Alleged misappropriation of investor funds for twenty years calls into question CFTC's oversight

 

Washington, D.C. - Rep. Bruce Braley (IA-01) today called on the US House Oversight and Government Reform Committee to investigate the Commodities Futures Trading Commission's role in allowing Peregrine Financial Group of Cedar Falls to apparent misappropriate $200 million of investor funds over 20 years in what could be the largest financial fraud in Iowa history.

 

In a letter to committee Chairman Darrell Issa and Ranking Member Elijah Cummings, Braley requested a hearing into Peregrine Financial Group and the CFTC's oversight of commodities trading.  Braley is a member of the House Oversight Committee.

 

"It's shocking to think that Peregrine was defrauding its customers for more than 20 years," Braley said.  "My question is, where were the regulators who should have stopped this long ago and how did Peregrine so easily fool them?

 

"It's the job of regulators to protect farmers, families, and businesses who have invested in futures. I'm greatly concerned that this misappropriation of funds was allowed to continue for so long before it was discovered.  Iowans deserve answers - especially those who were victims of Peregrine's fraud."

 

In court filings, federal prosecutors allege that Russell Wassendorf, Sr., CEO of Peregrine Financial Group, admitted to falsifying bank statements and defrauding customers for 20 years.

 

The U.S. Commodity Futures Trading Commission (CFTC) has said that Peregrine has "used customer funds for purposes other than those intended by its customers." According to CFTC, the money has been misused for years and as many as 1,845 investors are missing their money.

 

The full text of Braley's letter to Issa and Cummings follows.

 

--

 

July 16, 2012

 

The Honorable Darrel Issa                          

Chairman                      

Committee on Oversight and Government Reform                        

B3540-A, Rayburn HOB                           

Washington, DC  20515                         

 

The Honorable Elijah Cummings

Ranking Member

Committee on Oversight and Government Reform

2471 Rayburn HOB

Washington, DC  20515

 

 

Dear Chairman Issa and Ranking Member Cummings:

 

I am writing to bring to your attention the apparent misappropriation of more than $200 million in client funds by Peregrine Financial Group, an Iowa-based futures trading company. According to the U.S. Commodity Futures Trading Commission (CFTC), Peregrine has "used customer funds for purposes other than those intended by its customers."

 

According to a criminal complaint filed by the U.S. Attorney on Friday, Russell Wassendorf, Sr., Founder and CEO of Peregrine Financial Group, admitted that he was defrauding his customers for as long as 20 years.  According to court documents, Peregrine had as many as 1,845 investors - and it is unclear whether their money will ever be recovered.

 

It is the job of regulators to protect farmers, families, and businesses who have invested in futures.  I'm greatly concerned that this misappropriation of funds was allowed to continue so long before being discovered.

 

In the wake of the MF Global debacle and these new allegations at Peregrine Financial Group, I ask that you immediately hold a hearing to look at unanswered questions related to the role of the CFTC in allowing this situation to continue and investigate whether this agency had the proper procedures in place to prevent this type of abuse from happening again. It is absolutely essential that there is investor confidence in our commodity trading system.

 

It is also important that any hearing focus on whether there is a process in place to expedite the recovery of the assets of these investors.

 

Thanks again for your consideration of this request. We owe it to American taxpayers and investors to ensure a secure marketplace where they can trust that their money is protected from fraud.

 

Sincerely,

Bruce L. Braley

Member of Congress

 

# # #

Measures will strengthen veterans' employment protections, enhance mortgage safeguards, and block deceptive targeting of vets by educational institutions 

Washington, D.C. - A package of bipartisan bills authored by Rep. Bruce Braley (IA-01), dubbed the "Blueprint for Veterans Opportunity," has been approved by the US House Committee on Veterans' Affairs.  The measures will help improve economic opportunities and job protections for America's military veterans.

The proposals were first advanced two weeks ago by the House Veterans' Affairs Subcommittee on Economic Opportunity, where Braley is the highest ranking Democrat.

Braley's "Blueprint" will strengthen employment protections for veterans seeking medical treatment for service-related injuries, enhance protections from home foreclosures against veterans, and target deceptive marketing practices by some educational institutions by providing veterans with standard information about available higher education options.

"The 'Blueprint for Veterans Opportunity' advanced by the Veterans' Affairs Committee today will strengthen protections for veterans' jobs, homes, and educational benefits," said Braley.  "This is a step forward for America's returning veterans.  I'm encouraged that these proposals attracted such strong bipartisan support.  It shows what's possible when we put aside party labels and work together to do good for men and women who have sacrificed so much for us."

The bills were passed with the overwhelming bipartisan support of the Veterans' Affairs panel.  Braley has worked closely with Republican Rep. Marlin Stutzman (IN-03) for months on these and other legislative proposals to improve economic prospects for veterans.  In October 2011, for example, Braley and Stutzman hosted a field hearing on reducing the unemployment rate among returning National Guard veterans in Waterloo, Iowa.

More detailed summaries of the components of Braley's "Blueprint for Veterans Opportunity" follow:

HR 5747, Military Family Home Protection Act. Includes Braley language that ensures opportunities for housing and employment by 1) expanding and improving protections from home foreclosures against military veterans and surviving spouses of servicemembers who died while serving our country; and 2) providing military and National Guard veterans up to 4 weeks of unpaid leave from their employer each calendar year for treatment for a service-related injury without fear of losing their jobs.

HR 4057, Improving Transparency of Education Opportunities for Veterans Act. Includes Braley language that targets aggressive and deceptive marketing to service members and veterans by some educational institutions and provides veterans with standard information about post-secondary institutions to help vets make more informed choices about college.

# # #

Washington, D.C. - Rep. Bruce Braley (IA-01) released the following statement today after voting against a Republican bill that would repeal the Affordable Care Act (ACA):

"I voted against repeal today for the sake of thousands of Iowans like my nephew, Tucker.  Tucker survived a fight with liver cancer at age 2 because he had health insurance.  But his parents lived in constant fear of losing their jobs because if they did, Tucker would be denied new insurance due to his pre-existing condition.  The healthcare reform law ended those fears - but repealing the law would roll back this important reform and many more.

 

"Because of the Affordable Care Act, 18,000 young Iowans can stay on their parents' insurance up to age 26, insurance companies are prohibited from denying coverage due to preexisting conditions, screenings for diseases like breast cancer are covered 100 percent, and 42,000 Iowa seniors are saving an average of $615 per year on their Medicare prescription drug benefits.

 

"Iowans can't afford to go back to where we started."

 

# # #

Loans will help improve electrical infrastructure across Iowa

Washington, D.C. - Rep. Bruce Braley (IA-01) today applauded news that the Maquoketa Valley Rural Electric Cooperative and the Corn Belt Power Cooperative have been approved for over $59 million in guaranteed loans by the US Department of Agriculture.

The Maquoketa Valley Rural Electric Cooperative has been approved for a $3,250,000 loan that will be used to build and improve hundreds of miles of distribution lines across Iowa, including smart grid projects. The Corn Belt Power Cooperative has been approved for a $55,788,000 loan that will allow the cooperative to begin generation system improvements, as well as environmental improvement projects.

"These loan guarantees will modernize and improve the electric grid, creating jobs now and helping to spur economic growth across rural Iowa in the future," Braley said.  "Improving Iowa's infrastructure is a big job. Today's announcement will make this job possible, while at the same time creating opportunities for Iowans involved in upgrading the infrastructure across the state."

 

The guaranteed loans are backed by the Federal Financing Bank and approved by Rural Development, a division of the US Department of Agriculture.

# # #

New legislation would roll back Bush tax cuts for rich Americans making over $250k per year

Washington, D.C. - July 11, 2012 - Rep. Bruce Braley (IA-01) introduced legislation today that would extend middle class tax cuts for two years and allow the Bush tax cuts for rich Americans making over $250,000 per year to expire at the end of 2012.

 

According to the Iowa Department of Revenue, in tax year 2010, 99.2 percent of Iowa taxpayers reported income under $250,000.

 

On Monday and again yesterday in Cedar Rapids, President Obama called on Congress to renew middle class tax cuts while allowing the Bush tax cuts for the wealthiest Americans to expire.

"The Bush tax cuts for the rich a decade ago are a big reason why we're facing record budget deficits today," Braley said.  "Extending middle class tax cuts will keep money in the pockets of more Iowa families, helping to drive job creation and economic growth.  Rolling back the Bush tax cuts for wealthy Americans making more than $250,000 will help close the deficit.

 

"With this bill, we're trying to bring Democrats and Republicans together around a fiscally responsible compromise.  It deserves bipartisan support."

 

Unless Congress acts by the end of 2012, the Bush tax cuts will expire completely.  Braley's Middle Class Tax Cut Protection Act would extend through 2014 the tax cuts for American families making less than $250,000 per year.  Braley's bill would protect a reduced capital gains tax rate for these taxpayers.

For rich families making more than $250,000 per year, the Bush tax cuts would expire.  The capital gains tax rate for these taxpayers would revert to a top rate of 20 percent.

Braley's bill also protects the American Opportunity Tax Credit (a $2,500 tax credit for college expenses), expanded child tax credits, and the Earned Income Tax Credit for families that work and have children.

The cost of extending the Bush tax cuts for the wealthiest Americans (those making over $250,000 per year) is estimated at $850 billion over 10 years.

Full text of the Middle Class Tax Cut Protection Act can be downloaded at the following link: http://go.usa.gov/wFL

# # #

Washington, D.C. - Rep. Bruce Braley (IA-01) today released the following statement after the US Commodity Futures Trading Commission announced it had filed a complaint against Peregrine Financial Group of Cedar Falls:

"Like many residents of the Cedar Valley, I was shocked at the seriousness of the allegations levied against Peregrine Financial Group today.  My immediate concern is with the Iowa farmers and grain elevators who may be victims of Peregrine's alleged fraud.  I'm also deeply concerned about the impact of this situation on the employees of Peregrine and the entire Cedar Valley community.  In the days and weeks to come, I'll be closely monitoring the actions of the CFTC and the FBI investigation of Peregrine."

# # #

Senate passed bipartisan bill year ago; House has not acted to keep flags made in USA

 

Washington, D.C. - On the eve of the Independence Day holiday, Rep. Bruce Braley (IA-01) and Sen. Sherrod Brown (Ohio) - the authors of the All-American Flag Act, which would require the federal government to purchase 100 percent made-in-America flags - urged the leaders of the House Oversight and Government Reform Committee to move the bill forward to it can be brought to the House floor for a vote.

 

Braley said, "It's just common sense: Americans' tax dollars should be used to purchase flags made in the USA.  The Senate has agreed in a bipartisan vote.  Now, it's time for the House to act.  I urge the Oversight Committee to protect America's greatest symbol and support manufacturers right here in the United States by immediately considering this bill."

 

Brown said, "Under current law, the American flags that fly from federal buildings?on July 4th and every day of the year?may be up to fifty percent foreign-made. Many American companies, including Annin and Company in Coshocton, proudly produce the American flag right here in the United States.  With strong bipartisan support in the Senate, the House Oversight and Government Reform Committee should move to discharge the All-American Flag Act and send it to the House floor for a vote. We should do all we can to support American manufacturing and job creation, especially when it comes to our most treasured of patriotic symbols?the American flag."

 

The All-American Flag Act unanimously passed the US Senate in July 2011, but the House has failed to schedule a vote for its companion bill, H.R. 1344, which was introduced by Rep. Braley. The bill must be approved by the House Oversight and Government Reform Committee in order to be voted on by the full House. Two years ago, the Braley-authored All-American Flag Act passed the House unanimously.

 

For more information on the All-American Flag Act, visit: http://go.usa.gov/wWU

 

Braley and Brown made the request in a letter to Oversight Committee leadership.  The text of that letter follows:

 

The Honorable Darrell Issa

Chairman

House Oversight and Government Reform Committee

2157 Rayburn House Office Building

Washington, DC 20515

 

The Honorable Elijah Cummings

Ranking Member

House Oversight and Government Reform Committee

2471 Rayburn House Office Building

Washington, DC 20515

 

Chairman Issa and Ranking Member Cummings:

 

As we approach the 4th of July, we are reminded of the importance of the American flag as the symbol of our nation.  Unfortunately, current law requires the government to purchase flags made of only 50 percent American-made materials.  We strongly believe that U.S. flags should consist of only American made materials.

 

That is why we introduced the All-American Flag Act.  This bill would require the federal government to purchase flags that contain 100 percent American-made materials.  In the 111th Congress, both of you supported this legislation when it was passed out of the Oversight Committee.  The bill was later adopted by voice-vote in the House.  Last July, the Senate unanimously passed the All-American Flag Act.

 

As the two primary authors of this legislation, we ask that the House Oversight and Government Reform Committee discharge the Senate passed version of the All-American Flag Act so it can be brought to the House floor for a vote.  Given that this legislation has already been passed unanimously by both the House and Senate, we believe that now is the time to see that this legislation is signed into law.

 

American flags should be made in America using American products.  Allowing the government to purchase flags with foreign-made materials is disrespectful to our country.  We urge you to discharge the All-American Flag Act from the House Oversight Committee so it can be brought to the House floor for a vote.

 

Thank you for your attention to our request.  We ask that you please reply to our letter within 10 business days with an answer on whether or not the Committee will discharge this legislation.  Please feel free to contact either of us if we can provide further assistance.

 

# # #

Washington, DC - Today, on the eve of Independence Day, Rep. Bruce Braley (IA-01) will visit the Iowa Veterans' Home in Marshalltown to make a presentation about his trip to Iwo Jima earlier this year.  Braley traveled to Iwo Jima in March 2012 with David Greene, a World War II veteran from Waterloo.  For more information on the trip, visit: http://go.usa.gov/w1A

TODAY, Tuesday July 3rd, 2012

10:30am:  Presentation on Trip to Iwo Jima with IVH Veterans

Iowa Veterans' Home

1301 Summit St.

Marshalltown, Iowa

 

# # #

The Supreme Court's landmark healthcare decision is dominating headlines across Iowa and the United States today.  Your attention is likely focused on the implications of this historic decision for Iowa and its effect on thousands of Iowans, and rightfully so.

But I wanted to take a break from healthcare for a brief moment to draw your attention to a remarkable series of accomplishments in recent days by Rep. Bruce Braley (IA-01).  Even for a representative recognized for his effectiveness, the previous two weeks have been some of the most productive in his Congressional career.

That this string of bipartisan achievements has come at a time of historically bitter division in Washington by a representative in the political minority in Congress makes it all the more impressive.  Simply put, Rep. Braley couldn't have found success on these measures without effectively bringing people together from both sides of the partisan divide.

They may not be accomplishments that will command bold headlines in newspapers or lead the evening news, but they represent the kind of real progress on issues we need to protect jobs in Iowa for middle class families and veterans, keep our kids safer, and create new economic opportunities.

In the words of our Vice President, it's is a big... well, you get the idea.

Without further ado, I bring you Braley's Big Six Bipartisan Accomplishments (of the last 10 days):

BRALEY'S BIG SIX BIPARTISAN ACCOMPLISHMENTS (OF THE LAST 10 DAYS)

1. Better Use of Refrigerator Regulations Amendment. Bipartisan bill introduced May 2012 by Braley and Rep. Lynn Westmoreland (GA-03); amendment version unanimously adopted by the US House and added to HR 4480, the Strategic Energy Production Act of 2012, on 6/21/12.  Measure removes burdensome government regulations on refrigerated deli-style display cases that threaten the future of their manufacture in the United States.  Lennox Industries (facilities in Marshalltown, Iowa) makes the deli cases.  More information: http://go.usa.gov/wa8

·         Marshalltown T-R: Braley Helps Remove Red Tape Impeding Manufacturing

2. Kadyn's Amendment. Bipartisan amendment unanimously adopted by the US House and added to HR 5972, the Transportation, Housing, and Urban Development Appropriations Act, on 6/27/12.  Requires the federal government to devote at least $10 million to helping states enforce traffic laws that punish reckless drivers for illegally passing stopped school buses.  More information: http://go.usa.gov/wxe

·         Des Moines Register: Kadyn's Amendment passes US House

·         KCRG: Kadyn's Amendment included in Transportation Bill

·         Mason City Globe-Gazette: US House passes Kadyn's Amendment

3. HR 3524, Disabled Veterans Employment Protection Act. Bill introduced November 2011 by Braley was unanimously approved by the Veterans Affairs Subcommittee on Economic Opportunity on 6/28/12.  Provides military and National Guard veterans up to 4 weeks of unpaid leave each calendar year for treatment for a service-related injury without fear of losing their jobs.  More information: http://go.usa.gov/vJ0

4. HR 5747, Military Veteran Home Protection Act. Introduced May 2012 by Rep. Elijah Cummings (MD-07).  Braley version introduced and unanimously adopted by Veterans Affairs Subcommittee on Economic Opportunity on 6/29/12 expands and improves protections from home foreclosures against military veterans and surviving spouses of servicemembers who died while serving our country.

5. HR 4057, Improving Transparency of Education Opportunities for Veterans Act. Introduced February 2012 by Rep. Gus Bilrakis (FL-09). Braley version introduced and unanimously adopted by Veterans Affairs Subcommittee on Economic Opportunity on 6/29/12 targets aggressive and deceptive marketing to service members and veterans by some educational institutions and provides veterans with standard information about post-secondary institutions to help vets make more informed choices about college.

6. HR 3826, Keeping College Affordable Act. Co-introduced by Braley and others in January 2012, was the first legislative proposal to keep college student loan interest rates low.  Blocks the increase in student loan interest rates by indefinitely extending the low, 3.4 percent interest rate on subsidized federal student loans.  Today, the US House approved in a bipartisan vote a compromise version that keeps student loan interest rates at 3.4 percent for the next year.  More information: http://go.usa.gov/waf

# # #

Washington, D.C. - Rep. Bruce Braley (IA-01) today released the following statement after voting in favor of a bipartisan compromise that will extend low student loan interest rates for one year.  The House voted to pass the compromise bill minutes ago by a vote of 373-52.

"Iowa college students can breathe a sigh of relief now that the student loan interest hike will be blocked for a year.  Iowa college graduates have the 3rd highest student debt load in the nation.  Thankfully, this bipartisan compromise ensures that more debt won't be piled even higher on them.

 

"Keeping college within reach of more students means that new economic opportunities will open to more young Iowans."

 

In January 2012, Braley co-wrote and introduced the first legislative proposal to block the student loan interest hike.  The Keeping College Affordable Act would have indefinitely extended the low, 3.4 percent interest rate on federally subsidized Stafford student loans.  For more information, visit: http://go.usa.gov/waf.

# # #

Pages