure. it impedes law enforcement investigations because, you know, they go to try and find

out who's the owner of a particular company and you can't penetrate behind. so, yes, it's an issue and it's an issue that we're trying to address. >> i just want to commend david and his office for the work they've done. they've really led on this. a mutual friend of ours, chip ponzi, has spearheaded his work over the years. i want to commend david and chip for that work. ma'am, right here in the third row, please. i think we'll have time for just one or two more. >> hi there. teresa brown. you mentioned at the beginning when dhs was formed and other changes after 9/11 you lost the law enforcement capacity at treasury department. you obviously have substantial intelligence capability. how do you coordinate with law enforcement agencies for intelligence-driven activities? what's sort of the coordination

mechanism and how does that work? >> we did lose the agency themselves are no longer a part of treasury but one of the things that changed in the period that i was away was the coordination and collaboration among the law enforcement community on both intelligence and the investigative side. and so, you know, the -- juan noted the lebanese canadian bank example where there was a treasury action where we worked extraordinarily closely with the dea, in developing the case, particularly on the intelligence side but also in sort of developing the legal case that we pursued. so we have our coordination, whether it's with dea, fbi, secret service, it's very good.

we have liaisons with many of those agencies who are resident at the treasury department. there's i think a very healthy and robust exchange of both law enforcement information and as appropriate intelligence information. >> and just a fair point, the treasury did keep its criminal investigators from the irs, who by the way led the effort to hunt saddam hussein assets in '03 and '04, in part because they were the sole remaining law enforcement in the treasury that we could direct. that was good, very good. >> let me reinforce that so i don't get in trouble when i get back to the office. irs-ci, the criminal investigative side of the irs we work with all of the time. there's a new head of irs-ci who just started two weeks ago or so and one of the first things that he did was come over to the

treasury department, meet with me, meet with my team and we spent an hour about talking different way has we can coordinate our activities. so it's still a very close relationship, even though irs-ci is still in treasury and the other law enforcement agencies are not. >> gentleman in the far back, who has been very patient and enthusiastic. >> my name is terry murphy. i'm associated with the csi but my day job is i'm an export control and sanctions lawyer. i'd just like to follow up on the immediate question and give you, if i may, a very brief quote from a notice about your regulations that came out yesterday. and here's what it says. headline: new u.s. sanctions against iran and syria have dramatic extra territorial implications. that's from a law firm, not mine, and signed by former

undersecretary of commerce for industry and security. so that's not an overstatement. i'd like to just mention and then stop, the british who used to resist extra territorial actions with great intensity now have a new law on corrupt practices that's probably much more extra territorial than ours, except for this one p. i wonder if you would take this as an opportunity to opine on the breadth of these sanctions, extra territorial actions, not just us but the canadians and europeans -- it was signed by

mario mancuso and -- [ inaudible ]. >> my old job is i was a lawyer. i always have to correct the record when people say what we're doing is extra territorial. it's not. what we do is regulate u.s. finances and u.s. businesses and decide with whom they are able to do business. we don't have any jurisdiction to tell any foreign company or foreign bank what it can or cannot do. we tell our own banks, our own businesses whom they can deal with. i think as a technical matter there is no extra territoriality in any of the authorities that we have been developing, including the new executive order. that being said, there's no question that what we're trying to do is to influence the conduct of entities operating

overseas. and, look, i make no apology for that. if you look at the legislation adopted in july 2010 that essentially says to foreign banks if you're doing business with banks in iran what we have designated for being plif rateors or supporting iran's terrorism, then you can't do business with u.s. financial institutions. we are embarked on an effort to put financial pressure on iran by, you know, by encouraging foreign financial institutions not to transact with these designated plif rateors,

designated terror promoters in iran. we can do that by saying if you want access to the u.s. market, you need to con didn't yourself in a way that we think is consistent with isolating these entities. you know, there's a very, very important objective here. it's one that is shared broadly around the world, which is to address the concerns with iran's nuclear program. that's what the legislation was about. the foreign sanctions evader executive order is specifically focused on iran and syria, two problems that have widespread international agreement in terms of the need to have them addressed and, you know, we are, you know -- on the one hand we are often praised for being

innovative and creative in how we are using our authorities. you know, it has this impact internationally because it's designed to have that. and i think it's, you know, the ultimate test is whether we're going to be successful in helping to achieve our national security and foreign policy objectives through the use of these tools. and, you know, i think the early returns that we're having a good impact. >> david, with that, let me thank you. the scope of our discussion today, including things we didn't even get to that we could have, new technologies, overuse of treasury authority, other things, demonstrate clearly not only is the treasury at the center of these debates but you are and i'm thankful for that.

i'd ask you to join in thanking david for coming. live coverage here on c-span3 today of several hearings. at 10:00 a.m. eastern, the senate subcommittee on primary health and aging hears testimony about efforts to reduce costs of hiv-aids drugs and develop incentives for research sharing. and the senate holds a hearing on human rights. mr. chen is awaiting travel documents to come to the u.s. last week a senate banking subcommittee held a hearing on passing a five-year extension to the national flood insurance program. the program offers homeowners in

flood-prone areas affordable flood insurance and expires at the end of the month. witnesses included representatives from insurance companies, real estate and environmental advocacy groups. this is 45 minutes. what we'll do before we start on this panel is i would like to give ranking member vitter the tonight to say a few words. >> thank you again, mr. chairman. i'll be very brief. i just wanted to underscore really my last point. today is may 9th, the entire program expires after may 31st, 22 days, slightly over three weeks, and we really, really need to act for the good of the country and the economy. and we need to act in a longer term way, not just another band-aid, another short-term extension, which creates and continues an unhealthy level of uncertainty.

and i appreciate the chairman feeling the same way and working very closely with me and others in this regard. i'm going to be doing two things this week that i hope get widespread report. i'll be passing around a new letter addressed to senators reid and mcconnell urging this to be put on the floor absolutely as soon as possible. senator tester and i had the same play on the floor three months ago and it's even more urgent now. secondly, i'm going to be proposing as a floor amendment to the next bill on the floor after the present one, whatever that is, the senate reauthorization bill with some noncontroversial perfecting amendments that have been worked out since committee.

so it looks like that next bill on the floor will either be an fda reuser authorization or small business tax bill. neither of those is highly partisan or highly controversial. which ever comes up i'll be proposing as an amendment with perfecting amendments built into it. i hope we can get a bipartisan cooperation and effort attached to that bill as a means of pushing this forward. >> absolutely. i don't think flood insurance should be controversial or partisan either. it impacts everybody. i want to get started with our next panel, representing a broad cross skri stri report for industry reform of nfip. i thank you for being here ahead of time. dr. david samson is the

president of bci, which represents more than a thousand homeowners, autos and business insurance companies that write over 30% of this nation's property and casualty insurance. dr. sampson served in the george w. bush administration, as assistant secretary of commerce. welcome mr. sampson. >> it's a pleasure to be with you today. i appreciate your leadership on this issue and for the invitation to be here. pci and its members who write about 52% of all the flood insurance with partners through nfip believe it vitally important to the economy. flooding occurs all across the country and we fully support your efforts to pass bipartisan legislation that includes

long-term authorization and meaningful reforms. i'd like to emphasize three key points in my testimony today. it is vitally important to avoid a lapse in the nfip. second, as confirmed by the government accountability office, the program needs meaningful structural reforms. and, third, privatization of the flood program is not feasible under current conditions. let me expand on those a little bit. the first priority of course is to avoid a lapse in coverage. you've already documented your concern about that. more than 5.6 million homeowners, renters and businesses are nfip policy holders and rely on this to protect their property. you've discussed the 12 short-term extensions sense 2008, leading to lapses in coverage when congress has

failed to act. during lapses, flood insurance policies could not be issued or renewed. each time it lapses, a cumbersome and series of special bridging transactions is required from insurers and consumers and the nfip to collect funds. all of this creates significant friction cost for the marketplace and for americans who rely on this important protection. while it is critical for congress to reauthorize before may 31st, the program as it stands needs structural reforms which are addressed in the senate banking committee bill. the nfip is deeply in debt and must transition to a more sustainable path. if a private insurance company held no sur applause and carried $18 billion in debt on add 4 billion annual revenue stream,

regulators would -- for six years running -- regulators would immediately shut it down and the ceo would be fired. yet that's the situation we face with the nfip program. two pci studies revealed they're providing government subsidized flood policies of roughly one third of what the full load risk cost would be in the private sector. the subsidies for repetitive loss and high risk are the greatest. the third point i wanted to make is while the program needs to be reauthorized and must be reformed, it's important to know discussions on privatizing the program are unfeasible under the current conditions. current nfip rates would need to be closer to true market rates before any meaningful discussion related to the private industry

taking on flood risk can take place. 2011 pci study estimated if the private market were to underwrite the flood peril, policy holders in flood plains could see rate increases up to 200 to 400%. proposals to end the nfip are unrealistic due to the unwillingness of homeowners to purchase coverage, even under mandate. we will do anything we can to help this overwhelmingly bipartisan piece of legislation make it through the senate in time to avoid the lapse and pursue the structural reforms you have proposed. >> thank you, dr. sampson. we appreciate your testimony and we'll have questions after we get done with the testimony of the other panelists. thank you for your perspective and for your testimony.

next we have mr. jon a. jensen, serves as government affair committee chairman of the independent insurance agents and brokers of america and as president of corel insurance group. he is currently the south carolina national director for independent insurance agents and brokers of america. he is the past chairman of the independent insurance agents and brokers of america's insure pac board of trustee. i want to welcome you today, mr. jensen. you may proceed with your testimony. >> thank you very much. i am pleased to be here today on behalf of the independent insurance agents and brokers of america to present our perspective. we commend the subcommittee for looking at this very important issue. i am president of corel

insurance group. . we also write nearly 3,000 nfip policies. since 2001 i have served as government affairs committee chairman for the big i, the largest trade association of independent insurance agents and brokers and we represent a nationwide network of more than a quarter million agents, brokers and employees. many of these agents serve as a sales force with nfip working with write your own compapolicy. the insurance company continues to be largely unable to underwrite flood insurance because of size of these losses.

prior to the program in 1968, virtually the only financial remedy available to consumers after floods was federal disaster assistance. since then the nfip has filled the private market void and created a reliability safety net for people whose properties have suffered damage. with this said we do recognize that the program is far from perfect, which is made all the more clear by the devastating 2005 hurricane season. the current $17.2 billion debt reveals some of the deficiencies of the program. congress should shore up the financial situation. i want to be very clear -- the big i strongly supports a long-term extension and reform legislation. there are important reforms that must happen to the program in order for it to be put on stable

footing. in particular the big i for many years has asked congress to begin phasing out subsidies found in the program. we are pleased that chairman johnson's legislation contains proposals to do just that for many properties. additionally the big i welcomes the legislation's proposal to increase the amount fema can raise premiums in any given year. currently fema can only raise premiums by 10% on mi property. the legislation would propose to increase this to 15%, which would allow the program become more financially sound. the big i would always prefer to utilize the private market. however, we have yet to see evidence that the private marketplace is any more prepared or capable of underwriting flood risk today than they were in 1968. that said, we welcome the study on privatization options found in the legislation and we'd be happy to discuss any ideas at

increasing the private market's role going forward. finally, i'd like to touch on one of the most important things found in the reform legislation and that is the long-term extension. as you know, for the past six years congress has not passed a long-term extension of the program and instead has opted to pass numerous short-term extensions. this has been done mainly so that congress could continue efforts that reform legislation. while the big i fully appreciates the passage of each of these short-term extensions, it should be noted that there is increasing frustration both in the marketplace and among our consumers with the program and its complete lack of stability. a five-year extension in the nfi pichlt is of more importance to you than i can stress. we strongly urge the senate leadership to. >> as you know this week a number of organizations from

very industries are taking part? a flood the hill week. i'm happy the realtors, pci and nature conservancy are part of that effort. hopefully we can make progress this week. i thank the economy for giving me this opportunity. we look forward to working with you on common sense legislation. >> i appreciate the kudos and it's good to see a guy who spells jon right. thank you. appreciate your testimony. mr. maurice veissi is president of the national association of realtors representing 1.1 million members involved in all aspects of residential and commercial real estate industries. he was elected president of the florida association of realtors in 2002 and was named realtor of

the year in 2003. i want to welcome you here today mr. veissi and continue with your testimony, please. >> chairman tester and senator vitter and members of the subcommittee, thank you for the opportunity to testify on this urgent need for a five-year reauthorization of the national flood insurance program. i'd be remiss if i didn't bring you these salutations from our past president of the louisiana association of realtors and all the 5,000 plus realtors in louisiana who appreciate senator vitter your involvement and commitment to this issue and from members who said to tell you are they are very much pleased and very much committed to what you're trying to accomplish here on the hill. my name is mo veissi, i'm the president 2012 for the national associates of