'Products Of The D.C. Swamp': Mary Gay Scanlon Slams GOP's 'Industry-Written' Crypto Bills

Forbes Breaking News

During debate on the House floor, Rep. Mary Gay Scanlon (D-PA) ripped into a Republican-backed rules package.

Transcript

00:00I rise in strong opposition to the rule. Although Bitcoin's been around for over

00:0515 years, cryptocurrencies and related decentralized financial products have

00:10exploded in the past few years. Many Americans now own cryptocurrencies and

00:14the industry has seen significant growth. At the same time, our laws have not kept

00:19up with these novel crypto products and there's a wide agreement that Congress

00:24must update our laws to appropriately account for crypto assets. However,

00:28today's bills are not the answer to that problem. The Clarity and Genius Acts are

00:34bad legislation. They're industry written bills that give the crypto industry

00:39everything it wants at the expense of retail investors, consumers and the

00:44overall health of our financial system. These bills are products of the DC

00:48swamp that so many of our colleagues usually condemn. Mr. Speaker, every time

00:53our Republican colleagues write a finance bill, it leaves us less safe and more

00:58prone to financial crisis. We saw the very real consequences of this when Silicon

01:03Valley Bank failed in 2023. That failure was the direct result of Republican

01:09legislation that exempted Silicon Valley Bank from Dodd-Frank Act regulations. GOP

01:15proponents of that bill had argued without evidence that Dodd-Frank was too

01:19onerous and that big banks needed regulatory relief. But it only took a couple of

01:24years for their disastrous deregulatory agenda to lead exactly where we all knew

01:29it would, with billions of dollars of customer deposits evaporating overnight and with the

01:34federal government bailing out the bank's uninsured depositors. This time,

01:40Republicans are at it again with two bills that will create a weak and ineffective

01:44regulatory regime for cryptocurrencies and stable coins, allowing exchanges and insurers

01:50to continue risky, fraudulent and illegal practices with limited oversight by the SEC or Commodity Futures

01:58Trading Commission. These bills give the crypto industry exactly what it wants. They get the illusion

02:03of a real regulatory regime and the legitimacy that would bestow. They get weak rules that can be

02:10exploited and manipulated for financial gain. And they get enforcement mechanisms that are so meager

02:16and underfunded that they won't deter bad actors. We've seen what deregulation gets us. It got us the

02:222008 financial crisis. It gets us bankruptcies and bailouts. And it ultimately leaves hard-working

02:28Americans holding the bag while CEOs get golden parachutes. And it's not like we're talking about

02:34deregulating some benign financial product. Crypto stands out as a uniquely risky asset. From the

02:42invention of Bitcoin until now, the primary demonstrated uses for cryptocurrencies have been

02:47speculation, fraud, and money laundering. You can't really use crypto to buy anything. The coins

02:54themselves aren't backed by any profits, assets, or other tangible property. And while we've been

02:59hearing about all the wonders of the blockchain for over a decade, shockingly few companies actually

03:04use it in a way that's essential to their business. In practice, the main real-life use case for crypto

03:11is money laundering. Crypto is used by Mexican cartels to launder their proceeds from drugs

03:17trafficked into the United States. Terrorist organizations fund their operations with crypto.

03:24And countries like North Korea use cryptocurrencies to avoid U.S. sanctions and fund their nuclear weapons

03:30programs. In fact, Bitcoin and Tether are the payment methods of choice for the fentanyl manufacturers

03:37in China that supply the Mexican cartels as well as other fentanyl traffickers inside the United States.

03:44These criminal organizations rely on crypto and the legislation under consideration today will not

03:51disrupt that illegal commerce. The Clarity and Genius Acts will not do anything to prevent crypto from

03:57being used to break our laws or fund fentanyl deaths and senior fraud. These bills do not provide any

04:04meaningful regulations to ensure that issuers and exchanges fully comply with anti-money laundering

04:10laws. Add to this that cryptocurrencies are used to facilitate billions of dollars worth of fraud

04:17against Americans each year. This fraud comes in the form of scams, especially those targeting seniors,

04:23where fraudsters trick people into purchasing fake crypto products and then run off with the money,

04:29leaving the seniors with no recourse. Then there's the institutional fraud, the fraud that comes from

04:34the crypto companies themselves. Here we also have a long list of examples, the most notable being the

04:40fall in bankruptcy of cryptocurrency exchange FTX, which incorporated itself in the Bahamas to avoid

04:47American regulatory scrutiny, gambled with customer funds and ultimately left its customers penniless

04:54because of fraudulent business practices. There's no other way around it. The Clarity and Genius Acts will

05:00not stop these types of fraud from happening and they will leave regular investors on the hook if they're

05:06victims of fraud. The other glaring omission in these bills is they do nothing to stop the abuse of

05:11cryptocurrencies and stable coins as tools for bribery and influence peddling. As President Trump and his

05:19allies have demonstrated on a daily basis, any politician can issue a crypto asset, own the majority

05:25of tokens, and then anyone who wants to buy that politician's assistant attention or votes can just

05:32invest in the asset. There's no oversight or disclosure requirement. There's deniability on both sides of

05:38the transaction. Any person, any foreign country can bribe and buy politicians through cryptocurrency like this.

05:47And those who've purchased such coins have been open about their motivations for doing so.

05:53Right before his inauguration, President Trump issued his own coin, the Trump coin, for which he is the

05:58majority owner. Millions of dollars of questionable funds, including funds from foreigners and foreign

06:03governments, have flowed into this coin, as well as his company's Trump Media and World Liberty Financial.

06:10All in all, it's estimated that President Trump has netted one billion dollars from those crypto

06:15schemes, which take advantage of the office of the president to enrich him and his family. During the

06:242024 election, crypto companies donated millions of dollars to elect the president, and after he was

06:30elected, they donated millions more to his inaugural committee. And it's notable that in his first six

06:36months in office, Trump has dismantled all the regulators that oversee the financial and crypto

06:42industries, dropped criminal charges and investigations against various crypto companies, pardoned a crypto

06:48exchange that pleaded guilty to abetting money laundering, and pardoned the former owner of the Silk Road,

06:55who was responsible for selling hundreds of millions of dollars worth of drugs on the deep web.

07:01Apparently, anyone who seeks to buy influence in this White House simply has to find one of the

07:06president's companies or meme coins and make a sizable investment. Emiratis and Saudis are investing in

07:13Trump's crypto assets to curry favor. People looking for pardons, dismissals or preferential regulatory

07:20treatment are taking advantage of the Trump crypto scheme. Lawyers and lobbyists are advertising to

07:26clients that they can buy a pardon for the right price. It's easily the biggest potential corruption scandal

07:33in our nation's presidential history. If there's any crypto regulation we need right now, it's a bright

07:39line prohibition on any elected official profiting off a crypto asset. Mr. Speaker, this year marks the

07:4615th anniversary of the Supreme Court's Citizens United decision, which paved the way for corporations

07:52and billionaires to spend unlimited money in our elections. Because of this ruling, anyone for the right

07:59price can buy their preferred outcomes in our elections and in Congress. And one need look no

08:05further than Elon Musk and the crypto bills that we are considering today to see the impact of the

08:12Citizens United decision. We all know about the millions that Musk poured into the Trump campaign

08:18and the White House access he was granted before their abrupt split recently. But the crypto industry also

08:25spent a lot of money, and it spent money to make these bills happen. Over the past few years, the

08:30crypto industry has emerged as one of the biggest and most aggressive political spenders in American

08:36politics. In the 2024 election, crypto emerged as the biggest corporate spender accounting for nearly

08:42half of all the corporate money spent. Crypto outspent every other business lobby by tens of millions of

08:50dollars. And while the crypto industry's political spending is enormous, what really sets it apart

08:55is the brazenness with which the industry buys influence in Washington. Usually it's hard to

09:01exactly pinpoint a direct relationship between political spending and outcomes, but crypto spending

09:06is so in your face that we can actually put a price on these bills. All in all, the Clarity and Genius

09:13Acts cost the crypto industry about $245 million. And that's a conservative figure. That's just the money

09:19spent on 2024 campaigns. If you count money spent to hire expensive lobbyists, to come to Congress,

09:26and apply representatives with industry talking points, the number's even higher. Crypto's $245

09:32million was spent supporting candidates who backed the industry and defeating candidates who did not.

09:38And crypto got a good return on its investment. In the overwhelming majority of races that crypto

09:44principles invested in, they got their preferred candidate. And now crypto companies have been

09:49able to write their own regulations to ensure they won't face serious scrutiny or oversight,

09:54meaning that fraud and money laundering will continue unabated, and investors will be on the

09:59hook when the next crypto crisis happens. Fifteen years after the Citizens United decision, these bills

10:05are the direct result. Crypto is a textbook example of the consequences of that decision. The question

10:12before us today is, how should cryptocurrencies be regulated? And the answer we're getting is with

10:18regulations provided by the crypto industry itself. Fifteen years later, Citizens United has been an

10:24unmitigated disaster for our country. Unlimited spending in politics has corroded our democracy.

10:31It has bred cynicism and nihilism in the political process. It's made Americans feel disenfranchised and

10:36powerless. It says to every American, your voice doesn't count unless you can

10:42pay to play. We have a political system where any company or any rich person can pay for

10:47advertisements, pay for lobbyists, donate to campaigns and PACs and super PACs, all to buy

10:52influence and get their desired income outcomes from Congress or the White House. And time and time again,

10:59in every sector of our economy, corporations and the rich have won in Congress, in the courts,

11:04and in the rulemaking process, even in decision making by enforcement agencies.

11:08We see the consequences of Citizens United everywhere we turn. It's the reason corporations

11:15can screw over workers and consumers with no penalty. It's why every part of the economy is

11:20monopolized by two or three companies that sell you poor products and give you bad service. It's why

11:26we're diving headfirst into a global climate crisis and doing nothing about it. It's why every time

11:32someone runs for office on a platform of putting people over profits, they have to endure attacks

11:37from super PACs supported by billionaires or business interests. Our democracy will remain

11:43in peril so long as the mega rich can buy influence, votes and elections. If anyone was unsure of the

11:51consequences posed by Citizens United in 2010, it is now clear, but beyond any doubt, that the decision was an

11:58abject failure for the country. We have to overturn Citizens United, get dark money out of politics,

12:04and make sure that our government is accountable to voters, not donors. But to my colleagues here

12:10in the House, we don't need to end campaign spending for members of Congress to do the right thing.

12:16Integrity doesn't require authorizing legislation. We cannot allow big money donors to buy or bully

12:23Congress. We need to do the right thing. Mr. Speaker, today's rule also provides for consideration of

12:29the fiscal year 2026 defense appropriations bill. Since taking the majority in the House, Republicans

12:35have abandoned, unfortunately, any pretense of bipartisan compromise to promote our national security by

12:42loading every defense bill with radical right-wing policy riders. These riders have turned what was

12:48once a rare area of bipartisan consensus into yet another partisan divide. This time around, Republicans

12:56have loaded the national defense bill with provisions to prevent female service members from accessing

13:02reproductive health care. They've given a green light to discrimination against LGBTQ service members,

13:09and this bill does nothing to address the gross mismanagement of the Pentagon by Pete Hegseth,

13:15a man who has leaked classified intelligence, who spends more time in front of his Pentagon makeup

13:21mirror and doing press stunts than effectively managing the armed forces, and who has prioritized

13:27support for bigotry and weird culture war obsessions like changing the pictures on the Pentagon's website

13:33and renaming military bases after Confederate icons. When you combine this bill with the money spent by

13:40Republicans in the big beautiful bill, the United States is on track to spend over a trillion dollars on defense.

13:48Every year we spend more and more on defense, and it's not clear that taxpayers are getting a good deal.

13:55After years of consolidation and lax antitrust enforcement, the defense industry has ossified

14:01around five major prime contractors, each with a degree of specialization.

14:06That means only two or three companies ever compete for a major contract. The consequences of this

14:12consolidation can be found across the defense industrial base. We don't make enough of the weapons

14:18and platforms that we need. Production for major platforms is often beset by delays and cost overruns.

14:25We spend billions on studies and research programs that don't lead anywhere. Production timelines are always

14:32being extended, delivery times delay, per-unit costs increase, and in the face of these glaring business

14:39inefficiencies, Congress and the Pentagon always give the contractors what they ask for, and ask for

14:45very little in return. We need to replenish our weapons stockpiles. We need to quickly field next

14:51generation military assets like the Columbia submarine and the B-21 radar. We need to bolster supply chains

14:58that support this production, and we need to ensure that the nation has the industrial capacity to

15:03respond to a sustained major conflict anywhere in the world. But in order for us to achieve these goals,

15:10meet our national security needs, and support our service members, Congress needs to perform real

15:16oversight over the Pentagon and defense contractors. In my time in Congress, I have supported multiple

15:22efforts to require the Pentagon to perform a clean audit with tangible enforcement mechanisms to ensure

15:28compliance. But in each case, these efforts haven't garnered the votes for passage, because at the

15:34end of the day, this body has not been willing to hold the Pentagon and defense industry's feet to the fire.

15:41The Pentagon has failed to complete seven audits in a row. Seven! And until the Pentagon faces real

15:48consequences for being unable to account for the billions of taxpayer dollars it spends every year

15:54and failing to comply with congressional oversight, we will never have accountability. And at a time when

16:00our Republican colleagues' quest to root out fraud, waste, and abuse has led them to slash funding for

16:07Americans' health care and hunger relief, it's astonishing that they're willing to write yet another

16:13blank check to the Department of Defense, no questions asked, despite growing evidence of cost

16:18overruns, mismanagement, and more. At the end of the day, I want our service members to have every

16:25single advantage over our adversaries. I want them to have all the tools, platforms, resources, and weapon

16:31systems we can provide. But I don't want taxpayers to get a bad deal. I don't want to waste money on

16:38overpriced defense contracts that over-promise and under-deliver. Mr. Speaker, I reserve the balance of my time.

16:45the gentlelady reserves and

16:46the gentlelady reserves —

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