Patrick Leahy: “I am joined by friends and colleagues, the senior Senator from Maryland, Mr. Sarbanes, and the senior Senator from…”

“I am joined by friends and colleagues, the senior Senator from Maryland, Mr. Sarbanes, and the senior Senator from Virginia, Mr. Warner, in offering a bipartisan amendment that will moderately preserve the current conflict-of-interest standards for investment banks. We are doing this to safeguard the integrity of the bankruptcy process. Section 414 of the underlying bill would severely weaken the disinterested persons rule. That was an important conflict-of-interest standard. It has actually been part of the Bankruptcy Code since 1938. It has been there before I was born. We believe that the standard embodied in current law is critical to protecting the interests of investors and the public. So our bipartisan amendment is a modest compromise. It limits the conflict-of-interest prohibition, not a total exclusion but just 5 years prior to the filing of the bankruptcy petition. In other words, a prohibition which has been the bankruptcy law forever would now be cut back just to apply in the 5 years immediately preceding the bankruptcy. I think it is a reasonable compromise. The current disinterested persons standards are intended to ensure that professionals who advise a company in bankruptcy have no conflicts of interest, are neutral, and when we consider how huge some of these bankruptcy have been, Enron and others, we want somebody without a conflict of interest; we want somebody who can be neutral.”