Spencer Bachus

Mr. BACHUS

Mr. BACHUS. Mr. Chairman, if the gentleman from California [Mr. Lewis] will continue to yield, those problems need to be addressed, and they need to be taken seriously, and there needs to be serious action taken.

Mr. BACHUS. Mr. Chairman, will the gentleman yield?

Mr. BACHUS. I do think he has a role to play, and he needs to play that role. And the agreement that my colleagues have outlined I think is our agreement, but I just hope they are as serious as we profess to be about this.

Mr. BACHUS. As I understand, I think part of the budget agreement was funding at $125 million. I do not think any of us anticipated on this side of the aisle or on that side of the aisle that we had the problem that we now know we have. The Secretary of the Treasury can address this problem and take immediate action, and he needs to set a standard over there, and he needs to, quite frankly, punish those who have done wrong. And as my colleagues know, I think we can commend to him, he can take action, and we can get this program back on track.

Mr. BACHUS. Mr. Chairman, will the gentleman yield?

Mr. BACHUS. Mr. Chairman, I believe we have an agreement here. I believe if we spend an additional amount of time to take advantage with each other in a written document, we have a good faith agreement to investigate this. I think we have all acknowledged that it is serious, and we have a framework that this appropriation is going to be conditioned upon our investigating, and Treasury making us a full report and making some standards and setting up a good procedure.

Mr. BACHUS. I think from a technical standpoint, that is what I will do. I am relying on the good faith of Treasury, and we are going to go forward with this investigation. I would hope that they will simply acknowledge this misconduct, which I think the IG has, and that this program gets cleaned up.

Mr. BACHUS. Mr. Chairman, will the gentleman yield?

Mr. BACHUS. Mr. Chairman, if the gentleman will continue to yield, I think this bill is going to go out of the House presently, tonight or tomorrow. I think what needs to be done is it needs to be added in conference.

Mr. BACHUS. Mr. Chairman, will the gentleman yield?

Mr. BACHUS. If the gentleman will continue to yield, as the chairman of the Committee on General Oversight and Investigations, we cannot have oversight as some cat and mouse game where we have to ask the right question in the right way. If we do not, we get a misleading answer, we get no answer, or we get a promise of an answer. This is serious. We owe the American people oversight, and also we owe them an honest process of awarding these grants. Good recipients, good intentions, but we also have to have an honest, open, good process of making these awards. I will simply say that we have got to address this problem. It is a problem that we have and the administration has, and it has to be addressed and it cannot be glossed over. And, as my colleagues know, my patience is being tried on this, that we do not really have a problem or this is all politics when we have the creation of these documents against legal advice.

Mr. BACHUS. Mr. Chairman, let me stress that this is not about mischief, this is not about giving demerits. This is about willful intent. This is about misconduct. This is about trying to mislead Congress and, therefore, the American people in our oversight. This deals with the highest officials at CDFI. What I am saying is, enough is enough. How can we increase funding for a program that has fought oversight and has significant problems? We can clear this up, and I do not know if it is 30, 60, or 90 days, but the Treasury Department has to get out of denial.

Mr. BACHUS. Mr. Chairman, will the gentleman yield?

Mr. BACHUS. Mr. Chairman, I am sensitive to that agreement. Let me wrap up and then I will engage in a colloquy. I think what we are doing here today is healthy because we are not simply slamming each other's motivations. We are not trying to grab this for political purposes. I think that it does do a disservice to our debate when we characterize the President's advocacy of this program in a demeaning way. He is a supporter of this program and of what it is designed to do. We have to have every applicant go through the same process, play by the same rules, and this agency has got to be forthright, honest, open and expedient when we go in to review it. They have to give us an honest review.

Mr. BACHUS. I yield to the gentlewoman from California.

Mr. BACHUS. Mr. Chairman, I would say that it ought to be deeply disturbing to him to have something like this happen, and him to be involved in it only because he is an advocate and supporter of the program.

Mr. BACHUS. I yield to the gentleman from Minnesota.

Mr. BACHUS. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, let me say that I wanted us to focus for a minute on a problem we have. That problem is that the people who directed that these documents be placed in the files are the director and the assistant director of this fund. We are not talking about clerks here. We are not talking about low level officials. We do need to move in two directions. One is that we clean up our program as opposed to close it down, or some for philosophical reasons say close it down. This amendment freezes funding this year. I will say again, I think Shorebank has done good work. I do not think that that, and I have not pointed the finger at Shore Bank or these three other institutions. They received funding. What I have said is that they did not go through the same process from what the files appeared. It is a different situation. I do not want this to be taken personally on my part, particularly this is a program that the President fervently believes in.

Mr. BACHUS. If the gentleman will continue to yield, Mr. Chairman, there are two allegations that things may have been improper. One is that these documents should have been dated. Even the legal counsel at Treasury cautioned against doing what was done. I will say this, and I say this with some hesitance of being misinterpreted, but I am going to say it, President Clinton was a supporter of this program before it was created. He advocated it before it was created. He was a proponent of it. So his involvement in pushing it or advocating it should in no way indicate any ill intent on his part.

Mr. BACHUS. Mr. Chairman, I do agree that we are caught on the horns of a dilemma, and that you can advocate for this program and condemn the act that happened. So I do not fault the gentleman for that. We have been hurt in our oversight. I do not question the gentleman's motives. I do not question that. That is not for me to do, or to question the effectiveness of the program.

Mr. BACHUS. Mr. Chairman, let me say this. On April 14, I announced my intention to review the files. These documents were created on the night of April 17 and the morning of April 18. I have been attempting since that time to find out the truth, and it was only on the inspector general's report coming in this week that I knew about it.

Mr. BACHUS. Mr. Chairman, will the gentleman yield?

Mr. BACHUS. Mr. Chairman, let me first clarify two things that I think have been said here that are in error. One is that the inspector general has addressed the issue of whether the grants were proper or not. In a letter to me yesterday, she says that her investigation was restricted from that, and that that investigation continues to go on. So she has really not addressed that. We do not know whether or not the grant process, whether or not there was fraud or whether there was not. What we do know is that the letter of the law was not followed, that documents were manufactured. I think it does put us on the horns of a dilemma. The Department of Treasury has not dismissed this. They say they have serious concerns about this. What I am saying, and I am not speaking for my colleagues, I am not talking about the underlying intent of this program. I am not talking about the good it has done or that it could do. I am certainly not saying there is not a need in these communities for help and that there are some worthy goals. I am simply saying that when we take 271 applications and give four applicants about one-third of the money without a review process, and then take the other 267 and make them go through a review process, and then when I am charged as chairman of the Committee on Government Reform and Oversight to come in and review the process, and instead being told, hey, we do not have any paperwork on these four, these documents were put in there to mislead.

Mr. BACHUS. Mr. Chairman, will the gentleman yield?

Mr. BACHUS. It is not, and I would say this, not for bad paperwork, but for a process that was unethical, that was misleading, that misrepresented that there was in fact to these four applicants, they were awarded money. They did not go through the process that the other 257 applicants went through, even if they are worthy. Even if we say these guys are great, we just cannot ignore the law. We cannot ignore the rules.