Hi All –
Some good news. We noted in our last update (click here update) that we’d requested that Congressman Kanjorski’s office demand that SIPC turn over the kinds of details that will help to “score” HR5032, a necessary procedural step regarding this legislation. We are heartened to tell you that the demand letter has been received by SIPC. This is a major success in that it may finally begin to shed light on some of the information that SIPC and the Trustee alone have been harboring, and could be an important foundation for the upcoming Kanjorski Committee hearings and the mark-up session shortly thereafter.
Further good news…. in prior emails we spoke to the issue of some of the various and obvious language flaws in the original proposed legislation — specifically, the definition of “negligent”. We also expressed great concern about fracturing the group over language issues we felt would be readily resolved during the mark-up session of the bill through amendment. That said, we have received firm confirmation from one of the bill’s primary sponsors that important language changes will, in fact, be made to the current HR5032. One attorney most concerned over the “negligent” language issue was kind enough to assist with the language change, and we will have a number of attorneys working with us to offer final language changes as we get further down the road. In addition, please know that an advocate close to one of the bill sponsor’s office stepped up and worked hard to get this early acknowledgment to help appease those who were distrustful that these changes would be made.
These changes, among others, would most likely be offered via a “manager’s amendment,” and clarify that clawback would be limited to professionals and registered investment advisors, or those complicit in the fraud; that customers (as currently defined by SIPA) would not lose their $500,000 SIPC insurance; and that the retroactivity language in the bill is applicable to all qualifying pending SIPA liquidation cases.
As stated, we look to compile the gamut of various language and other issues to prepare for further discussion with the bill sponsors in advance of the mark-up. Therefore, if you have other issues regarding language or other “cracks” in the legislation, please bring them to our attention before taking individual action so we can resolve them more effectively. Again, we must work in a coordinated fashion, and can only go to the well so many times.
In terms of timelines, once the hearings are completed, hopefully the Committee will shortly begin the mark-up of the bill while considering the viability of “net equity”. It’s important that letters of support for the bill and net equity ramp up efficiently as encouraged by our grassroots team. Ilene and DJ and the other volunteers will keep all posted. Hopefully the basic scoring can be accomplished in a timely fashion so that net equity can be included in the mark-up, which we know is essential for the needed broad support from the victims.
Next steps. Now that we have some assurance that those congressional staff members pressing this bill on our behalf will not unintentionally seek to undermine their constituencies whom they’re trying to help and will seek to remedy those issues, we need to turn to the important task at hand of getting Congress to support HR5032 and build support for FAS Net Equity. How? We must now redouble our grassroots lobby efforts and focus on the hearings. Once again, it is important — critical — that we not be seen as fractured, that we work smart, use our resources wisely. We cannot afford the luxury of adding further confusion to our goals. If you are considering an initiative that may even inadvertently undermine the collective efforts, please discuss your intentions with us first. Too much is at stake, and time spent undoing damage is precious time diverted from essential energies.
Indirects. In addition to providing to NIAP any additional changes around language flaws in the bill, items that might be seen as adding significantly to the benefits desired should be routed through Congressman Perlmutter, as we indicated in earlier update (click here for update). Just as we are taking guidance from Congressman Ackerman’s office on the direct side, we’ve been strongly directed to take guidance from Cong. Permutter, given his leadership on this aspect of the legislation. Relief for indirects is a significant political lift, and NIAP has worked and will continue to work to communicate the need for relief for indirects to the Committee and general House members. We will not be able to extend the ask beyond what Congressman Perlmutter is supporting however, for reasons we’ve discussed previously.
Avoiding Further Fracturing and Confusion. Frankly, we cannot afford the luxury of adding further confusion to our goals. Particularly on the direct side, if you are considering an initiative that may give the appearance of the existence of conflicting efforts, we request that you discuss your strategy with us first. Too much is at stake, and time spent undoing damage is precious time diverted from essential energies. We ask, once again, that if you intend to reach out to Congress, please coordinate your efforts with us. The recent forwarding of letters requesting rescinding of support for HR5032 and other visual materials has created confusion, and cost us expensive and needed political capital; as well intentioned as it may seem, it compromises our efforts, and lessens our chances of success. None of us want this. From now through the mark-up period, the more we are clearly operating as one, the more effective we will be. We have all worked too hard, too long, to suffer the impulses, even if well intentioned, of a few. Therefore, before acting on those impulses, please discuss them with us, and please do nothing to divert attention from NIAP prior to, and during the hearings. As mentioned in a prior communiqué, we have gained significant awareness up on the Hill and have a membership of nearly 1000.
Once again I thank those of you who have pressed for support for the bill or in other ways supported this endeavor, and encourage all of you who wish to help to contact Ilene and DJ. If you have strong presentation or other materials, please pass those along as well. I believe we can do this. Only by all of us working together strategically, with great lobby and pr professionals assisting, by focusing our efforts on what must be done do we maximize our chances of success.
In peace,
Ron Stein
