Robert Bennett

Mr. BENNETT

Mr. BENNETT. Mr. President, I rise today to introduce, with Senator Wyden, the Affordable Housing Barrier Removal Act of 1998. According to the National Association of Home Builders, housing compromises 12 percent of the economy of the United States and the housing construction and remodeling industries employ approximately 2 million people each year. However, housing costs continue to rise and housing affordability continues to be a challenge for many American families. Unnecessary regulations contribute significantly to the costs of housing. Layers of excessive and unnecessary regulation imposed by all levels of government--federal, state, and local--can add 20 to 35 percent to the cost of a new home. Mr. President, the removal of regulatory burdens is essential to increasing the home ownership rate in the United States. Home ownership is the cornerstone of family security, stability, and prosperity. Congress has the responsibility to do all that it can to encourage and promote policies that increase homeownership. Mr. President, it is for these reasons that Senator Wyden and I introduce the Barriers bill today. This bipartisan bill has three major goals. First, the bill require federal agencies to evaluate any new rule or regulations to determine if they have an impact on the cost of housing. Second, the bill will encourage states and localities to bring together all the parties involved in the production of housing and those who regulate them to discuss barriers and how to remove them. Third, the bill will remove outdated requirements in the Federal Housing Administration's single-family mortgage insurance program to make the program more efficient. In addition to the major goals of the legislation, the Barriers bill will authorize the United States Department of Housing and Urban Development (HUD) to become more involved in comprehensive efforts to encourage barrier removal activities. As the federal entity that oversees our national housing policy, HUD must be actively involved in strategies and activities to remove regulatory burdens to produce more affordable housing. Mr. President, while there is no doubt regulations are necessary to protect our workers and our environment, there must be a commonsense approach to relief from excessive regulatory burdens that impact other sectors of the economy. I look forward to the input from my other colleagues and others involved in the housing industry about this legislation. I believe it opens an important and timely dialogue, and I commend Senator Wyden for the leadership he is showing on this issue.

Mr. BENNETT

Mr. BENNETT. Mr. President, I thank my friend from Kentucky.

Mr. BENNETT. Mr. President, I make three points in the letter. First, I point out that it is still time for her to do in this instance what she has done five times before in instances that are, in my opinion, less serious than this one. There is still time to appoint an independent counsel. However, if she persists in refusing to do so, I think she has, at the very minimum, two responsibilities to this Congress. First, if she uncovers any indication of the passing of improper information through this conduit from the U.S. Government to either Lippo or the Chinese, or both, she has the responsibility to share that information with the Senate Intelligence Committee, and to share it as soon as she finds it. Second, if she comes across any indication that there was an illegal transfer of money from either the Lippo Group or the Chinese Government, or both, into the Democratic National Committee, she has the responsibility to share that information with the Governmental Affairs Committee immediately after she finds it. We can always reconvene in S. 407. We can always go into executive session. But she has a responsibility, by virtue of her determination to keep this matter to herself rather than giving it to an independent counsel, to be that responsive and that accountable to this Congress. I say to her, ``Madam Attorney General: By making the decision to keep this to yourself you have your work cut out for you. In addition to the pattern of poor memory at the highest level, you have a flock of witnesses who have fled the country. You have a flock of witnesses, including members of the White House staff, who have taken the fifth amendment. You have an intricate and almost massive task. And this Senator at least will be watching with great interest to see how you discharge it.'' I yield the floor. Exhibit 1 U.S. Senate, Washington, DC, March 13, 1998. Hon. Janet Reno, Attorney General of the United States, Department of Justice, Washington, DC. Dear Madame Attorney General: During its investigation of campaign finance irregularities, the Senate Governmental Affairs Committee uncovered a series of established contacts between the Chinese Government and the Clinton Administration. These contacts could have been used as conduits for the two-way passage of classified information and illegal campaign contributions. For example, the American Intelligence Community has concluded that the Riady family of Indonesia has had ``a long term relationship with a Chinese intelligence agency''. The Community further concluded that the Chinese intelligence agency ``seeks to locate and develop relationships with information collectors, particularly persons with close connections to the U.S. Government.'' The Committee determined that (1) the Riady family and its associates were the leading source of campaign funds for the Clinton-Gore ticket in 1992, and (2) the Riady family was able to place one of its top officials, John Huang, at the Commerce Department where he had access to sensitive intelligence information. The Committee also concluded that six individuals--John Huang, Charlie Trie, Maria Hsia, Mochtar and James Riady, and Ted Sioeng--have some affiliation to the Chinese Government. In a number of circumstances, including allegations against Cabinet officers Henry Cisneros, Michael Espy and Bruce Babbitt, you have decided that potential conflicts of interests required the appointment of an Independent Counsel. The Chinese conduit issue raised by the Committee is far more significant to public confidence in the proper functioning of the American Government than any of these cases. Further, the six individuals named by the Committee all have strong links to ``covered persons'' under the Independent Counsel statute. Therefore, I believe that the appointment of such a Counsel is required. I urge you to reconsider your decision not to do so. However, if you persist in your decision to retain jurisdiction within Justice over these cases, it is incumbent on you to agree to do two things as your investigation proceeds: (1) Inform the Senate Select Committee on Intelligence of possible classified information that may have flowed through the conduit from the Clinton Administration to the Chinese Government. (2) Inform the Governmental Affairs Committee of any illegal campaign funds which may have made its way through the conduit from Chinese sources to Clinton- Gore or the Democratic National Committee. By refusing to turn this matter over to an Independent Counsel, you have taken upon yourself the responsibility to be thorough, vigorous and timely in your investigation. Given the high level of public and congressional interest in the serious circumstances involved, it is only appropriate that the Congress continue to be kept informed of your progress. Sincerely, Robert F. Bennett, U.S. Senator. Mr. McCONNELL addressed the Chair.

Mr. BENNETT. I thank my friend from South Carolina. This is high praise coming from a man who served with my father and who has set an ethical standard of which the rest of the Senate can be proud. Mr. President, I suggest the absence of a quorum.

Mr. BENNETT. Mr. President, I am here for two reasons today. First, the Governmental Affairs Committee filed its report last week. I have individual views in that report regarding the scandals surrounding the 1996 Presidential campaign. I said in my individual views that I would focus, in a major floor speech, on what I consider to be the principal issue of that investigation. I am here today to fulfill that responsibility. Secondly, today I have sent a letter to the Attorney General focusing on what I consider to be the principal problem connected with our investigation. I owe it to her to make a full explanation of why I have sent her that letter. Now, Mr. President, I am a Member of the Senate who served on the first committee investigating Whitewater activities, chaired by Don Riegle, the Senator from Michigan. I call that Whitewater I. I served on the second committee investigating the matters relating to Whitewater, chaired by Senator D'Amato, which I call Whitewater II. I served on the Governmental Affairs Committee investigating the excesses of the 1996 campaign, which I shall call Thompson. From those three committees, I have some observations that I think I would like the Members of the Senate to be aware of. I am going to do two things in my presentation. First, I will outline the common threads that have run through all three of those investigations. They give us a pattern of how the Clinton administration reacts to scandal; and, second, I will, in response to the letter I have sent to the Attorney General, focus on the one specific situation that remains unresolved that in my opinion is the most important situation in this whole circumstance. So let us go to my first task, the identification of the common threads. At the end of Whitewater I, I went back to the office and dictated a memo to myself for historical purposes to help me remember what I had learned out of that situation. I have gone back and reread that memo and share with you now the things I wrote down. I came to the conclusion that the low-level people who testified before us--that is, people who are fairly far down in the bureaucracy-- have good memories, gave us direct answers, and tell the truth as they see it. I found that pattern across the board. On the other hand, the higher level officials had bad memories, gave us evasive answers, and did their best, in my opinion, to shave the truth. As I say, I saw this pattern in the very first Whitewater committee. I saw it repeated again and again through all three experiences. Let me give you some examples. In Whitewater I, the Resolution Trust Corporation employees, who were involved with investigating this matter, who first noticed the criminal referrals relating to President Clinton's--then Governor Clinton's--business partners, all had good memories, gave us direct answers and told us the truth. But when we got to a higher level, we found a Treasury Department official who actually tried to convince the committee that he had lied to his own diary. That is, the notes he had taken contemporaneous to the events were wrong and the version he was now giving us before the committee was the correct one. When we got to the highest level, members of the White House staff, we had the people who could not remember anything. In Whitewater II, at the lowest level, the Secret Service people, the Park Police, the White House secretaries who worked in the office of the White House general counsel all had clear memories, all told us the truth, all were very direct in their responses. When we got up to a slightly higher level, reminiscent of the man who lied to his diary, we had a political appointee who could not recognize her own voice when it was played back to her on a tape recording of a conversation she herself had had, saying, ``I'm not sure that's me.'' When we got to the highest level, White House intimates, we had a White House official who said she could not remember being in the White House even though the Secret Service showed she had been there and had been in the family residence portion of the White House for 2 hours on that particular day, and she had no recollection whatsoever of the incident. She did recall making calls of condolence to people with respect to Vince Foster's suicide, but she could not recall any conversations about any other subject during that time period. Now, when we get to the Thompson committee, at the lowest level, we had briefers from the CIA, we had secretaries at the Department of Commerce, we had a bookkeeper from the Lippo Bank, all of whom had very clear memories--direct answers, believable. Then we got up to the DNC staffer, he constantly had to have his deposition read back to him when he was in front of the television cameras to remind him that his version now was not the same as his version previously. When we got to the highest level, the Deputy Chief of Staff to the President of the United States, he said he ``could not recall'' 299 times--one time short of a perfect bowling score. So, I came to my first conclusion: If you want to know what happened, talk to the people at the lower level, talk to the people whose jobs are not dependent upon White House patronage. The second common theme comes not from a detailed memo to myself but from an editorial that appeared in the New York Times. This editorial appeared January 22nd of this year. It was not talking about the three investigations that I have described, but it does analyze, better than anything I have seen, the patterns of this administration. It says, quoting from the New York Times: This Administration repeatedly forces its supporters to choose between loyalty and respect for the law. Those are Clinton . . . themes established long before the charges that Mr. Clinton had a sexual relationship with a White House intern. . . . In such circumstances in the past, the White House has relied on two principal weapons, stonewalling and attacking. . . . I would like to take it through the same pattern as the first theme I discovered. Let us go back to Whitewater I. Admittedly, there was a relatively small amount of stonewalling in Whitewater I. It was mainly memory loss. But there were attacks, attacks on the RTC employees, attacks on their veracity, attacks on their integrity, attacks on the way they did their jobs. We really saw this pattern in stonewalling and attacking when we got to Whitewater II. Stonewall the subpoena. Insist that you cannot find the notes. Say that that is attorney-client privilege. Then we saw something new that entered in here which I call the ``incompetence defense.'' Constantly we were told the reason they could not produce the information we wanted is that ``a Secretary had misread the subpoena. . . . We didn't know that's what you wanted. . . . That was in the wrong file. . . . We looked in the wrong place. . . . We don't know where the notes came from.'' Part of the stonewalling pattern was the incompetence defense. ``We are so incompetent down here we can't provide you with anything.'' Attack? Oh, yes, we saw it in Whitewater II--attack witnesses, including, incidentally, Linda Tripp, who was one of the low-level people who appeared before us in Whitewater II and who, in response to the attack she received by virtue of her direct answers, decided she had better start tape recording all of her conversations in order to protect herself. Attack the witnesses, attack the committee staff, and most of all, attack the chairman. All of us in this Chamber know the tremendous amount of abuse that was heaped upon the head of the committee, Al D'Amato, by virtue of his chairmanship of that committee. I personally saw it in the following instance. I appeared on the News Hour with Jim Lehrer opposite Anne Lewis, Deputy Director of the Democratic National Committee. She said on that occasion, with great indignation, ``It is no coincidence that Al D'Amato, the chairman of Bob Dole's election effort, was appointed chairman of the committee to handle this investigation against President Clinton.'' I stepped in and corrected her. I said, ``As a matter of fact, it is coincidence.'' It is the purest coincidence. The individual who made the decision that Al D'Amato would be the chairman of that investigation was actually George Mitchell, the Democratic majority leader in this Senate, who in the 103d Congress determined it would be the Banking Committee that would handle the Whitewater investigation. George Mitchell didn't realize that the voters would put Al D'Amato in that position in the 104th Congress. Pure coincidence. I saw Anne Lewis on television the next day after I had given her that additional information saying, ``It is no coincidence'' about Al D'Amato, and she went on with her charge, her unrelenting attack. In the Thompson committee, the same pattern. They attacked the witnesses, they attacked the staff, they attacked the chairman, and in this case, they attacked the committee members. I know that because they attacked me. Here was the circumstance. We had a description of Charlie Trie and how he was acting, and one of the members of the committee said he really couldn't understand that action, implying that Charlie Trie should be dismissed as nothing more than a buffoon. I stepped in and said, ``No. I have owned a business in Asia. I have done business in Asia. Charlie Trie's actions are the typical actions of an Asian businessman.'' By that afternoon, the Democratic National Committee issued a press release attacking me as a racist, and within 3 or 4 days, par for the course with their efficiency, there were letters to the editor of my hometown newspaper repeating the charge that I was a racist. I found it interesting that somewhat later when President Clinton was describing why Charlie Trie acted the way in which he did, he pointed out he was simply responding to the culture that he came out of, the business situation in which he found himself--in other words, a typical Asian businessman. I find it interesting that to the Democratic National Committee when I say it, it is racist; when President Clinton says it, it is exculpatory. In fact, of course, it is neither one. Stonewall and attack, stonewall and attack, stonewall and attack. We saw it through all three of these investigations. If I may, we are seeing it again with respect to Kenneth Starr and what is going on in the investigation into the President's personal life. Those are the themes that I saw. The second conclusion I add to the first one: The White House will stonewall and attack at every turn. Those who speak up candidly do so at their peril. Now, let me go to my second task, which is to focus on what I consider to be the most serious unresolved situation in all of this. For this we need to take a little history. We go back to 1977 and to the State of Arkansas. In 1977, Mochtar Riady decided it was time to come to the United States. He found a partner who would help him come into the United States, a man by the name of Jackson Stephens of Little Rock, AR. Now, Mochtar Riady is an ethnic Chinese who was born in Indonesia. He rose from running a bicycle shop to becoming a billionaire. We know on the basis of the IMF debate that is currently going on with respect to Indonesia how one becomes a billionaire in Indonesia. It is being called ``crony capitalism.'' It is characterized by money laundering, insider trading, and a cozy relationship with the Government that usually involves substantial payments to officials of the Government. That is the culture in which Mochtar Riady became a billionaire. We will revisit that in a minute. As I say, in 1977 Mochtar Riady wanted to come to the United States, and given the fact that his company, his group, called the Lippo Group, is primarily involved in banking, insurance, securities, and property development, it is natural that he should first look to acquire a bank. Jackson Stephens said to him, ``We can help you acquire the National Bank of Georgia from Bert Lance.'' But Mochtar Riady did not move fast enough. There were some Middle East investors who moved in, acquired the National Bank of Georgia, renamed it the Bank of Commerce and Credit International, or BCCI, and it went on to its own history and its own story, and we will leave it at that. Perhaps disappointed in his inability to acquire the National Bank of Georgia, Mochtar Riady looked elsewhere, and Jack Stephens had an alternative for him in the State of Arkansas. So Mochtar Riady sent his second son and heir, James Riady, to Little Rock, to intern at Stephens & Company where he became acquainted with the then Attorney General of the State of Arkansas, a rising young politician named Bill Clinton. Riady and Stephens went on to joint ventures in Hong Kong and in other deals. But in 1984, Riady and Stephens jointly took control of the Worthen Bank in Little Rock. James Riady was installed to run the Worthen Bank, and he brought from Hong Kong an experienced international banker to help him, a man by the name of John Huang. Now, immediately the bank ran afoul of Federal regulators. The Comptroller of the Currency accused bank officials of breaking Federal laws that limit insider loans. One reporter put it, ``The Feds imposed controls on insider lending and started to ease the Riadys out of the bank. The pipeline from Worthen to Jakarta would be cut off.'' Forced out of their control of the Worthen Bank, the Riadys moved their operations to California. They took over a small bank, renamed it the Lippo Bank of California, and James Riady and John Huang moved to California to head up the bank. Now, as occurred in Arkansas, the stewardship of the Lippo Bank of California promptly drew the attention of the regulators. Twice within 4 years it was hit with cease and desist orders from the FDIC. The first one was issued for ``unsafe or unsound banking practices.'' The second was issued for underreporting foreign currency transfers between California accounts and accounts in Hong Kong. The Los Angeles Times has noted, ``Since 1990, Lippo Bank has spent most of its existence under the FDIC cease and desist orders which are uncommon and among the most severe actions an agency can take.'' Now, the Riadys did not stop with banking in California. They branched out into other businesses. We found three of them in the Thompson committee, Hip Hing Holdings, San Jose Holdings, and Toy Center Holdings. There was one common thread of all three, they all lost money. The most spectacular loser was Hip Hing Holdings. Here is a summary of its financial results. In 1992, it had total income of $38,400. It had expenses exceeding that income of $482,395. They donated, out of that $38,000 in total income, $55,400 to the Democratic National Committee. That has since been returned, having been determined to have been illegal. In 1993, it didn't do any better. Its income went down to $35,000, which brought losses, because their expenses were stable, brought their losses up to $493,000, and this time they donated $32,960 to the Democrats. The committee determined this was a clear example of money laundering because the $55,400 that came in 1992 was all reimbursed from Jakarta. We asked the bookkeeper of the Hip Hing Holdings how this worked. She said, ``Whenever I needed any money I contacted Jakarta and they sent it.'' Now, John Huang was the president of Hip Hing Holdings. He was also an officer in every other one of these Lippo corporations that I have described, including the Lippo Bank, the one for which he was qualified by virtue of his background. We asked the Lippo Bank president what John Huang did all day. The president and John Huang had adjoining offices and they shared a single secretary. You would think if anyone would know what John Huang's activities were, it would be the bank president of the Lippo Bank. He responded he had no idea what John Huang did all day. We asked the same question of the bookkeeper; we got the same answer. They didn't know what the president of this company, which was losing half a million a year, and no one seemed to care, was doing with his time. Well, we know what he was doing with his time. John Huang traveled extensively as the Riadys' principal agent in the United States. Among other places, he went to Little Rock to keep up his contact with then Gov. Bill Clinton. He raised money for Governor Clinton's reelection and he raised money for the campaign for President. The committee determined that in 1992 the Riadys were the largest single contributor to the Democratic National Committee, larger than any union, larger than any Hollywood star, larger than any special interest group connected with the Democratic Party. The No. 1 contributor to the Democratic National Committee was the Riady family. After the election, John Huang continued traveling the country as the Riadys principal agent in the United States, but he added a new wrinkle to his activities. He started hosting officials of the People's Republic of China, taking them wherever possible to introduce them to members of the Clinton administration. In one case, he brought a Riady partner with connections to the Chinese intelligence apparatus to meet Vice President Gore. Now, why the People's Republic of China? Why would the Riadys be interested in courting favor with the Chinese? Public sources say the Riadys have more than $1 billion invested in China. We asked the CIA if there were other links between the Riadys and the Chinese. The answers are in S- 407, the secret room here in the Capitol, and any Senator who wishes can repair there and see just how close the relationship is between the Riadys and the Chinese. I assure you it is very close. This is what the committee says: ``The committee has learned from recently acquired information that James and Mochtar Riady have had a long-term relationship with a Chinese intelligence agency. The relationship is based on mutual benefit, with the Riadys receiving assistance in finding business opportunities in exchange for large sums of money and other help''-- I said we would revisit crony capitalism. ``Although the relationship appears based on business interests, the committee understands that the Chinese intelligence agency seeks to locate and develop relationships with information collectors, particularly persons with close connections to the U.S. Government.'' Let's go back to 1992. The Riadys, the largest single contributor, what did they want? The answer: they wanted a job in the Clinton administration for John Huang. Now, when his name went to the personnel processors, they assumed, we found out in the committee, that the primary reason for supporting John Huang was he was an Asian American and this was one of President Clinton's diversity appointments. Frankly, the appointment languished. It sat there for a year and a half and then two things happened: No. 1, Webb Hubbell, Hillary Clinton's former law partner, and President Clinton's close friend, found himself out of a job, out of money, and on his way to jail. No. 2, James Riady went to the White House five times in 1 week. On his last day at the White House, which was June 25, he attended the President's radio address. The White House photographers turned on the videotape. I have seen the videotape of the radio address and of the people who were there. At the end of the radio address, each person there shook hands with the President, had his picture taken, and left. Hanging back until everyone was gone was James Riady and John Huang. After the radio address was over and the people had cleared the Oval Office, James Riady, John Huang, and Bill Clinton were left alone. At that point, unfortunately, the White House photographer turned off the video camera, so we don't know what happened at that meeting. But this much we do know: On the next business day, Monday, June 27, Webb Hubbell was retained by the Lippo Group for $100,000, and John Huang got a memo from James Riady outlining his severance from Lippo in anticipation of his joining the administration in the Commerce Department. Ultimately, that severance came to nearly $900,000--over 4 years' pay--to an executive who had presided over nothing but losing operations. Well, as we know, the amounts we have shown of these losses are chump change to a billionaire. The Riadys were not in America to make money. They came to America looking for something other than financial gain from their investments in the United States, and they seemed to have gotten it when John Huang went to the Commerce Department less than a month after that White House meeting. James Riady summarized it very well when he described John Huang as ``my man in the American Government.'' John Huang didn't have just any job. He became the principal Deputy Assistant Secretary for International Economic Policy with access to critical economic information, including classified briefings from the CIA. What did John Huang do at the Commerce Department? Well, we know from some of those lower level people that he attended a lot of meetings and that he was a very assiduous note taker. He was an information collector. But other than that, his superiors at Commerce said the same thing that his superiors at the Lippo Bank said: ``We really don't know what John Huang did with his time. We really don't know what he did each day.'' Well, we know at least some of the things he did. No. 1, we know he went to the White House 67 times while he was Deputy Assistant Secretary. I know Cabinet officers who would be jealous of the opportunity to go to the White House half that often. No. 2, we know that at least once or twice nearly every week in the entire time he was at the Commerce Department he walked out of his Commerce Department office, went across the street to Stephens Inc's Washington office where he received packages, FAXes, and phone calls; and then with the door closed in an office in that suite, he made phone calls and sent out FAXes. We do not know to whom. We do not know what was in those packages that he received there or why it was essential for him to go there at least once, and often twice, almost every single week for 18 months. We also know that even though he had received close to $900,000 in severance from the Lippo Group, there was one tie with the Lippo Group that was not severed. They left him with a corporate telephone credit card, and he used that credit card to make over 400 telephone calls to Lippo officials--at least 232 of them to officials of the Lippo Bank. Many of these calls were made on his Commerce Department telephone, using the corporate credit card from the corporation from which, supposedly, he had been severed. Now, here, therefore, is the structure: You have John Huang in the Commerce Department, in an area of great sensitivity, taking notes and getting briefed by the CIA, and in and out of the White House more often than a Cabinet officer. He is on the phone weekly, or more often, to Lippo executives who have very close ties to Chinese intelligence. If ever there was a conduit that could be used to pass intelligence information from inside the Clinton administration to the Chinese intelligence apparatus, or Lippo, or both, that conduit was this: From the United States Government through the conduit created by John Huang to the Lippo Group or the Chinese Government. Was this what the Riadys hoped for when they paid for all those money-losing corporations? If it is, they certainly had it. Of course, all of this would disappear if Bill Clinton failed to be reelected in 1996. So, in 1995, it was decided in another Oval Office meeting, attended by James Riady, John Huang, Bruce Lindsey, and President William Clinton, that John Huang would move from the Commerce Department to the Democratic National Committee. The same apparatus that could have been used to funnel intelligence information out could now be used to funnel dollars in. Now, there was objection in the Democratic National Committee to John Huang because they were afraid he would break the rules, break the law, and embarrass them in his fundraising activities. The President himself overcame those objections, making it clear that he wanted John Huang at the DNC. John Huang went there and he began to raise money. Indeed, did he raise money. Here is the list of John Huang's fundraising capabilities: In November of 1995, he raised $30,000; in December, $100,000; in February of 1996, $1.1 million; in April of 1996, $140,000; in May of 1996, $600,000; in June of 1996, $90,000; in July of 1996, $700,000. In all, it was over $3 million. He created enormous cash flow for the Democratic National Committee. Unfortunately, it went both ways because almost half of the money that flowed in from John Huang's activities had to flow back out as it was determined to have come from illegal sources. His most spectacular success was the dinner in February of 1996 when they raised $1.1 million. Here is what President Clinton had to say on that occasion: I am virtually overwhelmed by this event tonight. I have known John Huang a very long time. When he told me this event was going to unfold as it has tonight, I wasn't quite sure I believed him. But he has never told me anything that didn't come to pass, an all of you have made it possible. Unfortunately, a substantial number of the people at the head table at that event could not participate in this tribute to John Huang because they didn't understand English. They were not citizens of the United States, and they weren't quite sure what was going on. But they were sure that money was going in the direction they wanted it to go. Now, I want to focus on the most famous of John Huang's fundraising activities--the April 29, 1996, fundraiser at the Buddhist Temple that he ran along with Maria Hsia. The amount of money he raised was not the largest amount, but it was the most significant amount. He raised $140,000, most of which had to be returned because the alleged donors were, in fact, reimbursed, dollar for dollar, in a way that is classic money laundering and clearly illegal. I focus on this not because it is the most famous, but because it is the best symbol of what appears to have been going on here. It has the most complete cast of characters. Here we have one event, and representing the Clinton administration was the Vice President, Al Gore; representing the DNC, its chairman, Don Fowler; representing the Lippo Group, John Huang, still carrying a Lippo credit card; and representing Chinese intelligence, Maria Hsia and Ted Sioeng. I need to talk a minute about Ted Sioeng. There were press reports that indicated he was, in fact, connected with Chinese intelligence. When we were in room 407 getting a confidential briefing in executive session from the Director of the FBI and the Director of the CIA, I asked the question, ``Is there any connection between Ted Sioeng and the intelligence operation of the People's Republic of China?'' The answer I got was, ``We don't know.'' So I asked the question, ``Aren't you interested?'' ``Well, yes.'' I then asked the question, ``Will you find out?'' ``Yes.'' And then I asked the question, ``When you find out, will you share that information with this committee?'' ``Yes.'' The next time we gathered in executive session with the Director of the CIA and the Director of the FBI, this was their opening comment: ``We need to make a correction of our previous statements. It turns out that in response to Senator Bennett's questions, we went back and checked our files and discovered that we did indeed have information linking Ted Sioeng to the People's Republic of China.'' This was discovered in the CIA files. When they went to find the source of that information in the CIA files, they discovered that their source was the FBI. In fact, it was in both agencies and neither agency Director had known about this. I won't go into that matter further, because Senator Specter made a speech about it on the floor castigating the Department of Justice for not doing the very fundamental kind of activities that would have discovered that and prevented their Directors from being so embarrassed before the members of the committee. It is time to summarize. What do we have here? We have a conduit that runs from the inside of the Clinton administration to the inside of the Chinese intelligence apparatus. It is a conduit through which could flow from the United States to the Chinese classified information about U.S. trade policy and strategy. It is also a conduit through which could flow from the Chinese, or Lippo, to the Democratic National Committee funds to support the reelection of President Clinton. We do know that funds did flow through that conduit from Lippo to the DNC-- those funds that I identified that came through Hip Hing Holdings that have had to be returned. We do not know whether funds have come from the Chinese Government, either down through Lippo or directly through the conduit to the Democratic National Committee. So the key question that must be answered and, in my opinion, still is unresolved after all of these investigations, is: Was this conduit ever used either way for either purpose--the transmission of intelligence information, or the transmission of money? When I tried to find out by asking direct questions in executive session on this issue, I always get the same answer: ``Senator, we cannot give you that information because it is part of an ongoing criminal investigation.'' Now, on its face, that is an acceptable answer. That says that something is being done about this. Someone of importance in the justice apparatus of the United States is looking into this and pursuing a criminal investigation. But I want to put that in context. Who should conduct that investigation, the Department of Justice or an independent counsel? When we had word of a scandal in Arkansas prior to Bill Clinton becoming President of the United States, Janet Reno, the Attorney General of the United States, said that is a matter that requires an independent counsel. When we had a matter when one Indian tribe was accused of influencing a decision relating to the gambling license for a competing Indian tribe, Janet Reno, the Attorney General of the United States, said that is a matter for an independent counsel. When we had accusations that Henry Cisneros lied to the FBI about the amount of money he paid his mistress prior to his confirmation hearings, Janet Reno, Attorney General of the United States, said that is a matter for an independent counsel. When we had accusations that Secretary Espy, Secretary of the Agriculture, had taken favors improperly from certain lobbyists, Janet Reno, Attorney General of the United States, said that is a matter for an independent counsel. When we had information that the President had behaved in an improper way in his personal life, Janet Reno, Attorney General of the United States, turned to Ken Starr and said, ``That's a matter for an independent counsel.'' But on the question of whether or not this conduit was utilized for illegal transfers of money or intelligence information, either way, Janet Reno, Attorney General of the United States, says, ``This one I will investigate myself.'' On this one she has staked the integrity and objectivity of the Department of Justice. If she has staked the integrity and objectivity of the Department of Justice, in my opinion, there must be an accounting of that integrity. So I have today written the Attorney General a letter. I ask unanimous consent that it appear in the Record following my remarks.

Mr. BENNETT

Mr. BENNETT. The Senator from Montana has informed me he does not intend to use the time reserved for him. Not seeing the Senator from Pennsylvania on the floor, I now claim my 45 minutes and will proceed.

Mr. BENNETT

Mr. BENNETT. I have no objection.

Mr. BENNETT. Mr. President, I note the Senator from California is on the floor, and I suggest she be recognized first.

Mr. BENNETT. Mr. President, I ask unanimous consent that the Senator from Montana, Mr. Burns, the Senator from California, Mrs. Boxer, and the Senator from Pennsylvania, Mr. Specter, each be recognized for up to 3 minutes apiece, and that the time not count against my 45 minutes; that following the presentations of each of these three Senators, I be allowed to proceed with the 45 minutes as called for in the previous order.

Mr. BENNETT

Mr. BENNETT. Mr. President, I rise today with my distinguished colleague, Senator Dodd, in support of HR. 3116, the Examination Parity and Year 2000 Readiness for Financial Institutions Act. We jointly introduced the Senate version of this bill, S. 1671 and are in full agreement with it in every respect. Mr. subcommittee has held five hearings on Year 2000 compliance and I will chair another hearing on this issue next week. Generally speaking, most of our financial institutions are ill prepared to face the millenial date change at this time. None of our regulatory agencies are in the position they should be, based on the time schedule issued by OMB and GAO. This problem is compounded because several of our regulatory agencies have insufficient enforcement authority to ensure that the financial institutions they regulate can continue to function in a safe and sound manner after the millennial date change. The bill before us at this time will give authority to the Office of Thrift Supervision (OTS) and the National Credit Union Administration (NCUA) in parity with the authority provided to other Federal banking agencies under the Bank Service Company Act (BSCA) with respect to the performance of services by contracted service providers. For example, OTS will be able to examine service providers that contract with a savings association, its subsidiary, or any savings and loan affiliate or other entity as identified in this legislation, as if it were inspecting the savings association itself. Under the BSCA, other Federal banking agencies already have this authority over service providers that contract with an insured bank or any subsidiary or affiliate of the bank that is examined by the agency. This authority enables all of the Federal banking agencies to take appropriate action against service providers, if for example, the services are provided in such a way as to jeopardize the safety and soundness of the financial institutions in question. This authority allows the regulatory agencies to take appropriate action against a service provider if the services being performed may result in a regulated entity not being Y2K complaint. We expect that the Federal banking agencies will continue to use their authority under the BSCA, and the authority provided by this legislation, to remedy the situation of services being rendered which will result in Year 2000 noncompliance, as well as to prevent any other unsafe and unsound practices. To ensure that the legislation is interpreted to give OTS parity with the other regulators and that Congressional intent is clear, the bill references the OTS's ability to issue orders under section 8 of the Federal Deposit Insurance Act, which includes the Federal banking agencies' general enforcement authority to address unsafe or unsound practices. This bill also requires that federal financial regulatory agencies hold seminars for financial institutions on the implications of the Year 2000 problem for safe and sound operations, and to provide model approaches for solving common Y2K problems. Passage of this bill is supported by both the NCUA and OTS. In a ``Statement of Administration Policy,'' OMB has notified us that ``the Administration supports passage of HR. 3116.'' I want to take this opportunity to thank Chairman D'Amato, Senator Sarbanes, and Senator Dodd for their assistance and support. In particular, I want to thank Howard Mennell, Steve Harris, Andrew Lowenthal, Robert Cresanti, Robert Andros, and Laura Ayoud for their efforts in bringing this bill to a prompt and mutually satisfactory resolution. I also want to thank my House colleagues and their staff for adopting the language of our Senate bill, S. 1671, in the final version of the House passed H.3116. This has greatly expedited the handling of this bill in the Senate.

Mr. BENNETT

Mr. BENNETT. Mr. President, I rise today, with my esteemed colleague Senator Dodd, to address an issue of significant import. Almost all of our nation's commercial banks, thrifts, and credit unions are regulated and insured. This brings great peace of mind to the American public. We all rest easier knowing that our funds, held by our insured and regulated financial institutions, are protected by (a) an insurance fund, (b) a safety and soundness regulator, and (c) the full faith and credit of the US Treasury. In order to continue this tradition of safe and sound banking practice, we need to ensure that banking law stays abreast of current practices in the market place and that our banks have the most up-to-date information available on upcoming issues affecting the safety and soundness of their operations. The Bill we introduce today has a two-fold purpose. It grants the Office of Thrift Supervision (OTS) and the National Credit Union Administration (NCUA) the authority to examine third party service organizations which have assumed more of the traditional bank functions. This bill will make OTS and NCUA comparable to the Office of the Controller of the Currency and the Federal Deposit Insurance Corporation in their ability to ensure safe and sound banking practices as they relate to third party service organizations. This Bill also requires federal financial regulatory agencies to hold seminars for financial institutions on the implications of the Year 2000 (Y2K) problem for safe and sound operations, and to provide model approaches for solving common Y2K problems. The authorities proposed for the NCUA and OTS have been requested by both regulatory agencies. NCUA ``strongly supports [this proposal] and urges its quick enactment.'' OTS, in separate letters to Senator Dodd and myself, refers to the current situation as an ``obstacle'' to their supervisory efforts and a ``statutory deficiency''. OTS Director Seidman further states ``I support your efforts. . . . I have asked my staff to cooperate fully with Senate Banking Committee staff to address any concerns you may have regarding this provision.'' OTS staff has been very helpful in this effort and I want to take this opportunity to thank OTS Director Seidman for her assistance as well as Ms Deborah Dakins. I also want to express appreciation to the Senate Banking Committee staff, especially Mr. Andrew Lowenthal, and my own Subcommittee staff for their efforts. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. BENNETT

Mr. BENNETT. Mr. President, I rise today, with my esteemed colleague Senator Dodd, to address an issue of significant import. Almost all of our nation's commercial banks, thrifts, and credit unions are regulated and insured. This brings great peace of mind to the American public. We all rest easier knowing that our funds, held by our insured and regulated financial institutions, are protected by (a) an insurance fund, (b) a safety and soundness regulator, and (c) the full faith and credit of the US Treasury. In order to continue this tradition of safe and sound banking practice, we need to ensure that banking law stays abreast of current practices in the market place and that our banks have the most up-to-date information available on upcoming issues affecting the safety and soundness of their operations. The Bill we introduce today has a two-fold purpose. It grants the Office of Thrift Supervision (OTS) and the National Credit Union Administration (NCUA) the authority to examine third party service organizations which have assumed more of the traditional bank functions. This bill will make OTS and NCUA comparable to the Office of the Controller of the Currency and the Federal Deposit Insurance Corporation in their ability to ensure safe and sound banking practices as they relate to third party service organizations. This Bill also requires federal financial regulatory agencies to hold seminars for financial institutions on the implications of the Year 2000 (Y2K) problem for safe and sound operations, and to provide model approaches for solving common Y2K problems. The authorities proposed for the NCUA and OTS have been requested by both regulatory agencies. NCUA ``strongly supports [this proposal] and urges its quick enactment.'' OTS, in separate letters to Senator Dodd and myself, refers to the current situation as an ``obstacle'' to their supervisory efforts and a ``statutory deficiency''. OTS Director Seidman further states ``I support your efforts. . . . I have asked my staff to cooperate fully with Senate Banking Committee staff to address any concerns you may have regarding this provision.'' OTS staff has been very helpful in this effort and I want to take this opportunity to thank OTS Director Seidman for her assistance as well as Ms Deborah Dakins. I also want to express appreciation to the Senate Banking Committee staff, especially Mr. Andrew Lowenthal, and my own Subcommittee staff for their efforts. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. BENNETT

Mr. BENNETT. I thank the Chair. Mr. President, I am not a lawyer. Sometimes that is an advantage, sometimes it is a disadvantage. But I happen to have devoted a good portion of my life to trying to understand the Constitution and understand the intentions of the Founding Fathers. I don't know what was fully intended by the passing of the Watergate reforms, because, frankly, that was a period of time when I was leaving Washington instead of paying attention to what was going on here. But I do know what was intended in the passing of the first amendment. I do know what was intended in the creation of the Constitution. I believe that McCain-Feingold falls on two overwhelmingly significant points: No. 1, and most important, it is clearly unconstitutional; and No. 2, equally crippling, it is totally unworkable. On those two bases, I am happy and proud to be part of the group that is opposing it here today. Mr. McCONNELL addressed the Chair.

Mr. BENNETT. Mr. President, if I might interrupt.

Mr. BENNETT. Salt Lake City has nonpartisan races. There are no limits on contributions and there are no limits on spending, and somehow we have managed to maintain the pattern of decent mayors through that whole situation.

Mr. BENNETT. Mr. President, I thank the Senator from Kentucky and I thank my colleagues for this debate. Let me make a personal point at the beginning of my comments. While I disagree quite heartily with the position taken on behalf of those who support McCain-Feingold, I do not challenge their integrity or their motives. I believe that they are acting on the basis of the highest motives, that they honestly believe that this legislation would, in fact, be good for our political system and be good for the Republic as a whole. I disagree most heartily with that position and I do my best to try to convince them that the course they are on, however well meaning and well motivated, is, in fact, dangerous and threatening of our first amendment rights. I learned today on the floor that in Europe it has been determined that if we went down this road we would be violating basic human rights, according to the European court. I am delighted to know that the Europeans have that much common sense. Clearly, the United States Supreme Court has made that clear and we in this body should not shirk our constitutional responsibility. I was somewhat distressed to hear the comment that the Supreme Court and only the Supreme Court can determine what the Constitution has to say about this. I think we have a responsibility to pay attention to the Constitution in this body itself and not burden the Supreme Court with laws that are clearly unconstitutional. There is always the chance one of them might slip through. A court might not be appropriately attentive when a case comes before them, and we get unconstitutional legislation. We are the first line of defense as far as the first amendment in the Constitution is concerned, and we should take that responsibility very seriously and not say, ``Oh, well, let's pass a law because it sounds good, let's pass a law because the New York Times will give us a good editorial, and the Supreme Court will bail us out by declaring it unconstitutional.'' That is a very dangerous position to take and I want to do my best to see to it that the first line of defense of the first amendment is drawn here in this body and maintained here so that the Supreme Court can pay attention to other issues. I want to address the two points that my friend from Maine talked about, soft money contributions and bogus issue ads. Let me reverse the order and talk about the first one, the bogus issue ads. She suggests, and I'm sure sincerely and honestly she believes, that bogus issue ads have come as a result of an attempt to get around the Watergate reforms. In fact, bogus issue ads have been with us since the beginning of the Republic and they are a free exercise of first amendment rights by Americans pre-Watergate, post-Watergate, and frankly post McCain- Feingold. Americans will find a way around that even if the Supreme Court were to allow McCain-Feingold to stand, should we pass it. One of the most vivid memories I have in politics is, as a 17-year- old high school student, watching my father, who was running for his first term in this body, standing in the living room of my grandmother, his mother, holding a newspaper and saying, ``I can handle my enemies but, Lord, protect me from my friends''--a newspaper attacking the incumbent Senator from Utah, Elbert Thomas, as a Communist. And my father, trying to run his own campaign on other issues, was terribly distressed by this four-page attack on his opponent. There are those who wrote about that election after it was over who blamed my father for that rag. One of the professors from whom I took classes at the University of Utah, in the political science department, wrote an extensive article in the Western Political Quarterly in which he called the 1950 Senate race the dirtiest in Utah history, and blamed my father for calling his opponent a Communist and smearing him. My father had absolutely nothing to do with that particular publication and had no control over it. Mr. President, 1950 was clearly pre-Watergate. It was clearly pre- the reforms that the Senator from Maine hopes to reestablish here. However distasteful it was, however reprehensible it may have been, it was well within the rights of the first amendment guaranteed to the people who put up the money, published the paper, and distributed it. As the Senator from Kentucky indicated, we don't like independent expenditure ads. We want to control them. They make us mad--many times from our friends, many times from our opponents. But they are part of the price we pay for a free press and free speech in this country and I, for one, am not willing, in the name of shutting down that kind of an ad, to damage the first amendment right that everyone has, including the first amendment right to be stupid, the first amendment right to be outrageous, the first amendment right to say inflammatory kinds of things. I think that right is precious and the line to protect it must be drawn here in the Senate and not let us wait until we get to the Supreme Court. Now, the second issue, the issue of soft money contributions. Like the Senator from Maine, I sat on the Governmental Affairs Committee. I heard the testimony. Maybe I heard some different testimony than that which she heard, but one of the things that struck me most clearly was testimony from someone not of my party, not of my political persuasion, someone on the liberal end of the spectrum, who made this point historically. When Lyndon Johnson was President of the United States and prosecuting the war in Vietnam in a way that outraged huge numbers of our citizens to the point of protests in the streets, he was challenged in the electoral process within his own party by one brave Member of this body, Eugene McCarthy. McCarthy went to New Hampshire and took on an incumbent President within his own party, an unheard of kind of thing. He didn't win that primary but he came close. He came a close enough second that he shook LBJ to the point that LBJ subsequently left the race. How was the McCarthy campaign financed? It was financed with five wealthy individuals, each one of whom put up $100,000 apiece. And in 1968, $100,000 went a lot farther than it does in 1998. In a way, he brought the Government down, not because he had $500,000 to spend but because he had a message that the people of New Hampshire responded to. Without the $500,000, however, the message could not have been heard. He and the others who were involved with him, who testified before our committee, said, ``If we had been limited to $1,000 apiece, McCarthy would never have been able to challenge Lyndon Johnson. If we had been limited to that kind of restriction, history would have been changed.'' And he quoted, I believe it was Senator McCarthy, who said, ``The Founding Fathers did not say: To this we pledge our lives, our fortunes up to $1,000, and our sacred honor.'' They went the whole way and the Constitution gives them the opportunity to go the whole way. We have put limitations on. I happen to think that is a mistake, and I have talked about that. But we have allowed political parties to flourish by unlimited contributions to those parties. That is the terrible, awful, debilitating, corrosive soft money that we are talking about: The ability to challenge an incumbent President, the ability to expand political discourse at a time of great national concern over the direction in which an administration is going. I ask unanimous consent I be allowed to continue for another 2 minutes.

Mr. BENNETT

Mr. BENNETT. I thank the Senator from West Virginia. There could be no higher tribute. I am grateful to him. Mr. MOYNIHAN addressed the Chair.

Mr. BENNETT. I am happy to yield.

Mr. BENNETT. Mr. President, I hesitate to intrude on this debate, but confession is good for the soul. I campaigned on behalf of a line-item veto. I worked on this floor for the passage of the line-item veto. I enthusiastically voted for the line-item veto. I learned one thing in basic training when I was in the military service of this country that has remained with me. One of the things they taught us was that the best time to escape is immediately after you are captured. Don't wait until you have been taken to the back lines. Don't wait until you have been put in a prison camp to try to plot your escape. Escape immediately after you are captured, when you are within 100 yards of your own lines. You are in the confusion of the battlefield, you are under the control of troops who are not trained to hold on to prisoners. I have applied that principle in my life. When I make a mistake I want to escape from it as quickly as possible instead of waiting until I have been put into prison later on behind the enemy lines. I reasoned that the experience of State Governors, 47 of whom have line-item vetoes, bade well for the line-item veto. My own Governor in the State of Utah has it. And it has not been the source of mischief in the process of legislation in the State. I have seen that it has become the source of mischief here in this body. And, as I said to my revered colleague on the Appropriations Committee when this came up--and our chairman was expressing his usual enthusiasm; in this case in anger for his position--it may be that I will have to eat a little crow. So as I receive the news of the action having been taken by the court in this case, I stand now to say that I would not support an effort to try to overturn that decision. The time to escape is immediately after you are captured. And we have been captured. And I will escape from my previous posture. I apologize, albeit much too late, to my primary opponent who stood in opposition to the line-item veto. And this was a matter of difference between the two of us in the primary. I think I made some progress because as we got near the vote he recanted and came to my side so as to try to get the people who were in favor of a line-item veto to vote for him instead of me. But I believe the arguments that have been repeated here, the information given here from the decision of the judge, are sufficiently persuasive that I need to make this apology and this recanting of a previous position. While I may not be with my two colleagues on many other matters, I try to be with them on constitutional matters. It is on this basis that I opposed a constitutional amendment regarding flag burning. That puts me at odds with my senior colleague from Utah, which always distresses me. It is for this purpose that I oppose McCain-Feingold campaign finance reform because I think it is unconstitutional. I believe the courts have ruled in similar cases that the guts of the McCain-Feingold bill is in fact an intrusion on the first amendment. But I think there is no more important function that we have in this Chamber, whatever our disagreements on the specifics, than the function of protecting the Constitution against the whims of the hour. And so I thank Senator Byrd and Senator Moynihan for their scholarship and for their leadership on this issue, and I, as one Senator at least on the other side of the issue, throw in the towel, eat a little crow, and declare my willingness to escape from a previous position.

Mr. BENNETT. I thank the senior Senator from New York. Both of my senior friends are far too lavish in their praise, but I will accept it anyway in the spirit of the moment. I yield the floor.

Mr. BENNETT

Mr. BENNETT. Mr. President, I submit for the Record the following National African American Creed, written by one of my constituents, Mr. Terry Harris. Mr. Harris is an active member of the National Association for the Advancement of Colored People (NAACP), and has presented this creed before the NAACP Executive Board. Mr. Harris' National African American Creed challenges people to make a difference beginning with themselves. In particular, Mr. Harris encourages other African Americans to eschew drugs and gang violence, gain an education, display kindness, and support our country. I commend Mr. Harris on his interest in helping others. The material follows: The African American Creed (By Terrance Harris) I, the African American, man, woman, child--son and daughter and great-grandchild of slaves, descendant of Africa and child of God, no longer have to search to find my place in this world. I, the African American, have a responsibility to my forefathers whose struggles I must continue to ward off hatred and bigotry. I, the African American, descendant of Ishmael and Abraham, have a responsibility, to help my brothers and sisters when, and after, they fall by the wayside. I, the African American, descendant of great kings and queens of Africa, am obligated to teach my children about our ancestors and their customs. I, the African American, of dark complexion, have a responsibility for keeping my dark beautiful armor shined with Christ-like luster in my daily walk. I, the African American, whose ancestors were great warriors, must become a great warrior against such things as drugs and gang violence. I, the African American, come from a race which was so powerful, to cause a nation to change its views on segregation and rethink its views on desegregation. I, the African American, great grandchild of great chiefs in Africa, have a responsibility to become the head of my family and to raise my children in such a manner that will enable my children to become great leaders. I, the African American, come from a race which helped to build this country, have a responsibility to keep the talent alive and to build great buildings that will stand along side the great pyramids of Egypt. I, the African American, whose forefathers came from a land rich in vegetation and animal life, have a responsibility to preserve that beauty so that my children will have the same opportunities to bathe in the beauty of nature that God has created for all to enjoy. I, the African American, whose ancestors used as a part of their culture, great dances, am obligated to pass this tradition and the history behind the dances on to my children. I, the African American, come from a race where such powerful men and women laid down their lives so that I might be able to get a fair education, am obligated to attend a school of higher learning. I, the African American, whose forefathers have been spit upon and smitten, all in the name of equality, just so you and I could stand here today, must be willing to display in return the same equal kindness that we have demanded, not just to men and women of the African American race, but to men and women of all races. I, the African American, whose fathers and mothers can now become men of science, medicine, and law, am obligated to follow in their footsteps ensuring the best possible care, in order to preserve my history. I, the African American, whose forefathers have died in wars when they were not allowed to drink from the same drinking fountain, yet were equal enough to share the same bullet, but couldn't be buried in the same cemetery, am obligated to become a great general of the Armed Forces, and even to become President of the United States of America. My country `tis of thee, sweet land of Liberty let it be known that if any changes are to occur, it must start with me--of Thee I sing. Land where my fathers died, land of every man's pride, from every mountain side, let freedom ring and ring.

Mr. BENNETT

Mr. BENNETT. Mr. President, I suggest the absence of a quorum.

Mr. BENNETT

Mr. BENNETT. Mr. President, I rise today to introduce the Digital Signature and Electronic Authentication Law (SEAL) of 1998. We Americans place such trust in the act of signing a document that we traditionally have referred to the written signature as a ``John Hancock'' after one of the first signers of the Declaration of Independence and one of our country's founding fathers. As the country moves into the 21st century and into the digital age, it is necessary for the government to validate the use of equally trustworthy forms of authentication for electronic transactions. In doing this, our country will secure its position as a leader in the international digital economy. Electronic authentication, broadly defined, is any technology which provides a way for the recipient of a message to verify the identity of the sender, make sure the message was not altered in transit, and confirm that the message was the one the sender intended to transmit. Parties to electronic transactions must have access to this authentication process in order to feel secure in conducting business over open networks. While this concept is fairly simple, the legislative process has proven quite complex. Many states have enacted legislation on electronic authentication, but the state laws are vastly different. Because electronic transactions do not respect state or national boundaries, there are no clear rules to govern this activity. This lack of direction has limited the use of electronic authentication. The process is further complicated by the number of competing technologies available to provide authentication as well as the fact that businesses from all different sectors of the economy seek to use and offer authentication services. As Chairman of the Banking Committee's Subcommittee on Financial Services and Technology, I have examined this issue and have determined that the appropriate first step toward addressing it is to introduce a firmly grounded, free-market bill that addresses the concerns of financial institutions. In introducing this bill, I do not want to suggest that this authority should belong exclusively to that group. I have stated repeatedly my belief that all entities, banks and nonbanks alike, should be authorized to use electronic authentication for their own transactions and offer the service to third parties. In attempting to fashion a bill that would appropriately address the needs and concerns of all interested groups, however, I have reached an impasse. My attempts to reach out and engage those representing nonbank interests in serious discussions have failed. I have determined, therefore, that it is appropriate for me to take a first step and introduce this bill to address the needs of financial institutions. While I do not intend to create a monopoly for banks, and indeed hope that this legislation can be amended to include other entities, I do recognize that there are valid reasons why we may choose to address the concerns of financial institutions separately. Financial institutions are accustomed to assuming ``trusted third party'' roles, including serving as trustee and offering notary and signature guarantee services. Offering electronic authentication services is the functional equivalent of those traditional bank activities. Financial institutions are highly regulated entities, and the financial institution regulators have experience in supervising these ``trusted third party'' activities. Many of the transactions which individuals and businesses will seek to authenticate are likely to be financial transactions. In Europe and other countries around the world, electronic authentication activities are conducted almost exclusively by financial institutions. By taking a first step and authorizing our financial institutions to use electronic authentication, we will strengthen our position in establishing the conditions for international transactions. The Digital SEAL Bill is, as I have described it, a minimalist, free- market bill. It provides quite simply that a financial institution may use electronic authentication in the conduct of its business and that the use of such electronic authentication shall be valid. A financial institution's use of electronic authentication shall be governed by the rules of the system or agreement under which it operates and shall be regulated by the appropriate financial institution regulator. The bill defines electronic authentication broadly in an effort to be as technologically neutral as possible. Of equal importance is what this bill does not do. It does not create a new regulatory bureaucracy to supervise this activity. It does not impair consumers' rights under the Truth in Lending Act, the Electronic Fund Transfer Act, or any state law of similar purpose. Finally, it does not limit, in any way, the ability of any other entity to use or offer electronic authentication in the course of its business. The time has come for Congress to begin a serious discussion of the impact of technology on commercial transactions and consider how age- old concepts, like the importance of a signature, will fit into an increasingly electronic world. Electronic authentication is a good starting point for this discussion, and passage of this bill will advance the development of electronic banking and commerce. I look forward to working with my colleagues to enact this legislation to give financial institutions, and appropriate other entities, the authority to use electronic authentication.

Mr. BENNETT

Mr. BENNETT. Mr. President, I rise today to introduce the Digital Signature and Electronic Authentication Law (SEAL) of 1998. We Americans place such trust in the act of signing a document that we traditionally have referred to the written signature as a ``John Hancock'' after one of the first signers of the Declaration of Independence and one of our country's founding fathers. As the country moves into the 21st century and into the digital age, it is necessary for the government to validate the use of equally trustworthy forms of authentication for electronic transactions. In doing this, our country will secure its position as a leader in the international digital economy. Electronic authentication, broadly defined, is any technology which provides a way for the recipient of a message to verify the identity of the sender, make sure the message was not altered in transit, and confirm that the message was the one the sender intended to transmit. Parties to electronic transactions must have access to this authentication process in order to feel secure in conducting business over open networks. While this concept is fairly simple, the legislative process has proven quite complex. Many states have enacted legislation on electronic authentication, but the state laws are vastly different. Because electronic transactions do not respect state or national boundaries, there are no clear rules to govern this activity. This lack of direction has limited the use of electronic authentication. The process is further complicated by the number of competing technologies available to provide authentication as well as the fact that businesses from all different sectors of the economy seek to use and offer authentication services. As Chairman of the Banking Committee's Subcommittee on Financial Services and Technology, I have examined this issue and have determined that the appropriate first step toward addressing it is to introduce a firmly grounded, free-market bill that addresses the concerns of financial institutions. In introducing this bill, I do not want to suggest that this authority should belong exclusively to that group. I have stated repeatedly my belief that all entities, banks and nonbanks alike, should be authorized to use electronic authentication for their own transactions and offer the service to third parties. In attempting to fashion a bill that would appropriately address the needs and concerns of all interested groups, however, I have reached an impasse. My attempts to reach out and engage those representing nonbank interests in serious discussions have failed. I have determined, therefore, that it is appropriate for me to take a first step and introduce this bill to address the needs of financial institutions. While I do not intend to create a monopoly for banks, and indeed hope that this legislation can be amended to include other entities, I do recognize that there are valid reasons why we may choose to address the concerns of financial institutions separately. Financial institutions are accustomed to assuming ``trusted third party'' roles, including serving as trustee and offering notary and signature guarantee services. Offering electronic authentication services is the functional equivalent of those traditional bank activities. Financial institutions are highly regulated entities, and the financial institution regulators have experience in supervising these ``trusted third party'' activities. Many of the transactions which individuals and businesses will seek to authenticate are likely to be financial transactions. In Europe and other countries around the world, electronic authentication activities are conducted almost exclusively by financial institutions. By taking a first step and authorizing our financial institutions to use electronic authentication, we will strengthen our position in establishing the conditions for international transactions. The Digital SEAL Bill is, as I have described it, a minimalist, free- market bill. It provides quite simply that a financial institution may use electronic authentication in the conduct of its business and that the use of such electronic authentication shall be valid. A financial institution's use of electronic authentication shall be governed by the rules of the system or agreement under which it operates and shall be regulated by the appropriate financial institution regulator. The bill defines electronic authentication broadly in an effort to be as technologically neutral as possible. Of equal importance is what this bill does not do. It does not create a new regulatory bureaucracy to supervise this activity. It does not impair consumers' rights under the Truth in Lending Act, the Electronic Fund Transfer Act, or any state law of similar purpose. Finally, it does not limit, in any way, the ability of any other entity to use or offer electronic authentication in the course of its business. The time has come for Congress to begin a serious discussion of the impact of technology on commercial transactions and consider how age- old concepts, like the importance of a signature, will fit into an increasingly electronic world. Electronic authentication is a good starting point for this discussion, and passage of this bill will advance the development of electronic banking and commerce. I look forward to working with my colleagues to enact this legislation to give financial institutions, and appropriate other entities, the authority to use electronic authentication.

Mr. BENNETT

Mr. BENNETT. Mr. President, may I inquire as to the parliamentary circumstance? Are we in morning business?