William Cohen

Mr. COHEN

Mr. COHEN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. COHEN. Mr. President, I send to the desk an amendment and ask for its immediate consideration.

Mr. COHEN. Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. COHEN. Mr. President, the amendment that I am offering today with Senator Bumpers is very simple and very straightforward. It would permit legal services organizations across the country to use non- Federal funds to cover the costs of testifying at legislative hearings, commenting on administrative regulations, and responding to requests for information from public officials. Mr. President, I find it ironic that as we are seeking to devolve more and more responsibility to the States, that we would preclude those organizations representing low-income individuals from testifying before legislative bodies, offering comment on regulatory proposals, or responding to inquiries from lawmakers. We have a situation in the State of Maine in which the chairman of the Judiciary Committee, a Republican, has a very cooperative relationship with Pine Tree Legal Assistance. This Republican Senator has urged that the restriction on the use of non-Federal money be lifted so that Pine Tree can be called to testify before the committee. I do not understand why we would seek to preclude non-Federal funds from being used in a way that will actually, hopefully, avoid lengthy court battles. We are talking about the possibility of turning Medicaid over to the States in the way of a block grant and reforming a host of critical social programs. During these reform efforts, the States will be adopting regulations and proposals that would have an impact upon the lives of those that the programs are designed to serve. Yet, the very lawyers who would be called upon to help the poor are relegated to bringing lawsuits or to representing them in court, when in fact their expertise would be helpful to legislators that formulate policies, to agencies that implement the programs, and to lawmakers who seek some clarification in fairly esoteric areas of the law. This amendment is very simple. It says that legal services organizations across the country are not precluded from using non- Federal funds for the purposes of testifying at legislative hearings, commenting on administrative regulations, and responding to requests for information from public officials. Mr. President, there have been a number of restrictions included in the bill to preclude activities which the Congress has decided that no longer should be carried out by legal services attorneys. But it seems to me that this list of restrictions should not include a blanket prohibition on the participation of attorneys representing the poor before legislative bodies. So I hope that this amendment will be supported by a wide variety of our colleagues because it does not present a threat to the proponents of restricting activities of legal services lawyers. Rather, it will ultimately be beneficial to lawmakers and government officials who are seeking to craft programs that will have a direct impact upon the poorest of our society. So I hope that my colleagues will join Senator Bumpers and myself in supporting this legislation. Mr. GREGG addressed the Chair.

Mr. COHEN. What time?

Mr. COHEN. Does Senator Bumpers have any objection to a time limitation on this?

Mr. COHEN. I yield the floor. Mr. BUMPERS addressed the Chair.

Mr. COHEN

Mr. COHEN. Mr. President, I rise today to take a moment to praise a worthy nonprofit organization that is having a real impact on four communities in my home State of Maine. The organization is Faith in Action, a national program of the Robert Wood Johnson Foundation that in 1993 began providing technical assistance and startup grants to help develop interfaith volunteer projects that focus on helping those in need of care from the community. During the first 2 years of the program, Faith in Action limited its grants to faith coalitions--churches, temples, and synagogues--that wanted to begin volunteer care giving projects within their community A total of 800 such projects will be funded over 4 years of this initiative. In 1995, Faith In Action expanded its criteria, and now encourages health and social service agencies to join with congregations to develop new projects. Each approved coalition is awarded a $25,000 grant to assist people in the community of all ages who have special needs. Over the last year, these grants have helped fund important projects in four communities in Maine: Portland, Bangor, Richmond, and Lubec. In Bangor, two Faith in Action programs are up and running, providing the frail elderly residents in and around that city with a variety of assistance. Developed by St. Joseph Healthcare, in conjunction with area churches and synagogues, the project assesses the needs of elderly residents, particularly improving their access to quality health care. Volunteers provide transportation, home visits, help in meal preparation, light housekeeping or repairs in the home, and other services to assist the elderly who want to maintain some independence, but cannot do everything for themselves. A similar project is starting up in the small town of Richmond, where the grant money is being used to assist the homebound elderly with transportation, companionship, and other services. A new facility has opened in that town for those elderly residents who need some living assistance, but do not qualify for a nursing home. Some of the Faith in Action funds went toward the purchase of a van to help these residents get to and from the grocery store, pharmacy, and other errands. A grant in Portland is targeted for persons who have acquired brain injuries and will go toward meeting the special needs of that population. And far up the coast, in the town of Lubec, a Faith in Action grant is being used to help meet the needs of children, adults, and seniors who are receiving hospice care. The common link between all these projects, of course, is the members of the community reaching out to help those within their city or town who need their help. Faith in Action grants are rooted in voluntarism, and in linking the different religious communities within a city or town to work together to better serve the community. Only by working together can we solve some of the many problems within our cities and towns. As chairman of the Senate Special Committee on Aging, I am extremely aware of the daunting demographics that we face in the coming decades. More than 33 million Americans are over the age of 65 today--a number that will double in the coming three decades. We need to prepare now to meet the needs of today's aging population. Faith in Action is an organization with the vision to meet that goal, by encouraging the diverse members of a community to work with one another to address the special needs of individuals within that community. We need to encourage more and more people to get involved in Faith in Action volunteer projects, or in any volunteer project at all. We can do so much for each other, even if it is only for a few hours each month. I congratulate the organizations in Maine that have already received Faith in Action grants and are putting them to such important use. I encourage other churches, synagogues, and temples in Maine and around the country to contact their local health and social service agencies and see if they can come up with a project that might serve the needs of the elderly or disabled in their community. Finally, I salute Faith in Action and the Robert Wood Johnson Foundation for their dedication to these projects--keep up the good work.

Mr. COHEN

Mr. COHEN. Mr. President, I wish to announce that the Subcommittee on Oversight of Government Management and the District of Columbia, Committee on Governmental Affairs, will hold a hearing on Friday, March 8, 1996, at 9:30 a.m., in room 342 of the Dirksen Senate Office Building, on oversight of governmentwide travel management.

Mr. COHEN

Mr. COHEN. Mr. President, I wish to announce that the Special Committee on Aging will hold a hearing on Wednesday, March 6, 1996, at 9:30 a.m., in room 562 of the Dirksen Senate Office Building. The hearing will discuss telemarketing scams against the elderly. subcommittee on forests and public land management

Mr. COHEN

Mr. COHEN. Mr. President, earlier this month, I again had the honor of leading the U.S. delegation to the annual Wehrkunde conference on security policy in Munich. This conference serves as a valuable opportunity for policymakers, security analysts, and defense industry leaders from both sides of the Atlantic to exchange views on pressing European security issues and to build the relationships that are the sinews of an alliance. This year's conference was notable both because it was held as NATO forces were breaking new ground with the IFOR mission in Bosnia and for the participation of senior officials from Central Europe and Russia, including the Russian Deputy Defense Minister, which provided for productive, if sometimes heated, dialog on NATO enlargement. The conference thus offered an appropriate setting for a speech by Secretary of Defense Perry in which he outlined a vision for the future of the Atlantic alliance and its relationship with Russia, based on the accomplishments of the past and the current cooperation in Bosnia. Secretary Perry is to be commended for laying out a thoughtful and challenging agenda for addressing the issues currently facing the Alliance. I also want to commend him for not only weaving the words of T.S. Eliot into his remarks, but for ferreting out the little known fact that Eliot was on the stage half a century ago when George Marshall gave the speech that became the Marshall plan. Mr. President, I think all Senators would benefit from reading Secretary Perry's Wehrkunde address and ask that it be printed in the Record. The address follows: Remarks by Secretary of Defense William J. Perry Behind my desk at the Pentagon hangs a portrait of the great statesman, George C. Marshall. Marshall, who was the third Secretary of Defense in the United States, is a role model of mine. He had a great vision for Europe--a Europe which from the Atlantic to the Urals was united in peace, freedom and democracy; and a strong trans-Atlantic partnership sustained by bipartisan political support in the United States. Marshall not only had this vision, he also had a plan to make this vision a reality in post-war Europe. And in a famous speech at Harvard University in 1947, he outlined what came to be called the Marshall Plan. A little known fact is that joining Marshall on the dais that day was the famous poet, T.S. Eliot, who 10 years earlier had written: Footfalls echo in the memory Down the passage we did not take Towards the door we never opened. These words by T.S. Eliot foreshadowed the fate of Marshall's plan in Eastern and Central Europe. Because on that day, 50 years ago, as the footfalls of World War II still echoed across a shattered continent, the Marshall Plan offered Europe a new passage toward reconstruction and renewal. Half of Europe took this passage, and opened the door to prosperity and freedom. Half of Europe was denied this passage when Joseph Stalin slammed the door on Marshall's offer. And for 50 years, the footfalls of what might have been echoed in our memories. Today, as the Cold War becomes an echo in our memory, we have a second chance to make Marshall's vision a reality: To go down the passage we did not take 50 years ago, towards the door we never opened. Behind that door lies George Marshall's Europe. To open this door, we do not need a second Marshall Plan, but we do need to draw on Marshall's vision. Marshall recognized that peace, democracy and prosperity were ultimately inseparable. And Marshall understood that if you identify what people desire most, and provide them with a path to reach it, then they will do the hard work necessary to achieve their goals. In the late 1940s what Western European countries desired most was to rebuild their societies and economies. And the Marshall Plan provided a path for achieving this goal. By taking this passage, the nations of Western Europe built an economic powerhouse. And along the way, they built strong democracies and a strong security institution called NATO. Today, countries in the other half of Europe are struggling to rebuild their societies and economies, and the one thing they all desire is greater security. NATO's challenge is to provide these Europeans a path for achieving their security goal. And along the way, we want them very much to develop strong democracies and strong economies. This other half of Europe includes the nations of Central and Eastern Europe and the Newly Independent States. It includes Russia. And it includes the nations of the former Yugoslavia. Today, NATO is reaching out to all three areas and providing a path to Marshall's Europe. The primary path NATO has provided is the Partnership for Peace. Just as the Marshall Plan worked because it was rooted firmly in the self-interest of both the United States and Europe, so too does the Partnership for Peace work because it is rooted firmly in the self-interest of both NATO and the Partner nations. PFP is bringing the newly free nations of Europe and the former Soviet Union into the security architecture of Europe as a whole. Our nations are working and training together in military joint exercises. But make no mistake, the Partnership for Peace is more than just joint exercises. Just as the Marshall Plan had an impact well beyond the economies of Western Europe, PFP is echoing beyond the security realm in Central and Eastern Europe, and into the political and economic realms as well. Just as the Marshall Plan used economic revival as the catalyst for political stabilization--and ultimately the development of the modern Europe--the PFP uses security cooperation as a catalyst for political and economic reform. PFP members are working to uphold democracy, tolerate diversity, respect the rights of minorities and respect freedom of expression. They are working to build market economies. They are working hard to develop democratic control of their military forces, to be good neighbors and respect the sovereign rights outside their borders. And they are working hard to make their military forces compatible with NATO. For those Partner countries that are embracing PFP as a passage to NATO membership, these actions are a key to opening that door. For many of these nations, aspiration to NATO membership has become the rock on which all major political parties base their platforms. It is providing the same overlapping consensus that NATO membership engenders in NATO countries, making compromise and reconciliation possible. In Hungary, all six major political parties in the Parliament united to pass a resolution in support of IFOR, the Bosnia peace implementation force, by a vote of 300 to 1. In Poland, the new President--a former member of the former communist party--re-affirmed Poland's NATO aspirations. In Slovakia, Hungary and Rumania, governments are quietly resolving border disputes, and putting into place protection for ethnic minorities. For these countries, the Partnership for Peace is becoming a passage to democracy and market reform, as well as a passage to security cooperation with the West. But even those countries that do not aspire to NATO membership are realizing many of the same political and social gains from active participation in the PFP. Moreover, PFP is providing them the tools and the opportunities to develop closer ties to NATO, and learn from NATO--even as they choose to remain outside the Alliance. And PFP is building bonds among the Partner nations--even outside the framework of cooperation with NATO. That is why defense ministers from many Partner nations have said to me that even if, or when, they eventually join NATO, they want to sustain their active participation in PFP. In short, by creating the Partnership For Peace, NATO is doing more than just building the basis for enlargement. It, is in fact, creating a new zone of security and stability throughout Europe. That is why I believe that the creation of the Partnership for Peace has been one of the most significant events of the post-Cold War era. By forging networks of people and institutions working together to preserve freedom, promote democracy and build free markets, the PFP today is a catalyst for transforming Central and Eastern Europe, much as Marshall Plan transformed Western Europe in the '40s and '50s. It is the passage this half of Europe did not take in 1947; it is the door that we never opened. To lock in the gains of reform, NATO must ensure that the ties we are creating in PFP continue to deepen and that we actually proceed with the gradual and deliberate, but steady, process of outreach and enlargement to the East. NATO enlargement is inevitable. And if NATO enlargement is a carrot encouraging reforms, then we cannot keep that carrot continually out of reach. So it is critical that we implement the second phase of NATO enlargement agreed upon at the NAC Ministerial Meeting in December. And even as some countries join NATO, it will be important to keep the door open for others down the road. We must make sure that PFP continues to provide a place in the security architecture of Europe so that we keep the door open to Marshall's Europe even for those nations that do not aspire to become NATO members. For Marshall's vision to be truly fulfilled, one of the nations that must walk through this door is Russia. Russia has been a key player in Europe's security for over 300 years. It will remain a key player in the coming decades, for better or for worse. Our job is to make it for the better. Unlike with the Marshall Plan 50 years ago, Russia today has chosen to participate in the Partnership for Peace. And in the spirit of Marshall, we welcome Russia's participation, and hope that over time it will take on a leading role in PFP commensurate with its importance as a great power. But for Russia to join us as a full and active partner in completing Marshall's vision, NATO and Russia need to build on our common ground, even when we don't agree with each other's conclusions. It is fair to say that most members of Russia's political establishment do not welcome or even accept NATO's plans for enlargement. Anybody that doubted that yesterday, if you heard Mr. Kokoshin's speech, realized the extent of the opposition to NATO enlargement in Russia. When I was in Russia last June, I had a number of conversations with Russian government leaders and Duma members about the future of European security. I offered them a series of postulates about that future. I told them if I were in Russia's shoes, I would want the future security picture in Europe to have the following characteristics: First, I said, if I were a Russian leader, I would want the United States to be involved in the security of Europe. They agreed with that postulate. Then, I said, if I were a Russian leader, I would want to see Germany an integrated part of the European security structure. And they agreed with that postulate. And third, I said, if I were a Russian leader, I would want Russia to be in the security architecture of Europe, not isolated outside of it. They agreed with this postulate also. Finally, I asked them how could a Russian leader best achieve these goals? I concluded they could only be achieved through a healthy and vibrant NATO. That is NATO, far from being a threat to Russia, actually contributes to the security of Russia, as well as to the security of its own members. When I reached that conclusion most of the Russians I talked to fell off the cliff. They agreed with each of my premises--but they did not agree with my conclusion. But in the absence of NATO and its partnership arrangements, I do not see any way of achieving those goals--our shared goals-- of a safe and peaceful Europe. I have to tell you that I did not persuade my Russian colleagues with my argument. But, I do believe that as Russia deepens its involvement with NATO, it will come to believe in the truth of my conclusion, as well as my premises. And I believe that Russia will want to have a cooperative relation with NATO and a leading role in the Partnership for Peace. And that Russia will come to understand that enlargement means enlarging a zone of security and stability that is very much in Russia's interest, not a threat to Russia. But the way for this new understanding to occur is for NATO to continue to reach out to Russia not only from the top down but from the bottom up. Last year at Wehrkunde, I proposed that NATO and Russia begin a separate plan of activities, outside the Partnership for Peace. Since then, we have all discussed and even agreed upon this proposal in principle, but we have not yet put it on paper. We must do so. We cannot let disagreements over the ``theology'' of building NATO- Russia relations get in the way of ``here and now'' opportunities to work together where our interests clearly overlap. Instead of letting theology dictate our practice, we should let our practice shape our theology. One example of where the United States is already doing this is with our program of bilateral training exercises with Russia. We have held four such exercises in the last year, each a great success, and each conducted in a spirit of trust and goodwill. This summer, the United States and Russia will move beyond the bilateral and jointly participate in a major regional Partnership For Peace exercise with forces from Ukraine, Russia, United States and other regional powers. Our bilateral contact program with Russia is not confined to joint exercises or even to just the security field. Through the Gore-Chernomyrdin Commission, it extends to the fields of science and technology, space, defense conversion, business development, the environment, health care and agriculture. Just this past week the Commission met in Washington, and Mr. Kokoshin and I both participated in the defense conversion program of this Commission. I urge all NATO nations to build on this model. These contacts provide important exchanges of information. They help break down years of distrust and suspicion. They weave the Russians into the kind of personal and professional networks that have long characterized relations among all of the Allies. These are the kind of activities that will build trust between Russia and NATO. And these are the kind of activities that will keep Russia on the passage toward integration with Europe, to pass through that open door. Mr. Grachev and I attended the joint U.S. exercise in Kansas last October. And we met after the exercise with the American and the Russian soldiers conducting that exercise, and talked to them. He told the Russian soldiers what they were doing was very important, that they should extend their friendship and cooperation with the American soldiers, and that this was the basis for creating a peaceful world for their children. The American soldiers were as much interested in what he was saying as the Russians were, I can assure you. Ironically, the place where a distinct NATO-Russia relationship is occurring in practice is in Bosnia. Today, as we speak, a Russian brigade is serving in the American Multinational Division of IFOR. It took an enormous amount of work to make this happen. Minister Grachev and I met four times over a two month period to iron out the details. Generals Joulwan and Nash work closely every day with their counterparts, General Shevtsov and Colonel Lentsov. NATO and Russia do have a special relationship today in Bosnia, and Russia is demonstrating its commitment to participating in the future security architecture of Europe. The reason we are all working so hard to make this relationship successful is not just because of the additional troops Russia brings to Bosnia, but because Russia's participation in Bosnia casts a very long shadow that will have an impact on the security of Europe for years to come. When we deal with the most important security problem which Europe has faced since the Cold War was over, we want to have Russia inside the circle, working with us, not outside the circle, throwing rocks at us. Indeed, the more you think about what NATO and Russia are doing together in Bosnia, the more amazing it becomes. I can only imagine what General Eisenhower, the first SACEUR, would think if he saw a General from Russia sitting with General Joulwan, today's SACEUR, at the SHAPE compound reviewing a secret NATO OPLAN. We need to build on this model, to institutionalize it, and expand it to cover the entire range of NATO and Russia's overlapping security interests. By so doing, NATO and Russia can move forward as full partners in completing Marshall's version. Just as the NATO-Russia relationship is being forged in Bosnia, so too is the future of NATO itself. I was in Bosnia several weeks ago. I was struck by the dedication and professionalism of every unit from every country that is participating. I was also struck by the stark contrast between the devastation and suffering I saw in Sarajevo, and the rebirth and renewal I have seen in the other capitals of Central and Eastern Europe. Bosnia is what happens when newly independent nations focus on old hatreds instead of new challenges. Four years ago, some people in the former Yugoslavia chose not to join Marshall's Europe. And the death and bloodshed that resulted will long echo in our memory. But today the door to Marshall's Europe is open again for them--and holding that door open are NATO, Russia and the newly free peoples of Central and Eastern Europe. The success or failure of IFOR is crucial to whether or not we will complete Marshall's vision. It is in Bosnia where we are sending the message that NATO is the bedrock on which the future security and stability of Europe will be built. It is in Bosnia where NATO is first reaping the benefits of joint peacekeeping training with our new Peace Partners. It is in Bosnia where future NATO members are showing themselves ready and able to shoulder the burdens of membership. And it is in Bosnia where we are showing that we can work as partners with Russian forces. Bosnia is not a peacekeeping exercise. It is the real thing. Bosnia is also teaching us important lessons about the kind of NATO that Marshall's Europe will require. Ever since the end of the Cold War, NATO has struggled to develop a mechanism for executing the new missions using NATO assets with the voluntary participation of NATO members. In the conference room, we have so far failed to come up with an agreement on a Combined Joint Task Force, CJTF. But in the field, we have cut through these theological arguments and put together IFOR, which is CJTF. As with the NATO-Russia relationship, we need to take the practical lessons learned in putting IFOR together and extrapolate back until we have a CJTF that works. Bosnia also casts in sharp relief something we have suspected for some time: that it is time for NATO to adapt itself internally to deal with the new challenges of this new era. NATO was not well structured for the Bosnia mission. At a time when our political and geostrategic thinking has been completely reoriented, symbolized by our partnership in peacekeeping with former adversaries, and at a time when our individual military forces have streamlined and modernized for the battlefield of the future, NATO's command and decision-making structure is still geared for the challenges and the battlefields of the past. The time has come to streamline and modernize NATO, recognizing that our challenge is no longer simply to execute a known plan with already designated forces, as it was during the Cold War. We must make NATO's command structure more responsive and more flexible, and streamline the planning and force preparation process, and simplify and speed-up the entire decision-making process. And we must complete the task of giving NATO's European members a stronger identity within the alliance. These kinds of internal changes will ready NATO for enlargement, and will allow us to better respond to the future challenges to European security and stability. It is in this context that we welcome the French decision to participate more fully in NATO's military bodies. And we look forward to working with France as we transform the Alliance and realize Marshall's vision of a Europe united in peace, freedom and democracy. In 1947, Marshall told America that it must ``face up to the responsibility which history has placed upon our country.'' Today, it is not only America, but also Russia; is not only NATO nations, but all of Europe--all of us must face up to the responsibility which history has placed upon us. This means reaching out to each other not only in the spirit of friendship, but also in the spirit of self-interest. This means working towards our goals not only from the top-down, but also the ground-up. And it means recognizing that when the outside world changes, we must look inside our institutions and see what changes are needed there. If we do these things, then next year, when we commemorate the 50th Anniversary of the Marshall Plan, we will be able to say that we made Marshall's vision our own. That Partnership for Peace is a strong, permanent pillar of Europe's security architecture. That NATO and Russia have a relationship where trust, understanding and cooperation are givens, not goals. That all the nations of the former Yugoslavia are adding, not detracting, from Europe's security. And that we have taken the passage to a new Europe and opened the door to a new era of peace, freedom and democracy. Thank you very much.

Mr. COHEN

Mr. COHEN. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 3225

Mr. COHEN. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 3452

Mr. COHEN

Mr. COHEN. I thank the Chair. I yield the floor and suggest the absence of a quorum.

Mr. COHEN

Mr. COHEN. Mr. President, when France, Germany, Japan, and South Korea are included in a list of nations, we automatically assume that this must be a list of America's allies--our military and political partners since the end of the Second World War. Unfortunately, this is not only a list of America's trustworthy friends, it is also a list of governments that have systematically practiced economic espionage against American companies in the past--and continue to do so to this day. The term ``espionage'' evokes images of the cloak-and-dagger side of the United States-Soviet confrontation in the cold war. Since the end of the East-West struggle, however, an equally damaging and pervasive form of spying has received increasing attention--the spying that nations undertake against foreign-owned corporations in order to give their own firms an advantage in the increasingly cut-throat world of international business. Unlike the politico-military espionage of the cold war, economic espionage pits friendly nations against each other. Instead of military strategy and weapon technologies, the sought-after secrets in economic espionage are marketing strategies and production technologies. While the cost of politico-military espionage was reduced military security, and damage from economic espionage comes in the form of billions of dollars annually in lost international contracts, pirated products and stolen corporate proprietary information. The direct cost of this espionage is borne by America's international corporations. The indirect costs are borne by the American economy as a whole--jobs and profits are lost; the competitive edge is stolen away. The 103d Congress adopted an amendment I sponsored requiring the President to submit an annual report on foreign industrial espionage targeted against U.S. industry. The unclassified version of the President's first annual report, which is very understated compared to the classified version, acknowledged ``the post-cold-war reality that economic and technological information are as much a target of foreign intelligence collection as military and political information.'' The report goes on to state: In today's world in which a country's power and stature are often measured by its economic/industrial capability, foreign government ministries--such as those dealing with finance and trade--and major industrial sectors are increasingly look upon to play a more prominent role in their respective country's (economic) collection efforts. While a military rival steals documents for a state-of-the-art weapon or defense system, an economic competitor steals a U.S. companies proprietary business information or government trade strategies. Just as a foreign country's defense establishment is the main recipient of US defense-related information, foreign companies and commercially oriented government ministries are the main beneficiaries of US economic information. That aggregate losses that can mount as a result of such efforts can reach billions of dollars per year, constituting a serious national security concern. According to Joseph Recci of the American Society for Industrial Security, ``American corporations are losing billions of dollars each year in valuable technology and proprietary information to foreign espionage.'' In a recent survey of Fortune 500 companies, the society notes that the number of corporations reporting that they have been victims of economic espionage has grown by 260 percent since 1985. Peter Schweizer, in his 1994 study of state-sponsored economic espionage, ``Friendly Spies,'' estimated that such espionage costs American business upwards of $100 billion annually. This alarming trend in foreign corporate and state-sponsored economic espionage will continue in coming years. Intelligence agencies in industrialized nations have found themselves with a lot of time on their hands since the end of the cold war, and the governments of these nations have come to see economic competition as the new central threat to their national security. In testimony before the Senate Select Intelligence Committee earlier this year, then acting Director of Central Intelligence Adm. William Studeman predicted, ``the threat to U.S. economic interests will absolutely increase as foreign governments attempt to ensure the success of their companies.'' A few examples of actual cases should illustrate how pervasive the problem has become: Pierre Marion, the former head of the French intelligence agency, the DGSE, has admitted that up to 15 hotel rooms of foreign business executives are broken into in Paris every day by DGSE agents. Proprietary papers are copied, and this information is then passed on to French companies to give them an edge in competition and negotiation. Japanese, Korean, and German intelligence agents and corporations have been known to recruit as spies midlevel managers and scientists at American high-technology corporations. In exchange for money, these Americans have provided the foreign agents with valuable trade secrets and formulas, destroying American companies' market leadership. The foreign offices of American corporations are often subjected to wiretaps on their phones and infiltration of their foreign national staff by agents of the host country's intelligence service. American competitiveness, profits, and jobs are the cost. I refer my colleagues to a statement I made on March 10, 1994--140 S 2731-38--for further examples of the foreign corporate and state- sponsored economic espionage that American firms face. The United States has taken some steps to counter this pervasive problem, but action has been neither strong enough nor smart enough to make a real dent in foreign corporate and state-sponsored economic espionage in the United States and against Americans abroad. Admiral Studeman testified in January, ``the private sector's concerns about increasing signs of `economic espionage' * * * are well founded. Despite the continuing necessity to protect sensitive sources and methods, more can and must be done against state-sponsored economic espionage.'' As the President's report delicately puts it: ``efforts across the government to investigate and counter economic and industrial intelligence collection activities were fragmented and uncoordinated * * * resulting in many partially informed decisions and diverging collection and analytical efforts.'' U.S. efforts, in plain English, are chaotic and largely ineffective, which is why I wrote last year's legislation requiring the President to report not only on the threat but also on how the Federal Government is organized to counter the threat and what changes in Federal organization and law could improve that effort. In the closing days of the Bush administration, the Justice Department confirmed to me that legislation was required to improve law enforcement officials' ability to investigate and prosecute foreign industrial espionage. But it was not until this past year that Federal officials, after consulting with industry representatives, were able to identify for me specific legislative changes to accomplish this objective, and we have spent several months refining bill language. I rise today, Mr. President, to offer the product of these efforts, the Economic Espionage and Protection of Proprietary Economic Information Act of 1995. The act is designed to counter this threat by creating a criminal offense for engaging in foreign corporate or state-sponsored economic espionage. The bill also clarifies existing provisions of criminal statutes relating to stolen property and racketeering to make clear that they apply to foreign corporate and state-sponsored economic espionage. Finally, the bill punishes individuals and/or corporations found guilty of practicing foreign-sponsored economic espionage by fining them and banning them from import-export activity in the United States for 5 years following their conviction. This bill has been carefully crafted in coordination with Federal law enforcement authorities and industry representatives. In establishing this criminal offense, the bill provides for those officials ordering the espionage to be held liable, as well as those who commit the act. It provides for forfeiture of any proceeds of and assets used in such espionage in accordance with the provisions of the Comprehensive Drug Abuse Prevention and Control Act of 1970. These provisions would apply to espionage committed outside the United States if committed by a U.S. citizen or if committed against an American and resulting in an affect in the United States. Finally, the bill would allow a court to take appropriate measures to ensure that protection of proprietary information during the prosecution of economic espionage cases. Mr. President, it is imperative that the United States send a clear message to individuals and foreign governments and corporations--both our friends and our foes--that this country does not accept international corporate and state-sponsored economic espionage as a legitimate business practice. We must demonstrate our resolve to combat this unfair economic practice, regardless of who engages in it. The free market system has been the source of America's prosperity and her world economic might. I ask you all to join me in supporting this legislation to fight a practice which is polluting the international free market and robbing our Nation's firms and workers of the success that their technological innovation and marketing know-how has earned them. In a report entitled ``Economic Espionage: a Threat to U.S. Industry,'' the GAO stated the situation clearly: ``The loss of proprietary information and technology through espionage activity will have broadening detrimental consequences to both U.S. economic viability and our national security interests.'' I urge my colleagues to support the Economic Espionage Act to send a message to nations around the world that America will not tolerate unjust practices in international trade and the subverting of American firms' ability to compete fairly in the world marketplace.

Mr. COHEN

Mr. COHEN. Mr. President, when France, Germany, Japan, and South Korea are included in a list of nations, we automatically assume that this must be a list of America's allies--our military and political partners since the end of the Second World War. Unfortunately, this is not only a list of America's trustworthy friends, it is also a list of governments that have systematically practiced economic espionage against American companies in the past--and continue to do so to this day. The term ``espionage'' evokes images of the cloak-and-dagger side of the United States-Soviet confrontation in the cold war. Since the end of the East-West struggle, however, an equally damaging and pervasive form of spying has received increasing attention--the spying that nations undertake against foreign-owned corporations in order to give their own firms an advantage in the increasingly cut-throat world of international business. Unlike the politico-military espionage of the cold war, economic espionage pits friendly nations against each other. Instead of military strategy and weapon technologies, the sought-after secrets in economic espionage are marketing strategies and production technologies. While the cost of politico-military espionage was reduced military security, and damage from economic espionage comes in the form of billions of dollars annually in lost international contracts, pirated products and stolen corporate proprietary information. The direct cost of this espionage is borne by America's international corporations. The indirect costs are borne by the American economy as a whole--jobs and profits are lost; the competitive edge is stolen away. The 103d Congress adopted an amendment I sponsored requiring the President to submit an annual report on foreign industrial espionage targeted against U.S. industry. The unclassified version of the President's first annual report, which is very understated compared to the classified version, acknowledged ``the post-cold-war reality that economic and technological information are as much a target of foreign intelligence collection as military and political information.'' The report goes on to state: In today's world in which a country's power and stature are often measured by its economic/industrial capability, foreign government ministries--such as those dealing with finance and trade--and major industrial sectors are increasingly look upon to play a more prominent role in their respective country's (economic) collection efforts. While a military rival steals documents for a state-of-the-art weapon or defense system, an economic competitor steals a U.S. companies proprietary business information or government trade strategies. Just as a foreign country's defense establishment is the main recipient of US defense-related information, foreign companies and commercially oriented government ministries are the main beneficiaries of US economic information. That aggregate losses that can mount as a result of such efforts can reach billions of dollars per year, constituting a serious national security concern. According to Joseph Recci of the American Society for Industrial Security, ``American corporations are losing billions of dollars each year in valuable technology and proprietary information to foreign espionage.'' In a recent survey of Fortune 500 companies, the society notes that the number of corporations reporting that they have been victims of economic espionage has grown by 260 percent since 1985. Peter Schweizer, in his 1994 study of state-sponsored economic espionage, ``Friendly Spies,'' estimated that such espionage costs American business upwards of $100 billion annually. This alarming trend in foreign corporate and state-sponsored economic espionage will continue in coming years. Intelligence agencies in industrialized nations have found themselves with a lot of time on their hands since the end of the cold war, and the governments of these nations have come to see economic competition as the new central threat to their national security. In testimony before the Senate Select Intelligence Committee earlier this year, then acting Director of Central Intelligence Adm. William Studeman predicted, ``the threat to U.S. economic interests will absolutely increase as foreign governments attempt to ensure the success of their companies.'' A few examples of actual cases should illustrate how pervasive the problem has become: Pierre Marion, the former head of the French intelligence agency, the DGSE, has admitted that up to 15 hotel rooms of foreign business executives are broken into in Paris every day by DGSE agents. Proprietary papers are copied, and this information is then passed on to French companies to give them an edge in competition and negotiation. Japanese, Korean, and German intelligence agents and corporations have been known to recruit as spies midlevel managers and scientists at American high-technology corporations. In exchange for money, these Americans have provided the foreign agents with valuable trade secrets and formulas, destroying American companies' market leadership. The foreign offices of American corporations are often subjected to wiretaps on their phones and infiltration of their foreign national staff by agents of the host country's intelligence service. American competitiveness, profits, and jobs are the cost. I refer my colleagues to a statement I made on March 10, 1994--140 S 2731-38--for further examples of the foreign corporate and state- sponsored economic espionage that American firms face. The United States has taken some steps to counter this pervasive problem, but action has been neither strong enough nor smart enough to make a real dent in foreign corporate and state-sponsored economic espionage in the United States and against Americans abroad. Admiral Studeman testified in January, ``the private sector's concerns about increasing signs of `economic espionage' * * * are well founded. Despite the continuing necessity to protect sensitive sources and methods, more can and must be done against state-sponsored economic espionage.'' As the President's report delicately puts it: ``efforts across the government to investigate and counter economic and industrial intelligence collection activities were fragmented and uncoordinated * * * resulting in many partially informed decisions and diverging collection and analytical efforts.'' U.S. efforts, in plain English, are chaotic and largely ineffective, which is why I wrote last year's legislation requiring the President to report not only on the threat but also on how the Federal Government is organized to counter the threat and what changes in Federal organization and law could improve that effort. In the closing days of the Bush administration, the Justice Department confirmed to me that legislation was required to improve law enforcement officials' ability to investigate and prosecute foreign industrial espionage. But it was not until this past year that Federal officials, after consulting with industry representatives, were able to identify for me specific legislative changes to accomplish this objective, and we have spent several months refining bill language. I rise today, Mr. President, to offer the product of these efforts, the Economic Espionage and Protection of Proprietary Economic Information Act of 1995. The act is designed to counter this threat by creating a criminal offense for engaging in foreign corporate or state-sponsored economic espionage. The bill also clarifies existing provisions of criminal statutes relating to stolen property and racketeering to make clear that they apply to foreign corporate and state-sponsored economic espionage. Finally, the bill punishes individuals and/or corporations found guilty of practicing foreign-sponsored economic espionage by fining them and banning them from import-export activity in the United States for 5 years following their conviction. This bill has been carefully crafted in coordination with Federal law enforcement authorities and industry representatives. In establishing this criminal offense, the bill provides for those officials ordering the espionage to be held liable, as well as those who commit the act. It provides for forfeiture of any proceeds of and assets used in such espionage in accordance with the provisions of the Comprehensive Drug Abuse Prevention and Control Act of 1970. These provisions would apply to espionage committed outside the United States if committed by a U.S. citizen or if committed against an American and resulting in an affect in the United States. Finally, the bill would allow a court to take appropriate measures to ensure that protection of proprietary information during the prosecution of economic espionage cases. Mr. President, it is imperative that the United States send a clear message to individuals and foreign governments and corporations--both our friends and our foes--that this country does not accept international corporate and state-sponsored economic espionage as a legitimate business practice. We must demonstrate our resolve to combat this unfair economic practice, regardless of who engages in it. The free market system has been the source of America's prosperity and her world economic might. I ask you all to join me in supporting this legislation to fight a practice which is polluting the international free market and robbing our Nation's firms and workers of the success that their technological innovation and marketing know-how has earned them. In a report entitled ``Economic Espionage: a Threat to U.S. Industry,'' the GAO stated the situation clearly: ``The loss of proprietary information and technology through espionage activity will have broadening detrimental consequences to both U.S. economic viability and our national security interests.'' I urge my colleagues to support the Economic Espionage Act to send a message to nations around the world that America will not tolerate unjust practices in international trade and the subverting of American firms' ability to compete fairly in the world marketplace.

Mr. COHEN

Mr. COHEN. Mr. President, 3 months ago, the Senate voted overwhelmingly to bring about fundamental change to welfare in this country. The entitlement status of cash welfare is ended in this bill. This is the most important step we can take if we want to successfully end the cycle of dependency. As Marvin Olasky noted in his recent book, ``The Tragedy of American Compassion,'' effective welfare requires the ability to distinguish those who have fallen on hard times and need a helping hand from those who simply refuse to act in a disciplined and responsible manner. When welfare is a Federal entitlement, it is very difficult to make these distinctions. However, ending the entitlement must be accompanied by the support necessary to get welfare recipients into jobs. In considering our welfare system, I think it is useful to distinguish beneficiaries by three major groups. First, there are those in need of temporary assistance. People who, while they are generally able to support themselves and their families, they have fallen on hard times. Food stamps and other assistance must be there to provide temporary help when unforeseen economic crises occur. The second group includes those whom most of us would agree cannot work. These individuals--through no fault of their own, are simply not able to economically provide for themselves. They have disabilities that warrant our compassion not our scorn. The welfare system should be there for them. The third group consists of people who fall somewhere in between the first and second groups. They have been on and off the welfare rolls for years, yet they don't seem to fit the profile of someone whom most would agree cannot work. It is this third group that should be the focus of the current welfare debate. The debate has often been extremely polarized. Many on the left are reluctant to vest any sense of personal responsibility in welfare recipients. They view them as unwitting victims of societal injustices, refusing to acknowledge the role that personal behavior may play. On the other hand, many on the right are reluctant to acknowledge that no person is an island--that each of us thrives or fails to thrive, to some extent, as a result of our environment. Some on the right naively believe that we all have the same opportunities and that a failure to succeed is simply evidence of laziness. For many beneficiaries in this third group, one of the most essential ingredients for self-sufficiency is the availability of child care. I am of the opinion that we cannot mandate strict work requirements without providing States with a reasonable amount of child care funding. During Senate debate on welfare, I worked on a bipartisan basis with other Members to increase funding for child care. Even under the current system of entitlement, there are more than 3,000 children of working parents already waiting to receive child care assistance in Maine. While the conference agreement decreases the Senate funding level by about $200 million, that decrease in funds is balanced by a reduction in the work requirements in the early years of implementation. Rather than the 25 percent level called for in the Senate bill, States will be required to place 15 percent of their caseload in work activities. In addition, the conference agreement will add $1.6 billion in funding for the social services block grant. This block grant has been used in many States to fund additional child care services for low- income families and this funding will allow States to furnish additional services for child care and to promote economic self- sufficiency. The provision for child care services in the agreement continues to provide protections for children who are not yet in school by prohibiting States from penalizing mothers who cannot work because there simply is no child care available. We have been criticized on all sides for providing too much and providing too little in this legislation. We do not know how States will react to this new flexibility and independence in setting policy. This legislation reflects the philosophy that Washington does not have all the answers. We should no longer assume that one-size-fits-all Federal solutions offer better hope than granting more freedom to States to design approaches that address a State's unique set of circumstances. Having said that, I believe we have a common and national interest in assuring an effective social safety net for all Americans, regardless of where citizens may reside. So I would not support any effort to completely remove the Federal Government from the welfare system. Through Government, we have an obligation to try to counter the negative influences which impact some of the poorest members of our society. Many Americans are born into environments of drugs, crime and severe poverty. And regrettably, too many of our young people are growing up without two parents involved in their lives. The correlation between single parenthood and welfare dependency is overwhelming. Ninety-two percent of AFDC families have no father in the home. Society must also acknowledge the correlation between crime and fatherlessness. Three-quarters of all long-term prisoners grew up without fathers in their homes or active in their lives. When 24 percent of children born today are born to unwed mothers, we cannot avoid this issue if we hope to break the cycle of poverty and crime that permeate some of our communities. Unfortunately, no one really knows how to stop that cycle. For this reason, I do not support efforts to attach a lot of strings to the welfare block grants, including provisions ostensibly designed to curb illegitimacy. It is clear that welfare reform cannot disregard the growing incidence of out-of-wedlock births, teen pregnancy, and absent fathers, but it is also clear that we don't know what will counter this trend. Accordingly, we ought not prescribe a Federal solution that would hamstring the ability of States to try different approaches. This legislation does bring a new national presence to the collection of child support and establishing paternity for children born out-of- wedlock. By taking a tougher stand to establish and then enforce child support orders, some of the families currently tied to the welfare system may be able to get loose. Financial support cannot replace the presence of a good father in a household but it will relieve some of the burdens placed on single mothers. I support the general thrust of the pending welfare legislation to turn more decisionmaking authority over to the States. Consistency would suggest that we not at the same time put a lot of requirements on States on how and who to spend Federal welfare dollars. I do think that it is important to ensure that States share responsibility with the Federal Government by investing dollars at the State level in welfare programs. For this reason, I supported a strong maintenance of effort requirement which remains largely intact in the conference report. Block-granting AFDC to the States is not a panacea. A welfare system that has clearer lines of responsibility and accountability will be more effective. But this is not the end of the welfare debate. Hopefully, we will enact legislation this year that will make meaningful improvements in the current system. But turning these programs over to the States will not itself fix the problems. Congress and the President must continue to work with States to improve the welfare system to make sure that a safety net is there for those who need it but is denied to those who abuse it. I intend to support the conference agreement, but I do have reservations regarding some of the changes that were included in the final agreement. We have been put on notice that this legislation will be vetoed by President Clinton. If the President follows through on his promise, it is my hope that we can revisit those important issues when the legislation returns to Congress.

Mr. COHEN

Mr. COHEN. Mr. President, today I am introducing the Protecting Class Action Plaintiffs Act of 1995. This legislation is necessary to address a troubling number of instances where class action lawsuits have been filed on behalf of thousands, and in some cases, millions of Americans, but the suits have been settled in ways that do not promote the best interest of the plaintiffs. A class action is a lawsuit in which an attorney not only represents an individual plaintiff, but in addition, the suit seeks relief for all those individuals who have suffered an injury similar to the plaintiff. For example, a suit brought against a pharmaceutical company by a person suffering from the side effects of a drug, can, if the court approves it as a class action, be expanded to cover all individuals who used that drug. More often than not, these suits are settled. Settlement agreements provide monetary and other relief to class Members, protect defendants from future lawsuits, and stipulate how the plaintiffs' attorneys will be paid. All class members are notified of the terms of the settlement and given the opportunity to exclude themselves from the class action if they do not want to be bound by the agreement. All class action settlements must be approved by a court. Although the class action is an important part of our civil justice system, it is fraught with difficulties. The primary problem is that the client in a class action is a diffuse group of thousands of individuals scattered across the country, that is incapable of exercising meaningful control over the litigation. While in theory the class action lawyers must be responsive to their clients, in practice, the lawyers control all aspects of the litigation. Moreover, when a class actions is settled, the amount of the attorneys' fee, is negotiated between the plaintiffs' lawyers and the defendants. Yet, in most cases, the fee is paid by the class members-- the only party that does not have a seat at the bargaining table. In addition, class actions are now being used by defendants as a tool to limit their future liabilities. Class actions are being settled that cover all individuals exposed to a particular substance but whose injuries have not yet manifest themselves. As Prof. John Coffee of the Columbia Law School has written, ``the class action is providing a means by which unsuspecting future claimants suffer the extinguishment of their claims even before they learn of their injury.'' In light of the incentives that are driving the parties, it is easy to understand how class action settlements can be abused. Plaintiffs' attorneys and corporate defendants can reach agreements that satisfy their respective interests--limiting the defendants' liability and maximizing the attorneys' fee. But, because the plaintiffs themselves do not participate in the settlement negotiations, they are sometimes left out in the cold. Again, as Professor Coffee has concluded, ``if not actually collusive, settlements all too frequently have advanced the interests of plaintiffs' attorneys, not those of class members.'' Presumably, judges would not approve settlements that were unfair to the plaintiffs. But, it is difficult for judges to adequately scrutinize such settlements. In most instances, the only parties appearing before them--the plaintiffs' lawyers and the defendants-- support the settlement. Without anyone providing adversarial scrutiny to reveal the flaws in class action settlements, judges are apt to approve them, especially since they result in the removal of complex cases from crowded court dockets. I am familiar with one particularly egregious case where this is exactly what transpired. A constituent of mine, Dexter Kamilewicz, of Yarmouth, ME was a member of a class action lawsuit filed in Alabama State Court against BancBoston Mortgage Corp. The suit alleged that the bank was availing itself of ``free money'' by requiring its mortgage holders to maintain an excessive balance in their mortgage escrow account. After the court ruled in favor of the plaintiffs on a preliminary motion, the parties settled the case. Under the settlement, the defendants agreed to refund the excess money they were holding in escrow and provide a small amount of compensation to the plaintiffs for lost interest. BancBoston offered to pay the entire fee for the lawyers representing the class based on a formula that had been used to settle a different case. But the plaintiffs' lawyers rejected this offer. Instead, they insisted that their fees be paid directly from their clients' escrow accounts based on a formula that would provide them a more lucrative return. The bank assented to this process and the State court judge approved the settlement. Pursuant to the settlement, Mr. Kamilewicz received a check for $2.19 in back interest, but did not receive any other refund because his escrow account did not have an excessive balance. Then, about a year later, Mr. Kamilewicz noticed on his annual bank statement that $91.33 had been withdrawn from his escrow account for miscellaneous disbursements. The bank told him that the money was used to pay the class action lawyers. In essence, Mr. Kamilewicz paid $91.33 to the lawyers for work on a lawsuit that provided him with only a $2.19 benefit. The class action lawyers, however, did quite well. According to a recent New York Times article about the case, they received $8.5 million--over 20 percent of the $40 million refunded by the bank to class members. Not only is this a large fee, but one must consider that the $40 million refund was, and always would have been the plaintiffs' money. The only benefit of the lawsuit to the class was that they received the money in 1994 instead of when they closed their mortgages. The attorney fee in this case, therefore, bore no relationship to the actual benefit that the lawsuit provided to the class. Since the New York Times article ran, I have learned a bit about the lawyers who were involved in this case. In an unrelated case from Chicago, a judge would not even permit these lawyers to maintain a class action based on his view that they would not adequately represent the class. The judge commented on the record that: For five and a half years . . . I have been witness to their unparalleled and shocking abuse of process; their blatant manipulation of the rules of Court; their disregard for orderly processes and Court orders; their discourtesy and hostility to opposing counsel; their subversion of their clients' best interests; their preoccupation with slanderous accusations; their disinclination to trial preparation; their unfamiliarity with and disregard for case law precedent in their path; and their unabashed utilization of class action techniques as a weapon to heighten litigation costs and bootstrap modest individual claims into handsome class fees. The judge concluded that he ``could think of no plague worse than to have a Court impose [these lawyers] on absent and unsuspecting members of a class.'' There are other problematic cases from across the country. In Philadelphia, a group of lawyers settled a set of cases for clients of theirs against a consortium of asbestos companies. In exchange, these same lawyers agreed to a class action settlement covering all other individuals exposed to the companies' asbestos. The class action settlement, however, provided less money for the class members than had been provided for the lawyers' individual clients. To make matters worse, this class action--Georgine versus Amchem Products--covers individuals that have been exposed to asbestos but have not yet become sick. How can these individuals make a rational decision about the merits of the settlement when they do not know whether they will become ill and, if they do, how serious their illnesses will be? This month's American Bar Association Journal contains an article about two competing nationwide class actions currently pending in two different State courts. These cases both concern defective polybutelene pipe that is causing floods in people's homes across the country. The case in Tennessee has settled for $850 million. It may cover over 3 million homeowners. The case in Alabama is going to trial. Lawyers in the Alabama case are trying to convince homeowners to opt-out of the Tennessee settlement and join their case. Homeowners are receiving conflicting notices from both cases and are confused. As one of them said, ``I don't know about all this legal stuff . . . all I want is my walls fixed.'' So there are a wide range of legal and ethical issues concerning class actions that are deserving of some careful attention from Congress. My legislation is a first step in this direction. It attempts to address the problem of class action settlements in two ways: First, it would require class action lawyers to notify the attorney general of States in which class members reside whenever a class action is settled. Providing notice to the attorneys general will enable them to scrutinize class action settlements and object to the court if the settlements fail to promote the consumers' interests. In my view, the participation of the attorneys general is critical to improve the class action settlement process. Second, the legislation would require that notices mailed to class members contain summaries written in plain, easily understandable language. Such summaries are necessary because most class action notices are lengthy and filled with legal jargon that the average citizen cannot understand. Anyone covered by a class action settlement should know the benefits they will obtain, the rights that they are sacrificing, and the way their attorneys will be paid, Today, most people simply throw away action notices like junk mail because they are too complicated and difficult to comprehend. In sum, the legislation will bring some sunlight into the class action process and, as we know, sunlight is the best disinfectant. It will enable State attorneys general to provide adversarial scrutiny to settlements and promote the interests of consumers when the plaintiffs' lawyers and corporate defendants are not. It will also give individual call members the information they need to make informed decisions about whether they wish to join a class action or be bound by a settlement agreement. This is a modest step, but one that I believe will be effective. Before closing, I want to make clear that I do not oppose class action lawsuits. Over the past three decades, class actions have been used to oppose racially segregated schools, obtain redress for victims of employment discrimination, and provide compensation for individuals exposed to toxic chemicals or injured by defective products. Class actions increase access to our civil justice system because they enable people to pursue claims collectively that otherwise would be too expensive to litigate. The difficulty of any litigation reform endeavor is finding ways to weed out the bad cases without closing the courthouse doors to those who have genuine grievances deserving of redress. Legislation that limits monetary recoveries or provides immunity for wrongdoers does not meet this litmus test. In an effort to deter frivolous lawsuits these measures have the perverse effect of limiting the remedies available to those with legitimate claims. The legislation I am introducing today is an example of the type of litigation reform that I believe will help to protect against unethical attorney behavior and curb abusive lawsuits. It will not limit the availability of judicial remedies for meritorious cases. I urge my colleagues to support the legislation and I ask unanimous consent that a copy of the bill and the New York Times article about the Kamilewicz case be included in the Record.

Mr. COHEN

Mr. COHEN. Mr. President, today I am introducing the Protecting Class Action Plaintiffs Act of 1995. This legislation is necessary to address a troubling number of instances where class action lawsuits have been filed on behalf of thousands, and in some cases, millions of Americans, but the suits have been settled in ways that do not promote the best interest of the plaintiffs. A class action is a lawsuit in which an attorney not only represents an individual plaintiff, but in addition, the suit seeks relief for all those individuals who have suffered an injury similar to the plaintiff. For example, a suit brought against a pharmaceutical company by a person suffering from the side effects of a drug, can, if the court approves it as a class action, be expanded to cover all individuals who used that drug. More often than not, these suits are settled. Settlement agreements provide monetary and other relief to class Members, protect defendants from future lawsuits, and stipulate how the plaintiffs' attorneys will be paid. All class members are notified of the terms of the settlement and given the opportunity to exclude themselves from the class action if they do not want to be bound by the agreement. All class action settlements must be approved by a court. Although the class action is an important part of our civil justice system, it is fraught with difficulties. The primary problem is that the client in a class action is a diffuse group of thousands of individuals scattered across the country, that is incapable of exercising meaningful control over the litigation. While in theory the class action lawyers must be responsive to their clients, in practice, the lawyers control all aspects of the litigation. Moreover, when a class actions is settled, the amount of the attorneys' fee, is negotiated between the plaintiffs' lawyers and the defendants. Yet, in most cases, the fee is paid by the class members-- the only party that does not have a seat at the bargaining table. In addition, class actions are now being used by defendants as a tool to limit their future liabilities. Class actions are being settled that cover all individuals exposed to a particular substance but whose injuries have not yet manifest themselves. As Prof. John Coffee of the Columbia Law School has written, ``the class action is providing a means by which unsuspecting future claimants suffer the extinguishment of their claims even before they learn of their injury.'' In light of the incentives that are driving the parties, it is easy to understand how class action settlements can be abused. Plaintiffs' attorneys and corporate defendants can reach agreements that satisfy their respective interests--limiting the defendants' liability and maximizing the attorneys' fee. But, because the plaintiffs themselves do not participate in the settlement negotiations, they are sometimes left out in the cold. Again, as Professor Coffee has concluded, ``if not actually collusive, settlements all too frequently have advanced the interests of plaintiffs' attorneys, not those of class members.'' Presumably, judges would not approve settlements that were unfair to the plaintiffs. But, it is difficult for judges to adequately scrutinize such settlements. In most instances, the only parties appearing before them--the plaintiffs' lawyers and the defendants-- support the settlement. Without anyone providing adversarial scrutiny to reveal the flaws in class action settlements, judges are apt to approve them, especially since they result in the removal of complex cases from crowded court dockets. I am familiar with one particularly egregious case where this is exactly what transpired. A constituent of mine, Dexter Kamilewicz, of Yarmouth, ME was a member of a class action lawsuit filed in Alabama State Court against BancBoston Mortgage Corp. The suit alleged that the bank was availing itself of ``free money'' by requiring its mortgage holders to maintain an excessive balance in their mortgage escrow account. After the court ruled in favor of the plaintiffs on a preliminary motion, the parties settled the case. Under the settlement, the defendants agreed to refund the excess money they were holding in escrow and provide a small amount of compensation to the plaintiffs for lost interest. BancBoston offered to pay the entire fee for the lawyers representing the class based on a formula that had been used to settle a different case. But the plaintiffs' lawyers rejected this offer. Instead, they insisted that their fees be paid directly from their clients' escrow accounts based on a formula that would provide them a more lucrative return. The bank assented to this process and the State court judge approved the settlement. Pursuant to the settlement, Mr. Kamilewicz received a check for $2.19 in back interest, but did not receive any other refund because his escrow account did not have an excessive balance. Then, about a year later, Mr. Kamilewicz noticed on his annual bank statement that $91.33 had been withdrawn from his escrow account for miscellaneous disbursements. The bank told him that the money was used to pay the class action lawyers. In essence, Mr. Kamilewicz paid $91.33 to the lawyers for work on a lawsuit that provided him with only a $2.19 benefit. The class action lawyers, however, did quite well. According to a recent New York Times article about the case, they received $8.5 million--over 20 percent of the $40 million refunded by the bank to class members. Not only is this a large fee, but one must consider that the $40 million refund was, and always would have been the plaintiffs' money. The only benefit of the lawsuit to the class was that they received the money in 1994 instead of when they closed their mortgages. The attorney fee in this case, therefore, bore no relationship to the actual benefit that the lawsuit provided to the class. Since the New York Times article ran, I have learned a bit about the lawyers who were involved in this case. In an unrelated case from Chicago, a judge would not even permit these lawyers to maintain a class action based on his view that they would not adequately represent the class. The judge commented on the record that: For five and a half years . . . I have been witness to their unparalleled and shocking abuse of process; their blatant manipulation of the rules of Court; their disregard for orderly processes and Court orders; their discourtesy and hostility to opposing counsel; their subversion of their clients' best interests; their preoccupation with slanderous accusations; their disinclination to trial preparation; their unfamiliarity with and disregard for case law precedent in their path; and their unabashed utilization of class action techniques as a weapon to heighten litigation costs and bootstrap modest individual claims into handsome class fees. The judge concluded that he ``could think of no plague worse than to have a Court impose [these lawyers] on absent and unsuspecting members of a class.'' There are other problematic cases from across the country. In Philadelphia, a group of lawyers settled a set of cases for clients of theirs against a consortium of asbestos companies. In exchange, these same lawyers agreed to a class action settlement covering all other individuals exposed to the companies' asbestos. The class action settlement, however, provided less money for the class members than had been provided for the lawyers' individual clients. To make matters worse, this class action--Georgine versus Amchem Products--covers individuals that have been exposed to asbestos but have not yet become sick. How can these individuals make a rational decision about the merits of the settlement when they do not know whether they will become ill and, if they do, how serious their illnesses will be? This month's American Bar Association Journal contains an article about two competing nationwide class actions currently pending in two different State courts. These cases both concern defective polybutelene pipe that is causing floods in people's homes across the country. The case in Tennessee has settled for $850 million. It may cover over 3 million homeowners. The case in Alabama is going to trial. Lawyers in the Alabama case are trying to convince homeowners to opt-out of the Tennessee settlement and join their case. Homeowners are receiving conflicting notices from both cases and are confused. As one of them said, ``I don't know about all this legal stuff . . . all I want is my walls fixed.'' So there are a wide range of legal and ethical issues concerning class actions that are deserving of some careful attention from Congress. My legislation is a first step in this direction. It attempts to address the problem of class action settlements in two ways: First, it would require class action lawyers to notify the attorney general of States in which class members reside whenever a class action is settled. Providing notice to the attorneys general will enable them to scrutinize class action settlements and object to the court if the settlements fail to promote the consumers' interests. In my view, the participation of the attorneys general is critical to improve the class action settlement process. Second, the legislation would require that notices mailed to class members contain summaries written in plain, easily understandable language. Such summaries are necessary because most class action notices are lengthy and filled with legal jargon that the average citizen cannot understand. Anyone covered by a class action settlement should know the benefits they will obtain, the rights that they are sacrificing, and the way their attorneys will be paid, Today, most people simply throw away action notices like junk mail because they are too complicated and difficult to comprehend. In sum, the legislation will bring some sunlight into the class action process and, as we know, sunlight is the best disinfectant. It will enable State attorneys general to provide adversarial scrutiny to settlements and promote the interests of consumers when the plaintiffs' lawyers and corporate defendants are not. It will also give individual call members the information they need to make informed decisions about whether they wish to join a class action or be bound by a settlement agreement. This is a modest step, but one that I believe will be effective. Before closing, I want to make clear that I do not oppose class action lawsuits. Over the past three decades, class actions have been used to oppose racially segregated schools, obtain redress for victims of employment discrimination, and provide compensation for individuals exposed to toxic chemicals or injured by defective products. Class actions increase access to our civil justice system because they enable people to pursue claims collectively that otherwise would be too expensive to litigate. The difficulty of any litigation reform endeavor is finding ways to weed out the bad cases without closing the courthouse doors to those who have genuine grievances deserving of redress. Legislation that limits monetary recoveries or provides immunity for wrongdoers does not meet this litmus test. In an effort to deter frivolous lawsuits these measures have the perverse effect of limiting the remedies available to those with legitimate claims. The legislation I am introducing today is an example of the type of litigation reform that I believe will help to protect against unethical attorney behavior and curb abusive lawsuits. It will not limit the availability of judicial remedies for meritorious cases. I urge my colleagues to support the legislation and I ask unanimous consent that a copy of the bill and the New York Times article about the Kamilewicz case be included in the Record.

Mr. COHEN

Mr. COHEN. Certainly.

Mr. COHEN. Can I inquire as to whether my 20 minutes starts now?

Mr. COHEN. Mr. President, we just heard a standard display of Democratic rhetoric from our colleague from Nebraska. According to my colleague from Nebraska, whatever the Pentagon sends up here, Congress is duty bound to oblige. If they send up a bill requesting certain systems, we either have to accept them or reject them, but no discretion is left for us to exercise, I gather from the statement of my colleague from Nebraska. Mr. President, I recall when they were in the majority. Whenever the President sent a bill up here, it was standard Democratic rhetoric: ``Whatever the President proposes, forget about it, Congress disposes. It's the congressional responsibility to formulate a budget, not the President's. He submits it, but we dispose of it.'' So now that they are in the minority, they are complaining that this exceeds the President's request. They did not have that particular concern when they were in the majority. So I think it is incumbent to point out, for example, that there was a certain land transfer, called the Corn Husker Army Ammunition Plant. It was not in the President's request. It was added somehow. So it has been historically the case that the Congress has the power and responsibility to decide which land transfers should be included and which should not, which systems should be built and which should not. When the Pentagon makes a request, it does not mean the Congress simply rolls over and either accepts it or eliminates it. What my colleague failed to point out is that, as I believe Secretary Perry has noted, procurement has been cut back rather significantly, about 72 percent since the height of Ronald Reagan's defense budgets. A 72-percent cut in procurement, and Secretary Perry said if there was going to be an increase over the President's request, as we provided, it should be put into procurement. So that whole long litany of systems cited by my friend from Nebraska really ignores the fact that the Defense Department itself said if we had more money, we would spend it on procurement, and that is precisely what we have done. I want to talk a little bit about the national missile defense system. I was really struck by the statement that the Communists are coming back into power because we are debating whether we are going to have a national missile defense system. I never heard anything so absurd in my life. Whether the Communists come back into power has little to do with our debate right here. It has everything to do with what is taking place in Russia right now in terms of their troubled efforts in trying to democratize their country, to move to a capitalist system, to a democratic capitalist system. I think it ironic they come to the floor and suggest that because we want a system to protect the American people, this is going to require the Russians to return to their old Communist ways. A great deal has been said about the national missile defense system, but not a lot has been said about the immediate threat to our troops overseas as well as our allies, which are theater missiles. This bill makes great strides toward protecting our allies and our servicemen and women who are abroad from these kinds of theater missiles that can be targeted at them. Did we not learn anything during the Persian Gulf war? Do we want our troops to again be in the situation they faced in Saudi Arabia and that Israel faced? A situation in which we had to depend upon Patriots to take down those Scud missiles? The TMD programs accelerated by this bill are designed to protect our service men and women abroad and also our allies. It is something the administration also supports, by the way. This bill is a strong endorsement of the TMD systems. With regard to national missile defense, a number of statements have been made about the conference report, that somehow it endangers the ABM Treaty. And, again, I found this somewhat ironic. It makes very little sense to me. We passed language by a vote of 84 to 15 that had been negotiated by Senator Warner, myself, Senator Nunn and Senator Levin. And this Senate compromise language that was endorsed by an overwhelming vote was actually watered down in conference. That is what strikes me as being so ironic about this. The Senate compromise we negotiated, for example, called for the development of a national missile defense system with multiple sites. Since the ABM Treaty, as amended, only allows one site, the Senate compromise language that we negotiated actually envisioned either amending the treaty or indicating we would withdraw from it, as the treaty permits. In fact, the compromise called for negotiations to amend the treaty and stated that if we could not successfully negotiate amendments, we would actually consider withdrawing from it. It seems to me the language we have before us is actually much weaker than that. The Senate compromise language that we passed 84 to 15 called for a system that would actually go beyond the bounds of the ABM Treaty, but the conference report does not. The conference report does not even mention a multiple-site system. There is no mention at all of a multiple-site system. It does not say we cannot develop one, but there is no requirement that we do develop one. The major change on national missile defense in this language is that under the Senate-passed compromise, we would ``develop for deployment'' in the future, and that language has been changed to ``deploy'' in the future. But we have actually written it in a way that would allow us to deploy a system consistent with the ABM Treaty. That is the irony involved, because you could have one site, theoretically, providing defense for the United States. That would be consistent with the ABM Treaty. By the way, I want to point out, the Russians already have an ABM system. They have their one site. So we could, in fact, be consistent with the ABM Treaty developing one site that could, theoretically speaking, potentially protect all of the United States. So I find it ironic that they are now saying this particular language is going to destroy the ABM Treaty; this language is causing the Russians to rethink their role in the world with respect to the United States; this conference report is going to cause them to turn to communism once again. That is clearly the most excessive rhetoric that I have heard to date. The fact of the matter is that the administration is opposed to the deployment of a system of any kind to defend the American people. And during the conference negotiations, White House officials made it clear they would oppose any legislation that altered in any way the administration's so-called National Missile Defense Technology Readiness Program, what they call a rolling hedge, but I think is more accurately described as simply spinning our wheels. In other words, they threaten to veto any defense authorization bill that did anything other than rubber-stamp their National Missile Defense Program. Mr. President, we are the ones who control the power of the purse. We cannot accept the administration telling us: You cannot change under any circumstances the formulation of a program. They have the right to veto it, but we should not in any manner forego our power to try to define what we believe to be in the best interest of the American people. So what this debate over missile defense is really all about, it is not about whether the conference report somehow endangers the ABM Treaty, because it clearly does not, but whether we are going to proceed toward the deployment of a national missile defense system as permitted by the ABM Treaty even today. Frankly, I think it is unfortunate that some of the Members on the other side come forward to declare that this conference report constitutes an ``anticipatory breach'' of the ABM Treaty and warn the Russian Duma might kill the ABM Treaty in response. There is nothing in this report that would cause the Russians to react in a negative manner, but the Russian Duma might be incited to react by, I think, careless remarks being made by some Members in this Chamber. I was disturbed last weekend to read an opinion article in the Washington Post, coauthored by a Russian arms negotiator that followed this false line of reasoning. The quote was, ``The prime cause of Russian second thoughts'' about the START II treaty, according to Yuri Nazarkin, ``is the Republican- led effort that began this summer to mandate the deployment of a multisite strategic antiballistic missile, or ABM, system by the year 2003. This system,'' Nazarkin writes, ``was called for originally in the Senate version of the defense authorization bill and endorsed last week by a House-Senate conference committee. Yet, it would violate the 1972 ABM Treaty,'' Nazarkin concludes. That is simply not accurate. The conference report, as written, does not violate the treaty. The fact is that we could deploy an ABM system, if necessary, from a single site, which would be consistent with the treaty. For those Members to come on to the floor and say this is an anticipatory breach is wrong. It sends precisely the wrong signal. If other Members are worried about the Russian Duma reacting negatively, they have their own words to point to in terms of why this is taking place. We have to ask why is a Russian arms negotiator, who carries weight in Moscow, making erroneous statements? He is repeating the erroneous statements being made right here on the Senate floor. I urge my colleagues to read, very carefully, the language in this report. Mr. President, I want to spend a few moments in talking about the B-2 bomber. My colleague from Nebraska mentioned that this is a system which the Defense Department did not call for, and I agree. In fact, for many years I led the effort to terminate the B-2 program here on the floor with the Senator from Vermont, Senator Leahy, and in the committee this year I led the successful effort to strike funding for the B-2. There were some Members on the other side who support the B-2, and some on our side support it. It is not that I do not support the B-2 bomber; it is a fine aircraft. The fact of the matter is that I do not think we can afford to start building 20 new B-2 bombers, which is what Members of the House would like to do. The conference report did provide $493 million above the administration's request for the B-2. But, again, contrary to what some have said, it in no way endorsed the production of additional B-2 bombers or bringing back the B-2 bomber production base. All of these funds, I point out, have been fenced until March 31. Hopefully, the administration will send up a rescission bill to take the funds out for the B-2 bomber. The only statement in the conference report regarding this $493 million is the Senate conferees' statement that the funds can be spent--I want to emphasize these words--``only for procurement of B-2 components, upgrades, and modifications'' for the existing B-2 fleet. The House conferees have remained silent on this issue. They were insisting that they could put language in the manager's statement that would allow for the opening of a brand new production line, and we successfully resisted that. Our language is that it should be used for spare parts, upgrades and modifications of the existing fleet, and not to open a brand new line. Second, because of our concern over the cost of the B-2, we called on the Secretary of Defense to explore what new technologies might be developed in the coming years for a new type of bomber that, hopefully, would be less expensive than the B-2. Make this very clear, Mr. President. We are opposed to opening up a brandnew line of the production of B-2 bombers. Now, some of our Members want that. But, frankly, the conferees on the Senate side believe that that was simply not affordable, and the conference report reflects that view. Mr. President, we asked the Secretary of Defense to make an examination of exactly what he would cut out if Congress were to direct him in the future to buy more B-2's. The Secretary of Defense has to come back and identify for us which programs he would cut because, clearly, it would exceed the President's budget and the 5-year defense plan. Because if any decision were ever made to buy more B-2's, we would have to then, at that time, start picking and choosing which systems would have to be deleted or defunded. That is something every Member ought to understand as to what we were able to achieve. To recap, Mr. President, there is not a single word in the conference report about buying components for new B-2's or bringing back the B-2 production facilities that were closed. Everything in this conference report is focused on the high cost of the B-2 and the unacceptable trade-offs of other defense programs that would be required by any future decision to buy more B-2's. What the conference does talk about is using the authorized funds for supporting the existing B-2 fleet, not to open up a new B-2 line. Mr. President, I will conclude by telling you what I think is going on here. The President's political advisers would like the President to veto this bill, so he could score points with certain constituencies by arguing that we are spending too much on defense. They wanted him to veto the DOD appropriations bill for the same reason, but he could not do so because he wanted to win over some of the Members of this body on the Bosnia resolution. Now they are saying that while we lost that particular battle--he signed the bill even though he did not want to and the funds have been appropriated--so let us please certain constituents by urging him to veto this measure. But the President faces a real dilemma on this. He has deployed American troops to a war zone in Bosnia. Congress has adopted legislation supporting the troops in the field. If the President vetoes this conference report, he is going to be perceived by many soldiers and their families as withholding support for them--at the very time that he has dispatched them on a very dangerous mission. If he vetoes this, he will be vetoing a pay raise for the troops in Bosnia and all of our troops. He will be vetoing an increase in the housing allowance that supports their families back in Germany, here in the United States, and around the world. He will be vetoing a new program to allow DOD to use the private sector to improve military housing, which is a program DOD desperately wants and our soldiers and their families desperately need. In short, the President faces a dilemma. If he vetoes this bill, he will score some political points, but it will harm our troops and their families, including those now putting their lives on the line in Bosnia. So the members of his party in the Senate are trying to save him from this dilemma by defeating this conference report on the Senate floor. That is what this debate is really all about. All this discussion about the ABM Treaty and the various programs and the add-ons is really a cover for this issue. American troops are in the field. Their worried families are back in Germany and elsewhere, living in woefully substandard housing. We should be thinking about them and not the 1996 election season. I urge my colleagues to look beyond the litany of excuses offered on the other side for opposing this bill and do the right thing and pass the conference report. If the President chooses to veto it, let that be his choice, not ours. I yield the floor.

Mr. COHEN. Mr. President, Senator Levin and I, along with other Members, spent a great deal of time on the competition provisions of the conference report. We have prepared a joint statement on these provisions that I ask be printed in the Record.

Mr. COHEN. Mr. President, the procurement and information technology management reforms in the DOD Authorization Conference Report will result in billions of dollars in savings to the taxpayer. Some observers have suggested that perhaps as much as $60 billion is wasted each year from inefficiencies in the Federal contracting process. The rewards to the taxpayer from the Government finding more efficient ways to purchase goods and services are indeed great--potentially equivalent to a third of the budget deficit and more than what we will spend on new weapons this year. The reforms contained in this bill are needed if we are to seriously address the inefficiencies in the procurement process. Although last year's Federal Acquisition Streamlining Act was a good first step, many problems continue to exist which result in great inefficiencies, cumbersome and unnecessary delays, and an overly bureaucratic process. The provisions in this legislation complement our past streamlining efforts and will allow the government to pay less of a bureaucratic premium on the price of goods and services it buys. The need to continue procurement reform is widely recognized. Both Houses of Congress and the Administration have worked together on a bipartisan basis to develop these provisions. The procurement reform package that the conferees agreed to includes two major provisions: the Federal Acquisition Reform Act and the Information Technology Management Reform Act. These two Acts will go a long way to putting an end to many of the inefficiencies of the current system. The savings that can be achieved from procurement reform are significant. By passing the Federal Acquisition Streamlining Act last year, we will realize $12 billion in savings over the next 5 years. The Federal Acquisition Reform Act in the DOD conference report can be expected to save additional billions through eliminating unnecessary paperwork burdens, streamlining the process for buying commercial items, clarifying procurement ethics laws, and improving the process for contracting for large construction projects. Billions more will be saved in this bill as a result of the Information Technology Management Reform Act, legislation which Senator Levin and I introduced earlier this year, which emphasizes the use of technology to achieve more efficient and cost-effective government. Agencies will be required to conduct a systematic re-examination of how they do business before investing in information technology. This review will identify areas for improvement and result in significant savings through the re-design or ``re-engineering'' of existing government business activity. According to the Administration, efforts to re-engineer government through information technology as mandated in this legislation will save at least $4.3 billion over the next 5 years. The systematic use of information technology to re-engineer government will be a lasting contribution of this bill. Not only will we save billions of dollars through these efforts, but we will improve the delivery of services to the taxpayer by effectively applying modern information technology to government processes. The need to reform how the Federal Government approaches and purchases information technology is well documented. My report of October 1994 entitled ``Computer Chaos,'' outlined the problems affecting the $27 billion we spend each year on information technology. Much of this money is wasted buying new systems that agencies have not adequately planned for or managed. In other words, government has not done a very good job deciding what it needs before spending millions, or in some cases, billions of dollars on information systems. Consequently new systems, especially high dollars systems, rarely work as intended and do little to improve agency performance. In addition, a large portion of the $200 billion spent on information technology over the last decade has been spent maintaining old technology that no longer performs as needed. Agencies thus spend billions of dollars each year to keep old, inefficient computer systems running, and continue to buy new computer systems that are poorly planned and, once operational, do not meet their needs. Agencies trying to replace these old ``legacy'' systems have also been plagued by the constraints of the current procurement system. Over the last three decades, the process for buying federal computers has become too bureaucratic and cumbersome. It has spawned thousands of pages of regulations and caused agencies to be primarily concerned with conformity to a paperwork process. What the process fails to address are the results--more efficient and less expensive government and, most importantly, fairness to the taxpayers. In addition, an adversarial culture has developed between government and business. Many companies believe government contracting officers and bureaucrats won't give them a fair shake. Federal employees are suspicious of companies because of a fear of being second guessed and having the procurement protested. In short, it is a culture of little trust, less communication and no incentives to use information technology to improve the way government does business and achieve the savings that we so desperately need. The Information Technology Management Reform Act is designed to create positive management incentives, increase communication and get business and government working together to meet the technology needs of the federal government. In addition to helping agencies buy technology faster and cheaper, the bill would ensure that a responsible management approach is taken to maximize the taxpayer's return on the government's investment in information technology. Among other provisions, this legislation will repeal the Brooks Automatic Data Processing Equipment Act, authorize commercial-like buying procedures, and emphasize achieving results rather than conformity to the process. While we cannot legislate good management we can establish a framework for effective management to take place. This is what this legislation sets out to do. Once enacted, agencies will be required to emphasize up-front planning and establish clear performance goals designed to improve agency operations. Once the up-front planning is complete and performance goals are established, other reforms would make it simpler and faster for agencies to purchase the technology to help them achieve their goals. The Information Technology Management Reform Act will also discourage the so-called ``megasystem'' buys. Following the private sector model, agencies will be encouraged to take an incremental approach to buying information technology that is more manageable and less risky. Agencies now combine or ``bundle'' many of their information technology requirements into large ``systems'' buys primarily because the existing procurement process takes so long to complete. Reducing the amount of time it takes to conduct a procurement and simplifying the process will take away the incentive to bundle requirements and will result in smaller contracts. Encouraging the use of smaller contracts will enhance competition. Many of the most dynamic technology companies in the nation, most of which would be classified as small businesses, choose not to even bid on federal contracts because of the size and red-tape involved. Meanwhile, some of those who benefit from the complexities of the existing federal contracting process continue to promote a more complicated, legalistic system in order to discourage new entrants into the federal marketplace. By replacing the current system with one that is less bureaucratic and process driven, agencies will be able to buy technology faster and for less money by taking advantage of the dynamic marketplace in information technology. More importantly, a system will be in place to ensure that before investing a dollar in technology, government agencies will have carefully planned and justified their expenditures in terms of benefits accrued to the taxpayer. We stand at the culmination of years of effort in acquisition and management reform that started with the Hoover Commission and continued with the Ash Council, the Grace Commission, the Packard Commission and, most recently, the Section 800 panel. Failure to act now will cost taxpayers billions of dollars in continued inefficiency and waste. By passing this conference report, we can take a significant step toward transforming the way the government does business and eventually regain the confidence of taxpayers in their government. In concluding I want to both commend and express my appreciation to Senator Stevens, Chairman of the Governmental Affairs Committee, and Senator Glenn, the Ranking member as well as Senator Roth who served as Chairman earlier this year and Senators Smith and Thurmond. It is through these Senators leadership that we have been able to craft legislation that will save billions of taxpayer dollars. I also want to thank Representatives Clinger and Spence. Without their foresight and perseverance we would not be voting on procurement reform legislation this year. I would also like to thank my friend and colleague Senator Levin who I have worked closely with for over 15 years on the Oversight Subcommittee. I very much appreciate his counsel and support on efforts to reform the procurement system and improve government through the effective use of information technology. Manufacturing Technology Program

Mr. COHEN. Mr. President, there have been objections raised to the shipbuilding agreement negotiated during conference. They assert that it directs the procurement of specific ships at specific shipyards without a clear industrial base requirement and will produce increased cost. This is simply not the case. Let me focus first on one of the principal shipbuilding accounts, the Arleigh Burke class destroyers program. The Senate conferees were confronted with diverse factors concerning these ships that we attempted to resolve as cost effectively as possible. Let me summarize these factors. The Navy has repeatedly told Congress that the minimum annual procurement of Arleigh Burke class destroyers needed to maintain an adequate industrial base is three. Testimony by Department of Defense witnesses has confirmed this assessment, as did a Congressional Research Service study completed last year. The Navy gave high priority to including three of these ships in its fiscal year 1996 budget and did so. As a last minute measure to generate additional funds for the Army's fiscal year 1996 budget, the Department of Defense reduced the number of Arleigh Burke class destroyers in the President's Budget from three to two. During the period between submission of the President's Budget and our conference, numerous Navy and DOD officials have emphasized the importance of including the original three destroyers to the budget. The original appropriations conference funded two destroyers in fiscal year 1996, but also directed the Navy to negotiate for and execute contracts for two more on the first day of fiscal year 1997. This language was subsequently modified in the final DOD appropriations conference report to call for three destroyers in fiscal year 1996. But its original form was a marker that influenced our conference for most of its duration. In fiscal year 1994, and again in fiscal year 1995, the Navy concluded that cutthroat bidding in the destroyer program was leading to cost growth and the need for additional funding to resolve it. The Arleigh Burke class has been in procurement for some time. Its construction costs at both building yards are well understood. A Navy industrial base study, completed earlier this year, concluded that the best acquisition strategy for the Arleigh Burke class would be to retain two building yards and award contracts based on an allocation method that emphasized cost reduction. Numerous DOD and industry officials have pointed out that the best way to achieve efficiency and reduce costs in the shipbuilding industry is to provide a stable construction program, something that the President's Budget as submitted would clearly not accomplish. The Senate defense bill's provision dealing with acquisition of Arleigh Burke class destroyers, while a meritorious approach, could not prevail in conference because of opposition to it by the other defense committees. In distilling these diverse factors into a conference position, the Senate conferees concluded that it was appropriate to explicitly endorse the results of the Navy's industrial base study, which resulted in the Navy's allocation method for awarding Arleigh Burke class destroyers. In short, Mr. President, the conferees endorsed the Navy's industrial base analysis and the Navy's allocation method that resulted from its industrial base study. Assertions to the contrary are simply erroneous. There are other conference outcomes that were important to the House, but whose justification in my opinion is less clear. I would remind my colleagues, however, that this was a long and difficult conference with compromise necessary on both sides. We successfully rejected many provisions sought by the House. But, as occurs in every conference, we eventually accepted a few things that were important to House Members. In doing so, however, we worked to ensure that the language adopted is sufficiently permissive that the Department of Defense retains adequate discretion in developing its course of action. Mr. President, I would also like to address some assertions that have been made today on the nature of the conference agreement on nuclear attack submarines. In his remarks this morning Senator Nunn implied that the conference agreement would commit the Navy and the Defense Department to a program of advanced technology development for submarines that is too costly and would risk the lives of Navy personnel. In my opinion Senator Nunn did not correctly characterize the actual conference agreement. Let me summarize the conference outcome on nuclear attack submarines as I see it: The House and Senate had divergent goals. Believing the Navy's New Attack Submarine inadequate to its mission, the House conferees sought a program for the incorporation of advanced technology into a series of four developmental submarines before beginning series production. The Senate conferees sought authorization for the final Seawolf submarine, SSN-23, and competition for series production of the Navy's next class, the New Attack Submarine. The Senate conferees did not share the House's conclusions about the inadequacy of the New Attack Submarine to deal with future threats. After a period of lengthy negotiations that included active participation by the Navy and the Department of Defense, a compromise was reached. In its barest essentials this compromise provides that: the Senate position on authorization of SSN-23 and competition for future submarine procurement would be preserved; and the House would gain a provision that directs the Department of Defense to prepare a plan that could lead to the insertion of technology through the construction of a series of prototype submarines, each of which would be cheaper and more capable. I emphasize that the conference agreement accepts a requirement for a DOD plan. It does not commit the Senate to a program. Do I think this issue will remain contentious? Yes, I do. In press release and interview the House is declaring that the conference accepted the House program. Assertions to the contrary, the House is not correct. I urge my colleagues to read the Conference Report. Any decision to pursue an advanced submarine technology program that might emerge from the plan that it mandates will be the subject of future debate and legislative action by Congress. This conference report commits no procurement funds to it. Further, the Senate has not endorsed the House's concept as the best course of action to pursue for acquisition of submarines with the necessary mission capabilities. I agree with Senator Nunn that the twin objectives of lower cost but more capable have proven elusive in the past--often sought but seldom, if ever, achieved. I also agree with Senator Nunn that the language of the submarine provision in the conference report could have spoken more directly to the costs and risks associated with the House's technology thrust. I have never said the provision could not be improved. What I have said is that it was the best compromise that could be achieved in this conference. Next year will be another matter. I want to assure my colleagues that I would never, ever, endorse a speculative and unproven program that would put the lives of American sailors needlessly at risk. This conference agreement does not do that, and I will never subscribe to a conference agreement that does. Mr. President, another question has been raised concerning a conference outcome that would create a bipartisan congressional panel on submarines. I want to address this question. The House, in its conference position, was focused on ensuring the rapid incorporation of advanced technology into future submarines. The House's objective was ensure that sufficient technology would be inserted into submarine designs before beginning series construction of a new class to ensure the United States retains a comfortable edge of technical superiority over any conceivable threat. Aware of potential opposition from DOD, the House's negotiating posture during conference was based on the premise that extraordinary measures would need to be taken to prevent bureaucratic or passive resistance from overcoming the technical thrust that it considered essential. The Senate conferees' objective during conference was to preserve the centerpiece of the Senate's submarine provision: competition based on price. Consequently, the goals of the House and Senate were divergent. After a period of lengthy negotiations, an agreement was reached that was satisfactory to both House and Senate. One aspect of this agreement, an outcome strongly sought by the House conferees, was the creation of a panel that will focus on the incorporation of advanced technology into future submarines. The House believed such a panel necessary because it was not confident that could count on unbiased and objective input by the Department of Defense. In the original form proposed by the House, this panel would have been at Presidential level. Its membership would have included a cross- section of experts appointed by the President, the House, and the Senate. Its oversight responsibilities and authority would have been quite broad. The final form of the panel, as defined in the conference agreement, is much different. It will be composed of three members of the Senate Armed Services Committee and three members of the House National Security Committee. The members will be appointed by the chairmen of the two committees. The panel will receive reports annually from the Secretary of the Navy on the status of submarine modernization and research and development. It will in turn report annually to the House National Security Committee and the Senate Armed Services Committee on the Navy's progress in developing a less expensive, more capable submarine. While this panel will, by its nature, focus greater attention on submarines than other ships, all decisions regarding submarine programs will of course continue to rest with two Armed Services committees. Mr. President, some Senators also have objected to the inclusion of spending floors in the conference report. The Senate conferees were opposed to inclusion of this language and resisted it during conference. We reluctantly accepted a version of the House-proposed language after concluding that acceptance was necessary in order to have a conference report. But we did so only after we made sure that both the Armed Services Committee's minority members and the members of the Appropriations Committee were fully informed of its nature and our assessment that this was necessary to reach a conference agreement. The conference report is part of a larger process that eventually leads to the obligation of funds for various purposes. There will be future opportunities for either the Appropriations Committee or the Department of Defense to register objection and prevent expenditures should they desire to do so. In summary, Mr. President, the Senate conferees won sufficient latitude in the language so that DOD or the Appropriations Committee would not be forced to spend funds or carry out actions to which they objected. USUHS Provision