Ackerman Bill HR5032 - NIAP UPDATE

First of all, thanks very much for everything you are doing to support NIAP’s efforts to reach its goals of securing restitution for the innocent victims of Ponzi schemes. Some of you have asked for a clarification of the importance of the Ackerman legislation (HR 5032) — “The Ponzi Victims Bill of Rights of 2010” — and its emphasis on the clawback issue and how NIAP will be addressing the Net Equity issue.

It is important to note that nearly half the direct investor victims are potential clawback targets and will face significant legal bills (and great anxiety) as they will have to mount vigorous defenses against the Trustee’s pursuit of these clawbacks.

However, Net Equity continues to be a primary goal for NIAP and, to that end, NIAP is concurrently working towards Congressional clarification of the final account statement definition of net equity (FAS-NE). Net equity was not included in the Ackerman legislation for one primary reason: resistance from the US Treasury who is not clear about the potential cost. Any legislation that could conceivably cost the US Treasury – even if, as in our case, it is a governmental line of credit – must be assessed or “scored.” The information needed for this scoring , is being kept carefully guarded by the Trustee and SIPC. According to Ackerman’s key staff, Cong. Ackerman and Cong. Perlmutter did not want to hold up the anti-clawback and assistance for indirect investors while trying to estimate the potential costs.

We are actively working with a top-tier lobby firm in DC – the Smith Free Group (SFG) – who understands our issues and priorities, and is providing critical guidance on this central issue. Their general position is that we must support the admittedly flawed Ackerman legislation now, lobby Congress regarding the importance of adding FAS Net Equity language to the final bill, hold hearings, discuss adjustments relating to concerns of indirect investors, and work hard to insure the improved language is in the final bill. SFG, with extensive Capitol Hill lobbying experience, has been emphatic that we must first build sponsorship for the Ackerman legislation. To undermine the process at this point will only kill the bill and Congress would be all too happy to allow it just disappear off the radar.

So here’s the legislative/lobby approach we’re taking:

1. At NIAP’s request, Congressman Kanjorski – Chairman of the Financial Services Subcommittee on Capital Markets – is demanding from SIPC and the Trustee the key information needed to assess FAS- NE on the SIPC fund and Treasury. If SIPC declines, this information can be subpoenaed. House Financial Services Chairman Barney Frank is also on board with this. This information will lead to hearings, ideally in July, that will allow modifications to be made and require the obtaining of key information.

2. We (SFG, NIAP) continue to meet with Congressmen in DC and directly plead the case regarding FAS-NE. In addition to the many meetings being undertaken by SFG, we will be asking victims to accompany us to DC in June to make the rounds on Capitol Hill.

Grass roots support/back up plan:

1. We are mobilizing via our current grass roots letter writing efforts, encouraging support for the Ackerman bill but also encouraging support for a FAS-NE definition. We will need a broad base of Congressional support nationally, which is why it will be critically important to have friends and family in areas other than the northeast and southeast write letters demanding Congressional support.

2. We are preparing to wage a strong FAS-NE standalone effort targeted to key Congressional members if we do not pick up strong support.

3. We are prepared to unleash a PR campaign targeted to the Beltway, to help force support of FAS NE.

4. We will take whatever PR & grassroots efforts necessary to try to lift FAS-NE to success.

The process will take several months, but we must build up steam right away. We are awaiting a general projected timetable from SFG on this. In the interim, we will continue to build support and momentum for the Ackerman bill and use it as the leverage point to bring in the FAS-NE support.


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