WASHINGTON - May 20, 2010 - Senator Chuck Grassley said today that changes proposed today by the National Institutes of Health, or NIH, to its conflict of interest policies for federally funded medical research would be an important step in the right direction.

The NIH has drafted new regulations in response to investigations by Grassley and others that showed that researchers failed to accurately disclose their financial relationships with industry.  The proposal announced today is now open for public comment for 60 days under the federal rulemaking process.

"Disclosure of financial relationships and the resulting accountability have been sorely lacking in federally sponsored research," Grassley said.  "I've worked for greater transparency through legislative reform and administrative changes.  I've urged the NIH to flex its muscle and use the power of its grants, which are prestigious and sizeable, to bring about transparency.  Enforcement of current requirements has been lax, and the federal agency has failed to send a message to grantees that accountability in this area matters."  The NIH awards approximately $24 billion a year in grants for medical research.

Senator Chuck Grassley issued the comment below about his vote with a bipartisan group of senators to continue debate on S.3217, the Financial Stability Bill.

Background Information:

Grassley has offered a number of amendments aimed at increasing transparency and accountability in the bureaucracy and industry, including the Federal Reserve, the Securities and Exchange Commission, credit-rating agencies and Congress itself.  He won passage of his amendment to establish for employees of credit-rating agencies the same whistleblower protections he secured for corporate employees after Enron, and the Senate approved an amendment he cosponsored to remove the conflicts of interest that compromise assessments by credit-rating agencies.  Grassley also won passage of his amendment to strengthen the hand of Inspectors General throughout the federal bureaucracy to fight fraud, abuse and mismanagement.  Grassley's IG amendment was adopted by a vote of 75 to 21, and responded to language in the Dodd bill which would have undermined the independence of Inspectors General at five federal agencies dealing with the financial system.

Grassley Comment:

"There was opposition from Republicans and Democrats to shutting down debate because there are important amendments that should be considered but that could have been shut out by this procedural move.  For example, there was an amendment to protect small businesses from unfair overreach by the new bureaucracy created in this bill.  There's an amendment to make big banks pay for the new consumer agency, rather than taxpayers.  There's an amendment to protect private consumer information.  There's an amendment to make sure ATM fees are proportional to the cost of the service.  There's an amendment to make the hedge-fund registration requirement more effective.  There's an amendment to keep taxpayers from being played in a new derivatives market should cap-and-trade climate legislation be pushed through Congress by the current majority.  It wasn't responsible to shut down this bill at this time given the stakes for consumers and taxpayers and everything that's been learned about the lack of accountability with regulators and industry leading up to the financial crisis of 2008."

WASHINGTON - May 18, 2010 - An amendment offered by Senator Chuck Grassley and cosponsored by Senator Claire McCaskill would make changes to the pending Senate financial regulation bill to strengthen the independence and accountability of all agency-appointed inspectors general, including those at five key financial agencies.

"Taxpayers and Congress count on these watchdogs to go after waste, fraud and mismanagement in the federal bureaucracy, and Congress ought to focus on additional steps to strengthen the role of inspectors general, rather than take away from their important work for accountability," Grassley said.

Grassley said he offered his amendment because language in the financial regulation bill to make five of these positions presidentially appointed could introduce politics into what traditionally have been career, non-political positions.  "A change like this works against independence because these five positions run relatively small offices and don't have the professional staffs that contribute to independent work in the biggest agencies in the federal government," Grassley said.

Grassley said his amendment would strike the problematic provision and replace it with a system designed to establish maximum independence and accountability.  Grassley's language would make these five inspectors general, and a number of other agency appointed inspectors general, report to the bipartisan board or commission heading the agency.  It also ensures that an inspector general could be removed only by a two-thirds majority vote of the bipartisan board or commission.  Grassley said his amendment also would hold inspectors general accountable by requiring that they disclose the results of all their peer reviews in agency semi-annual reports to Congress.  Each inspector general is frequently reviewed by other inspectors general but the reviews are rarely made public.  Grassley's requirement would change that.

"Above all, the framework for inspectors general needs to promote independence and accountability," Grassley said.  "It only makes sense to take action with this financial regulation bill to strengthen the work of the inspectors general who oversee the federal regulators in charge of safeguarding the marketplace.  There's no doubt that a lack of accountability contributed to the financial crisis of 2008."

Grassley has been a consistent advocate for the work of inspectors general.  He has worked successfully both to empower independent inspector general work and to hold inspectors general accountable when responsibilities are neglected.  The amendment has been endorsed by the non-partisan Project on Government Oversight, or POGO.


Floor Statement of Senator Chuck Grassley

Restoring American Financial Stability Act of 2010: Grassley/McCaskill Amendment #4072

Designated Federal Entity Inspectors General Independence


Mr. President, I ask that the pending amendment be set aside and I call up the Grassley-McCaskill amendment number 4072.

I understand there is an objection, but I ask consent for Senator McCaskill and me to speak on our amendment.

Our amendment, would correct serious problems in section 989B of the Dodd-Lincoln substitute.  This section of the bill would change the way that five Inspectors General are hired and fired.

Currently, these five inspectors general are hired and fired by the agency that they oversee, but section 989B would put the President in charge of hiring and firing them.  This provision was included because the sponsors of the legislation believe that making inspectors general presidentially appointed will make them more independent.

However, rather than strengthening oversight over our financial institutions with more independent watchdogs, section 989B could introduce politics into what have traditionally been career, non-political positions.

Under the Inspector General Act of 1978, there are two types of Inspectors General, Presidentially Appointed IGs and Designated Federal Entity IGs (DFE IGs).  Both types of Inspectors General are tasked with hunting down waste, fraud, and abuse at federal agencies.  However, there are some major differences in how they are appointed and removed from office and how they operate.

DFE IGs are appointed by the agency rather than the President.  The Inspector General Act created 30 of them, not just the five addressed in this bill.  The agency-appointed IGs typically run smaller offices than Presidential appointees, often with just a handful of employees.  Almost all of them oversee agencies that are headed by a bi-partisan board or commission.

By contrast, Presidentially-appointed IG's generally run much larger offices and employ dozens or hundreds of employees to oversee Departments such as the Department of Defense, the Department of Justice, Health and Human Services, and so on.  They are nominated by the President and confirmed by the Senate.  They are subject to removal at any time by the President.  However, the President must provide Congress 30 days notice and a written list of reasons for dismissing the inspector general.

Agency-appointed IGs have a similar protection requiring that the agency notify Congress in advance of the reasons for any removal.

The sponsors of section 989B argue that because agency-appointed IGs are hired and fired by the agency they oversee, they might be tempted to pull their punches more than someone who could only be fired by the President.  I actually agree that this is a potential problem.  However, the solution in this bill misses the mark.

Unfortunately, Section 989B only attempts to address this independence issue at five of the 30 agency-appointed IGs.  In my view, this fix is too narrow.  In addition, it attempts to ensure independence by replacing these five IGs with Presidential appointees.

There is no evidence that a Presidential appointees will be more independent than their predecessors.  There have been problems in the past with Presidential appointees being too cozy with the agency they are supposed to oversee or pulling punches for political reasons.

There is strong evidence that agency-appointed IGs can be fiercely independent despite the possibility of being removed by the agency head.  It all depends on the quality of the appointment.

For example, David Kotz, the Securities and Exchange Commission Inspector General has exposed the SEC's failures in the Madoff and Stanford cases, and is currently looking into the timing of the government suit against Goldman Sachs. Similarly, the Pension Benefit Guarantee Corporation's (PBGC) Inspector General aggressively investigated the former head of the agency, Charles Millard, and has challenged the acting director about providing inaccurate information to Congress.  Despite the potential risks of being replaced, these IGs have not been timid about challenging their agencies to improve.

Because of the way section 989B is currently drafted, these IGs could be summarily dismissed soon after the bill is signed into law.  Under this provision, each IG could continue to serve but only until the President nominates a replacement.  Once the President makes a nomination the IGs would no longer enjoy legal protections for their independence and would become instant lame ducks.  In fact, SEC Inspector General Kotz recently stated that if this provision becomes law it will effectively end some of the ongoing investigations his office has at the SEC.

There is a practical problem with Presidential appointments as well.  This administration does not have a great track record in filling vacancies in an expeditious manner.  Having no watchdog on duty is a concern for all Americans.

There are over a dozen IG positions where there is a vacancy, an acting, or an interim IG.  The administration waited 18 months to appoint an IG at the Federal Housing Finance Agency, which oversees Freddie Mac and Fannie Mae. That's 18 months without strong leadership able to direct audits, investigations, or examinations of agency policy.  That's 18 months without a cop on the beat.  Maybe that's the way the administration likes it.  I'm sure the bureaucrats at these agencies would enjoy life more without an Inspector General asking questions. Imagine if the SEC were not held accountable for their failures in stopping the Madoff or Sanford ponzi schemes.

This bill would create five lame ducks in the IG community and the potential for more extended vacancies unless we fix it.  There would be far less oversight during the lengthy transition process under the current bill with no guarantee of vigorous oversight by the new appointees.  Essentially, this provision could politicize the positions that have historically been filled by career public servants.

I know the goal of this provision is to enhance IG independence, but there are better ways to protect the independence of these IGs than by replacing them with Presidential appointees.

We should do it more effectively and make sure that all agency-appointed IGs are more independent, not just the five singled out in the bill.  That's why I'm offering this amendment.  The Grassley-McCaskill amendment simply applies the same sort of protections that have worked for one of the 30 agency appointed IGs to the other 29 agency-appointed IGs.  The Postal Service Inspector General enjoys enhanced protections and my amendment would extend those protections more broadly.

Our amendment would strike section 989B of the bill and replace it with a system that will bring true reform, independence, and accountability.

It would make the IGs report to the entire bi-partisan board or commission heading their agency, and the IG could only be removed for cause by a 2/3 majority vote of the bi-partisan board or commission.  This would ensure that should an agency make a political attempt to remove an IG, there would be the possibility of dissent among the board or commission members.

These are serious protections from political interference currently enjoyed by the Postal Service IG, but it also allows an IG to be held accountable when necessary.  These same provisions have worked for the Postal Service Inspector General and it is time to extend them to the all the agency-appointed IGs.

It also holds IG's accountable by requiring that they disclose the results of all their peer reviews in the semi-annual reports to Congress, thereby making them public.

This amendment strikes the right balance, improving both independence and accountability of all DFE-IGs.  In fact, even the White House has gone on the record telling the Center for Public Integrity, "the administration does not support in any way politicizing the function of the Inspector General and we have not proposed these changes" in the Dodd/Lincoln substitute.

The amendment is supported by the non-partisan Project on Government Oversight and has bi-partisan support from members on the Committee with jurisdiction over the IG Act.  This important amendment deserves an up-or-down vote at the appropriate time.

I yield to Senator McCaskill.

WASHINGTON - Sen. Chuck Grassley of Iowa is working to educate fellow members of Congress and the public about the needs of youth in foster care, with a special focus on the 29,000 young people who "age out" of foster care each year without permanent families.  May is National Foster Care Month.

"Children in foster care don't have highly paid 'K' street lobbyists advancing their cause," Grassley said.  "To move forward with legislation, Congress needs to hear ideas and opinions directly from the community.  Information sessions and panel discussions offer us the opportunity to learn what we need to do to move forward so that no child is ever without a permanent and loving home, and that foster youth have a smooth transition out of the system."

Grassley is founder and co-chairman of the Senate Caucus on Foster Youth.  This week, he and his co-chairman, Sen. Mary Landrieu of Louisiana, hosted a policy briefing covering recommendations in areas such as employment, housing, financial security, education, mentoring and permanency to improve the experiences and outcomes of youth in foster care. The panelists included researchers, child welfare experts, and alumni of the foster care system.

In coordination with the briefing on older foster youth, Grassley joined in introducing a Senate resolution on National Foster Care Month. The measure, which was introduced with bipartisan support, encourages Congress to implement sound policy to improve the lives of the almost 500,000 children in the foster care system.  For the text of the resolution, please click here.

And on Monday, Grassley will co-host an event that will feature excerpts from an upcoming Porch Productions documentary "From Place to Place", which follows six young people as they age out of the foster care system, followed by a roundtable discussion among two of the subjects of the film, leading child welfare researchers, advocates, young people from foster care, and policy makers.  The documentary preview and roundtable discussion, "When Foster Care Becomes Home: What Can Be Done to Improve Options for Youth in Foster Care?", will be held on Monday, May 17, 2010, from 3:30 p.m. to 5 p.m. EST in Senate Dirksen Building, Room G-50, Washington, D.C.

Grassley said a forthcoming legislative vehicle to help foster youth is the reauthorization of the federal Elementary and Secondary Education Act.  Grassley has urged the Health Education Labor and Pensions Committee, which earlier this year began holding hearings on the reauthorization of the act, to consider the direct experiences of foster youth in the nation's educational system and their suggestions for reform. Reforms could include better record-keeping, more of an effort to keep students in the same school when their foster home changes, and better coordination between school personnel and child welfare agencies in developing strategies to help these youths.  Last month, a committee hearing including testimony from a foster youth, as Grassley encouraged.  The teen-ager described her difficulties staying in a school throughout homelessness and then foster care.

"The older kids in foster care and the young adults who have just 'aged out' and don't have the support and stability of a permanent family face special challenges," Grassley said.  "The issues challenging these young people - school attendance and performance, substance abuse, financial literacy, teen pregnancy, homelessness, and juvenile delinquency - have come to my attention through my efforts on foster care and adoption over the last 13 years."

In 2008, Congress passed and the President signed legislation Grassley initiated to make major updates to foster care laws and dramatically increase adoption into permanent, loving homes.  The law - Fostering Connections to Success and Increasing Adoption Act of 2008 -- also broke new ground by establishing opportunities for states to extend care and help "aged out" kids with education and vocational training.  Monitoring implementation of this law is another focus of the Senate caucus.


It's no wonder public opinion towards the federal government is sinking to historic lows. Consider the disingenuous public relations strategy undertaken by General Motors (GM) and the Treasury Department. With great fanfare, the U.S. automaker boasted that it was paying back billions of tax dollars to Uncle Sam thanks to an upswing in car sales.

Upon closer review, however, the repayment announcement is overshadowed by the fact that the Treasury Department allowed GM to dip into another taxpayer-financed pot of money to repay $7 billion of its taxpayer-backed government loan.

It's obvious why the car company and Treasury Department would be eager to claim tax dollars were being paid back "in full" and earlier than scheduled.  However, it's regrettable the very public announcement essentially misled the American public by glossing over very relevant details.

Taxpayers still own 61 percent (paid for with $41 billion tax dollars) of General Motors' common stock. It's highly likely the taxpaying public won't rejoice in an estimate by the nonpartisan Congressional Budget Office. It says taxpayers stand to lose around $30 billion on the General Motors bailout when it's all said and done.

The idea that Washington can solve every problem with a government program is rooted in a misguided borrow-and-spend mentality.

Holding the federal government accountable, tracking tax dollars and keeping the people's business open and accessible to public scrutiny are central to my congressional oversight.  As Chairman or Ranking Member of the tax-writing Senate Finance Committee, I've led efforts to shut down offshore corporate tax loopholes; investigate the eligibility and compliance of non-profit organizations relative to their tax-exempt status; disclose financial relationships between the pharmaceutical industry and researchers who provide expertise that influences health decisions; and, most recently, scrutinize the trillions of tax dollars that Washington has pumped into the private sector.

As Congress debates financial regulatory reform, I worked to advance bipartisan legislation that would bring more transparency and accountability to the Federal Reserve. The Fed controls the supply of money in the U.S. economy. Last year the Federal Reserve took unprecedented action to stabilize banks at risk of failing. The American public has a right to know who has taken the money and how it has been spent. Allowing the independent investigative arm of Congress, the Government Accountability Office, to audit the Federal Reserve's emergency lending program would give lawmakers and taxpayers another tool to protect tax dollars.  I also cosponsored legislation to reform the way credit-rating agency evaluations are handled in order to help bring about the independent assessment investors deserve.  It's a matter of market integrity.

In these times of economic uncertainty, the American public is facing an even bigger burden of public debt. Washington is marching towards an all-time-high spending benchmark, reaching 25 percent of the nation's gross domestic product. Now, the nonpartisan Congressional Budget Office, or CBO, said health care reform will cost $115 billion more than projected.  That makes the deficit reduction that was promised impossible.  Despite the President's promise that health care reform would not add one dime to the deficit, when costs for Social Security and the new long-term care CLASS Act program in the bill are factored in, the real result is that the bill signed into law adds $90 billion to the deficit.

A bigger government has a bigger appetite for more and more taxes. Without a major shift, the current path of reckless deficit spending and unsustainable public entitlements will keep future generations of Americans working longer than ever before just to fulfill their tax obligations let alone maintain a certain standard of living.

Friday, May 14, 2010

Senator seeks distance between regulators and industry

WASHINGTON - Senator Chuck Grassley has filed an amendment to the Senate financial regulation bill to create a new registration requirement for certain employees at all major financial regulatory agencies who leave the agency.  The amendment would also establish a two-year ban on these former employees from representing clients before their former employer.  The ban is similar to revolving door ban the Senate places on its own members and would apply to employees that are paid a salary that is statutorily authorized above the standard government pay scale.

"The revolving door is a real issue, and we've seen situations where someone is a high-level government official one day and representing a major player in the financial world before their former agency just days later, without any public disclosure whatsoever," Grassley said.  "In addition to making things transparent, my amendment also would create a reasonable waiting period that's similar to those applied to members of Congress, congressional employees, cabinet level officers and other high ranking employees in the executive branch."

The agencies impacted by this amendment include the Securities and Exchange Commission, Federal Reserve, Federal Deposit Insurance Corporation, Farm Credit Administration, National Credit Union Administration, the Office of the Comptroller of Currency, Office of Federal Housing Enterprise Oversight, the Office of Thrift Supervision, and the Commodities Future Trading Commission.  Congress has exempted certain employees at these agencies from the government pay scale, and the agencies are empowered to increase pay.  Annual salaries exceed $200,000, in some instances.

Grassley has co-sponsored a number of amendments to the financial regulation bill which focus on greater transparency and accountability for both regulators and financial institutions, including audit authority over the Federal Reserve.

Last week, Grassley won passage of an amendment to provide whistleblower protections to employees of credit-rating agencies.  "People who know of wrong-doing and speak up should be able to do so without fear of retaliation.  These protections are similar to those I won for corporate employees after the Enron scandal," he said.  "The credit-rating agencies contributed to the financial crisis of 2008.  They were too cozy with the industry that they were supposed to be assessing in an independent and credible way."  Separately, Grassley has cosponsored an amendment offered by Senator Al Franken of Minnesota that would create a firewall so that a credit-rating agency can be selected independent of an issuer.  This amendment goes after conflicts of interest between rating agencies and issuers.



WASHINGTON - The champion for whistleblowers, Senator Chuck Grassley, today said that late last night an amendment he offered with Senator Ben Cardin to extend whistleblower protections to credit rating agency employees, passed the Senate.

The amendment to the financial regulation reform bill would make the employees of Nationally Recognized Statistical Rating Organizations - such as Moody's Investor Service, Standard & Poor's, and Fitch Ratings - eligible for protection under whistleblower protections signed into law in the Corporate and Auditing Accountability, Responsibility and Transparency Act of 2002 (Sarbanes-Oxley).

"People who know of wrong doing should feel comfortable to come forward without fear of retaliation," Grassley said.  "Providing whistleblower protection to credit rating agency employees is another way to shore up public trust in our financial system and help prevent history from repeating itself by ensuring those who know of problems feel free to speak up."

Grassley secured the provisions in the 2002 Sarbanes-Oxley law after the fall out of several Enron-like scandals led to a crack down on corporate fraud and abuse.  The provisions made federal whistleblower protections available to employees of publicly traded companies for the first time ever.





WASHINGTON - April 28, 2010 - Senator Chuck Grassley today continued to peel back the layers of taxpayer obligations behind last week's claim and fanfare about General Motors repaying its multi-billion dollar loan from the Troubled Asset Relief Program, the $700 billion taxpayer-funded bailout.

Last week, Grassley asked the Treasury Secretary why the administration had allowed GM to use money from an escrow account at Treasury to repay this loan, allowing "an elaborate TARP money shuffle."

In a floor speech this afternoon, Grassley said the response he received today from the Treasury Department confirmed that taxpayers funded the loan repayment by way of cash that GM has because the federal government originally loaned that cash to GM, and then the federal government agreed to forgive some of GM's debt during bankruptcy in exchange for stock in the company, the value of which is uncertain.

"The bottom line is that the repayment was made on the dime of taxpayers across America, and it's misleading to say that GM repaid its TARP loans 'in full, with interest, ahead of schedule, because more customers are buying' GM cars," Grassley said.  "Taxpayers remain on the hook, thanks to the failed deal cut by the government to try to save GM from bankruptcy.  Now, GM has pulled an additional $6.6 billion out of the escrow account but has left unpaid a $2.5 billion, nine-percent loan to the union health benefit fund."

Here is the April 19, 2010, request from GM to the Treasury Department asking for the distribution to GM of the entire amount of the reserve funds. 

Grassley said the American people deserve straightforward information about what's happening with TARP and the tax dollars being used by the Treasury Department to manage what the government has taken over from the private sector.  "The situation hasn't been described in a candid way, and that's added insult to injury after more than a year of bailouts and record-level deficit spending."

Grassley has conducted oversight of the Treasury Department's management of TARP and gone to bat for the Special Inspector General for TARP when the administration has put up barriers to the Inspector General determining where the money has gone.  The Iowa senator has criticized the lack of transparency with how TARP funds have been used and, last fall, he cosponsored legislation to end the program.

The Special Inspector General for TARP was created at the urging of Grassley and Senator Max Baucus of Montana, and when the Treasury Department changed the focus of the program less than a month after it began, Grassley worked with Senator Claire McCaskill of Missouri to retool the Inspector General's authority and empower the office to adequately scrutinize TARP spending and management.

Here is the text of Grassley's remarks today.

Floor Statement of U.S. Senator Chuck Grassley


Wednesday, April 28, 2010

Mr. President.  Last Thursday, I wrote Secretary Geithner asking why the Treasury Department allowed General Motors to use TARP money from a Treasury escrow account to repay its multi-billion dollar TARP taxpayer loan.  This afternoon, I received a response from Treasury.  I'd like to say a few words about the reply and the questions that remain unanswered.  Last week, Treasury and GM announced with press releases and nationwide TV commercials that GM had repaid its TARP loans "in full, with interest, ahead of schedule, because more customers are buying [GM vehicles]."

However, the hype does not match the reality.  Taxpayers have not been repaid in full?far from it.  Many billions of TARP dollars remain invested by Treasury in GM, and much of it will never be repaid.  The Congressional Budget Office estimates that taxpayers will lose around $30 billion on GM.  In addition, the payment that occurred last week did not come from revenue GM earned by selling cars, despite what was claimed.  Instead, Treasury allowed GM to use funds in a separate escrow account to pay its TARP debt.  The Treasury Department's response to me today makes a point of saying that GM "owns" the money in the escrow account, as if that somehow justifies all the hoopla about GM's so-called "repayment."

Well, let's look at how GM came to "own" those escrow funds in the first place.  The escrow funds were part of the TARP money Treasury paid for GM stock coming out of the bankruptcy.  The money was supposed to be used by GM for expenses, as Treasury concedes.  Treasury had the power to approve or disapprove GM's use of the money to repay the TARP taxpayer loan.  Treasury approved, and GM pretended it was paying the loan back from revenue because business had improved.  Business may have improved, but that's not how they paid the loan.  Taking TARP money out of one account to pay back TARP loans in another account is not at all the same as paying off a loan with earnings, as GM's TV commercials imply they have done.  That is why I called it "an elaborate TARP money shuffle" and nothing in Treasury's reply today changes that.

The public would know nothing about the TARP escrow money being the source of the supposed repayment from simply watching GM's TV commercials or reading Treasury's press release.  Treasury's letter today says all these details are public knowledge and nothing new.  Well, that may be technically correct, but it wasn't clearly communicated that way to the average citizen.  Most Americans don't pore through SEC filings and Special Inspector General's reports.

The GM commercial also did not mention that GM could have used the TARP escrow funds to repay a $2.5 billion, nine-percent loan it received from its union health plan as part of the bankruptcy process.  The union loan runs until 2017.  The TARP loan was at seven percent and ran until 2015.  What sort of money manager would advise you to pay off a lower interest loan before a higher interest loan?  GM and Treasury have still not explained that, and I have asked the TARP watchdog, Special Inspector Neil Barofsky, to get to the bottom of it.  And to make matters worse, Treasury has admitted that it let GM take an additional $6.6 billion of TARP dollars out of the escrow fund last week with no strings attached.  That money, too, could have been used to repay the high interest union loan.

There are reports that GM also applied to the Department of Energy for a $10 billion, five-percent loan to retool its plants to meet fuel economy standards.  GM seems to be using government money to pay back government money, and then asking for more government money at a lower interest rate.  It sounds like a plan to refinance GM's government debt with more taxpayer money--not pay it back.

GM had to ask permission from Treasury to use the taxpayers' stock investment to pay off the taxpayers' loan. Treasury's response to my letter says that "Treasury retained approval rights over GMs use of funds from the escrow account in order to protect the taxpayer."  Well, why didn't they protect the taxpayer then?  Why would Treasury allow GM to use its equity investment to pay off the loan when it means giving up the legal right to a seven percent rate of return for the taxpayers in exchange for essentially nothing?  Since the taxpayer has an equity stake in the company, it's true that future growth of GM could theoretically make taxpayers whole, but taxpayers already had that equity interest before this latest transaction and didn't get any more equity as a result of the transaction.

Another key question is why would GM orchestrate a major media campaign to make the public think this all represents some big accomplishment by GM when the truth is that the taxpayers are still on the hook for billions that we may never recover?  Using the taxpayers' stock investment in GM to reduce its debt to the taxpayers is not the same as repaying that debt from money actually earned by selling cars.  Treasury's reply today does not explain why it approved this transaction.  Maybe it's a step in the right direction, maybe not.  But, instead of misleading the American people, we should be clear and up front about what happened here.

Highlights need to focus on visa security and protecting American workers

WASHINGTON - During an oversight hearing of the Department of Homeland Security, Chuck Grassley this week told Secretary Janet Napolitano that during his town hall meetings in March and April, Iowans were upset that federal immigration laws weren't being enforced.

Grassley also brought to Napolitano's attention legislation that he has introduced that would treat visa revocations similar to visa denials, because the right of that person to be in the United States is no longer valid.  Already, if an individual is denied a visa by the consular officer, there's no judicial review of that decision.  The Grassley bill would apply the same standard for individuals on U.S. soil who should not have been granted a visa, limiting their rights to judicial review of such a decision.

"The Christmas Day bomber highlighted the need to review U.S. visa policies, especially how agencies handle visa revocations when alarming information is provided to authorities," Grassley said.  "The Secretary has the authority to revoke a visa to any individual who is a threat to the country, however if a foreign national is already on U.S. soil, there's concern about that person accessing the U.S. court system and challenging the revocation."

During his questioning of Napolitano, Grassley also continued to highlight abuses within the H-1B and L Visa programs.  He pointed out that some of the problems previously highlighted by congressional oversight of the H-1B Visa program have led applicants to use the L Visa program.  The L Visa program has no wage protections, no annual numerical limits, fewer obligations on employers, and fewer protections for American workers.

Grassley is the author of H-1B and L Visa reform legislation which would increase enforcement, modify wage requirements, and ensure protection for visa holders and American workers.  The bill would not eliminate the program or change the numerical cap of visas available to petitioning employers.


WASHINGTON - April 28, 2010 - Senator  Chuck Grassley is working to make sure changes made to the federal False Claims Act are recognized and incorporated by the 14 states that passed state False Claims Act in response to a federal incentive aimed at reducing Medicaid fraud.

In a letter sent today, Grassley asked the Inspector General for the Department of Health and Human Services and the Attorney General to review existing state False Claims Acts for compliance with recent changes to the federal False Claims Act and to issue appropriate guidance for any state interested in the federal incentive, which allows states to increase their shares of Medicaid recoveries by 10 percent by allowing whistleblower lawsuits.  In addition to the 14 states which have qualified for this incentive, six states applied for it but did not meet the requirements.

"Updated information will help states fine tune existing state laws and state-level proposals, in order to be eligible for the federal incentive and beef up fraud-fighting efforts," Grassley said.  "This kind of effort at the state and federal level is more important than ever as Medicaid programs are expanded and face new burdens and growing fiscal challenges.  Every dollar lost to fraud is one less dollar for those who depend on the program and harms the sustainability of the Medicaid program."

The federal incentive for states to adopt whistleblower provisions as part of state laws on false claims was established by legislation Grassley got passed as part of the Deficit Reduction Act of 2005.  Additionally, in 1986, Grassley was the principal Senate sponsor of whistleblower amendments that updated the federal False Claims Act.  To date, those provisions have helped to recover $22 billion for the federal Treasury that otherwise would be lost to fraud.

Grassley said updated guidance is needed because of changes made to the federal False Claims Act during the last year.  In May 2009, the President signed the Fraud Enforcement Recovery Act, sponsored by Grassley and Senators Patrick Leahy and Ted Kaufman, which made major changes to strengthen the federal False Claims Act by removing liability loopholes and addressing statutory confusion.  Additional related, though less extensive changes, were made as part of the Patient Protection and Affordable Care Act enacted in March 2010, based upon legislation originally sponsored by Grassley and Senators Dick Durbin and Patrick Leahy.

"The federal False Claims Act has become the federal government's most effective tool against health care fraud, and a major factor in its success is the way that it empowers whistleblowers who know about wrongdoing.  They are the watchdogs that taxpayers and beneficiaries need working on their behalf, and the more states that recognize the value of whistleblowers in fighting fraud, the better," Grassley said.

Grassley is Ranking Member of the Finance Committee, with jurisdiction over Medicaid and Medicare, and a senior member of the Judiciary Committee, with jurisdiction over the False Claims Act.