04.28.09

Whitehouse Applauds Passage of Bill to Fight Financial Crime

Washington, D.C. - U.S. Senator Sheldon Whitehouse (D-RI) today applauded the Senate's passage of legislation to improve enforcement of mortgage, securities, and financial institution fraud. Whitehouse, a former U.S. Attorney and Attorney General for Rhode Island and a member of the Senate Judiciary Committee, is a cosponsor of the Fraud Enforcement and Recovery Act (S. 386).

"The Fraud Enforcement and Recovery Act will enhance our ability to combat fraud and help bring justice to those injured by misconduct that contributed to our current financial crisis. It provides essential money for investigating and prosecuting fraud; makes critical changes to our existing criminal fraud statutes, so they capture the malfeasance in the mortgage and financial markets that we hear about every day; and strengthens the False Claims Act to facilitate actions against government contractors or their subcontractors for wasting government money.

"This legislation will also help us better understand what led to, and who is responsible for, the financial turmoil so we can be sure we don't repeat our mistakes. Specifically, the final version of this bill contains a successful amendment that was offered by Senator Johnny Isakson of Georgia, and that I cosponsored. This amendment, which was based on a bill I also cosponsored, the Financial Markets Commission Act, creates a new panel modeled after the 9/11 Commission. Like the Depression-era Pecora Commission, this panel will investigate the causes of the collapse of the banking system and housing market. I was involved with the formation of a similar commission in Rhode Island to investigate the collapse of RISDIC, the Rhode Island Share and Deposit Indemnity Corporation, which helped our state learn more about the sources of Rhode Island's banking crisis in the early-1990s. Last September, I wrote to the Majority Leader and to Senator Dodd to recommend that we consider creating such a commission, and I'm pleased that this legislation takes that important step.

"It's too late to turn back the clock and prevent today's financial crisis from happening. But we can provide the resources to hold the bad actors accountable now, to the fullest extent of the law. The Fraud Enforcement and Recovery Act will help ensure that our enforcement resources match the gravity of the situation before us."

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