Grassley Pens Bill to Guard Against Tax Return Identity Theft
WASHINGTON – Senate Judiciary Committee Chairman Chuck Grassley today introduced legislation to combat tax return theft by perpetrators who steal the identities of innocent Americans. The Tax Return Identity Theft Protection Act of 2016 strengthens penalties for identity thieves, establishes enhanced sentences for crimes against vulnerable and frequently targeted groups, and clarifies the state of mind proof requirement that has created an obstacle to holding some identity thieves accountable. Grassley’s bill comes as the deadline for submitting tax returns looms for many taxpayers.
“Tax refunds can be a silver lining for many Americans during tax season, but they’ve also attracted the attention of fraudsters and identity thieves. These crooks use stolen personal tax information to swoop in and seize the tax refunds of unwitting Americans early in the season before the victims ever file. The crime is costing Americans billions of dollars annually, and can take many months to correct. My bill discourages this unscrupulous behavior by increasing penalties, especially when the victim is particularly vulnerable,” Grassley said.
Identity thieves successfully stole $5.75 billion in fraudulent tax refunds in the 2013 tax year, according to Internal Revenue Service (IRS) estimates, with another $24 billion in theft that was prevented. Taxpayers whose returns were compromised wait 278 days on average for the account to be corrected and their return reissued. Identity theft victims spend on average six months and $1,300 to correct their records.
Grassley’s bill seeks to deter tax return identity theft and other related fraud by increasing the maximum punishment for such crimes to a term of 20 years imprisonment. In addition to tax return identity theft, these offenses include stealing a victim’s identity to conspire to defraud the government, file a false claim against the government, or steal public money, property or records. The bill also enhances penalties for crimes against vulnerable groups that government watchdogs have identified as frequently targeted by identity thieves. These groups include the aging and low income populations as well as members of the military.
The bill also clarifies that prosecutors need only to prove that an individual charged with identity theft under certain statutes “knowingly” used a means of identification that was not legitimately issued to that individual, regardless of whether the individual knew that the identification belonged to another person.
Text of the Tax Return Identity Theft Protection Act of 2016 is available HERE. A summary of the bill can be found HERE.
-30-Senate Passes Bill to Combat Trade Secret Theft
This week the Senate unanimously cleared another bipartisan Judiciary Committee-passed bill that addresses a growing problem in our country. As chairman, I led the Defend Trade Secrets Act out of committee. The bill has strong bipartisanship co-sponsorship – 65 Republicans and Democrats. It provides new tools for businesses to fight back against bad actors and prevent thieves from stealing trade secrets.
It’s estimated that the American economy loses 2.1 million jobs and around $300 billion every year because of trade secret theft.
The Defend Trade Secrets Act will create a new avenue for companies to pursue civil claims against trade secret thieves in federal court and protect against the dissemination of intellectual property.
Passing this legislation is important for employers and innovators like Iowa’s DuPont Pioneer. The company was the victim in a high profile 2013 trade secrets case in which six foreign nationals conspired to steal engineered corn seeds to benefit a foreign company. It’s clear that without effective tools to combat trade secret theft, innovative businesses are vulnerable to attack.
Passing legislation to help Americans deal with a growing problem like trade secret theft, in a bipartisan fashion, will protect American jobs and innovation. It is an important accomplishment.
This is the 17th bill that the Senate has passed in this Congress that was cleared by the Judiciary Committee. ALL of these bills have been bipartisan.
In fact, we’ve processed 24 bills out of the Judiciary Committee, all in a bipartisan fashion. Of these, 6 have been signed into law by the President.
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Fiduciary rule for financial advisers; Grassley expresses concern
Sen. Chuck Grassley, as then-chairman of the Committee on Finance, with jurisdiction over taxes, played a large role in drafting the Pension Protection Act of 2006. That bill became law and contained the most sweeping reforms of pension funding rules since 1974, helping to guarantee that companies uphold their pension promises to workers. The measure permanently extended enhancements to employer-based retirement plans and individual retirement savings tax incentives that Grassley led to enactment in 2001. Last September, Grassley joined a letter from the Iowa congressional delegation to the Secretary of Labor on the need for substantial changes to the department’s proposed fiduciary rule for financial advisors. He made the following comment on the final fiduciary rule released today.
“Everybody agrees financial advisors should work in their clients’ best interests but federal regulations that put financial advice out of reach for people who won’t be able to afford it could be throwing the baby out with the bath water. Regulations that raise costs for financial advisors could make it unaffordable for small businesses to offer their employees retirement plans. Also, additional regulations might price small financial firms out of the market. The end result would be fewer choices for consumers. I’ll look at the regulations more closely but so far, I’m worried that the Obama Administration pushed forward with something that could result in worse services, fewer options and higher costs for a lot of customers.”
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Floor Statement of Senator Chuck Grassley of Iowa, Chairman, Senate Judiciary Committee
The Pressure Strategy
Thursday, April 7, 2016
Mr. President,
We have a unique opportunity for the American people to have a voice in the direction of the Supreme Court. The American people should be afforded the opportunity to weigh in on this matter.
Our side believes very strongly that the people deserve to be heard and they should be allowed to decide, through their vote for the next President, the type of person who should be on the Supreme Court.
As I’ve stated previously, this is a reasonable approach, it is a fair approach and it is the historical approach – one echoed by then-chairman Biden and Senators Schumer and other senators.
The other side has been talking a great deal about a so-called “pressure campaign” to try to get members to change positions.
It’s no secret that the White House strategy is to put pressure on me and other Republicans in the hopes that we can be worn down and ultimately agree to hold hearings on the nominee.
This “pressure campaign,” which is targeted at me and a handful of my colleagues, is based on the supposition that I will “crack” and move forward on consideration of President Obama’s pick.
This strategy has failed to recognize that I’m no stranger to political pressure and strong-arm tactics. Not necessarily from Democrat presidents, probably more from Republican presidents.
When I make a decision based on sound principle, I’m not about to flip-flop because the left has organized a “pressure campaign.”
As many of my colleagues and constituents know, I’ve done battle with administrations of both parties.
I’ve fought over irresponsible budgets, waste and fraud, and policy disagreements.
I’ve made tough decisions, and stuck with them, regardless of whatever pressure was applied.
The so-called pressure being applied to me now is nothing compared to what I’ve withstood from heavy-handed White House political operations in the past. Let me say, by the way, most of that has come from Republican White Houses.
Just to give you a few examples –
In 1981, as a new member of the Senate, I voted against some of President Reagan’s first budget proposals, because they failed to balance.
I recall very specifically a Budget Committee mark-up of President Reagan’s first budget in April of 1981.
I was one of three Republicans to vote against that resolution because it did not put us on a path to a balanced budget.
You can imagine when a budget has to come out on a party-line vote, you can't lose three Republicans. And three Republicans who were elected in 1980 on a promise to balance the budget did not go along with it. And what a loss it was for this new President Reagan that his budget might not get adopted by the Budget Committee.
We were under immense pressure to act on the President’s budget, regardless of the deficits it would cause. But, we stood on principle and didn’t succumb to the pressure.
Just as an example, right after that vote, when it wasn’t voted out of the Budget Committee, I was home on a spring recess. I remember calls from the White House. I remember threats from the Chamber of Commerce-even interrupting my town meetings.
I also led the charge to freeze spending and end the Reagan defense build-up as a way to get the federal budget deficit under control.
In 1984, I teamed up with Senator Biden and Senator Kassebaum of Kansas to propose a freeze of the defense budget that would have cut hundreds of billions of dollars from the annual deficits.
At the time, it was known as the Kassebaum, Grassley, Biden, or KGB defense freeze.
We were going to make sure that across the board the budget was defensible.
For months, I endured pressure from the Reagan administration and Republican colleagues that argued a freeze on defense spending would constitute unilateral disarmament.
President Reagan had put together a less-aggressive deficit reduction plan. We didn’t think it went far enough.
My bipartisan plan was attacked for being dangerous and causing draconian cuts to the defense budget.
I knew it was realistic and responsible.
I didn’t back down. We forced a vote in the Budget Committee and on May 2, 1984, we forced a vote on the Senate floor.
Although we weren’t successful, this effort required the Senate and the nation to have a debate about the growing defense budget, including waste and inefficiencies at the Pentagon, and the growing federal fiscal deficits.
Despite the weeks-long pressure from conservatives and the Reagan Administration, I did not back down, because I knew the policy was on my side.
In this process, I stood up to pressure from President Reagan, Defense Secretary Casper Weinberger, Senator Barry Goldwater, Senator John Tower, and many others.
I remember a meeting at the White House where I reminded the President that he had been talking through the campaign about the Welfare queens fraudulently on the budget. It happens that I reminded him that there were Defense queens as well.
I started doing oversight of the Defense Department. It wasn’t long before evidence of waste and fraud began appearing.
We uncovered contractors that billed the defense department $435 for a claw hammer, $750 for toilet seats, $695 for an ash tray.
We found coffee pots that cost $7,600.
I had no problem finding Democrats to join my oversight efforts back then.
But, it’s interesting how hard it is to find bipartisan help when doing oversight of the current Democrat administration.
Nevertheless, on May 2, 1985, after a year of work to make the case that the defense department needed structural reforms and slower spending growth, I was successful.
My amendment to freeze the defense budget and allow for increases based on inflation was agreed to when a motion to table failed by a 48-51 vote.
A majority of Republicans opposed me, and a majority of Democrats were with me. That didn’t matter, because I knew we were doing the right thing.
I went against my own party, and my own President to hold the Pentagon accountable, and I never backed off.
I had a similar experience with President George H.W. Bush in 1991.
In January of 1991, the Senate debated a resolution to authorize the use of U.S. Armed Forces to remove Saddam Hussein’s forces from Kuwait.
I opposed it because I felt the economic and diplomatic sanctions that I voted for should have been given more time to work.
I was not ready to give up on sanctions in favor of war.
In the end, I was one of just two Republicans, along with Senator Hatfield, who opposed the resolution.
I was under pressure from President Bush, Vice President Quayle and White House chief of staff John Sununu.
I was even pressured by Iowa’s Governor, Terry Branstad.
I heard from a lot of Iowans, particular Republicans, who were disappointed, and even angry with my position.
Some were even considering a public rebuke because of my vote.
Being one of just two Republicans, it was difficult to differ with a Republican President on such a major issue.
But, as I stated at the time, my decision was above any partisanship.
It was a decision of conscience rather than a matter of Republican versus Democrat.
After a tremendous amount of soul-searching, I did what I thought was right, regardless of the political pressure.
The same is true today with regard to the Supreme Court vacancy.
Under President George W. Bush, I faced another dilemma.
The President and the Republican congressional leadership determined that they wanted to provide $1.6 trillion in tax relief in 2001.
I was the chairman of the Finance Committee. The problem is, we had a 50-50 Senate at the time. The parties’ numbers were equal in the Senate and on the Finance Committee.
I had two members on my side who were reluctant to support a huge tax cut because they had concerns about deficits and the debt.
And, as we saw a few years later, their concerns were not totally unwarranted. But, at the time, the administration and leadership would have nothing to do with it.
Except that the President wanted $1.6 trillion of tax decreases. But obviously the President and the White House weren't thinking anything about what Republicans might vote against it. And when you have a 50-50 Senate, you can't lose a lot of Republicans.
After very difficult negotiations, I finally rounded up enough votes to support $1.3 trillion in tax relief.
A hailstorm of criticism followed. There were Republican House members who held press conferences denouncing the fact that we weren’t able to achieve the whole $1.6 trillion.
Now, those House members were more professional in their criticism than we witness almost every day from the current Minority Leader.
But, it was still a very contentious and difficult period that included both the budget and reconciliation process.
Minority Leader Reid has also recently brought up the pressure I came under in regard to Obamacare back in 2009.
Of course, his version is his usual attempt to rewrite the actual history.
As the Ranking Member of the Finance Committee at the time, I was involved in very in-depth negotiations to try to come up with a healthcare solution.
We started in November 2008. We had negotiations between three Republicans and three Democrats on the Finance Committee. We met hours and hours, almost totally time consuming. So we met in November 2008, through mid-September 2009, and then they decided that they -- the other side -- decided they ought to go political and not worry about Republicans.
The Minority Leader, in his usual inaccurate statement of the facts, has tried to say Republicans walked out of those negotiations.
The fact is, we were given a deadline and told if we didn’t agree to the latest draft of the bill, then the Democrats would have to move on.
And I would ask anybody in the Senate who wants some reference on this to talk to Senator Snowe or Senator Enzi. I was the other Republican. Talk to Senator Baucus. Talk to Senator Conrad. And the then-Senator from New Mexico. The President called six of us down to the White House in early August 2009.
The first question I got was, would you, Senator Grassley, be willing to go along with two or three Republicans to have a bipartisan bill with Obamacare. And I said, Mr. President, the answer is no because, what do you think we have been working on for nine months? We have been working trying to get a broad bipartisan agreement. It's something like 70-75 votes that we’re trying to get if you really want to change social policy and have it stick. We didn't abandon this until 2009, but my idea is that probably it was that meeting at the White House in early August 2009, where this President decided we don't want to mess around with those Republicans any more, we’ve got 60 votes, we're going to move ahead.
Well, that happened in September. The fact is we were given that deadline and we were shoved out of the room.
So, when we didn’t bow to this pressure and agree to their demands, it ended up being a partisan document, and that's why it still doesn't have majority support of the American people. I want the Minority Leader to know that's what happened, not what he described a couple of weeks ago.
Eventually, as we all know, the former Majority Leader, now Minority Leader, had his staff rewrite the bill in secret in the backrooms of his leadership offices.
And, we ended up with the disaster called Obamacare we have today.
The Senate Minority leader also recently proclaimed that rather than follow Leader McConnell, “Republicans are sprinting in the opposite direction.”
He also wishfully claimed that the Republican façade was cracking on the issue.
Senator Schumer fancifully stated, “Because of the pressure, Republicans are beginning to change.”
You can almost hear the ruby slippers on the other side clicking while they wish this narrative were true.
The fact is, the pressure they’ve applied thus far has had no impact on this Senator’s principled position.
Our side knows and believes that what we’re doing is right, and when that’s the case, it’s not hard to withstand the outrage and pressure they’ve manufactured.
This pressure pales in comparison to what I’ve endured and withstood from both Democrats and Republicans in the past.
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Floor Speech of Senator Chuck Grassley on Admiral Losey Whistleblower Investigation
Delivered April 6, 2016
Mr. President, I come to the floor today to tell a story about how a distinguished naval career was ruined by abuse of suspected whistleblowers.
The end-result is a mixed bag of good and bad.
In doing oversight of Defense Department whistleblower cases, I have learned a difficult lesson. As hard as we may try, whistleblower cases rarely have good outcomes. True, a wrong may have been made right. A measure of justice may have been meted out. But the victims – the whistleblowers – have been left out in the cold. They may never get the remedies they seek and deserve.
At the center of this case is an honored naval officer, Rear Admiral Brian L. Losey. He can only blame himself for what happened. No matter how you cut it, though, the destruction of a distinguished military career – especially one devoted to hazardous duty in special operations – is unfortunate and sad. Yet that’s accountability’s harsh reality. He allegedly broke the law and must now pay the price.
In the end, under pressure from several quarters, Secretary of the Navy Ray Mabus was forced to deny Admiral Losey his second star. This promotion was hanging fire for five years mostly because of ongoing investigations. Admiral Losey had allegedly retaliated against several whistleblowers.
If Secretary of the Navy Mabus and the Navy’s top brass had their way, Admiral Losey would be wearing that second star today. But late last year, it got tossed into a boiling cauldron.
Mounting opposition was coming from four different directions:
First, on November 13, 2015, after learning about the controversy, a bipartisan group of senators weighed in with a request for all reports on the Losey matter. The request came from Senators Wyden, Kirk, Boxer, Johnson, Markey, McCaskill, and Baldwin along with this Senator from Iowa. We are members of the Whistleblowers Protection Caucus. Others also requested these reports.
Second, on December 2, 2015, we received 4 of the 5 Department of Defense Office of the Inspector General reports of investigation. One is still being reviewed, and I will have more to say about that in a minute.
In reviewing these documents, we quickly realized that Admiral Losey appeared to be a serial “retaliator.” The evidence was overwhelming. He allegedly broke the law.
It all began in July 2011 at the Norfolk Navy base travel office. There was a minor dispute over who should pay for his daughter’s airline ticket to Germany. As a Coast Guard Academy cadet, she was not entitled to travel as a dependent at taxpayers’ expense.
Although Admiral Losey, his wife, and staff allegedly “pestered” the travel office to pay for the ticket, Admiral Losey eventually purchased it with his own money. Nonetheless, the incident triggered a Hotline complaint on July 13, 2011. Admiral Losey was informed of the complaint two months later.
It was all down-hill from there.
After learning of the anonymous Hotline tip, Admiral Losey was reportedly “livid.” He saw it as an act of disloyalty and “a conspiracy to undermine his command.” He reportedly developed a list of suspects and began a punitive hunt for moles. Reports indicate he was determined to find out who blew the whistle, and when he did, he allegedly said he “would cut the head off this snake and end this.”
In his drive to root out the moles, he created a “toxic” environment in his command. His seemingly reckless behavior and blatant disregard for the law and well-being of his subordinates led to his downfall.
The end-result of the admiral’s misguided search for moles were a series of reprisals against suspected whistleblowers. His choice of suspects was gravely mistaken.
Not one, in fact, had blown the whistle. Yet, each was allegedly subjected to adverse personnel action at his direction or with his concurrence. His targets were mostly senior members of his command staff in Stuttgart, Germany.
The person who actually blew the whistle worked in the travel office in Norfolk, Virginia. Clearly, this was a case of misdirected retaliation, which makes his alleged abuses even more egregious.
As soon as Senators finished reviewing these reports and started asking pointed questions, the Navy knew the watch-dogs were on the case. The Navy brass went to general quarters.
According to reports in the Washington Post, the top brass turned up the pressure. They arbitrarily dismissed the Inspector General’s findings and put the promotion on the fast track.
Third, my good friend from Oregon, Senator Ron Wyden, on December 18, 2015, upset that apple cart.
He placed a hold on the pending nomination for a new Under Secretary of the Navy, Dr. Janine Ann Davidson. His hold was not directed at her. Instead, it was directed at Admiral Losey’s pending promotion. He had grave concerns about the revelations in the Inspector General’s reports.
His hold restored much-needed leverage lost when the Senate confirmed the admiral’s promotion in December 2011. He wanted Secretary Mabus to reconsider the promotion. I commend my friend from Oregon for taking this action. It was a game-changer.
Fourth, on January 14, 2016, there came a bolt out of the blue.
The Senate Armed Services Committee fired a shot across the bow that stopped the Navy dead in the water.
The Committee’s letter to Secretary Mabus began with this damaging assessment: After reviewing the investigative reports, we “maintain deep reservations” about Admiral Losey’s ability to successfully perform at the two-star level.
This was the death knell, but the Committee’s condemnation did not end there.
If it had known in 2011 what it knows today, the Committee said, it would never have confirmed Admiral Losey’s nomination.
The Inspector General’s damaging investigative reports had turned its earlier assessment upside down.
The Committee then slammed the door shut.
The Committee urged Secretary Mabus to use his authority to deny the promotion. That was no gentle nudge. This letter effectively ended Admiral Losey’s career.
Secretary Mabus had run out of options. He had to do what he had to do. The Committee of jurisdiction had laid down the law. The admiral should not be promoted. End of story.
Admiral Losey will now step down as leader of the Naval Special Warfare Command and retire.
The Committee’s ground-breaking letter was signed by the Chairman, Senator McCain, and Ranking Member, Senator Reed.
This letter constitutes a sharp departure from the past.
During the course of my oversight work, I have had several beefs with the Committee over issues exactly like this one. All were about the need to hold senior officers accountable for alleged misconduct based on evidence in IG reports. The response back then was very different from what I see here today.
I see this letter as a breakthrough. It’s a masterpiece.
I am proud of the Committee. This about-face came under new leadership. I hope it signals the dawning of a bright, new day.
I thank Chairman McCain and Ranking Member Reed from the bottom of my heart for outstanding leadership.
Their action sends a message to whistleblowers: reprisal will not be tolerated. That’s a real morale booster for all whistleblowers suffering under the weight of reprisal.
I thank them for having the courage to do the right thing. Holding such a distinguished naval officer accountable was no easy task. To the contrary, it was as difficult as they get.
Mr. President, now that the question of the admiral’s promotion has been laid to rest, I would like to turn to some unfinished business that I alluded to earlier. The true scope of the admiral’s retaliatory actions is still being examined.
The focus is on the 5th and final report of the Losey investigation.
It’s more like a phantom than a real report.
Over one thousand one hundred and fifty days have passed since this investigation began, and it’s still not finished. It should be a piece of cake. The cast of characters, facts, evidence, and findings should be essentially the same as in the other Losey reports published long ago.
So what is really going on here?
I have received several anonymous tips. What I hear is disturbing. This report is allegedly being doctored, causing a bitter internal dispute.
On one side are the investigators. They appear to be guided by the evidence. On the other side is top management. They appear eager to line up with the Navy’s decision to arbitrarily dismiss the evidence.
From the get-go, the findings in the draft report substantiated reprisal allegations against Admiral Losey -- consistent with the other reports. Top management initially concurred with those findings. However, in response to alleged pressure from Secretary Mabus’ office, they caved and agreed to take Losey out of the report,
How could they get such a bad case of weak knees? The evidence starring them in the face seems irrefutable -- rock-solid. Plus, it was just re-affirmed by an unlikely source – the U.S. Air Force.
Because two Air Force officers were allegedly involved, the Air Force had to conduct its own review. The Air Force also found the evidence compelling. As a result, the Air Force officer, who was Admiral Losey’s command attorney, reportedly faces potential legal trouble. He allegedly facilitated the Admiral’s retaliatory actions. The other will retire.
Despite the red flags and need for caution, caution was tossed to the wind.
On March 31, 2015, Deputy Inspector General Marguerite Garrison gave the Navy a green light to proceed. She notified Admiral Losey by letter that “he was no longer a subject of the investigation.”
How could she do such a thing?
At that point in time, Admiral Losey’s alleged retaliation was the centerpiece of the report. True, it was a draft report in the midst of review. True, there were questions about Admiral Losey’s role. Yet, after the passage of one year, the dispute remains unresolved. The report is still in draft – mired in controversy.
Mr. President, something is rotten in the Pentagon.
To send such a letter, which was inconsistent with the evidence in an unfinished report, seems inappropriate.
The Garrison letter set the stage for what followed.
To conform with the Garrison letter, the findings in the draft report had to be allegedly changed from substantiated to not substantiated.
The investigators dug in their heels and stood their ground. The evidence was apparently on their side.
In early December 2015, as the Losey promotion issue reached a critical juncture, top management allegedly “directed” the investigators to change the report’s finding from substantiated to not-substantiated. The investigators were also allegedly directed to change facts and evidence to fit the desired finding. In other words, key pieces of evidence had to be allegedly “removed” to ensure that the evidence presented in the report was aligned with the specified conclusions.
These are very serious allegations.
Deliberately falsifying information in an official report constitutes a potential violation of law.
If the directed re-write of this report really happened and if it is allowed to stand, it could undermine the integrity of the investigative process.
The new acting Defense Department IG, Mr. Glenn Fine, needs to grab the bull by the horns.
He needs to call the top officials involved on the carpet. This would include Mrs. Garrison and her deputies, Director Nilgun Tolek and Deputy Director Michael Shanker. He needs to ask them to explain and justify their actions.
Next, he needs to ask the investigators to present their side of the story.
Then he needs to independently and objectively weigh the evidence and figure out what needs to be done.
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