Friday, December 09, 2011

Sen. Chuck Grassley of Iowa today made the following comment on disclosure that Philip Falcone and Harbinger Capital Partners have received a Wells Notice from the Securities and Exchange Commission. For months, Grassley has questioned the Federal Communications Commission's fast-tracking of the firm's LightSquared project. Grassley is blocking consideration of two FCC nominees over the agency's refusal to provide information on why it fast-tracked the project.

"In my initial letter to the FCC on its decision to fast-track the LightSquared project, I noted that the hedge fund owner behind the project, Philip Falcone, faced ongoing SEC investigations.  On July 5, 2011, I followed up by writing a letter that asked FCC Chairman Julius Genachowski if he was concerned about these multiple SEC investigations of Mr. Falcone, especially since the FCC had granted Mr. Falcone's company a $10 billion victory following a shortened comment period.

"Today, documents have been released showing that Mr. Falcone and his hedge fund, Harbinger Capital, received a Wells Notice from the SEC.  While this does not mean the SEC definitely will take action against Mr. Falcone and his hedge fund, it does show that the SEC staff believes there is sufficient evidence to consider recommending an enforcement action.  Now the FCC is faced with the real possibility that it made a multi-billion-dollar grant of valuable spectrum to someone who could be charged with violating securities laws.  I raised this concern seven months ago.  Chairman Genachowksi was dismissive.  Now, more than ever, the FCC chairman should lead the effort to provide documents and offer insight into how the agency decided to give Mr. Falcone, Harbinger Capital and LightSquared this multi-billion-dollar grant."

 

WASHINGTON --- Led by Senators Chuck Grassley and Tom Harkin, a group of 10 U.S. senators today called on a top official for the Army Corps of Engineers to carefully consider the weakened level of flood protection caused by damaged levees and other river infrastructure when deciding on water releases this winter and next spring.

In a letter to the Corps commander responsible for the Northwestern division, the senators said the Corps plans for an aggressive approach with winter and spring releases is encouraging, but that infrastructure damage also must be a major factor in the Corps management decisions because repairs will not be completed before possibly high water flows in 2012.    The reality of damaged levees means that water releases before March need to be above normal levels and that reservoir reserves need to be maximized, the senators said, noting the risk to communities and farmland.

Click here to read today's letter.

Senators Roy Blunt and Claire McCaskill of Missouri, Ben Nelson and Mike Johanns of Nebraska, Kent Conrad and John Hoeven of North Dakota, and John Thune and Tim Johnson of South Dakota signed the letter, along with Harkin and Grassley.

The Iowa senators are active participants in a Missouri River Working Group, which is comprised of the senators representing states along the river from Montana to Missouri.  Yesterday, the working group asked the nonpartisan Government Accountability Office for a formal review of the 2011 Missouri River flood and the actions taken by the U.S. Army Corps of Engineers, as well as recommendations for improving flood control operations along the river system.

In yesterday's letter to Gene Dodaro, Comptroller General of the United States and head of the U.S. Government Accountability Office (GAO), the senators detailed the record flooding that occurred this summer.  "There are varying viewpoints surrounding the recent flooding of the Missouri River. Various parties have suggested that more water than necessary was being held back in the upstream reservoirs.  Corps officials, on the other hand, contend that the unprecedented amount of rain changed their picture completely, forcing them to release record levels of water through the system.  Given the varying viewpoints on this issue, we are requesting that GAO examine key issues related to the Missouri River Flood of 2011," the letter said.

Click here to read yesterday's letter.

Thursday, December 8, 2011

Senator Chuck Grassley of Iowa today made the following comment regarding his intention to place a hold on two nominees for the Federal Communications Commission (FCC) when the nominees are placed on the Senate calendar for consideration.

"More than seven months ago, I started asking the FCC for information that would shed light on the agency's apparent rush to approve the LightSquared project.  The agency has provided none of the information and found excuses not to provide the information.  Even the private companies involved, LightSquared and Harbinger Capital, have promised to be more forthcoming than the FCC as a public agency funded by the taxpayers.  LightSquared and Harbinger Capital promised to provide me with requested documents on their dealings with the FCC this week.  As a last resort to try to exhort more transparency and accountability from the FCC, I'll place a hold on consideration of the agency nominees on the Senate floor.  This agency controls a big part of the economy.  It conducts the public's business.  And the public's business ought to be public."

Thursday, Dec. 8, 2011

Sen. Chuck Grassley of Iowa today made the following comment on recent interest from President Obama and his education secretary in the cost of higher education.

"It's good to see the Administration is at last recognizing the problem of high college tuition, at least verbally.  If the Administration wanted to take action, it could have taken seriously the mandate to study colleges' use of tax-preferred arrangements to house their assets.  The Treasury Department's study on donor-advised funds and supporting organizations, released this week, highlighted that colleges heavily use these vehicles, yet the study stopped there.  The Administration could and should find ways to get educational institutions to help the people they're supposed to help instead of hoarding assets at taxpayer expense.  In addition to the benefit of income tax exemption, private, tax-exempt colleges and universities are able to raise capital through tax-exempt bonds and tax-deductible contributions.  It's important to understand whether these tax benefits are fueling the tuition increases by subsidizing high salaries for college leaders and rock-climbing walls and other non-educational amenities to try to attract students.  The Administration should follow through on the proposal to require new disclosures for tax-exempt colleges and universities, similar to the schedule required for tax-exempt hospitals.  Additional transparency related to revenues and expenses would give us all a better handle on how tuition is set.  Colleges that have well-funded endowments, including money housed offshore to avoid taxes, should tap more of those resources before raising tuition."

Grassley's comment on the Treasury Department's study on donor-advised funds and supporting organizations is available here.
Thursday, December 8, 2011

Senator Chuck Grassley made the following comment regarding his vote against the nomination of Richard Cordray to be the director of the Consumer Financial Protection Bureau, or CFPB.

"This position was created to operate inside the Federal Reserve, without any opportunity to hold the bureau accountable.  That's the wrong direction.  Lack of accountability contributed in big ways to many of the problems that came to a head in the 2008 financial meltdown.  It doesn't make sense to try to fix things with more of the same and unchecked power.  Our system of government depends on checks and balances.  Americans deserve to have their voices heard in any regulatory process through the representative branch of government.  This position, as currently set up, flies in the face of those values and principles."

Statement of Ranking Member Chuck Grassley of Iowa

Senate Committee on the Judiciary,

Subcommittee on Antitrust, Competition Policy and Consumer Rights

Hearing on "The Express Scripts/Medco Merger: Cost Savings for Consumers or More Profits for the Middlemen?"

Tuesday, December 6, 2011

Mr. Chairman, thank you for holding this hearing.  Whether people know it or not, this proposed merger will affect them.  Prescription drugs are a daily part of many folk's lives.  How those drugs are paid for and determining who gets paid what is a complex process.  At the heart of all of this are the Pharmacy Benefit Managers, or PBMs.

The combination of Express Scripts and Medco would create a company that processes almost one-third of all PBM-administered prescriptions.  Basically, one in four individuals who receive prescription drugs through a health plan will be impacted.  So, this is an important matter.  I expect the Federal Trade Commission will examine this merger rigorously, as they should.

Today this Committee has the opportunity to hear some practical concerns with the merger in a public forum.  I'm sure there will be much discussion on the legal issues that will be part of the Federal Trade Commission's review.  However, we get the chance to listen to those who support and oppose the proposed merger. I expect the discussion will be fruitful and informative.

I've heard from a large number of Iowa pharmacists who raise concerns.  I'm interested to hear about the effect this merger will have on them and consumers.  There are also transparency and competition issues that deserve discussion and today's a great opportunity to do so.

Again, thank you for holding this very important hearing, Mr. Chairman, and I look forward to hearing from the witnesses.
Tuesday, Dec. 6, 2011

The Treasury Department this week released a study on supporting organizations and donor-advised funds that was mandated by the Pension Protection Act of 2006 at the behest of the leaders of the Senate Finance Committee and House Ways and Means Committee.  Sen. Chuck Grassley, as chairman of the Senate Committee on Finance in 2006, championed this study to understand what issues still needed to be addressed after the Pension Act curbed only the most blatantly abusive transactions.  Grassley has long been concerned about abuses of tax law through tax-exempt organizations such as donor-advised funds and supporting organizations. In October, Grassley highlighted how the George Kaiser Family Foundation converted from a private foundation to a supporting organization about ten years ago and as a result, likely had more money to invest in the failed Solyndra energy company than it otherwise would have. Taxpayers lost money through the government's $535 million loan guarantee for Solyndra and also on the tremendous subsidy the government provided the George Kaiser Family Foundation through the charitable contribution deduction.  In October, Grassley cited that example in a letter to the IRS and Treasury, urging completion of the study mandated in 2006.  Grassley made the following comment on the newly released study, which is available here.


"The study is disappointing and unresponsive. It doesn't advance the ball in closing abusive loopholes. If anything, it gives abusive organizations cause for celebration.  The Treasury Department seems to be forgetting that for years, supporting organizations and donor-advised funds were on the IRS' annual 'Dirty Dozen' list of tax scams. Even the current list includes 'abuse of charitable organizations and deductions.'  Yet the Treasury study discusses the status quo and pay-out rates as if there's no cause for worry.  Treasury apparently thinks Congress fixed problems with supporting organizations and donor-advised funds in 2006.  In fact, Congress fixed a limited area and asked the IRS and Treasury to help us fix the rest.  The study doesn't offer any kind of road map about problems.

"It's also disappointing that the study used 2006 data. The IRS went to the trouble of revising the Form 990 in 2008 to glean more data from charitable organizations, yet none of the new data was used in this study.

"The study describes average pay-out rates but doesn't highlight how many of these entities pay out nothing or whether the pay-outs were to other supporting organizations and donor-advised funds. There's no information on how much money is getting to those who really could benefit from charitable work, which is especially critical in these tough economic times.  The superficial review misses the point of trying to determine whether Congress and the IRS should change the distribution rates and tax benefits that apply to these organizations.

"While the Administration continues to complain about millionaires and tax breaks for the rich, with this report, Treasury is in effect signing off on sweetheart tax breaks for billionaires.  The Administration had a chance to help the poor here but instead signed off on the status quo to the benefit of billionaires. 

"Treasury and the IRS missed an opportunity to shed light on loopholes that taxpayers heavily subsidize yet result in financial gains for a few principals and very little money for charities.  Unlike the Obama Treasury Department, those of us who want to close loopholes will have to keep drilling down."

***Iowa Supreme Court Chief Justice Mark Cady's prepared testimony is attached.

 

Prepared Statement of Senator Chuck Grassley

Ranking Member, Senate Committee on the Judiciary

Hearing of the Subcommittee on Administrative Oversight and the Courts

"Access to the Court: Televising the Supreme Court"

Tuesday, December 6, 2011

 

Madam Chairman, I want to thank you for calling a hearing on increasing the public's access to the Supreme Court.  Over ten years ago, Sen. Schumer and I introduced the Sunshine in the Courtroom Act, a bill which would grant federal judges the authority to allow cameras in the courtroom.  Since that time, this bill has been brought before the committee many times.  And each time it has been scrutinized, improved upon, and reported out under broad bi-partisan support.

Today's hearing focuses on a companion issue: whether or not the Supreme Court should permit cameras in its courtroom.  Just yesterday, Sen. Durbin and I introduced "The Cameras in the Courtroom Act of 2011," a bill which would require the Supreme Court to broadcast and televise its proceedings.  Like the Sunshine in the Courtroom Act, this bill has also been brought before the committee on several occasions.  It, too, was reported out favorably with bi-partisan support and was championed by my friend, Senator Arlen Specter, who I am pleased to see here today.

My interest in expanding the people's access to the Supreme Court increased eleven years ago when the Supreme Court decided to hear arguments on the Florida recount during the 2000 Presidential Election.  Senator Schumer and I urged the Supreme Court to open the arguments to live broadcast.  In response, the Supreme Court took the then unprecedented step of releasing an audio recording of their arguments shortly after they occurred.  It was a sign of progress that gave the entire country the opportunity to experience what so few get to: the Supreme Court at work.

Just last year, the Supreme Court began releasing audio recording of its proceedings at the end of each week.  This is another step in the right direction and I applaud the court for increasing its transparency and access.  But it is not enough.  I believe that the nature of our government and the fundamental principles upon which it was built require more.

As Abraham Lincoln said, ours is a government of the people, by the people, and for the people.  Our Constitution divides power.  It creates a system of checks and balances.  But most importantly, it makes the government accountable to the people.  The best way we can ensure that the federal government is accountable to the people is to create transparency, openness, and access.

Sadly, the vast majority of the people do not believe they have adequate access to the Supreme Court.  According to a poll released last year, 62 percent of Americans believe that they hear too little about the workings of the Supreme Court.  Two-thirds of Americans want to know more.  What could be a better source of the workings of the Supreme Court than the Supreme Court itself?

In 1947, the Supreme Court stated, "what transpires in the courtroom is public property."  Well, if its public property, then it belongs to the whole public, not just the 200 people who can fit inside the public gallery.  With today's technology, there is no reason why arguments could not be broadcast in an easy, unobtrusive, and respectful manner that would preserve the dignity of the Supreme Court's work and grant access to the millions of Americans wishing to know more.

My state, Iowa, knows something about this.  For over 30 years, it has permitted the broadcast of its trial and appellate courts.  In fact, I am pleased to welcome Iowa Supreme Court Chief Justice Mark Cady here today.  He has come to share with this committee his unique perspective of presiding over a court that broadcasts its proceedings.  He is a strong proponent of transparency and continues to pioneer new ways to give the public greater access to their court system.  I look forward to hearing his testimony and thank him for his time here today.

Before we begin, I ask that three things be included in the record.  First is a letter I wrote to Chief Justice Roberts last month, urging him to permit cameras during the court's upcoming arguments over the constitutionality of President Obama's healthcare law.  This upcoming case is the perfect example for why the Supreme Court should televise its proceedings.   It is a case which will address the role and reach of the federal government.  All of us deserve to see and hear the legal arguments in a case which will have a lasting effect on every single American.

The second and third are newspaper editorial opinions. One is written by the Editorial Board of Iowa's second largest paper, The Gazette.  The other is written by the Editorial Board of the Washington Post.  Both express belief that the Supreme Court must permit its proceedings to be broadcast.  It isn't often that the American Heartland and the Washington Establishment agree on something.   I ask that each of these be made part of the record.

Once again, I want to thank Sen. Klobuchar for organizing this hearing.  I would also like to thank each witness in advance for their testimony.  This is a distinguished panel of witnesses who will provide excellent insights.  I am eager to hear what each of you has to say.

Thank you, Madam Chairman.

 

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Monday, December 5, 2011

Senator Chuck Grassley's Regional Director based in Davenport, Penny Vacek, will be holding open office hours in Clinton, Jackson and Scott counties on Tuesday, December 13.  The office hours provide an opportunity for Iowans to obtain casework assistance or to express views.

Vacek's schedules for December 13 are as follows:

 

Tuesday, December 13, 2011

10 - 11 a.m.:  Jackson County

Public Library, 126 South 2nd Street, Maquoketa

 

11:30 a.m. - 12:30 p.m.:  Clinton County

City Hall Council Chambers, 510 9th Street, DeWitt

 

1 - 2 p.m.:  Scott County

Scott County Library - Eldridge Branch, 200 North 6th Avenue, Eldridge

 

Grassley's offices in Iowa regularly help constituents contact federal agencies to sort through problems with Social Security payments, military service matters, immigration cases and other issues.  His state offices are located in Cedar Rapids, Council Bluffs, Davenport, Des Moines, Sioux City and Waterloo.

Here is a comment from Grassley about his staff's upcoming office hour:

"Open office hours are designed to help more Iowans access the assistance that is available from the office of their United States Senator.  I hope anyone with federal agency-related casework will take advantage of Penny's visits."

Should constituents have any questions please contact Grassley's Davenport office at 563/322-4331.

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Senate Judiciary Subcommittee Hearing with Assistant Attorney General Lanny Breuer Questions for the Record received December 2, 2011 and letter from Attorney General Eric Holder, October 7, 2011

The February 4th Response - The Justice Department can't have it both ways

  • Attorney General Holder letter to Senator Grassley, Congressman Issa, October 7, 2011: "Senator Grassley has suggested that I was aware of Operation Fast and Furious from letters he provided to me on or about January 31, 2011 that were addressed to the former Acting Director of ATF.  However, those letters referred only to an ATF umbrella initiative on the Southwest Border that started under the prior Administration -- Project Gunrunner -- and not to Operation Fast and Furious."
  • Senator Grassley: "Did your Deputy Assistant Attorney General (DAAG) Jason Weinstein review the Department's February 4, 2011 letter to me?"

Assistant Attorney General Lanny Breuer, December 2, 2011: "Yes, DAAG Weinstein reviewed the letter; he also participated in its drafting."

"Based on the documents being produced by the Justice Department, I understand that two emails attaching drafts of the letter were sent to me by DAAG Weinstein on February 2, while I was in Mexico (February 1-3), and that I forwarded one of those emails to my personal email account on that day; I also understand that on February 4, after I had returned from Mexico, I received two emails attaching signed versions of the letter, including the final version, and that on February 5, I forwarded both emails to my personal email account. However, as I testified, I cannot say for sure whether I saw a draft of the letter before it was sent to you."

FACT

The letter which Deputy Assistant Attorney General Jason Weinstein participated in drafting, and which Assistant Attorney General Lanny Breuer was sent drafts of, stated: "ATF makes every effort to interdict weapons that have been purchased illegally and prevent their transportation to Mexico."  Weinstein knew this was clearly false because he knew about gunwalking in Operation Wide Receiver, which he brought to Breuer's attention in April 2010.  Had Breuer read this letter (he is unclear if he read it), he would have known this sentence was false as well.

Like Senator Grassley's January 27 letter, the Justice Department's February 4 letter applied to all of Project Gunrunner, of which both Operation Wide Receiver and Operation Fast and Furious were a part.  The Attorney General can't simultaneously claim that Senator Grassley's January 27 letter was too broad for him to be aware that Grassley was talking about of Fast and Furious but that their response was so narrow as to only apply to Fast and Furious, which is never specifically named in the Justice Department's February 4 letter.

Documents supporting the FACTS.

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