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Senator Carl Levin is the ranking Democrat on the Permanent Subcommittee on Investigations and chaired the subcommittee from June 2001 to January 2003. The subcommittee is part of the Homeland Security and Governmental Affairs Committee and has jurisdiction to conduct complex investigations into financial crime, organized crime, offshore jurisdictions, and federal waste, fraud, and abuse, among other issues. Recent PSI investigations include:
U.S. Tax Shelter Industry:
The Role of Accountants, Lawyers and Financial Professionals
In 2003, Senator Levin, with the cooperation of Chairman Norm Coleman, R-Minn., led a yearlong investigation into the development and marketing of abusive tax shelters. In order to gain a deeper understanding of the issues involved in the marketing of these tax products, the subcommittee conducted in-depth case studies examining four generic tax products designed, marketed and sold by a leading accounting firm, KPMG, to individuals or corporations to help them reduce or eliminate their U.S. taxes.
Senator Levin's subcommittee staff issued a 125-page report detailing what was found in these four case histories, and the subcommittee held two days of hearings that provided an inside look at how respected accounting firms, banks, investment advisors and lawyers have become high-powered engines behind the design and sale of abusive tax shelters. The evidence showed that these professionals were collecting hundreds of millions of dollars in fees while robbing the U.S. Treasury of billions of dollars in revenues each year.
PSI Tax Shelter Reports:
ENRON
In 2002, Senator Levin led a bipartisan, in-depth examination into the collapse of Enron. The Permanent Subcommittee on Investigations reviewed over two million pages of documents and conducted over 100 interviews. Senator Levin chaired four hearings probing the causes of the Enron debacle.
The subcommittee also issued two bipartisan reports, one examining the role of Enron Board of Directors, and the other examining the role of certain major U.S. financial institutions, in Enron's use of misleading financial accounting. The reports concluded that the Enron Board of Directors and some U.S. financial institutions had contributed to Enron's accounting deceptions, corporate abuses, and ultimate collapse.
The subcommittee's investigative work contributed to passage of the Sarbanes-Oxley Act in July 2002, enacting accounting and corporate reforms.
PSI Enron Reports:
GASOLINE AND CRUDE OIL PRICING
In 2001, Senator Levin directed the subcommittee to begin an investigation into recent gasoline and crude oil price spikes. Senator Levin chaired hearings in the spring of 2002 detailing how U.S. retail gasoline prices are set.
The hearings and a 400-page staff report by the subcommittee identified several factors responsible for rising prices and frequent price spikes, including oil industry mergers, refinery closings, tight gasoline supplies, and regional pipeline limitations.
In March 2003, the subcommittee released a second staff report detailing the operation of crude oil markets that affect the price of not only gasoline, but also key commodities like home heating oil, jet fuel, and diesel fuel. The report warned that these markets are vulnerable to price manipulation. The report also warned that ongoing large deposits of oil into the Strategic Petroleum Reserve while oil prices are high and oil supplies are tight have increased prices but not overall U.S. energy security.
The subcommittee's most recent report, "The Role of Market Speculation in Rising Oil and Gas Prices: A Need to Put a Cop on the Beat," released in June 2006, found that market speculation has contributed to rising oil and gasoline prices and that too many energy trades are occurring without regulatory oversight.
PSI Gasoline and Crude Oil Reports:
- The Role of Market Speculation in Rising Oil and Gas Prices: A Need to Put a Cop on the Beat [PDF] - June 27, 2006
- U.S. Strategic Petroleum Reserve: Recent Policy Has Increased Costs to Consumers but Not Overall U.S. Energy Security - March 5, 2003 (Link is to GPO Website - See S. Prt. 108-18)
- Gas Prices: How Are They Really Set? (Link is to GPO Website - See S. Hrg. 107-509, Report appears on p. 322 of hearing record entitled "Gas Prices: How are They Really Set?" held on April 30 and May 2, 2002)
Tax Havens and Abusive Tax Schemes
In 2001, the subcommittee initiated an investigation into issues related to offshore tax havens and abusive tax shelters. In July 2001, Senator Levin chaired a hearing to determine the U.S. position on an international effort to increase tax haven cooperation with international tax enforcement efforts. This investigation is ongoing.
Money Laundering
In 1999, Senator Levin directed his subcommittee staff to begin an investigation into money laundering vulnerabilities in the U.S. financial services sector including private banking, correspondent banking, and the securities industry. The Permanent Subcommittee on Investigation held hearings in November 1999 and March 2001, and issued two staff reports on the issue of money laundering. This inquiry is ongoing.
The subcommittee's investigative work provided the basis for many of the money laundering provisions in Title III of the USA Patriot Act of 2001.
PSI Money Laundering Reports:
- Correspondent Banking: A Gateway for Money Laundering (Link is to GPO Website - See S. Hrg. 107-84, Report appears on p. 273 of Volume 1 of Hearing records entitled "Role of U.S. Correspondent Banking in International Money Laundering" held on March 1, 2, and 6, 2001)
- Private Banking and Money Laundering: A Case Study of Opportunities and Vulnerabilities (Link is to GPO Website - See S. Hrg. 106-428, Report appears on p. 872 of hearing record entitled "Private Banking and Money Laundering: A Case Study of Opportunities and Vulnerabilities" held on November 9 and 10, 1999)
Visit the Permanent Subcommittee on Investigations website >
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