Entries in Senate (19)


Senate Could Question HSBC 'Too Big To Jail' Case

Simon Dawson/Bloomberg via Getty Images(WASHINGTON) -- Months after Europe's largest bank dodged a potentially crippling criminal prosecution for alleged money laundering, members of the U.S. Senate will have a chance to ask banking regulators whether some financial institutions really are too big to jail.

Congressional sources told ABC News they expect treasury and banking regulators will be among those called to testify before the Senate Banking Committee next week for a hearing that could answer questions that have been swirling since December, when the Justice Department announced it would not prosecute London-based HSBC for allegedly helping Mexican drug gangs launder money.

The decision not to prosecute HSBC came despite what attorneys there said was compelling evidence that the bank for years helped Mexican drug cartels move cash, concealed transactions involving rogue states such as Iran, and catered to clients alleged to have been involved in financing terrorist operations even after they had been warned to stop.

Justice Department officials reached a record $1.92 billion settlement with the bank, but said it was not prosecuting in part because of what the nation's top criminal prosecutor, Assistant Attorney General Lanny Breuer, called "collateral consequences."

In announcing the settlement, which also forced HSBC to open up its banks to government monitoring, Breuer asked the question rhetorically: "If you prosecute one of the largest banks in the world, do you risk that people will lose jobs, other financial institutions and other parties will leave the bank, and there will be some kind of event in the world economy?"

Sen. Jeff Merkley, an Oregon Democrat, wrote to Attorney General Eric Holder to express his dismay at the decision, saying it "deeply offends the public's sense of justice."

"I am deeply concerned that four years after the financial crisis, the department appears to have set the precedent that no bank, bank employee, or bank executive can be prosecuted even for serious criminal actions if that bank is a large, systemically-important financial institution," Merkley wrote in the pointed, three-page letter.

While the Banking Committee's agenda for the hearing has not been released, advocates for banking reform said they are hoping the senators can begin to piece together how the Department of Justice reached the conclusion that the consequences of prosecuting the bank would damage the economy. One key question, they said, was whether officials from the Treasury Department put pressure on the Justice Department to settle the HSBC case.

"I hope they demand all the memos, all the meeting minutes, open up the process," said Jack Blum, a Washington banking expert. "The case is over now. There is nothing to be gained by keeping it secret. Let's see what happened. The public has the right to know."

Senior officials from both the Treasury and Justice departments agreed to be interviewed by ABC News to address this question in recent weeks, but not to be identified by name. In both cases the officials were adamant that Treasury officials in no way attempted to influence the decision on how to resolve the HSBC case.

Asked how Justice officials reached the conclusion that a prosecution of HSBC would unsettle the global economy, a senior Justice official told ABC News, "We do our own independent analysis."

"We educate ourselves on the size of the company involved, on the business environment in which they operated, and we consult with many people," the official said. "Do we let [Treasury officials] influence our prosecutorial judgment? That's a definite no. There is no improper influence. There is a process of being educated, but absolutely no undue influence."

A senior Treasury official concurred, saying he could recall no meeting in which member of his agency attempted to persuade the Justice Department to settle the case.

Justice officials added that, while they stopped short of a criminal prosecution, they do not believe HSBC got off easy. They were forced to pay a record fine, agree to government monitoring, agree to continue to cooperate with investigators, and to become "the gold standard" in complying with U.S. money laundering laws.

But advocates who want to see greater efforts to stop banks from moving money for those suspected of criminal activity said they have not been impressed. "This thing stinks to high heaven," Blum said.
Stefanie Ostfeld, a policy advisor with Global Witness, an international advocacy organization that works to root out financial crimes and corruption, told ABC News, "If we want to change the behavior of bankers, the punishment needs to fit the crime."

"Senior bankers must be held legally responsible," Ostfeld said. "At the very least, they should be prevented from working in the industry and their bonuses should be clawed back. In the most serious cases, like HSBC, senior bankers should face jail time."

In what may have been a preface of what is to come, Sen. Elizabeth Warren (D-Mass.) took her first crack at the subject during her first Banking Committee hearing earlier this month, when she grilled regulators.

"If they can break the law and drag in billions in profits, and then turn around and settle, paying out of those profits -- they don't have much incentive to follow the law," she said. "It's also the case that every time there's a settlement and not a trial, it means that we didn't have those days and days and days of testimony about what those financial institutions have been up to …Can you identify when you last took [one of] the Wall Street banks to trial?"

Thomas J. Curry, the comptroller of the currency, was among those being questioned. He could not name an instance. "We have not had to do it as a practical matter to achieve our supervisory goals," he said.

Copyright 2013 ABC News Radio


Senate, House Races Boosted by Outside Money Lose More Than Win

Ingram Publishing/Thinkstock(NEW YORK) -- If the super-rich tried to buy Senate and House seats in this election, they didn't have much luck, at least when it came to some of the most expensive U.S. congressional races.

Wealthy millionaires such as casino mogul Sheldon Adelson, Donald Trump and Dreamworks CEO Jeffrey Katzenberg took advantage of the ability to contribute tens of thousands, even millions of dollars to congressional super PACs in 2012, with mixed results.

Of the 10 most expensive Senate races in the country, only three were won by the candidate who had the most well-heeled outside groups backing them, according to data from the Campaign Finance Institute analyzed by ABC News.

Preliminary results in the House seem to indicate no real advantage for the candidate with the outside money advantage.

Of the 46 races in 2012 where more than $2 million was spent, the candidate with the outside spending advantage lost 21 times and won 16 times, with nine races still outstanding by mid-afternoon Wednesday, according to the CFI data.

Take the Florida Senate race, which pitted incumbent Democratic Sen. Bill Nelson against Republican Rep. Connie Mack.

Super PACs supporting Mack spent $15 million backing his Senate bid, more than three times the spending by outside groups that supported winner Nelson. Taking all spending on the race into consideration -- candidate fundraising, party spending and outside groups -- Nelson was outspent by more than $4 million.

Mack lost the race despite the backing of several deep-pocketed Republican donors, including Adelson, who donated $2 million, and former managing general partner of the San Francisco Giants Peter Magowan, who donated $1,000 to a super PAC supporting Mack.

In both chambers, but especially the House, Democrats did more in 2012 to compete but not match the number of Republican races in which their candidate outspent their opponent.

The result might have been an effective "draw" in terms of how money affected some races, Michael Malbin of the non-partisan Campaign Finance Institute said.

"The last time the independent spending totals significantly favored the Republicans, this time there was more of a party balance," Malbin said.

Although the sheer amount of money that poured into each House race didn't come close to the amounts spent in the Senate, House candidates in some cases were effectively dwarfed by their opponents' outside money advantage.

Outside groups spent more than $5 million working to elect Illinois GOP Rep. Joe Walsh, compared with the $500,000 spent by opponent Tammy Duckworth's outside allies. Coupled with Walsh's campaign's fundraising, the added cash gave him a nearly $3 million advantage over Democrat Duckworth, who won comfortably.

In Colorado's sixth district, Republican Mike Coffman was outspent 7-to-1 by outside groups supporting Democrat Joe Miklosi, who lost the race despite $1.9 million spent on the effort by outside groups.

The amount of money spent did match the outcome of the race in at least three big races in the Senate, however.

Endangered Missouri Democrat Sen. Claire McCaskill outspent her opponent, embattled Rep. Todd Akin, by close to $1 million and eventually pulled out a win, although arguably more because of Akin's abortion comments than her own campaigning.

In this election, the Campaign Finance Institute's Malbin said, the money still mattered, but only to a point.

"Once you have substantial amounts of money on both sides and both candidates are well known in their districts," he said, "then the incremental effect of more money goes down."

Copyright 2012 ABC News Radio


Senate Kills Anti-Outsourcing Bill; Democrats Point to Romney, GOP Points to Obama's Economy

iStockPhoto/Thinkstock(WASHINGTON) -- The Senate has rejected further consideration of a bill Democrats say would have eliminated existing tax breaks for employers who ship their jobs overseas. While Republicans sought to squash it as political theater on the part of the Democrats, Dems admit quarreling over the “Bring Jobs Home Act” was openly influenced by the 2012 presidential campaign.

“It’s fairly easy to see why Republicans are blocking our bill to stop outsourcing,” Senate Majority Leader Harry Reid, D-Nev., said at a press conference before the vote. “They’re obviously defending their presidential nominee, who of course made a fortune by shipping jobs overseas.” Reid's home state of Nevada is suffering from one of the worst unemployment rates in the union.

Reid was referring to Mitt Romney’s past involvement with Bain Capital, the private investment firm Democrats say bought companies, laid off many of their American workers, and outsourced their jobs. With more dismal economic news on their plates this week, Democrats have made Romney’s history with Bain a central talking point on the trail.

Senator Richard Durbin, D-Ill., followed Reid, saying that Thursday’s vote was about turning the Republican position on outsourcing into “a matter of record.”

“So the dance ends, the music ends and the votes are counted,” he said. “And we can find out whether or not the Republican senators support the Bain Capital investment strategy of exporting jobs overseas.”

Under existing law, employers may take tax deductions for the costs associated with moving jobs out of the country. The proposed legislation would have eliminated that, and used the resulting new revenue to fund a 20 percent tax credit for the costs companies run up “insourcing” labor back into the U.S.

The bill failed 56-42. A count of 60 was required to end discussion and move to a final vote.

To further push the issue, Democrats held a conference call with employees from Sensata Technologies, an electronics hardware manufacturer that plans to close its Freeport, Ill., plant at the end of the year and move those operations to China. Democrats say 150 people will be laid off in the process. Sensata, formerly known as the Sensors and Controls division of Texas Instruments, was spun off to Bain in 2006 for a reported $3 billion. The call was held after the vote.

“There is no reason in the world this would not have passed except for so many of the Republican senators have other interests,” said Tom Gaulrupp, a 33-year veteran of the company.

Gaulrupp says there was never a year the company did not draw a profit. Another employee, Lin Feller, was more frank:

“They do not care about us. The average guy on the street, they just do not care about us.”

On the House floor Thursday morning the ranking Republican member of the Senate finance committee called the bill “a joke,” suggesting President Obama’s campaign staff were its true authors.

“It’s devoid of serious content because it is of political rather than economic priorities,” Orrin Hatch, R-Utah, said.

Speaking on the House floor, Hatch said it was “misleading” for Democrats to say there is a tax break for outsourcing. Holding up a large book, Hatch said the Democrats were trying to invent controversy.

“I’ll keep this book of tax codes at my desk here. If someone wants to show me the tax code that allows deductions for shipping jobs overseas. I’d like to see it. But it’s not in here.”

Congressional analysts at the Joint Committee on Taxation say $14 million could be raised next year from removing outsourcing credits, compared to a cost of $21 million for bringing those jobs back. Hatch points out the relatively low sum has already been passed in Obama campaign ads on the issue.

Three Republicans voted in favor of the bill: Senators Susan Collins, Olympia Snowe and Scott Brown.

Copyright 2012 ABC News Radio


Senate to Vote on Postal Service Reform Bill?

Joe Raedle/Getty Images(WASHINGTON) -- For months, the Senate has attempted to pass a reform bill that would help the nation's ailing postal service.  And now, it looks like Tuesday could be the day lawmakers move forward with the legislation.

The U.S. Postal Service sorely needs help -- it's $12 billion in debt and faces the potential to run out of money as soon as the fall, agency officials have said.  The agency has had a 21 percent drop in mail over the last five years, faced with declining volume due to changing technology like email and bill payments online that has meant new challenges.

The Postmaster General has agreed to delay necessary closings of the anticipated 3,600 post offices nationwide until May 15 in order to give Congress the opportunity to help with legislation.  With that deadline less than a month away, the changes Congress make will change the face of the USPS and will directly impact how customers get their mail and how much they pay to send snail mail.

The bill up for consideration in the Senate, by Sen. Joe Lieberman, I-Conn., and Susan Collins, R-ME., is a major but measured piece of legislation.

It preserves overnight delivery and importantly maintains a six-day delivery for mail, widely seen by some as one of the simplest reforms to save the postal service.  The bill requires two more years of studies to determine whether to switch to five-day delivery would be viable.  It would help the institution modernize to meet the technological challenges they have been facing by calling for the appointment of a “chief innovation officer” to find new ways to bring in postal revenue.

The bill would cut in half the number of mail processing centers the USPS currently wants to close -- from 252 to 125.

The bill would also slow, if not stop, many post office closings by forcing the agency to consider the special needs of rural communities and undergo additional layers of regulatory approval.  For instance, the Postal Service might have to downsize rather than close facilities, or factor in whether rural residents might have poor Internet service or have to travel longer road distances should a post office close.

In the meantime, the Postal Service would get a cash infusion of roughly $11 billion, basically a refund of overpayments it made in previous years to a federal retirement fund.  The agency could use the money to pay down debt and offer buyouts to 100,000 postal employees.

On Tuesday, the Senate will vote on a slew of amendments, including one that would limit government conference spending and calls for more transparency for conference spending.  Aides believe that the final vote on the post office bill could come as early as Tuesday night.

Meanwhile, the House of Representatives is pursuing their own legislation, as well.  The House committee on Oversight and Government Reform is currently crafting its own bill.  The GOP’s edition would block no-layoff clauses in labor agreements, and create an appointed commission to help the USPS scale back costs and move towards a five-day delivery week.

Copyright 2012 ABC News Radio


Senate Rejects Obama Call to Strip Oil Company Tax Breaks

JEWEL SAMAD/AFP/Getty Images(WASHINGTON) -- A last-minute entreaty by President Obama wasn’t enough to convince senators to strip the oil and gas industry of billions in tax incentives.

The president said Thursday that Americans are getting fleeced by an oil industry awash in profits -- pinched at the pump by rising prices and forking over billions in taxpayer cash, and he put his weight behind a Senate bill that would repeal these tax breaks.

“Think about that. It’s like hitting the American people twice,” Obama said in a Rose Garden press conference, just before senators considered a bill that would roll back many such tax incentives for oil companies.

“They can either vote to spend billions of dollars more in oil subsidies that keep us trapped in the past. Or they can vote to end these taxpayer subsidies that aren’t needed to boost oil production so that we can invest in the future,” Obama said. “It’s that simple.”

Less than an hour later, Republican senators were joined by a handful of Democrats in the Senate to reject a bill that would do just that. They argue it would raise gas prices even more. The “Repeal Big Oil Tax Subsidies” bill failed to advance by a vote of 51-47. It needed 60 votes to overcome a procedural hurdle.

The bill would have killed several tax breaks taken by the five largest oil companies and use some of the proceeds to extend expiring energy tax provisions, such as tax breaks for renewable energy, electric cars and energy efficient homes.

Senate Democrats, mostly from oil-rich states, were not supportive of the legislation. They included Sen. Mark Begich, D-Alaska, Sen. Mary Landrieu, D-La., Ben Nelson, D-Neb., and Jim Webb, D-Va. Voting with the Democrats was Sen. Olympia Snowe, R-Maine.

President Obama had argued the tax breaks were more than Americans could afford.

“Last year the three biggest U.S. oil companies took home more than $80 billion in profits. Exxon pocketed nearly $4.7 million every hour. And when the price of oil goes up, prices at the pump go up, and so do these companies’ profits,” he said, adding, “In fact, one analysis shows that every time gas goes up by a penny, these companies usually pocket another $200 million in quarterly profits.”

Obama said the tax incentives for energy companies --which allow them to pay a lower effective tax rate than other companies -- are outdated and prime examples of a systemic unfairness that compounds frustration among consumers.

“It’s not as if these companies can’t stand on their own. American oil is booming,” Obama said. “With high oil prices around the world, they’ve got more than enough incentive to produce even more oil.”

But Republicans say Obama is calling for an effective tax hike on oil companies that would in turn be passed on to consumers in the form of even higher gas prices. Current nationwide averages are hovering near $4.00 per gallon.

Copyright 2012 ABC News Radio 


Senate Passes Congress Insider Trading Ban

Architect of the Capitol(WASHINGTON) -- The STOCK Act, a House-passed legislation to ban members of Congress from benefiting from insider stock trading, was approved by the Senate Thursday 96-3 and will go to President Obama for his signature.

The bill reaffirms that members of Congress, congressional staff, and executive and judicial branch officials are not exempt from the insider trading prohibitions arising under securities and commodities laws.

Members of Congress have consistently cited this legislation as one that could help restore some of the public’s confidence and trust.

“I believe by the overwhelming vote today that we have sent a message to the American people that we recognize that elected office is a place not for personal gain but for public service,” Sen. Susan Collins, R-Maine, said following the vote.

The bill requires members and senior congressional staff to report the purchase or sale of securities exceeding $1,000 no later than 30 days after the transaction. It also requires senior executive branch officials to disclose their home mortgages.

“I believe those who make the laws should live under the same laws as everyone else,” Sen. Scott Borwn, R-Mass., said. “Insider trading is wrong, whether it happens on Wall Street or on Capitol Hill. The passage of this legislation is an important step toward restoring trust in our government.”

The bill bans this group from participating in initial public offerings in any manner other than what is available to the members of the public. It strengthens laws relating to denial of congressional pensions to members who commit public corrupt crimes while serving in Congress and will deny pensions to former members who commit those crimes while serving in public offices.

The legislation also prohibits executives at Fannie Mae and Freddie Mac from receiving bonuses while the firms remain in federal conservatorship.

This bill is now headed towards the president’s desk for final signature.

Copyright 2012 ABC News Radio


Senate Passes JOBS Act With One Change

(WASHINGTON) -- The Senate passed the JOBS act by a vote of 73-26 on Thursday.

The Senate made one change to the House-passed bill, adding to it the crowdfunding amendment passed with bipartisan support. The amendment addresses the difficulties small businesses, young businesses and start-ups face in securing capital, compared with larger companies, by allowing them to raise capital from individual investors online and through social media. The amendment allows entrepreneurs to raise up to $1 million a year through an SEC-registered crowdfunding portal, providing investor protections.

“Crowdfunding will allow small businesses to bypass Wall Street and go straight to Main Street for financing, freeing every American to invest in a local business or the next great idea,” Sen. Scott Brown, R-Mass., said following the vote.

Since this amendment was added to the House-passed bill the amendment does not go straight to the president’s desk just yet. The bill must go back to the House of Representatives for final passage.

Following the vote, Majority Leader Reid called this a “small step” towards creating jobs and then quickly pivoted to call on the House of Representatives to take up another jobs measure that is stalled between the two chambers: the Senate’s bipartisan transportation bill.

Copyright 2012 ABC News Radio


Senate Passes Ban on Insider Trading

Architect of the Capitol(WASHINGTON) -- The ban on insider trading in Congress is moving along legislatively.

The Stop Trading on Congressional Knowledge (STOCK) Act passed in the Senate Thursday evening by a vote of 96-3.

Sens. Jeff Bingaman, D-N.M., Richard Burr, R-N.C., and Tom Coburn, R-Okla., voted against the bill. Sen. Mark Kirk, R-Ill., is still recovering from his stroke, so he did not vote.

The legislation turned into a much more expansive bill than when it was proposed, after a slew of amendments were debated all week and voted on Thursday.

Most significantly the bill, which bans members of Congress from benefiting from insider stock trading, now covers the executive branch as well, including the requirement that financial disclosure statements are now electronically filed to be available online and that the 30-day notice of stock or securities transactions also apply to a limited number of executive branch officials.

“If it affects us, it affects them, they have a tremendous amount of inside information and they should be held to the same standard that we are,” said Sen. Scott Brown, R-Mass.

But the expansion of the bill also had a few other inclusions, such as the requirement of disclosure of mortgages by members of Congress and limits to the bonuses of executives of Fannie Mae and Freddie Mac while they’re in a trusteeship.

At a time when public confidence in Congress is at an all-time low, senators hope this legislation will restore some much-needed confidence and trust from the American people.

“We sent a strong message by strengthening our laws that public office is not for private gain,” said Sen. Susan Collins, R-Maine. “The Senate came together in an overwhelming bipartisan fashion to correct the perception that insider trading is somehow going on in Washington, D.C. Whether or not members are engaging in insider trading, it is important that we respond to the perception that some members may be using their official position for private gain.”

The legislation will now be sent over to the House of Representatives. Senators hope President Obama can have a final bill ready for his signature by the end of the month.

Copyright 2012 ABC News Radio


Senate OKs Rise in Debt Ceiling

Architect of the Capitol(WASHINGTON) -- The  debt ceiling will rise once again -- this time by $1.2 trillion -- after the Senate Thursday blocked a resolution that would have denied President Obama an increase. The increase is enough to keep the government running and paying its bills through November 2012.

This increase would raise the U.S. government’s credit limit to $16.394 trillion. According to the U.S. Bureau of Economic Analysis, the current U.S. gross domestic product sits at $15.176 trillion.

And although it may appear, and Sen. Kay Hutchison, R-Texas said Thursday on the Senate floor, that the debt was at more than 100 percent of the current U.S. GDP, according to the Office of Management and Budget, the outstanding debt held by the public is currently estimated at 72 percent of the GDP.

The only time the U.S. has owed more than it took in was during 1945 and 1946.

Congress had 15 days following the president’s request to increase the debt limit to vote on a resolution of disapproval, as per the Budget Control Act passed by Congress last August.

The resolution, which passed the Republican-led House of Representatives last week, was voted down Thursday by the Senate by 52 to 44, with four GOP members not voting.  Even if the Senate had passed the resolution that would have denied the debt ceiling increase, it was expected that the president would have vetoed it.

With only one Republican, Sen. Scott Brown, R-Mass., voting with Democrats to filibuster the motion, Republican senators upheld Senate Minority Leader Mitch McConnell’s promise of sending “a simple message to the White House: No more blank checks.”

“Washington needs to start spending less than it takes in,” McConnell, R-Ky., said. “And our future will always be uncertain and our economy in danger as long as the president fails to lead on this crucial issue.”

Sen. Tom Coburn, R-Okla., one of many Republicans to speak in favor of the resolution, said it was no wonder Americans were “disgusted with Congress.”

“A debt limit doesn’t mean anything in this country, because every time we come up to the debt limit, what we do is just pass it rather than the things the American people have asked us to do,” Coburn said. “Shouldn’t we come together as men and women, Americans, not Democrats and Republicans, and say we’re going to do what we can do to assure the future of this country and quit thinking about the next election?”

Coburn added that “we ought to be doing what is needed. It’s called making priorities.”

Sen. Richard Durbin, D-Ill., said he agreed with Coburn’s call for bipartisanship and reining in the debt, but differed on how to go about it.

“What troubles me greatly is many of the same senators who are going to vote against the debt ceiling voted for the spending,” Durbin said. “They voted to spend the money knowing we didn’t have it....Don’t vote for the spending if you won’t vote for the borrowing, because we know now they are linked together.”

Two Democrats,  Sens. Joe Manchin, D-W. Va., and Ben Nelson, D-Neb., voted with Republicans to deny President Obama an increase.

Copyright 2012 ABC News Radio


Payroll Tax Showdown: What It Means to You

Steve Cole/Getty Images(WASHINGTON) -- Since a bipartisan bill to extend the payroll tax cut that passed the Senate on Saturday is expected to fail in the House Tuesday, lawmakers in Washington are gearing up for what could be a Christmas fight over how to avoid giving the average American a lousy gift for the New Year: a $1,000 tax hike.

While both parties have already agreed that the one-year cut should be extended, the political fight revolves around how to pay for the $112 billion tax cut, which went unfunded last year and which both parties have vowed will not add to the deficit this time around.

If the temporary holiday is allowed to expire, as it is set to do on Jan. 1, every worker would see their payroll taxes, which fund Social Security, increase by 2 percentage points to 6.2 percent, meaning Uncle Sam would take an extra $1,000 from a worker who earns $50,000 in 2012.

“If it doesn’t happen, every paycheck in the country will go down on Jan. 1,” said Chuck Marr, the director of federal tax policy at the Center for Budget and Policy Priorities. “It’s real money.  Every person you see every day has a thousand dollars less money.  That’s a lot of bucks.”

Because payroll taxes are only collected on the first $106,800 of income, cutting the rate has the greatest impact on low and middle income earners -- groups that tend to spend the largest proportion of their income.

“With the payroll tax cut, what is really at stake here is deciding whether or not to infuse $120 billion of disposable income into the economy in 2012,” said Andrew Fieldhouse, a federal budget policy analyst at the Economic Policy Institute.  “It’s not the best way to create jobs, but it is the biggest jobs measure being considered by Congress.”

Both Republicans and Democrats agree that raising taxes on middle and low income earners is a bad idea in the midst of an anemic economic recovery.  But the jury is still out on how big of an effect extending the current tax break will have on stimulating growth.

Republicans argue that the payroll tax cut shouldn't be funded with a tax increase that would be leveled at job creators, especially when the cut's stimulative effect is debatable. Democrats claim it is necessary to keep the economy growing.

Copyright 2011 ABC News Radio

ABC News Radio