military, professional soldiers who seek to remake their army into a respected defender of the nation, not a tool of corruption and foreign domination. it is time for leaders in the army to join the people and build a new, prosperous, free and yes, independent burma. in a blink of an eye, burma can reclaim its sovreignty and be put on the path of national reconciliation, democracy and yes, prosperity. the military in a new burma, as our professional armies in the democratic nations of the world will be a respected institution, not a tool of repression and corruption. the time has come to choose. let the burmese, the ethnic peoples of burma, the business and military leaders who long for legitimate and honest government and all the other patriots there, let them have the courage to step forward and

join together and retake their country. the time is now. this is a great moment of opportunity. people of burma, do not let this moment pass by. the world will celebrate with you as you recapture your nation. we are on your side, to the people of burma. thank you. . the speaker pro tempore: the gentleman yield back. for what purpose does the gentlewoman from texas rise? without objection. ms. jackson lee: thank you very much, mr. speaker. today, a giant of a human being , a light at the end of the tunnel, a calm voice in the midst of a storm, but yet a

woman who could create a storm around the issues of freedom and justice, passed away from this world and from our hearts. dr. dorothy -- dr. dorothy irene heights died today and i want to join with my colleagues and as well, the honorable diane watson who will have a special hour in tribute to dr. heights tonight, but i want to take the time to make sure that every aspect of our record today reflected on her loss. we lost, of course, dr. benjamin hooks who we paid tribute to as well. but in this life, there are few giants who reach down to talk to those who are still learning. dr. dorothy height was that woman. she is the only woman that was

present at the 1963 historic and powerful march on washington. she stayed steadfast in her meetings with franklin delano roosevelt. and, of course, she was successor to the national council of negro women. the only building on pennsylvania avenue owned by african-americans, and in this instance, african-american women, is the office of the national council, headed by dr. dorothy height. historic presence on pennsylvania avenue just a few blocks from the white house, what a statement of power. this afternoon as i landed here in washington, i went to that building to pay respects. i just simply had to be in her presence in this building. to be able to see her pictures and her face and to see and hear those who were gathering, to be able to honor her.

the whole plaza is part of that building. as i walked in, i heard the story that a homeless person came in the building to provide some flowers. to say thank you to dr. height for taking care of them. the men and women that surrounded her building, tragically, who are homeless, yet they knew of this giant of a woman who cared enough to let them -- let it be known that they were human beings. for 33 years, from 1944 to 1997, dorothy height served on the staff of the national board of the ywca and of course, she continued her service through the national council of negro women. i'm proud to be in the chapter, the dorothy height chapter of the national council of negro women in houston, texas. in 1952, dorothy height lived

in india, an african-american woman, she was at the delhi school of social work and through her work, with the ywca, she worked in india and burma and other places. she was subsequently elected the fourth national president of the national council of negro women. in 1960, dr. height was a woman team member, leader, in the united civil rights leadership, along with dr. martin luther king. with roy wilkins and john lewis, our colleague, but remember what i said, the only woman. what i've come to know dr. height as a member of congress and before, is that she is a woman that can speak in a resonating fashion. at the drop of a hat you can turn to her and say, dr. height, can you give us some remarks. when she finishes, you feel you

can fly like the eagles fly. she has given you words that will capture your heart and spirit. you say, i will be a fighter for justice. a distinguished woman a hat-wearing woman, but one thing about dr. height, she was a woman of dignity. but she never ran away from a fight for justice. she knew how to be an agitator and protester but she also knew how to be loving. the many things we can attribute to her include her work in the international tribunal of the international woman's year. she's won so many awards and i wanted to come to this floor tonight to be able to say dr. height, there will be many more words that will come on your passing but all i can say tonight is, we love you, and may you rest in peace. >> the gentlewoman's time has expired.

mr. defazio of oregon. ms. foxx from north carolina. for what purpose does the gentleman from new york rise? without objection. mr. rangel: i thank the chair for giving me this opportunity. i want to thank ms. jackson lee for her remarks and i thank my colleagues for giving me the opportunity to speak out of order. the reason i rise is there are very few people who have been active in the civil rights movement that -- they all came after dorothy height. she was there before adam powell, dr. martin luther king,

jim farmer and all the great civil rights leaders that have made the struggle. she's been a confidant from franklin roosevelt to president obama and all the presidents in between. she gave so much of herself without even talking about color, without just talking about women, but most of all in talking about humankind. she was a true believer that if america really did what it was supposed to do to the brothers and sisters and the citizens that made up this great country, then fairness and equity would determine that all people are truly treated equally. and even though she wasn't born in the city of new york, we are so proud she went to new york university, even though she was turned down with a scholarship at bernard college, that she stayed there and worked in our harlem ymca, that she was confidant to adam clayton powell at his church and

counseled his father who was pastor before him. time is beginning to record that there's been a lot of people that struggled to make this great country all she can be and when the final word is written, there's no question in my mind that dorothy height will not just go down as a black civil rights leader. she will go down as a great american who recognized that bringing together this country, black, white, jew, gentile, catholic, and protestant, by bringing this all together, she has indeed made this a better world. she's made it a better world because she's made this a better country. mr. speaker, i yield back the balance of my time. the speaker pro tempore: the gentleman yields back. under the speaker's announced policy of january 6, 2009, the

gentleman from california, mr. gare man dee, is recognized for 6 -- mr. garamendi is recognized for 60 minutes as the designee of the majority leader. mr. garamendi: mr. speaker, i request permission to engage in a colloquy with my colleagues. mr. speaker, tonight, we'd like to focus on the great trauma and pain that americans are suffering from. the -- we could start with it looking like that but if you turn this around, you can see what's happened over the last two years. americans are in a world of hurt. i recall so clearly in california the area i represented, actually, the entire state, as i would travel around, we would talk to people who would say that they were in the real estate business, they were buying houses, and my wife

and i, as we would drive to work, she would often say, how can it be? they don't have any money? what's going on? what was going on was the great scam and great fraud of this century. and the result is seen so clearly on this chart. beginning in the year -- in december of 2007, there is actually a little uptick in jobs during that bush administration year and then came the crash. and things came down around all america and we see the fall -- falloff in jobs from december of 2007 until the change of administrations in 2009. some 700,000 jobs were lost in december and january of 2008 and january of 2009. then we had a new administration. we began to turn things around. joining me tonight are members

of congress that were here in that period of time, who were engaged in the key pieces of legislation. the financial institutions literally were on the verge of collapse and so in december, and in november -- in december and november of 2008, the troubled asset program, the tarp program was put in place. the result of that was ultimately a stabilization, nearly $400 billion was transferred to the banks, the big wall street banks, some $200 billion, nearly $200 billion is still there. and to this day, those banks have neglected main street. they've taken care of themselves. but even so, we've seen as a result of the democratic party's legislation and the work of my colleagues, we've seen a gradual and steady improvement. the job losses began to tail off and ultimately, now in

2010, in february and march, we've actually seen an increase in the number of jobs, no longer the decline that's so paralyzed this nation. why did it happen? what was it all about? and what can we do about it? joining me tonight, as we discuss this issue, is five legislators, members of congress, who have played key roles in the passage of legislation, that have set things straight and have reined in wall street. first let me introduce from the great state of new jersey, mr. andrews. please share with us your experiences and the legislation that you and your colleagues are so much involved in. mr. andrews: i thank my friend for yielding. mr. speaker, i know that tonight many americans are going to put their head on the pillow and have a very restless and maybe sleepless night, again.

because tomorrow's going to be another day of trudging around with a resume no one seems to want, maybe they're concerned that the -- that tomorrow will be the day the final foreclosure notice arrives in the mail. tomorrow may be the day they have to pull the plug on their small business they struggled so hard to sustain. this problem began to metastasize, this cancer began to grow in this country in the summer of 2007. when the days of irresponsibly cheap credit and easy credit came to an end and the bubble began to burst. the part of the country i represent, between labor day of 2007 and labor day of 2009 we lost about 36,000 jobs, just evaporated, the way eight million jobs evaporated around

this country. now the president took office in january of 2009. he inherited what i believe was the worst economic crisis since the great depression. and we decided to act to try to take advantage of it and put some people back to work, building highways and roads and bridges, cut taxes for small businesses to buy a laptop or truck or piece of equipment. had a substantial tax cut for just about every family in the country, 98.5% of american families. . and these steps, although i believe they were steps in the right direction, opposed unanimously by the other side of the aisle, have taken us in a better direction but not enough. in my area of those 36,000 jobs we lost between labor day of

2007 and labor day of 2009, we have gotten about 16,000 of those jobs back since labor day of 2009. so between september of 2007 and september of 2009, we lost 36,000 jobs. from labor day of 2009 to the present, we gained about 16,000 of them back. i worry, mr. speaker, tonight and i say to my colleague as well that one of the reasons we haven't gotten enough of those jobs back is the credit crunch in this economy. i hear from entrepreneurs, large and small, people running stores and factories and software companies that they're profitable, they have collateral, they have a track record of paying their bills on time, but they cannot get credit. they cannot get the loans that they need to make their businesses grow. this lack of credit is rooted in

the lack of trust. and this lack of trust is rooted in the lack of confidence. and this lack of confidence, without a doubt, is rooted in the failure of the regulatory system to properly regulate the financial system and assure the investor and american people they are getting a fair deal. now, this house, late last year, passed legislation that would fix that problem, that would have some even-handed regulators look at the system that was once again petering on the brink of collapse that if you lend money, would have to have skin in the game. you can't have one industry that makes a profit by originating loans, but doesn't collect any of them and another industry that is solely responsible for collecting the loans that doesn't originate them. and the legislation said if these steps fail, the next time there has to be a bailout of the

failure, it won't be paid by real estate agents and teachers and truck drivers. it will be paid by the people who created the mess in the first place. now, a version of this legislation is being considered by the other body. and i know that the rules do not permit us to comment on the affairs of the other body, so i will not. i will simply offer this generic observation. when the health care bill was in its final stages of date debate, our friends on the republican side of the aisle insisted that there be an up-down vote on all aspects of the health care bill, and there was. there was an up-down vote on the underlying vote on the senate bill and the fix bill that occurred. that's the right way to do things, where there is a major question before the country there ought to be an up-down vote.

i hope the other body adheres to that principle. with an issue this significant, with the stakes being so high, i think the american people not only have a right to demand that the problem be fixed, i think they have a right to demand that their represent tives go on record and -- representatives go on record and say yes or no. we say yes to responsible leg regulation. and we would say no to those who would block a vote that blocks the will of the american people. mr. garamendi: the question is, whose side are you on, the middle class, the men and women who are trying to get a job, the men and women working or the side of wall street. you made an interesting point about loans. the american taxpayer gave to the banks some $400 billion to stablize that financial industry

and it was necessary. no one is doubting the necessity of it. every other strilized country in the world shored up their financial institutions and it worked. we want that money back but it's not kming back to the businesses in -- coming back to the businesses in our company. the total lending by u.s. banks fell 7.4%, the steepest drop since the onset of world war ii in 1942. at the same time, there were enormous profits and we'll come to the profits of wall street. many of those profits as a direct result of the money that the american people used to stabilize wall street. we want that back and we want to make it clear. we are on the side of the men and women out there, middle class, main street, that's where we stand. when you spoke to this a moment ago, our colleagues on the

republican side voted know. when it came time to rein in wall street, they voted no. mr. andrews: if the gentleman would yield, that certainly is my recollection as well, but there was opposition to this new rules of the road to the people who drove the economy into a ditch. but i will say this, that at least there was a vote, wasn't there? that the american people got a chance to see where each of their elected representatives stood on the question of new rules of the road for the financial industry. the gentleman from california has served in a lot of levels of public service. he served in the california legislature and served in a lot of governing bodies. is it correct when you are trying to solve a problem, you put it up for a vote? is that what happens? mr. garamendi: that's the american way, if you have a policy issue, you put it to the

legislative body. mr. andrews: when a body sees a serious problem and says we have a plan to fix it, but let's not take a yes-no vote on it, so let a small number of people decide because they have interests and we shouldn't put it up to a vote. is that the understanding the way government works in this country? mr. garamendi: i have seen some of that here recently in washington. apparently, one person can stop legislation and i think it's happened, some 50 times in a certain legislative body. mr. andrews: if the gentleman would yield. it's ironic that -- this congress funds institutes to help build democratic institutions. i'm glad we do.

it's kind of ironic that in the context of doing that, we have had fiascos where on two occasions, one person has said that extending unemployment benefits to people in grave need can't even be voted on. and we have a situation where a minimum right -- minority is going to take a position that we can't vote on fair rules to protect the american consumer. i thank the gentleman and i'm honored to serve in a body where we do take votes and have majority rule and we do get business. mr. garamendi: it has been a pleasure to serve here with you, mr. andrews and deal with these fundamental issues. we were talking a moment ago about the lending to small businesses and the fact that the

big u.s. banks have reduced it. if we look at the 22 wall street firms that got the most of the bailout, they have reduced their small business lending by $12 billion in last year in 2009. i have now been joined by our colleague from the great state of vermont, mr. peter welch. if you would, i would yield to you. mr. welch: i appreciate very much you having this hour to talk about wall street. you know, there is a couple of things about it that are obvious to everybody, both sides of the aisle. the salaries are out of control. $145 billion in bonus pool to the banks after they have been bailed out by the taxpayer, it's not acceptable. everybody, i think on both sides of the aisle is concerned about greed being too much part of the culture on wall street. on that we agree. but the threat, the long-term is

lamentable as the greed is, as unacceptable as the $145 billion in bonus money is, what goldman sachs and others are doing is destroying what banks are about. our american economy needs a financial sector that's strong and vibrant but that lends money to entrepreneurs, to buses that are going to create new products and allow manufacturing to occur in this country, to families that are trying to buy homes. what wall street has done and goldman sachs in this recent case about the filing of a s.e.c. lawsuit, highlights that they have gone from being an agency, an entity that lends money, to a gambling casino. and let's talk about the structure of this deal that is the subject of the s.e.c.

litigation for fraud charges. this is a situation where a hedge fund investor who figured the housing market was going to go south, put his own bets against the housing market, but asked goldman sachs to create an investment vehicle that was not distributing mortgages, it was not originating mortgages. it was just creating a pool where one side of the transaction bet that the underlying securities would go down in value and then other parties bet that they would go up in value. you might say, well, they are just betting. and you know what? that's true. but what they're not doing is investing. what they're not doing is lending. and as these debt obligations accelerate out from one buyer, one seller, one buyer, one seller, at the end of the day or end of the month or earned of

the year when the music stops and someone doesn't have a chair to sit in, it's the taxpayer left holding the bag. there is a vast acceleration of risk with no investment in any productive activity. not a sinkle mortgage was created. not a single business was financed. not a sinkle -- single company got venture capital. what is the social purpose that is achieved by allowing this type of casino gambling to occur with the sanctions of law and ultimately with the backstop of the taxpayer? so what this whole challenge to us is is not just about the personal habits in overreaching on greedy salaries that many of those folks have on wall street. and it is even more about

getting our taxpayer money back, it's about are we going to have a banking system that is going to be there to lend money to folks, businesses and entrepreneurs that need it and about creating jobs. i want to contrast the goldman approach with the banks in vermont. we have community banks and i know you do in california as well, ms. dahlkemper does as well. there is one in st. albans and go in that big lobby, there is a desk that is slightly bigger than the others, it's the president of the bank. he is sitting right there in the front hall. and anybody in st. albans who wants to talk about a car loan, service, checking account, they can talk to him right away. he feels good if his bank has made a loan to a farmer, family

or small business. you know what? that's the culture that i value and the americans value. the goldman culture is take as much as you can get. i yield back. mr. garamendi: it seems to be profit before people. profit before business. and for those of us in the congress, it's a question of where do you stand. do you stand with that community bank in vermont or stand with the big wall street banks. i have been there three weeks when the house took up the wall street reform. and i was really surprised. i thought that everybody must understand the necessity to rewrite the reform package and rules of the road so we don't have another collapse. i know the democratic side of the house voted for those ry forms and on the republican side of the house, very, very few voted for those reforms.

the question was clear to me, where do you stand. we were standing with reform and reining in wall street and our republican colleagues did not want to go there. so what does it mean for western pennsylvania? let me call upon the the gentlewoman from pennsylvania, ms. dahlkemper. you were here, how did this transpire? what took place? mrs. dahlkemper: i thank the gentleman from california for yielding. i just arrived back in washington today after a few days back in the district and i spent a lot of time with my dairy farmers and many of my different members of the agricultural community and our colleagues from vermont and california and you have many dairy farmers in your states also, and they're struggling. struggling to get the loans they need. they have had a double whammy. decrease in factors. but when they go to the banks, the banks' hands are tied and

the banks' hands are tied because of what happened on wall street. . it's because of the greed and recklessness, and i don't think we use that word enough, greed, on wall street. we need to protect farmers, small businesses, our entrepreneurs, from that greed of wall street. i was here when we voted for that piece of legislation, the wall street reform and consumer protection act and actually unanimously our colleagues on the other side of the aisle voted against that bill. yet it was something that really is going to ensure the protection of our farmers and small business owners. i'm a small business owner. our company every year depends on that line of credit. from our community bank an we have a good relationship as our colleague from vermont talked about, that relationship that our community banks, our hometown banks, they're doing the job we expect them to do.

on wall street, it was different. then they get the bailout. these figures on your graph right there are fairly shocking in terms of wall street paying billions. when my farmers are getting up at 4:30 in the morning to milk cows, knowing they're actually losing money every day. they're just trying to find a way to stay afloat. yet these other individuals on wall street are making billions. what we need to do is enforce the laws, enforce rules that will keep the big banks from making bad decisions and betting against our country, betting against homeowners and our country and ensure that taxpayers never again have to pay for these bailouts of financial institutions that were really too big to fail and we had to do what we had to do, to keep our financial system rolling. the future is what we're looking at here. so we've got, as you've got up there now, the wall street squeeze, the small businesses who are still struggling, as has been mentioned, to find those loans to first of all

keep their businesses afloat, whether it's a farmer or manufacturer or someone who has a retail store or whether to add on, maybe they want toin crease their business right now but can't find that loan. this all goes back to what happened on wall street a system that benefited the special interests, the lobbyists and the big banks on wall street. so i was very proud to vote for that piece of legislation. we need to get that piece of legislation voted on in the other body and get it out so we can protect those in pennsylvania's third district, those in california, vermont, and across this country who are just out there working hard every day, trying to make a living, trying to provide for their families. financial accountability, that's what we're looking for here. i appreciate the gentleman bringing this forward tonight. >> thank you very much for that perspective of agriculture. i've been in agriculture all my life, run a ranch and i know that the men and women that are agriculture in california, they need to be able to finance their operations.

these are not easy times. they need to extend their credit. they have in the past but they really need that credit. what we've seen very, very clearly in the last year is that wall street is interested in profits. i put this one up, but here's the one -- this makes me mad. this is what really upsets me. we're looking at 2007, the $137 billion of bonuses for wall street executives. 2008, that was in the midst of the great crash, it came down. to zero? after they closed this -- caused this crisis after they lost trillions of dollars in retirement funds, the value of homes collapsing? they still rewarded themselves with $123 billion in bonuses. then in 2009, as we began to come out of this, instead of lending $145 billion to your

farmers, to your dairy men, to the men and women that want to manufacturer and create jobs, no, no, they gave it to themselves. $145 billion of bonuses. how did they manage to do this. well they took the troubled asset relief money and turned it around, stabilized the companies, which is all to our benefit, but then instead of using that money to restart the american economy, instead of using that money to make loans to the small businesses and others across america and to help people who are losing their homes with their mortgages upside down, no, they decide they needed $145 billion of bonuses. mr. welch, who was here a few moments ago, had the right idea. he said, tack these bonuses and send that noun main street. that's where i'm coming from. and i think that's where the american people are. on the other hand, our friends on the other side of the aisle,

no, they don't want to do that. the question for americans is this. where do you stand? who are you fighting for? for main street, for working men and women of america? or are you fighting for wall street? it's very clear, since i've been here, that the democratic side of the aisle is fighting for main street and the men and women that are working. i'd like now to just take a second and ask unanimous consent that all members may have five legislative days in which to revise and extend their remarks, including extraneous material on this subject matter. now i'd like to turn to a colleague of mine, who i've had the pleasure of working with for many, many years. she was the chairperson of the california state senate banking and finance committee and now serves on the financial institutions committee here in the united states congress. the gentlewoman from the great

state of california, jackie speier. ms. speier: thank you. i thank the gentleman from the great state of california. you know, today we had a hearing in financial services committee in which we looked at the -- sort of an autopsy of lehman brothers. lehman brothers is particularly problematic for california but also for many other states and local jurisdictions because so many of these local jurisdictions had money invested in what were investment-great instruments atleeman -- investment-grade instruments atleeman's. and when lehman's went bellyup they lost everything. in san mateo county, $100 million just gone. even though it was prudently invested in investment-grade investments in lehman's. many developments that were supposed to take place didn't

happen. it was interesting today because mr. fold, the former c.e.o., said lehman brothers was risk averse, ironic when a company had $20 billion or $30 billion that basically just evaporated overnight. i think it's important as we discuss this issue to take us back to how did we get to where we are today? how did we get to a place where everything came crashing down, and i'd like to just point to the cracks in wall street which i think explain really well, if i get it right side up, what actually happened. if you recall, this was before our time, certainly, but in the 1930's, the glas-see gell act was passed by -- the glas-

steigel act was passed, it said never again is this going to happen because we're going to keep the banks, insurance companies and firms all separate. there's going to be a wall to separate them that worked perfectly for almost 60 years. then all of a sudden in 1996, wall street firms came a-calling and they came a-calling with, oh, please, let us just get involved a little bit. let us just become financial supermarkets. so in 1996, the federal reserve reinterpreted the act, several times, eventually allowing bank holding companies to earn up to 25% of their revenues in investmentback ba -- investment banking. but you know what? greed is something that is never enough. that wasn't enough. so in 1999, they came a-calling to congress again. this time, they said, take down those walls. take down those walls so we can become these financial

supermarkets, so we can be able to compete in europe and across the continent so we can be as effective as they are in making money. so in 1999, a new act was passed by congress, signed by then-president bill clinton. it was promoted by the chair of the fed, greenspan, by treasury secretary rubin and by others. what it did was repeal the glas-speigel act. all those regulations down the drain. then move toward to 2000, then a very smart person who is head of the commodities future trading commission at the time, she had worked on -- for a law firm here in washington for many years and she knew all about derivatives and all of a sudden she saw the derivative

market just escalate. she suggested that maybe we should look at this. maybe there should be some basic form of regulation. oh, no. wall street would have nothing to do with that. so she leaves the cftc and immediately they come a-calling again and this time congress passes the bill that becomes law that says, congress is prohibited -- buble this? congress is prohibited from regulating derivatives. still not enough. then in 2004, it became obvious that europe was getting a little nervous and they basically said, if these bank holding companies weren't going to be regulated by their countries, then they would be subject to european regulations. well, our investment banks wanted none of that. so this time they came to the s.e.c. and by regulation, the s.e.c. passed on their own

accord, not with congressional support or evaluation, a voluntary regulation to which all the investment banks would be subject for regulation purposes called the c.s.e. the consolidated supervise entities program. besides giving them the benefit of having a regulator here in the united states so they wouldn't be subject to more scrutiny in europe, it also did something that was quite frightening when we look back on it. it lifted the leverage cap that was 12 to one, it didn't lift to it 15 to one or 20 to one, it raised it to whatever, it took away the leverage cap completely. so no surprise that when all these various investment banks became troubled, like lehman's, like goldman sachs, they were

at 30 to one and even higher in terms of leverage. so there, you have what i believe is a pretty clear crack, as you see in wall street, that shows precisely what happened. that crack actually got deeper because there was one more and it was a very simple one, basically by the s.e.c. and the courts, that said that these investment banks were not fiduciary. that even though they were selling all of these instruments, that since they were taking a fee and not -- they were taking a percentage, not a fee, that they were not fiduciary and by doing that, they had no legal obligation, no legal obligation to say to anyone that they were shorting the very products they were selling, that they had side deals, that they did the very

things that now we look at and think, oh, my god, how did we allow this to happen. so i think that as we bring back this bill and hopefully that it doesn't get diluted in what was actually passed by the house, we're going to have something we can show the american people that's going to close all those cracks on wall street. we're going to pave it over so indeed the american people do have the kinds of protections they deserve. mr. garamendi: thank you very, very much for that description of the history and if the gentlewoman from california would care to engage in a colloquy with me, i'd like to discuss some of our history. i recall when you were chairperson of the california senate banking and insurance committee, that there was legislation, i was then the insurance commissioner, we were trying to hold insurance agents accountable for their actions, that they owed to their

customers their best good faith effort and that they would always deal in the interest of their customers, not in their own personal interests, not in the interest of the insurance companies, but rather in the interest of their customers that is one of the fundamental things that you described that was taken away in the mid 2000's so that the, as you were saying, the financial institutions no longer had any obligation to their customers, but rather to their bottom line. is that the case? ms. speier: that's correct. you have your agent, your broker, i should say, at any one of the brokeage firms and you think they're actually there -- brokerage firms and you think they're actually there to work for you. what you don't know is they only in many cases they only sell certain product, you don't get the choices you deserve and

you don't know what fees they're getting, they may get more fees for this product and so they sell more of this product rather than one that may be safer and provide you with the security that you're looking for. mr. garamendi: there out to be a law. there ought to be a law to holds banks to the highest standard, that they owe to their customers their best knowledge and informs and that they don't double deal. . double deal. that's what the current s.e.c. lawsuit against goldman sachs, it's about double dealing. they are playing both sides. that cannot allow. the cracks that you talked about, particularly the repeal in 1991, really opened the door to not only the kinds of

terrible meltdown in the housing market, but also the loss of trillions of dollars of value that people held in their assets, port noel yose, 40 -- portfolios in their 401k's we lost jobs as a result of wall street's double dealing, excesses, extraordinary greed. eight million jobs were lost. 2.8 million homes were foreclosed. pensions fell by $28 billion and trillions of dollars of assets of value that families needed for their retirement, for their ongoing businesses, all blown away. it's time for us, it's time for america to re-establish the fundamental rules of the road

that we had since the 1930's, since the great depression. clearly, laws were established that said if you are an investment banker, all right. if you are a banker, all right, but you cannot be all. we've got to go back to those very strict regulations, otherwise this is going to happen again. cannot depend upon the market to discipline itself. ms. speier: it's worse, because 10 years ago, there were 60 big banks. today, there are only five. because of this financial meltdown and the purchase by many of these banks by other banks, they are now too big to fail unless we take steps to make sure that they are contributing to a resolution trust fund, that there is a basis on which if a risky

enterprise is deemed to be so by a council of advisers that that particular entity can, in fact, be made smaller. because right now, we can't say that nothing is too big to fail because they are all too big to fail. mr. garamendi: if the gentlewoman would yield back. the american financial institutions have worked themselves into a situation that will continue the risk that brought down, nearly brought down the world's financial institutions and brought the world into one of its most dangerous economic times since the great depression. i know you that you are a member of the financial services committee here and you worked hard and long to put together a comprehensive reform of the financial institutions, one would that rein in the excesses and create transparency, a

reform that would create a consumer protection agency. consumer protection agency. could you describe some of the things that were going on in the background. the wall street firms, were they supporting the re-regulation of the industry? give us a little bit of history. ms. speier: i want to tell you that the financial services industry is spending $1.4 million a day right here in congress trying to convince members not to support the regulation reform measure. mr. garamendi: excuse me, if i might interrupt, please excuse me. are you telling me that the wall street banks, the financial industry is spending $1.4 million a day lobbying congress

and the senate to stop financial reform and the re-regulation of wall street? ms. speier: that's correct. but to answer your question, are they supportive? you bet they are not. they want the status quo to continue because they continue to reap the benefits with millions of dollars in bonuses and salaries that they get to take home. mr. garamendi: pretty simple, isn't it? greed, greed, greed. greed is not good for america or wall street, because it really brought this nation down to its knees in 2007-2008. and here's the greed. here's what we are talking about, extraordinary bonuses. this is money that should be on main street. $145 billion of bonuses in 2009, when people in your district and my district are losing their

homes, where foreclosures are going on, where banks are not making loans to small businesses, 20% unemployment in the construction industry, 12% in the state of california and they want these kinds of bonuses and at the same time not making loans to businesses? this has got to stop. this is what it's about. whose side are you on? are you on the side of the small businesses out there, the local bankers, the opportunity for this nation to come back or are you on the side of wall street? i ms. speier: i kno mr. garamendi: we have some work out ahead of us. we hope we will get a bill back, get a conference committee going a put in place ksh could you put that back up. there's a street that needs a repair. there is a street that needs

serious repair. i would love to see the act back in place. i was insurance commissioner in california. and i know how that industry operates and if the banks are able to play games moving money back and forth, there is going to be another crash. ms. speier: would the gentleman yield? in a discussion today on lehman's, this is an examiner who has been appointed to go through five million emails and documents and his report has been presented to the courts and to congress and it was just unbelievable to note that repo 105 which is shorlt for what lehman was doing, at the end of a quarter, they were selling off their liabilities, so it looked like they weren't leveraged just

highly and then after the quarter was over, they were buying back those liabilities and those are called repo 105. they did that over and over again and the s.e.c. knew about it and took no action. mr. garamendi: when did that happen? ms. speier: 2005, 2006, 2007, 2008. when they reduced the number of enforcement actions in this country by 80%. i said 80%. and the number of actions by some 60%. s.e.c. was asleep at the switch. mr. garamendi: my recollection is that the chairman of the board of the federal reserve was saying that the market would regulate itself. isn't that what mr. greenspan was saying and there was no need for government enforcement?

apparently he was wrong. and my recollection is that he came before a congressional committee and said, i made a mistake. i certainly did. if lehman brothers was allowed to cook the books, as an insurance regulator if a company came to me san i saw they were shifting the libets back over to the asset column, that company shk in trouble. but apparently the s.e.c. was a lap dog for wall street? spear atmosphere -- ms. speier: under christopher cox, a very member of this body, during those years, 2003-2007, to have that kind ofry deduction

in their action, and furthermore, to only have 24 employees, 24 employees in that division responsible for the d.e.c.'s that created in 2004, they were joifer worked and there was no intention to create the safeguards that we needed. i yield back. mr. garamendi: it's hard to believe that the regulatory system for the financial underpinnings of this nation was completely on the sidelines while wall street was playing these games. in the case of lehman brothers, flat out cooking their books. that was a fraud. that should have stopped. it didn't happen because of total regulatory process was on

the side line. 24 people looking over this entire industry and the s.e.c., under chairman cox, appointed by george w. bush, didn't do its job. where are we going to go today? we passed out of this house -- i find it a great privilege and honor to vote on the financial reform bill that was moved from congress over to the other house on democratic votes, very few. and i don't recall any members of the republican caucus voting for that financial reform. i know where we stood. we stood for regulating wall street and reining in wall street. we want those profits to go to main street, not to the big wigs on wall street. where do we go from here. we await the action of the other house, which hopefully will come. i know the president will be speaking on this matter tomorrow, thursday on wall

street. he will go up there and say and give us the reforms. we need these reforms to set in place the proper guidelines for wall street for the financial industry. will it happen? what's your guess? ms. speier: if the american people speak up, it will happen, much like anything else in this country. but we've got to make sure that the american people are educated as to what is at stake here. it's our future. whether or not the kind of funds in california are going to allow our kids to go to college, because there has been a shrinkage in the number of slots available because there is no money available with a shortfall in the state and so many people unemployed, the revenue isn't coming in. it becomes a death spiral and we cannot allow that to happen again.

mr. garamendi: people talk about the partisanship in congress and in washington, d.c. and i have really seen it. i saw it on the financial reform bill, democrats voting yes and republicans voting no. we saw it on issues going to scoom. we he -- school. we voted on major reform on educating american students. ms. speier: who was protecting who. if you go back to the student aid issue. what we had was an opportunity to take the $60 billion that was given to the middlemen, the banks and said we don't need to spend that any more and spend it on loans to students and not have those middlemen and have the banks servicing these loans

and you would have thought everyone was supportive of that, not true. mr. garamendi: we had no votes on taking $60 billion back from the big banks and giving it to . we also, just before that vote, we had a vote on the insurance industry, the health care reform was a major reform of the health insurance industry practices. no more discrimination against women. no more discrimination against people with pre-existing conditions. and the freedom from fear of losing your job, losing your health care insurance and losing your life and life savings, those major reforms were voted out of this house without one republican vote -- excuse me, there was one. one republican voted for those reforms of the insurance

practices to end health care discrimination. it's really interesting, bipartisanship not on the major issues of helping main street or students or reforming the health insurance practices. on those kinds of things, it's very clear where we stand on the democratic side of the aisle. we stand for reform. reining in wall street. bringing into play serious restrictions on the abilities of the health insurance companies to discriminate against women, children and those with pre-existing conditions. i know you have been on those fights and it has been a great pleasure. perhaps it's time to wrap this up and if you would like to close and then we'll go on our way.

ms. speier: i think the important message we're trying to drive home tonight is if you want to see reform, follow the money. follow the $1.4 million a day that's being spent by wall street trying to lobby to keep the status quo. follow the bonuses and the salaries. follow how the money was moved from one account to another. follow the shorting that went on in the industry where they were selling the same products that they were shorting because it was all about making money. we want to make sure that the average american is protected and that's why it's important to reform the system. i yield back. mr. garamendi: i thank you for your work on it. this is a clear dichotomy about where we stand. our friends in the republican caucus oppose the jobs bills put forth last year, the stimulus bill they opposed it. they opposed the unemployment insurance programs that would

keep people with enough money to be able to continue to keep their home and provide food for their people they opposed efforts to curtail excessive wall street bonuses, opposed creating a new consumer protection agency to rein in wall street or posed tax cuts for small businesses and opposed regulating wall street to prevent foreclosures. on the other side of the aisle, i proudly say that democrats in this house supported the jobs bill last year that created thousands of jobs, hundreds of thousands of jobs. we support the unemployment insurance extensions. we support the efforts to curtail wall street bonuses. and we support creating a new consumer protection agency to watch over us and we support the tax cuts for small businesses and working families and we support preventing

further foreclosures and meltdowns of the economy. it's been a challenge. and it's been a very, very important time in america. we've seen the worst of it, we've seen things getting better. we've also seen greed to the excess. and that greed, unfortunately, is going to continue unless we get a strong financial regulation bill to the president and i know that my democratic colleagues and i want to see that happen and we'll do everything we possibly can, and with that, mr. speaker, i yield back the remaining portion of my time. the speaker pro tempore: the gentleman yields back his time. under the speaker's announced policy of january 6, 2009, the gentleman from texas, mr. carter, is recognized for 60 minutes as the designee of the minutes as the designee of the minority leader.

mr. carter: thank you, mr. speaker. we like to get up on the floor of this house and we like to argue our points and we like to try to couch the facts in such a way that you come to a conclusion that suits our political leaning. that happens all the time in the courthouse when lawyers advocate for their clients, it happens here in congress when folks advocate, and there's a -- there's a commentator on -- maybe he wouldn't call himself a commentator, i don't know what he'd call himself, who says, the spin stops here. i would argue that the spin

really stops in the republican form of government that our founding fathers created at the united states supreme court. because at the united states supreme court, when they're looking at legislation passed by this body, the united states supreme court takes the facts that are presented to them and they take the law as it exists and then they look at the laws being discussed and they discuss it in light of the constitution of the united states. and in reality, all that we do in this chamber and all that we do in every courthouse in this land to resolve problems either between individuals, between parties, or between states, are or in some courts even between nations, all of that spin stops at the united states constitution. and so, we've just passed a

gargantuan health care bill, so many pages you can hardly lift it. even if you're a pretty good strong, stout guy. it has so many agencies and so many directions and so many things in it and we've talked about them add nauseam in this house. but the bottom line is, it comes down to now, this court, this issue is being brought before the united states supreme court, or ultimately will be brought before the united states supreme court. i would not in any form or fashion impose upon the united states supreme court my will, and i don't think anybody else in this body would either, but i think we have at least a way to look at this that we need to look at it. i don't think we're talking about spin.

we're talking about here's what we think is in violation of that document where the spin stops. this has all been started, initially started with 14 states, immediately upon the passage of this bill, filing suit to question the constitutionality of the democrats' health care bill. now called obamacare by some. this list has expanded to where now 20 states attorneys general, or their representatives, have become involved in one lawsuit or another. 19 of the states have followed under florida's lead and tallahassee on multiple grounds and virginia has filed independently in richmond solely on the constitutionality of the individual mandate. the issue goes far beyond

health care. if the commerce clause can be stretched to force individuals to buy health insurance, it will effectively loot the majority of the constitutional restraints on the power of the federal government. what does that statement mean that i just said? if you go back and you read the federalist papers, if you study the things that were said about what took place in our constitutional -- our constitutional convention, which was held to write our constitution, and what the debates were among the representatives of the individual states at that time, the real underlying concern of everyone was the power of government. that's what everybody gathered together to talk about. we need something that manages our situation in america, that's what our founding

fathers said when the 13 original states, the 13 original colonies, gathered to discuss what document would we found our sovereignty on? this gets off in philosophical concepts but just remember that until the creation of the united states, which declared the sovereignty of in our nation, that means the supreme authority, in our nation, lies with the people as if the people would create an instrument which would set out the definitions and the boundaries of that supreme authority that gave the life's blood to our country. that was done because they had just fought a war with tyrannical nations. that had been imposing its wilpon our nation.

at that time people who lived here who became our nation. and they were fed up to their eyes with people imposing wilpon them. and they wanted to make sure when they all agreed to get together and surrender certain things to a government, a centralized government, that would govern in some capacity over all the states that created that government, that they would make sure they were not creating another tyrant. and i think if you read that and the bill of rights connected with the original constitution, you will see that the very first thing they do is say, the government shall not do these things. then they went on to say, and the people have god-defined rights and here are those rights. the government will not interfere with those rights.

and it was the government, they were restricting -- it was the government they were restricting. it was the government they were talking about. and when we set it up and when we made the great compromise and all the other compromise which is it took for these various parties to resolve their differences and create a government, it was all about making sure they weren't creating another tyrant. and i think they succeeded. i think every american that has ever studied our constitution is extremely proud of that document and the people who created it. because it did what they set out to do. it made sure that no government, no authority, organized government, would be able to impose its will over the will of the american people at that time. now this concept has now spread around the world. you know we love to look at the free nations of the world.

at the time we created the constitution of the united states, all those friends and allies we call free nations of the world, they weren't free. and the concept was foreign to them. that the government couldn't impose its wilpon the people. it was foreign. kings did what kings wanted to do. what was they said in "the history of the world part i"? it's good to be the king. it was good to be the king. that's why we weren't happeny with king george we fought a war to get rid of him. he was imposing his will and the parliament was supporting him. we fought a war we won we wrote ourselves a constitution it said, we're not creating that kind of government.

so what our lawsuit is about is how far do we impose the will of the government over the will of the people. these are basic premises. and it's been in constant debate since the founding of our country. and it is slowly and surely expanded the power and the force and the strength of the federal government. but the bottom line is we start with the premise that americans did not want a government that imposed unfairly their wilpon other people. and these lawsuits which have been filed and these 20 attorneys general who are involved in carrying the

lawsuits to the united states supreme court are raising issues that say, we've reached a point in this particular piece of legislation, the democrats' health care bill, the obamacare bill, whatever you want to choose to call it, it's been called that way in the papers one way or the other. it is imposing upon people something it does not have the authority to impose. that's really, it's a real simple argument. what this bill does, it says everybody has to buy health insurance. period. end of story. you got to have coverage. it is required of you. and it sets up massive plans and descriptions and all kinds of things that just will absolutely cause your mind to shrink up like a prune when you start reading it, trying to figure out what all it, but when you cut through all the garbage, cut through all the spin, you cut

through all the arguments, just what does it do? it says, we're going to set up certain things that insurance have to cover and then you, american citizen, have to buy that insurance. that's what this bill says. you got to buy it. or you got to -- if you're not covered by insurance, if under some massive state plan which we already have, medicare, medicaid and others, if you are not covered there, if you don't have private insurance you got to buy private insurance. you got to go buy it. now, if you don't buy it we're going to punish you. and we're going to punish you by some call it a tax, some call it a fine, but it says we're going to put -- you're going pay this amount of money for not getting insurance. and our attorneys general of the now 20 states of this country are saying, whoa, wait a minute,

besides all the burden you're putting upon the states, contrary to the contracts we made on, for instance, medicaid which is the plan we have to take care of those people who are literally unable to buy their own insurance, it is designed for the poor and for the needy and it's a contract between the states and the federal government to create a plan that the states administer that will take care of the poor people of the country. now, the been expanded to two times poverty, three times poverty, four times poverty and goes on. and we've added to it what some call schip which is expanding it to cover uninsured children. and then in some states it's even gone so far as to expand uninsured children and their parents under this federal

supposed for poverty stricken people plan. but the key to what the states are arguing about that plan is, well, wait a minute, we made a deal with the federal government and we're partners in this by contract. we agreed. you -- that we would administer the plan, we would decide what was best for the citizens our state and that's what -- citizens of our state and that's what our medicaid program would be. and medicaid programs across the country differ. the medicaid program in texas is different from the medicaid program in georgia. in most instances they're relatively small differences but they're differences that the states felt fit their people in their state. because the states were in charge of administering medicare. states complained about sometimes standards that this congress has put on what kind of drugs you can give and what kind

of services you will give and those have been series of debates but they haven't broke the contract. one of the things that these states are arguing in this plan is not only are you mandating that people buy a private product from a private company, an insurance company, but you're punishing them for not doing it and then you're telling us that already provide a plan to cover a lot of these people that we have to take a massive inflution of -- infusion of new people that wasn't part of the deal. massive. i'm talking about doubling and tripling some medicaid budgets for the states and we're not going it help you out with it. temporarily we'll help you out with it. we bailed you out with some of the stimulus money in this last year. but that's all going away. but yuvene got to take care of

it and not only do you have to take care of it, you have to administer that agency, take care of all these new people we put in there, we're mandating you to do that and they're saying, oh, and by the way, while you're at it, this program we've got that's going to impose that people have to buy a certain insurance policy, we want to you administer that too. we not only want you to, we're mandating you to do it. so our states are saying, whoa, time out. that burden's bad enough. but let's get back to the original intent of the framers of the constitution. should government be able to force you to buy something you don't want to buy? now, you say to yourself, well, but it's for the good of the general public that we do this. no, it's really because if you've got a bunch of healthy people and you force healthy people who don't want to buy

insurance because they don't figure they're going to have any health care needs for about 10 years or 15 years, make them start paying premiums, make them become part of the pool, they won't cost you a dime, so they can help pay for the people at the other end that are getting health care. so the really a great big safety way of expanding who pays the bill. what it comes down to, what it means for the individual human being that's out there in the country, whose only thing that the government could be regulate something his breathing, because all he's done to be mandated to buy this policy has been alive. if he was dead he wouldn't have to buy it. but he's alive. and our federal government by this bill is saying, everybody alive out there, all 50 states and everybody out there, if you're alive you're buying this product and you've got to choose to buy it through approval which

will -- through a pool which will have certain insurance companies that will offer what we have decided those insurance companies will offer. what the federal government, this congress, this president, has decided they have to offer. and services under the policy. but you got the 19-year-old kid out there that says, wait a minute, i'm 19 years old, i'm bulletproof. i'm healthy as a horse. i can run a 4 -- 4:00 4x40. he won't do it. ok. how would you like to cough up up to $2,000 in extra tax money every year just because you didn't pay it? well, i wouldn't. well that's what we're telling you got to do. that's what this bill says. you can spin it every way you want but you cut down to the bottom line, what it does, that's what it does.

it says you have to buy something. now, as you're thinking about this, this is not so unreasonable, john, well, wait a minute. when i'm a lawyer, i've been a lawyer since 1969, you count the years, that's a long time. i've been a judge for 20 years. i can make a pretty darn good argument that everybody in this country ought to have a lawyer. in fact, i can make an argument that our world has become so complex that you are at risk for life and limb if you don't have a lawyer to stand up for you and protect you not only against this federal government but against the imposition of all government and the imposition of other entities, other partnerships, corporations, other individual people, because everybody's out there just ready to sue you. so you need a lawyer. if the policy of this nation is that you have to buy a product

that was created by this congress from an individual, from a company, i could not just have -- why can't i write a bill that says, oh, by the way, everybody need as lawyer, so you have to hire a lawyer? or, i'll create an agency which will farm out to all these lawyers in america that -- everybody will have a lawyer and if you don't, it's going to cost you $2,000 a year for not having a lawyer. because if you don't have one, especially if you don't have one and you don't have any funds, guess what? we're going to have to provide you one. or if you commit a crime we're going to provide you one anyway. so we should make everybody have a lawyer. i don't think a would get a lot of votes. in fact, i would almost guarantee that wouldn't get a lot of votes because lawyers aren't very popular. but this con -- but the concept's the same. the concept's just the say --

same. we're saying, if you have to buy a product, if you don't buy that product, we're going to punish you, we're going to fine you and it's going to be administered by the i.r.s. with their authorities and rights going forward. as i.r.s. agents. it's no different than me and my bill requiring to you hire a lawyer. it's for the good of the nation for you to have a lawyer. but, hey, i can think of another example, which a lot of the newspapers are using. in fact, i believe this one does. this is from "the washington post," is health care reform unconstitutional? look at the last line of this, they say, regulating the auto industry or paying cash for clunkers is one thing, making everyone buy a chevy is quite another. and that's the real issue. we switch over to another thing. right now as i understand it we -- the fellow government, along

with the labor unions own 51% of general motors. so arguably all of us, because, you know, you'll hear us stand up on the floor and say, this house belongs to the people. well, so you own -- you're not a stockholder but you, through your tax dollars, own 51% of general motors. or some percent close to that area. don't hold me to that number. but a whole lot of it. now, i'll come up here and say, you know what? they're still going broke. it's arguably for the good and the best interest of the american people that everybody buy a chevy. then we'll stop general motors from going broke. or a pontiac or a g.m.c. pickup or whatever general motors makes. so, why can't i -- if the constitution of the united states is -- requires people to buy a health policy with

mandates from the federal government as to what that policy will offer and it requires them to buy it or they will be fined, why can't i require them to buy a chevy? now, once again i started off saying, the buck stops at the united states supreme court. the spin stops at the united states supreme court. it's not -- it's down to what those supreme court justices are going to say the constitution says about can the commerce clause, which is the only logical way any argument can be made that this would be something the government could regulate, it would be regulated under what's called the commerce clause which says the federal government has the right to regulate commerce between states and commerce interstate between the federal government and states and foreign commerce. now, the commerce clause has been expanded and nobody's going to argue with that and i'm not going to argue with it.

but are we willing to say that because i breathe here tonight i'm in commerce? i'm not selling anything, i'm not buying anything, i'm not moving anything in any direction for the purposes of sale or for the purpose of anything to do with the economy or anything to do with commerce, i'm just here and i'm breathing the air of washington, d.c.. is that enough to make me commners? -- in commerce? and therefore be able to impose the power of the federal government upon my life to make me buy a certain product? is that a world that our founders envisioned us getting involved in? i would argue it's not. is that a world that the american people envision us getting involved in? i would argue it's not. and i would argue and i think the american people will back me up on this, i can guarantee you our twitters and emails are backing me up, that say, you

can't impose upon us things against our will of this nature, we have to buy from a certain company, a certain product. wouldn't it be great for dell computer if we said everybody's got to buy a dell? wouldn't it be great for, i don't know, some tractor company to say, by the way, even if you live in an apartment you have to own a tractor? because it's in the best interest of america that the tractors do good at what point can we stop all this? but the real spin and the real buck stops with the decisions that these courageous attorneys general across the country are going forward with, many of them against the will of their governors because of political fights, to stand up for the american people and say to the united states supreme court, we

need your help to tell us, are we going to impose the government's will to that extent? that's what i'm here to talk about and i'm glad i see one of my loyal friends and classmates, who, god bless him, he always comes when i'm standing down here, i'm proud to have him, my friend phil gingrey from georgia. i'll yield to mr. gingrey whatever time he may need to consume. mr. gingrey: mr. speaker, i thank the gentleman from texas, judge carter, for yielding to me. i was listening after the -- at the outset of the hour and i want to say to the gentleman that i agree with him completely in regard to where does the spin stop? judge carter said earlier, the spin stops at the constitution. he just commented a second ago, furthermore, the spin stops at the supreme court. i think it's absolutely right, as judge carter points out to

our colleagues, the constitution and the commerce clause -- in the commerce clause says the federal government can regulate commerce. but it doesn't say that the federal government can mandate commerce. and that's exactly the point, mr. speaker, that judge carter, representative carter from texas is making he used some examples, i could throw out another and say, well if the federal government can force -- force -- people, maybe against their will, and their ability to pay, to have a health insurance policy, why couldn't they go on and say, well, every adult male and woman between the ages of 21 and 64 has to buy cowboy boots. and not just cowboy boots but cowboy boots made in the state of texas. >> it's a great idea, i don't

think we can do it. >> maybe that's what president bush would have said, since he's from the state of texas. mr. speaker, i think our colleagues get our point here. and i, quite honestly, when 20 states, the attorneys general of 20 states join in bringing a suit against the -- challenging the constitutionality of this provision that actually mandates commerce and they represent in the aggregate, those 20 states, what, about 40% of the population? and then you have the state of virginia, the attorney general there, is filing his own institute on behalf of the people of the commonwealth and in our great state of georgia, governor purdue, mr. speaker, has asked our attorney general to join in the suit to join

general mccollum in the state of florida and these other 19 states, our democratic attorney general in the state of georgia, mr. speaker, has refused, even though the georgia constitution says if the governor is requesting that the attorney general defend the state of georgia, that the constitution requires him do that, but for whatever reason, i'm not saying it's political, but our democratic attorney general in the state of georgia has declined to join in that suit. i would commend governor purdue in that there are great attorneys in the state of georgia who have agreed to file suit on behalf of the state of georgia and its 9.5 million residents, the largest state east of the mississippi, five largest in population in the country, we are going to bring suit and it's going to be done on a pro bono basis. these attorneys normally charge

$700 an hour for their services, they're highly skilled, very experienced attorneys, and they're going to do this because our attorney general refuses to do it, unfortunately. but honestly, and i want to hear further, mr. speaker, i thank the gentleman for yielding me time, he's the expert, judge carter is an attorney and judge for over 20 years, he's the expert, but i really think and i want my colleagues to hear this, i think that the supreme court could vote nine to zero on behalf of -- in favor of these 20 states that are bringing suit against the institutionality of this provision mandated commerce, forcing people against their will to engage in commerce as judge carter has said. so i hope that it will be an expedited review, judge, maybe

not using the right terminology, and hopefully within a year, year and a half, that this thing will be settled. and colleagues, what that will do is it will unravel obamacare. it will unvalve -- unravel obamacare because to make a -- to try to simplify this, this thing would never have worked. do you think, mr. speaker, that the health insurance plans, these big insurance companies like aetna, blue cross, cigna, do you think they would have agreed to cover people with pre-existing conditions at standard rates if they had not been given this deal? they went over to the white house and you -- to the white house a year and a half ago, mr. speaker, along with the american medical association, the american association of retired persons, and big pharma, and there was a deal for everybody, mr. speaker, and

that was a good deal for the y alth insurance industr because they were going to pick up all these adigal people who were going to be forced to purchase health insurance, and not only health insurance, but they were going to be forced and are going to be forced to purchase health insurance that has first dollar coverage. you think there's any plans ultimately to expand health savings accounts, let young people who are healthy as the judge pointed out in taking care of himself and exercise, do all the right things to buy the insurance policy they can afford. one with a high deductible but a low monthly premium and it has high coverage, they can't do that. sthrale to have these plans by 2014, and the can't do it. i thank the gentleman for allowing me to share my thoughts. my colleagues know i've

practiced medicine for 31 years and i know of what i speak in regard to the american people being opposed to having the federal government come in lock, stock, and barrel and take over 1/6 of our economy to make decisions that should be made in the sanctity of the exam room between a doctor and a patient. i thank the gentleman and i yield back and i look forward to -- mr. carter: i thank you and reclaiming my time, just go over, welcome signs for all, it may not be all the states now, because more states have joined in, but texas, idaho, nevada, north dakota, arizona, louisiana, nebraska, south dakota, utah, michigan, pennsylvania, virginia, indiana, south carolina, alabama, georgia, mississippi, and florida. that's a pretty good gallery of the states.

and it's not just one region. it's across the country. it's because the american people are being affected across the country. ultimately the courage of these attorneys general will stand up for every american citizen on this issue. i commend them and congratulate them and i'm looking forward to in some small way, if i can, work with them. i think it's an important thing. the gentleman mentioned expert, we say in the legal profession, an expert is a guy from out of town with a briefcase. i have to -- i've seen that in a courtroom a lot and i have to agree with it in some cases. we're all in some form experts on the constitution we can stick one in our back pobblingt and carry it around. we can read it. a lot of people are getting the constitution and reading it. they're saying, wait a minute.

this thing was to restrict government. this doesn't restrict government. one of the arguments being made , and i have to shut down a little early, i may let mr. gingrey if he wants to, continue for the balance of my hour, the ninth and 10th amendments versus the commerce clause. the commerce clause says the u.s. congress shall have the power to regulate power if -- regulate trade -- commerce with foreign nations and among the several states and with the indian tribes. the ninth amendment says the enumeration in the constitution of certain rights shall not be construed to deny or disparage others retained by the people. remember the constitution starts off by saying that people have certain inalienable rights, rights that cannot be alienated. granted, by god.

that's what the constitution says. by divine providence. and among those are life, liberty and the pursuit of happiness. which means there's more. and this bill of rights and the constitution sets forth a lot of those rights. and remember, we go back to what were they starting to do? they were starting to get tyranny off our back. don't let the government impose its wilpon us. that's what we started out with when the first minmen went to bunker hill and breeds hill to stand up against the red coats. it was because they felt like the government was imposing unfair wilpon the individuals in the american colonies. in the 10th amendment -- the 10th amendment goes on to say the power is not delegated to the united states by the constitution nor prohibited to

it by the states or reserved to the states respectfully or to the people. so in other words, the rights that they don't deal with here belong to the states. and if the states are not in charge of those rights, then back to the people. it's a hard concept. some people sitting at home are going to say, and some people in this body are going to say, how do the people have rights that the government doesn't? well, they do. and in fact, they took up arms once and some would argue twice in our nation's history because of rights that people thought they had as individuals. so this is part of this revolutionary republican society we created. we created a republic and we were created out of a revolution. so we're fighting a basic

argument, a basic constitutional argument that goes forward before the supreme court sometime, hopefully, and in an expedited manner. and i agree with my friend mr. gingrey that expediting this is important for the american people. i guess if there's ever anything written into a bill that turns out to be good news about this bill, it's that it does not get implemented until 2014. which means it gets past a couple of election cycles where it might be an issue before it actually starts happening to us, which gives these attorneys general the opportunity to carry this through the court system and hopefully to the supreme court to put -- so the supreme court can give us an opinion about this particular health care bill. and whether or not we are going

to expand the clause that says u.s. congress can regulate commerce to the point where it can regulate individual activity of human beings to the point where it says you must buy something because it's for the good of you and the good of the nation even if you don't want to buy it. that's where we're going to go. and that's where they're going to have -- that's the question they're going to have to answer. it'll be -- it's going to be exciting to see what the conclusion is. i have a tremendous amount of faith in the judicial system and even though i've many times disagree twhed united states on issues, i've always and stoil this day by the oath i take, took both as a judge and the oath we take as members of congress, to preserve, protect and defend the constitution. against all enemies, foreign and domestic. now that oath says the ultimate sovereignty, we declare it to be the constitution.

and i have always had confidence that our supreme court, even when i disagreed with them, over the long haul, it would all be for the good of the constitution. i look forward to the opinion that's going to come out of the united states supreme court. tonight i have to cut this a little bit short. we'll be back talking about this another day. so i thank my colleague for joining me, i thank my other colleagues for listening and i yield back the balance of my time. the speaker pro tempore: the gentleman yields back his time. the chair will remind all persons in the gallery that they are here as guests of the house and that any manifestation of approval orties approval of proceedings or other audible conversation is in violation of the rules of the house. under the speaker's announced spoifl january 6, 2009, the chair recognizes the gentlewoman from california,

ms. watson, for -- ms. watson for 60 minutes. ms. watson: thank you, i ask unanimous consent that all members have five legislative kay days in which to revise and extend their remarks and include extrains you material. on the subject memorializing dorothy height. the speaker pro tempore: without objection. ms. watson: mr. speaker, we come with heavy hearts today to memorialize a woman who made such a great impact on us who passed away early this morning. dorothy height was a founding matriarch of the american civil rights movement, whose crusade for racial justice and gender

equality spanned more than six decades. she fought for equal rights for both african-americans and women . she was among the coalition of african-american leaders who pushed civil rights to the center of the american political stage after world war ii and she was a key figure in the struggle for school desegregation, voting rights, employment opportunities and public accusation -- accommodations in the 1950's and the 1960's. in high school dorothy was awarded a scholarship to a college for her or tore skills -- oratory skills, yet upon arrival she was denied entrance. at the time, the school admitted only two african-americans per

academic year and height had arrived after the other two had already been admitted. at its 1980 commencement ceremonies, the college awarded height its highest honor, the medal of distinction. she also went to new york university and received a master's degree in educational psychology and eventually became a recipient of no fewer than 36 honorary doctorates. dr. dorothy height began her career as a case worker for the new york city welfare department . and in 1944 dr. height joined the national staff of the ywca and she was instrumental in

bringing about an interracial charter for yc -- ywcma's in 1946. dr. height also served as national president of delta significant ma hit thata sorority from 1946 to 1957 and developed business training program and interracial and ecumenical education programs. in 1957 dr. dorothy height was named president of the national consul of negro women physicians that she held for 40 years in which she helped self-reliance including programs in nutrition, child care, housing and career counseling -- counseling. doing civil rights struggles in

the 1960's, dr. dorothy height helped orchestrate strategy with movement leaders including reverend dr. martin luther king jr., roadway wilkins, a. phillip randolph, whitney young, james former and john lewis. during the 1960's dr. dorothy height organized wednesdays in mississippi which brought together black and white women from the north and the south to create a dialogue of understanding and in the mid 1960's she wrote a clol umentitled "a woman's word" for "the weekly african-american" newspaper -- the weekly african-american newspaper, requests the new york amsterdam news."

in the 1970's and the in the 80's the national council of negro women helped organize and operate development projects in african countries. because of her experience and depth of knowledge. she later served on a number of committees including as a consultant on african affairs to the secretary of state, the president's committee on employment and the handicap and the president's committee on the status of women. in 1974 dr. height was named to the national council for the protection of human subjects, for the protection of human subjects, biomedical and behavior research which published the belmont report, a response to the infamous tuskegee syphilis study.

and an international ethical touchstone for researchers today. american leaders regularly took her counsel, including first lady eleanor roosevelt, and dr. height also encouraged president dwight d. eisenhower to desegregate schools and president lyndon b. johnson to appoint african-american women to positions in government. and i remember her telling me a story that the location of her office and their office building right now down on seventh street where you can see the capitol in the background was the last place that they retrieved two young african sisters who were running away from slavery and they brought them back and sold

them off of the spot that is a historical preservative for her national conference of negro women. what irony. but she was that great lady that could see into the future and i think that property just beckoneded to her. when she turned 90 years old, i was there at her birthday celebration here in washington, d.c., and they had purchased property that was very, very expensive but they were able to get it for $8 million. and oprah winfrey came and she said, i understand that you owe $5 million. she said, well, i have something with me that i think will help you. and she gave a check for $2.5

million. now, deduct that from the $5 million and then she proceeded that evening to go around the room and get those who were lobbyists, those who are advocates, to commit to paying off the balance and with a few months time, every penny for that property was paid for. what a story. it used to be seres, the headquarters for sears, and that's in chicago now. but the history of the property and where she still went when she was able to get there was the place where they sold the last two young african women into slavery. so i thought it was important to let you know the spiritual

impact, the special gift that she had for using good judgment and making the right decisions. and in 1994 president bill clinton awarded her the presidential medal of freedom, the nation's highest civilian honor. the musical stage play "if this hat could talk" is based on her memoirs, "open wide the freedom gates" was the name of her book of memories. it showcases her unique perspective on civil rights movements and detailed many behind-the-scenes figures and mentors who shaped her life and i am reminded that my

grandmother and my mother is now 100, her mother used to sit us down at her feet because most of the history of africa is oral, and she used to tell us these stories of mary. mary out of florida started the first college for colored girls and my grandma used to talk about her all the time. i finally found out that she went to school with mary when she lived and had her first child in florida. and so i always thought that mary was an aunt. i was so disappointed when i found out she wasn't related. she talked about the line of judea and they feel that most

black people were descendents of howie. my grand mother talked about mrs. roosevelt. she also talked about marcus scarfy and that back to africa movement. and so all of these were powerful figures in the history of black people here in america. and so when we would see dr. height, regardless of how ill she was, her mind was sharp, she was would -- she would bring forth this history that we could only read about. so, dorothy height had served on the advisory council of the white house initiative on historically black colleges and universities and the national advisory council on aging. wasn't that wonderful?

she lived to 98. passed this morning. on march 24, 2004, her 92nd birthday, she reeved -- received the congressional gold medal, the highest decoration congress can bestow. and i am so proud to say that i was the author of the bill that gave her the gold medal. and as i circulated around these chambers, i went to that side of the aisle and would sit next to various members and tell them, i'm carrying the gold medal bill for dorothy, dr. dorothy height. and they would say, who dr. dorothy height? and i'd get very quiet and i'd say, i'm going to tell you who she is but you better not let other people know you don't know who dorothy height is.

she proceeded, rosa parks -- she preceded rosa parks and she was 19 years old when mary mccloud about a sune handsed her the medal of leadership and she took it at age 19 and held it until her demise. of course she had to have other people take over after she retired. but i knew her story because my grandmother related to me and she started telling me about it when i was 3 years old. my sister, 18 months older than i, would have to sit there, she's deceased now, my grand mother read us the -- grandmother read us the newspaper. she could have read it upside down, sideways, bottom up, but i remember what she said because traditionally the story of our history was oral.

and that's why i took great pride after i entered these most honored chambers to pay tribute to a woman who's part of all of our history. dr. dorothy height was a chairperson of the executive committee on the leadership conference on civil rights. the largest civil rights organization in the united states of america. and dr. dorothy height was an honored guest and seated among the dignitaries at the inauguration of our current president, barack obama, on january 20, 2009. she helped create and organize the black family reunion

celebration held annually since 1985. these gatherings were intended to honor the traditions, the strength and the history of african-american families. while seeking solutions to such social problems as teen pregnancy, drug abuse and violence. . she attended these black family reunions and celebrated on the national mall until her death this morning. her death was something that we all feel so terrible about. we mourn her loss. but she leaves is a great

legacy. and we all stand on her shoulders. and she had the insight to keep our families together, because when we were kidnapped off of the continent, when they brought us here to america, they separated husbands and wives and took the babies away from their mothers' breast and sold them for more property. and she knew strength was with unity. and when you can bring families together, then you can be empowered. and so we owe so much to dr. dorothy height. and we pay tribute to her strength, her vision, her dedication and her brand. and her voice will never die

out. we will continue to hear it when we talk about equality and justice and opportunity and fairness. and with that, madam speaker, i'd like to call up the most distinguished member of congress from los angeles, maxine waters. for as much time as she might consume. ms. waters: thank you very much congresswoman watson. thank you for taking out this hour to remember drr dorothy height. i appreciate the fact that you not only organized this time, but you understood how important it is for all of us who knew her, who loved her and worked with her, to just stop and

remember her in this very, very special way. when i learned of her death, i immediately thought about march 24, 2004, that's when she received the great recognition from the congress of the united states, receiving the gold medal, the highest civilian award that can be given to a united states citizen. i remember that because when that ceremony took place, i remember watching her and reflecting on all that she had done for this country. i remember not only that she was the one woman in the civil rights movement that was dominated by men who sat in on the discussion of civil rights legislation, voting rights

legislation and this was at a time when women were not welcomed at the helm of the civil rights movement. but dorothy height was a very special woman and i'm sure that no matter what some of the men thought they couldn't turn her down because of her special way of handling situations. she was a highly cultured woman, articulate, refined and always able to and she not only managed those around her. i heard congresswoman watson talk about the black family reunions and they stand out as part of her tremendous work, at a time when black families were being demonized and being talked

about as dysfunctional. she not only showed that we are a people who care and love our families, but we came out to these great reunions in very special ways. i remember seeing young black males carrying their babies and i remember seeing young children being held by the hand by their grandmothers. so the mothers and fathers and brothers, sisters, aunts and uncles came out to these tremendous family reunions and i can recall not only attending in washington, d.c. but in my hometown of los angeles. i was there, because i respected her and admired her but she expected me to be there. we were friends for many, many years, dating back to our struggles in the carter administration when we created the international women's year

and we all convened in houston, texas to create the women's commission that was appointed by carter. i was there as a young woman, long before i came on the national scene and helped to organize on that floor the final statements that we delivered to president carter that created the national women's commission. dorothy height has been at the center of ever significant development on behalf of women. she not only worked on behalf of the civil rights movement but there for women. she worked for the national organization for women, the national women's political caucus, all of those organizations that sprung up when we began to realize we had power and we could exercise power and influence not only to help advance women in this country, but advance public policy as it related to women

and families. and so dr. dorothy height who sat at the greatest educator who involved herself in education in this country, had a great impact on dorothy height. and dorothy height was a big supporter of education. and she often told the stories of dr. bethune and she talked about the influence she had on her and her leadership. a now she's gone. who can take her place? there will be no other like dorothy height. of course, there many brilliant women, visionary women, articulate women, there are women who can manage ti highest levels, but you can't replicate

dorothy height. we can hope someone will honor the contributions she's made and give leadership to the national council of negro women in a manner she will be proud of, but no one can actually take her place. i stand here this evening to say that dorothy height not only was special and one of a kind, i loved her. i honor the time i was able to spend with her. i honor the birthday celebrations i was able to go to. i honor the times that she attended all of the chapter meetings across this country and i happened to be in some city or some state where i attended those chapter meetings. i honor having known her, because i think it certainly gave me not only insight into she was all about, but the inspiration that she provided

for me and the lessons that i learned from her. and so this evening, i simply say that we wish her journey to heaven to be the kind of journey where she will certainly rest in peace and get the rest that she so literally deserves. but we want her family to know and all of those who perhaps didn't know her how much she has meant not only to women and to the civil rights movement, but to this country. and we want to honor her in this very, very special way on the floor of congress so that it will be recorded in the congressional record, adding to all of the other ways that she will be eached into the history of this country and this world. thank you, dorothy, for having served. thank you for having led us. thank you for having been the kind of public servant that

helped this country to be a better country. and i yield back the balance of my time. ms. watson: i want to thank you. representative waters, for your association over the years with her and following in her footsteps. you know we all joined hands together. because i think those family reunions were a very special moment in our communities. and we remind each other of the importance of our family bounds and we show this country that we can stay together and our families are not dysfunctional. and that's what she stood for. and so i thank you for your words this evening and i have asked that all of these statements be recorded. and as we close out this late hour, i just want to say that we have had the privilege to live at a time when such a great,

great woman whose ancestry emanated from what we call the dark continent lives among us, taught among us and touched us all. may god rest her soul. thank you, madam speaker. the speaker pro tempore: the gentlewoman yields back. ms. watson: i yield back my time. ms. watson: madam speaker, i move now that the house do now adjourn. the speaker pro tempore: the question is on the motion to adjourn. those in favor say aye. those opposed, no. the ayes have it. the motion is agreed to. accordingly, the house stands

you can also connect with this on facebook and youtube and sign up for our scheduled alert c- span.org e-mails. . we will get an update on the number of financial stories we are following. the head of the treasury department's troubled assets

relief program testifies about a plan to levy a fee on banks and ordered to pay for tarp. after that, judd gregg and johnny isaacson talk about financial regulation. it is firmly in the brothers went before a house panel to talk about what led to their company fighting for bankruptcy in 2008. here is a portion of that house financial services committee hearing. >> we now have the final panel in our first witness. >> mr. chairman, members of the

house committee -- >> would you turn on your microphone, please? is there a light on? is that better? >> yes. >> i apologize. you have invited me here today to address in number of public policy issues raised by the member of their bankruptcy report filed by the examiner. since september 2008 i've given much thought to the financial crisis that forced lehman brothers into bankruptcy. the idea of the super regulator that monitors the financial markets for systemic risk i believe is a good one bit of this to regulators should have actual experience and an understanding of risk- management. it should also have access under

real time basis to all of permission and data, from all participants regarding all transactions and have clear standards for capital requirements, liquidity, and other risk management. the job can only be done with the creation and utilization of a mark to market capability that has the responsibility for determining a by tuition and capital hair cut and all assets, commitments, loans, and structures. officials from both were physically present in our offices, seeing everything in real time, monetary and reviewing our daily activities of liquidity and mark to market processing. the examiner recently published a lengthy report stating his views. despite popular misconceptions about the mortgage real-estate asset evaluation and risk-

management, the examiner found no breach of duty by anyone at lehman brothers with respect to any of these they did take issue with the 105 sale transactions. i have no recollection whatsoever of hearing anything about or seen documents related to rep 105 transactions while i was the ceo of lehman. what i will say is based on what i have recently learned. as ceo, i oversaw a global organization of more than 28,000 people with hundreds of business lines and products and with operations in more than 40 countries.

my responsibility was to create infrastructure with them all designed to ensure that the business was properly conducted in compliance with the applicable standards and regulations. there is been a lot of misinformation. among the worst for the completely erroneous reports on the front pages of major newspapers claiming that the men used rep 105 to remove toxic assets from the balance sheet. that was simply not true. virtually all of the transactions involved, most of government securities. some of the newspapers that got it wrong were fair minded enough to predict direction. another was a transaction to hide the assets.

the transaction were sold as mandated by the county rule 140. they contributed to the bankruptcy. that also was totally untrue. it is forced into bankruptcy amid one of the most turbulent periods in our economic history which culminated in a catastrophic crisis of confidence. that crisis almost brought down a large number of other financial institutions. they were safe because the government support in the form of additional capital and fundamental changes to the rules and regulations to governing banks. they acknowledge that there were not inherently improper. the men properly accounted for the transactions as required.

they were modeled on 140. in 2000, the road rules' that provided for them and how they should be accounted for. the review the policy and supported the application of the relevant rules. it mandated that they be accounted for. my job as a ceo was to put in place a robust process to ensure that they complied with all of the obligations to make accurate disclosures. i have hundreds and legal

functions to ensure that we did comply with all of our obligations. that process has a number of components. their role and auditing and reviewing our quarterly and annual --a rigorous certification process before every quarterly filing. the responsibility to review and certified for accuracy the firm's sec disclosures before they were filed. the mandatory meeting including me and more than 30 other senior officers were responsible for all parts of lehman. ivory light on the certification process because it showed that those with knowledge believed

the filings were complete and accurate. i never signed an sec filing unless it was first approved by the chief legal officer. in conclusion, given all tht has been said, i would like to add that i am very much aware t hat one day we had a firm and the next day we did not. a lot of people got hurt by t hat. i have to live with that.l i thank you. >> we will not hear from the former member of the board of directors, chair of the lehman brothers audit. >> thank you.

thank you. i like to thank the committee. sorry. can you hear me now? i'm sorry. i would like to think the committee formed by the me to appear at today's hearing. no one can deny that the bankruptcy of lehman brothers has had a disastrous impact on the company, its employees, investors, and even on our country and its economy. as a director of the firm, lehman's collapse ways of the parsley each and every day. -- weighs on me personally each and every day. the day we filed for bankruptcy was probably the darkest of my professional career. looking back, i am sure there are things lehman could have done differently. what may seem crystal clear

today was less three years ago. even after bear stearns nearly collapsed in march 2008, then treasury secretary stated that the worst was likely behind this. if only he and other financial leaders had been right. even in retrospect, it examiner found that there are absolutely no colorable claims against the independent directors in connection with our work on behalf of the company. this conclusion comports with our own belief that we did our absolute best to try to help navigate lehman through what was the greatest financial tsunami since the great depression. between 2007 and the bankruptcy filing, our board and its committees convened on more than 80 occasions. we received detailed reports from management on lehman's

financial performance and other important issues. board meetings were an active affair. we approach to management and demanded and received detailed answers. when issued that they spent a great deal of time discussing was risk. as directors, we took great comfort from their reports regarding lehman's extensive risk management system. in performing the oversight role, lehman's boarded directors relied upon the expertise of a variety of outstanding professionals, including ernst and young. in no time during our numerous substantive discussions of 2007 and 2000 eighth did they raise any red flags regarding lehman's risk management valuation or the firm certified filings. as the board of directors, we had confidence in what we understood to be leman's close working relationship with

government regulators. even before the financial crisis, lehman brothers voluntarily subject itself to the scrutiny of the sec. lehman continue to work vehemently with the sec and new york fed as the financial crisis deepened. we took steps to adjust to the worst economic climate. they said down the subprime mortgage lending unit, reduce market and as a backed securities exposure by many billions of dollars, raised more than $15 billion of new capital, and pursued a number of strategic alternatives. the examiner's report has raised questions about certain transactions now known as repo 105. this issue was never brought to the attention of the board. if there any questions

whatsoever, i believe our firms 's auditors would have raised. i would have expected them to do so. and they did not. i am not so presumptuous as to say i know precisely why the man collapsed. i believe that there were many contributing factors including the firm's real-estate exposure that was exasperated abide the bruise from applying mark to market accounting. they were fueling rumors. i was dismayed when the sec in the new york fed essentially told the board that lee min needed to file for bankruptcy. i do not understand why the government did not tell finance the sale of lehman to barkley's like it did in the case appears turns.

-- barkley is like it did bear stearns. there may be good explanations but i do not know why they are. the country's financial crisis and not have been nearly as severe and widespread. my thanks to the committee for the opportunity to speak with you today. while may not have the knowledge and expertise of the other witnesses before you, i am happy to address any questions you mat have. >> now you hear it an associate professor of economics of law at the university of missouri.

>> thank you. you asked earlier for a bear stearns regulator. if you have one now confronted you. we need to be blunt. you have not heard much bluntness in the hours of testimony. we stopped a non prime crisis before it became a crisis in 1991 by supervisory actions. we did it so effectively that people have forgotten that it even existed even though it cost several hundred millions of dollars in losses but none to the taxpayer. we did it by pre-emptive litigation. we broke a raging epidemic of accounting control fraud without new legislation from 1984 and through 1986. legislation would have been helpful. we sought legislation. we did not get it. we were able to stop that

because we did not simply continue business as usual. lehman's failure is a story in large part of a fraud. it is fraud that begins at the absolute latest in 2001. that is with their subprime and liars loan operation. lehman was the leading purveyor of liars' loans in the world. studies on these loans showed incidents of fraud of 90%. lehman sold this to the world with reps and warranties that there no such fraud. if you want to know why we have a global crisis, in large part it is before you. it has not been discussed today, amazingly.

financial institution leaders are not engaged in risky when they engage in these loans. these loans will cause a failure. they lose money. the only way to make money is to deceive others by selling that paper. that will lead to liability and failure. when people cheat, you cannot continue business as usual. they go into a different category. you must act completely differently as a regulator. the sec -- we are told they are only 24 people in the comprehensive program. who decided how many people would be in the program? and decided the staffing? the sec did. to say we only had 24 people is not an excuse. it is to give an admission of

criminal negligence. except it is not a criminal because you are a federal employee. in the context of the fdic, secretary timothy decker testified that this has been -- timothy geithner testified this has pushed the system to the brink of collapse. bernanke testified that we sent two people to be on site at lehman brothers. we sent 50 credit people to the largest savings and loan in america. it said $30 billion in assets. we forced out of the ceo. we replaced the ceo. we did that not deregulation but because of our leverage as creditors. i asked you, who had more leverage as creditors in 2008? the fed compared to the federal home loan bank of san francisco 19 years earlier?

incomprehensible greater leverage in the fed. it simply was not used. we have heard this. let's start with the repos. we have known since enron in 2001 that this is a common scam in which every major bank that was approached by enron agreed to help them deceive creditors and investors by doing these transactions. what happened? there was a proposal in 2004 to stop it. the regulatory head killed it. they came out with something pathetic in 2006 and installed the implementation to 2007. it is meaningless. we have known for a decade that these are frauds. we have known for a decade how to stop them. all of the major regulatory

agencies work implicit in that statement in destroying it. we have a self the filling policy of regulatory failure. because of the leadership in this era. we have the fed of new york finding this is a three card monet. what would you do if you knew that one of the largest enterprises in the world, when your nation is on the brink of collapse, is engaged in fraud? would you continue business as usual? that isw hat was done. o de meant a lot. they say that we only had a nuclear stick. sounds pretty good of a stick to use if you are on the brink of collapse of the system. that is not what the fed has to do. the fed is a central bank. central banks for centuries have gotten rid of the heads of

financial institutions the bank of england does not -- does it with a luncheon. the board of directors are invited. they did not say "no." \ there said down. the head of the bank of england says, we have lost confidence in the ceo of your enterprise. we believe that mr. jones would be an effective replacement. by 4:00 that day, mr. jones is running the place. he has a mandate to clean up all the problems. instead, every day that all the men remained under its leadership, the expspore of the american people to loss grew by hundreds of millions of dollars. cora was pumping out of up to $3 billion a month in liar's loans. losses on those are running roughly 50%.

it is critical not to xddo business as usual. we also heard from secretary timothy geithner and chairman bernanke we could not deal with these lenders because we had no authority over them. the fed had unique authority since 1994 to regulate all mortgage lenders. it finally used it in 2008. they could have stopped or aurora. they could have stopped the subprime unit. it was really a liar slow place as well. thank you very much.

>> thank you for inviting me. >> if you couple that a little closer to you. >> thank you for inviting me here today to answer questions about my story. i provided a written statement. i will definitely come under five minutes. i will give a brief oral statement. many people do not know me. i was born and educated in the nike kingdom. i have an undergraduate and postgraduate degree from scotland. in 1927, i joined the young office -- london office. i was transferred in 1981 to the new york office. i have 3 account

qualifications, one of which is certified public accounting. i specialize in financial services with the company. i obtained the position of principle. i specialize in financial products. i specialize in international securities and u.s. trust bank. i made my career internal control, identifying the issues, figuring out potential issues, and resolving issues. that is what i do for a living as a professional whistle- blower. my business is transacted by word of mouth. i very rarely reduce my issue resolutions. i joined lehman brothers just as

i went public in 1994. i answered an ad. i was approached because of my skill set. i became global product controller. i held the position twice. i also tell my final position twice, which was the global comptroller of the global balance sheet. -- global financial controller of the financial sheet. there are a number of issues. if i fast forward to the end of 2007, i had my normal loaded issues that were discussed regularly with my peers and my boss. those included all of these

which i will get to in a second. the also included issues in the second e-mail that was talked about for the year. my own personal issues were not being addressed. other issues were not being addressed or with very little communication. there is some issues as to why they were not being resolved. on may 16, which was two weeks before the end of the second quarter, i hand delivered my letter to the four jesse's. i'll give a quick time line of what happens. may 16 is a friday. on the monday after that, we discussed the venture. on wednesday, i said down with the general counsel to discuss the lecture.

on the thursday, i was on a conference call to brazil. it will be out of the office and fired on the spot without any notification. i stayed -- sorry. i am sorry. i stayed another two weeks. i had another meeting with internal order. i realize that thing was being done about my letter. -- that nothing was being done about my letter. i was so mad and nothing was being done. i said, i am going to write it down some other issues that were outside my domain. i drafted a second letter. i sent it to my attorney. he decided not to issue its. instead, he wrote the meat of the letter into their gas in an e-mail that is discussed earlier.

-- in two paragraphs in an e- mail that was discussed earlier. i mention it was out of my domain. that little was issued on june 10. on june 12, i met with ernst and young for the first time. at one point, i was left alone with ernst and young. i started out light. i have a loyalty to them. if we then brothers is not going to address this, they had already dismissed my e-mail to my attorney. it had nothing to do it my issues and other people's issues. i told the contents of that female-mail to ernst and young e

they learned about repo 105. the next day, i think we met -- i'm sorry. on page 960 of the examiner's report, there is reference to a presentation to the audit committee about my may 16 letter, some of the points. it is not have any content of the e-mail in it. i was not asked to give any presentation to the audit committee. i am sorry. i've gone over on my time i will answer any questions. >> thank you very much. i am going to take my five minutes to start with. i thought when the first two witnesses started it was going to be boring session. i wondered why we did not provide baseball bats. there seems to be material disagreement as to whether there is any responsibility at lehman

brothers or whether or not any rules or regulations were violated. it certainly that is obviously the conclusion we draw from the laughter to witnesses. -- latter two witnesses. let me try to classify your testimony. as i heard you, you did nothing wrong. you performed to the standards you would expect from the chief executive officer and the termination of lehman brothers was just something that happened. is that relatively correct? >> i wish it were that easy.

i did not hear you take any responsibility. >> i have testified before where at that time i said both in my written and oral that i take full responsibility for the decisions that i made, and all i can say to you is that i made this decisions, i had the information at the time, that i thought was accurate. with that, i made a prudent decision. >> what caused the demise of lehman brothers? >> and number of factors. >> what are they? >> a little bit of history.

i will not go back the 150 years. that is not appropriate. lehman brothers started as a public company in 1994. we were predominantly a fixed income house. we grew over time. added in equity capability and bill europe we eventually built out to an organization that had 28,000 people. there were hundreds of business lines and projects. 40 countries, five continents. >> i am not sure i understand. it is too hard? that is the point you are making? >> uno. there were other organizations

that were larger than ours. >> what happened? can you tell us why lehman brothers field? -- failed? t? here were a number of initiatives that we undertook as the group. please, understand that the past five years of our operation or all record years. we had grown from an organization that went from net income of about 100 million to and organization that had 4 billion. we went from an organization that had equity of about $1 billion to about $20.5 billion. we had been known for strong risk-management. we had been known for when in doubt, fall back into the right thing. we have been known for strong culture. >> i am trying to put in place

the pieces of what were the basis upon which we make decisions. you are asking me specifically -- where do we go wrong? >> very simply, what caused your demise? i do not think it is hard -- did you over invest in risky obligations? did you have a less than adequate staff? there has got to be some fundamental reasons. do not the man advertisements of 25 years. >> i did not mean to do that. i meant to lay a foundation for the mentality of the place for which we were coming. >> you heard the testimony earlier that you had reserve fund. they were in adequate because they were pledged into different categories. >> we had what? i'm sorry. >> you had capital reserve fund.

they had been pledged in different directions as they were not adequate and should not have been exposed on your balance sheets as reflecting the standard of equity. is that true? but i am not sure of what he meant by that. >> there is testimony earlier i think by the examiner that in one instance you had $2 million on the books and another instance 5 billion on the books. neither should have been on the books. >> you are talking about liquidity? >> we brought -- build a strong liquidity based on the mid- twenties to the mid-30's. we had a series of stress tests with the fed. i went personally to all three of those not once did i hear any

feedback that led me to believe that we were deficient. >> how about the day when they said you had to go down? no one said that it was insufficient? >> there was a facility in place where the men had access to the borrowing window. >> you are looking for a bailout? >> i did not say that. >> when your are looking at the federal reserve, if you cannot get that, what was your methodology to stay in business? where you going to get the sufficient collateral news? >> that facility had been in place. we have never needed it. we had not used it. we financed ourselves that friday night.

when the bed open the window to the investment banks for additional collateral, we all turn to each other and said," we are fallinin. we will get through this." we then learned the window was denied to us. >> that was quite correct. he obviously went down. let me ask the question. were you able to survive and the federal government forced to into bankruptcy? then we have a whole different story. >> i can just tell you the facts. the facts -- >> my time has expired. i'm glad to pass you to my friend from alabama. >> unfortunately, we do not have all afternoon for an answer.

>> before my time starts, could we have additional three minutes on our side? i will divide it with a minute and a half between the three gentlemen that are here presently. thank you. my first question, professor black, both secretary geithner and chairman bernanke concerning the federal research require lehman to correct the material misrepresentations on the grounds that they said they did not because they were not the primary regulator -- do you find that explanation convincing? >turn your microphone on if you

will. >> no, i think i have it word for word that secretary the nurse said that it pushed the financial system to the urge secretary dieter said it pushed the financial system to the brink of collapse. i insist that the problem be fixed. the fed had astonishingly large leverage. all the leverage they need it if it had exerted it. chairman bernanke was the one that should have been exerting its. >> they ignored the material misrepresentations on the grounds that they were not acting in a regulatory capacity. is it ever appropriate for a government regulator to look the other way because he is not the regulator? >> it is worse than that. we have a duty as regulators.

we swear an oath to protect. we have a duty to make a referral to the edge security and exchange commission when we find any evidence of securities fraud. we always did that as regulators. we have a duty to make criminal referrals. i did not hear anything about criminal referrals except from the bankruptcy examiner. >> there were also the counterparty. -- they were also of the counterparty and agency of the u.s. government and taxpayer. >> that makes it even more bizarre. we had a staff and san francisco of a 50 going through the credit files. if we are going to take exposure to something like lehman brothers that was vastly more complicated with more problems, we would have had a staff -- equivalent staff would be

sending 300 people. and stick, -- instead, you cannot believe that the whole global system is about to come down and say that you cannot do anything and will not try. >> the bigger to examiner described timothy geithner's fear that if lehman had tried to reduce the leverage by selling assets to market, they would have discovered air in the assets. the markets would have discovered they were grossly overvalued. what do you make of timothy geithner's remarks? >> he was asked about it twice that i recall. he did not answer either time. >> i asked him once. >> another member brought it up. he did not respond either time. it is the most obvious reason why the fed would not require i notn a county.

honesty in accounting would have showed that the problem was not liquidity at lehman brothers. that was a symptom of the underlying problem that it was massively in solvents. he said that the liability was grossly in excess. those are his own words. that is not any of us. >> thank you. did you in 2008 ever mention oversight by the sec or the fed in an effort to convey the impression that lehman was sounded? -- sound? >> did i ever mention it? >> yes, as a reason why people should consider of the men as financially sound. >> i do not recall that i did. >> what about when you are quoted to telling jim cramer,

i'm on the board of the federal reserve of new york. why would i be lying to you? they see everything you are explaining they were sound. they are watching everything. >> what did you mean by the statement that they see everything? >> i do remember that specifically. i said that they were on premises. they saw everything that the reducing real time. i could see that it would give you confidence. did they ever question why you

were doing? the sec or the fed ask you to do something different or change anything you were doing for safety? >> not that i am aware of. i do recall conversations more so where we talked about potential capital providers and structures. i believe i discussed with him the vast number of people with whom we had conversations without additional capital, potential investors, a structure for commercial real estate. i thought this conversations were strong and productive. >> did he leave you to believe that they might interject

capital into lehman orville you out? >> no. >> the final question is this. you said you are on the board of directors for new york. if he said that to mr. kramer - you do not recall that conversation? >> i recall having lunch with him. >> if you said that, what would you be trying to convey? >> as i think about it now, i do not know. yet as may question. i will try to answer it. if they had something to say, they would have said it to me. if the fed has something to say to me regarding our position or condition that needed to be modified or changed, i had

enough conversations with officials that they would have said it to me. that is why i actually said i believed these last two quarters are behind us. >> that is fair enough. thank you. >> thank you. i wanted to take on something mr. black said. i had to be elsewhere. i apologize. it was very important. in 1994, this congress passed a home owner's equity protection act that was largely led by my predecessor. he was not the chairman at the time, but that bill was passed in 1994. it was explicitly