Alfonse D’Amato

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I ask unanimous consent that the Committee on Rules and Administration be authorized to meet during the session of the Senate on Wednesday, April 30, 1997, beginning at 9:30 a.m. until business is completed, to hold a hearing to consider revisions to title 44.

Mr. D'AMATO. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on Wednesday, April 30, 1997, at 2:30 p.m. to hold a closed hearing on intelligence matters.

Mr. D'AMATO. Mr. President, I ask unanimous consent that the Senate Committee on Commerce, Science, and Transportation be authorized to meet on April 30, 1997, at 10 a.m. on emerging trade issues on the U.S. consumer.

Mr. D'AMATO. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet during the session of the Senate on Wednesday, April 30, 1997, at 10 a.m. to hold a hearing on Department of Justice oversight.

Mr. D'AMATO. Mr. President, I ask unanimous consent that the Senate Committee on Commerce, Science, and Transportation be authorized to meet on April 30, 1997, at 9:30 a.m. on the nomination of Andrew Pincus to be General Counsel of the Department of Commerce.

Mr. D'AMATO. Mr. President, the Finance Committee requests unanimous consent to conduct a hearing on Wednesday, April 30, 1997, beginning at 9:45 p.m. in room 215 Dirksen.

Mr. D'AMATO. Mr. President, I ask unanimous consent that the Committee on Labor and Human Resources be authorized to meet for a hearing on equal opportunity in Federal construction, during the session of the Senate on Wednesday, April 30, 1997, at 9:30 a.m.

Mr. D'AMATO. Mr. President, I ask unanimous consent on behalf of the Governmental Affairs Committee to meet on Wednesday, April 30, 1997, at 2 p.m. for a hearing on fighting crime and violence in the District of Columbia.

Mr. D'AMATO

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. D'AMATO. Mr. President, I suggest the absence of a quorum.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, the chairman of the Swiss Bankers Association in his letter stated: I am writing to express the SBA's unequivocal support for the concept of public disclosure of the names of account holders in the very special and limited circumstances presented by Holocaust-related dormant assets. This announcement is a major breakthrough because, for the first time, the Swiss bankers will be providing account names on a timely basis. We will not have to wait for the completion of the Volcker Commission and its report. That investigation may take a period of years to be completed. Why should the heirs and those people be deprived of a much more expeditious manner to come forward and to establish the right to those accounts? It is about time this has taken place because this question is one that has existed for over 50 years. I am pleased that we are making progress. I look forward to continuing in the efforts of attempting to see that justice is done, not only as it relates to the dormant accounts, but also on the question of the disposition of other assets and also in terms of the accountability of assets, of huge amounts of gold and other matters that were, I believe, surreptitiously and illegally transferred by the Nazis with the aid and assistance of some who claimed neutrality. But the point of the matter is that this is a significant breakthrough. I want to thank Ambassador Borer. I think he is to be commended because this is a significant departure and one that is long overdue from the past policies that said, ``Oh, no; these are secret accounts. They have been opened up that way,'' and then requiring people to go through incredibly difficult, if not impossible, proofs, requiring them to come up with sums of money that in many cases people just do not have. The question of having people, in the past, turned back because they did not have a death certificate of a family member who died in the death camps--that kind of thing has taken place repeatedly over the years. It certainly did not bode well for the fiduciary responsibility that the banks held up. They were the beacon and the repository of people's money, that they could rest at ease that their families would be protected and the assets protected. Indeed, the veil of silence worked to enrich others at the expense of the legitimate heirs. So, for the ambassador to be able to bring about this sea change-- this is a sea change, this is a significant breakthrough. I look forward to continuing to work in this area to see to it that the publication of these names takes place as quickly as possible so that there can be this feeling of closure that many are looking for. It is not just the money. It is a question of justice that people are seeking. Mr. President, I am heartened today by this very significant action that the Swiss Bankers Association have pledged. I look forward to working with the ambassador and the other representatives of the Swiss Government in seeing to it that this matter is dealt with sooner, rather than later. This is the commitment that they have made. This is a very prestigious, very important group. I hope this can be carried out, again, within a matter of days or weeks. Mr. President, 52 years is too long to have waited for this to take place. But better now than never. It still is, hopefully, the harbinger of better things to come in terms of clearing up and getting down to the roots of what has taken place. I commend the ambassador for this and say that I am very heartened because I think this is a tangible success. I also say to the World Jewish Congress and Edgar Bronfman and Israel Singer, they are to be commended for never losing faith in continuing their effort. Without their persistence, we never would have reached the point where we now have a proposal to put $4.7 billion forward in a humanitarian fund to be administered by a number of organizations in countries that will play a part in determining those people who are most in need. That fund would be administered over a period of some 15 years. Without the World Jewish Congress and its leadership, its perseverance, we never would have achieved the results I am speaking to today. That is, the publication of the names of those people who had dormant accounts, going back to 1945, nor would we have achieved the setting up of this humanitarian fund to aid those who are elderly and most in need. I thank the Chair and I suggest the absence of a quorum.

Mr. D'AMATO. Mr. President, yesterday I received a very important and a very encouraging letter from Ambassador Thomas Borer. Ambassador Borer is the special representative that the Swiss have appointed to handle the very perplexing and very troublesome question as it relates to the assets of Holocaust victims during and after World War II, particularly those as they related to the accounts that were opened in Swiss banks. Let me read this letter. It is a short one, but a very important one. It is from the Embassy of Switzerland, addressed to Senator D'Amato as chairman of the Banking Committee, Washington, DC: Dear Mr. Chairman: I am referring to your letter of March 20, 1997 and my reply of March 27, 1997 regarding the question of publishing the names of dormant account holders from the Holocaust era. Please find enclosed [a] copy of the letter of the Chairman of the Swiss Bankers Association to the Chairman of the Swiss Federal Banking Commission dated April 28, 1997. In this letter the SBA expresses its unequivocal support for this idea. I am going to place this letter in the Record. Mr. President, I ask unanimous consent that the letter be printed in the Record.

Mr. D'AMATO. Mr. President, let me tell you what this is about. I did write to Ambassador Borer. I spoke to him on March 20. And I indicated to the Ambassador that I thought that it was awfully important that the Swiss Bankers Association, that the Swiss Government do something to demonstrate tangibly an effort of good faith, that would be very important, that there are many accounts--we do not know exactly how many; but certainly they go into the hundreds, and they may go into more--that have been dormant since 1945, that it made little sense to wait years until the Swiss completed their investigation for the release of these names, that even if it took legislation--and I explained to him that it had been advised to me that there was a good possibility that it might not even take legislation--that the names of these accounts--those are dormant accounts that were opened prior to 1945 and that have been dormant since that point in time --that the need for secrecy certainly no longer existed, but that there was a need to connect the families and the heirs today who might have claim to those accounts, to their heirs, to their families. It is not just a question of money. It is a question of doing what is right, because unfortunately for 50-plus years people have been denied, heirs have been denied. They have had to go through a tortuous process, that in many cases it is just impossible to ascertain what moneys may or may not have been left to them, and that by the publication of the names in some registry, in some total form--something that is being done in many countries, in many States in our country where there is a dormant account, the names of the people are actually published so that people who may have claims can come forth. I wrote to him, and I will just quote you part. I am writing to you to impress upon you the need for the passage of legislation which would allow for the publication of names of dormant accounts presently held in Swiss banks. I feel that this change would go a long way towards solving this enormously difficult and complicated problem and would equally be seen as a productive step which I am sure would be warmly received. I am pleased to tell you that the Ambassador reported to me yesterday, yesterday morning, that the Swiss Bankers Association unequivocally supports the concept of public disclosure of the names of the account holders in this very special and limited situation of the dormant accounts now being investigated as it relates to the Holocaust and those dormant assets. I believe, Mr. President, that this is important. Mr. President, I ask unanimous consent that the letter from me to Ambassador Borer and a letter from the Swiss Bankers Association be printed in the Record.

Mr. D'AMATO

Mr. D'AMATO. Let me say that Senator Dodd has mentioned something that I think we can do, and that is we will attempt to do two things. First, where we have struggling communities that are working to upgrade themselves, we can and should be able to make the kind of investment that for not much in the way of dollars will lead to revitalization. I have met with people in the community today from Riverhead, Long Island, where a self-help program is attempting to take some of the old homes, in many cases that have been abandoned, and upgrading them. They are doing this on their own initiative. They are doing this without any Federal funds. It seems to me that through an enlightened program of revolving credit that we could provide a minimal amount of money--not tens of millions--but in some cases $100,000, or maybe something in the area of several hundreds of thousands of dollars, which communities could use in their own self-help programs to purchase distressed properties, coupled with low-rate mortgages for first-time home buyers. They want to be in a position where they can say to their communities, ``Help us rehabilitate these distressed properties'' and then provide young people the opportunity of homeownership that otherwise might not be available. I am looking forward to working with Senator Dodd in this area. Sometimes it is a small program in a community that can grow and develop a pride that can bring about increased support for homeownership in that community. I am looking forward to working to do that. I think the potential is unlimited. We have an obligation to attempt to do that. We don't need big national organizations that sometimes become counterproductive. They are worried about their own image, and they have lost sight of how to help smaller communities help themselves as opposed to Big-Brother Government coming in and saying, ``By the way, we can give them some of these tools.'' So I share this with you because I was so impressed by Mrs. Stark, whose husband is the local supervisor in the Town of Riverhead, who said ``This is what we are doing, Senator.'' I said, ``You know, we should be part of this to try to provide that opportunity.'' We are talking about an important subject, protecting the elderly. We have an obligation to see to it that we protect them, but also to give real opportunities to young families as well. I look forward to working with my friend and colleague on this.

Mr. D'AMATO. Mr. President, I know of no one else in the majority who seeks to speak to this issue. We would yield back all of our time.

Mr. D'AMATO. That is absolutely correct. Questions asked should include: has the prospective reverse mortgage recipient made or signed any agreement or contract authorizing any fees to a third party? Does the homeowner have the intention to or made any commitments to a third party to use the reverse mortgage proceeds to purchase any annuities, life insurance policies, or for other investment purposes? Has the homeowner been referred to the HUD-approved housing counseling agency or FHA-approved lender by a third party broker?

Mr. D'AMATO. Mr. President, let me commend Senator Dodd for his leadership in this and say to him that, No. 1, it is absolutely imperative that we see to it that our senior citizens are protected. If you stop and look at the numbers that I have indicated to you, 72 percent of all of these seniors live in their homes alone. For the most part, they are widows or widowers. What targets, what inviting targets they are. They are struggling to keep their homes, and these scam artists come along and say, ``We have the way for you to do it.'' Well, there is a way provided by the reverse mortgage program, without being ripped off for $5,000 or $6,000. They are bandits. We are going to make this immoral, horrible practice now illegal. Technically, they have been able to get away with this. This legislation will give to Secretary Cuomo the ability to prevent this. He has said to us that, within 1 hour of Congress giving him that authority, he will exercise that authority. So that is the least we can do. I ask that Senator Helms be added as an original cosponsor.

Mr. D'AMATO. Yes, that is the intention. S. 562 also includes a requirement for disclosure to the mortgagor of the costs of all services related to obtaining the HECM loan, including estate planning and financial advice. HUD should implement this disclosure requirement in a reasonable manner. HUD will not be required to mandate disclosure of the costs of services of persons such as attorneys or accountants who are in the business of giving professional advice. For fees not required to be included in the mortgagee's good faith estimate under the Real Estate Settlement Procedures Act, mortgagees should be permitted to rely on inquiries made to the mortgagors to determine if mortgagors have received the necessary disclosure of cost.

Mr. D'AMATO. Mr. President, I simply want to say that no one has worked harder in bringing this matter to light and sponsoring this legislation than Senator Bryan. He has pointed out that there are 12 million elderly homeowners who own their homes free and clear, and what has taken place is that they have become targets of these people who masquerade as estate planners. There are tens of thousands of older homeowners who are house-rich but cash-poor and have successfully utilized this program. But we have to see to it that we keep these scam artists from moving in further. The success of the reverse mortgage program has opened the door to scam artists that are moving into our communities. To date, fortunately, this has not become a situation that is widespread. Hopefully, we will be educating people by speaking to them today and telling them to watch out. But, more importantly, we should see to it that they have the protections afforded by this legislation. Let me also say that the State of Nevada has many senior citizens who are potential targets. Obviously, the Senator from Nevada is very concerned. Mr. President, one who has worked tirelessly in this matter has been Senator Dodd. I yield the floor to my friend and colleague, Senator Dodd.

Mr. D'AMATO. I would be pleased to do so. I believe the National Housing Act currently gives HUD the power to protect elderly homeowners seeking home equity conversion mortgage loans, including the authority to regulate or prohibit unnecessary or excessive fees that mortgagors pay to third parties for referrals to HECM lenders and related services. Due to the urgent need to protect elderly homeowners, S. 562 will require HUD initially to implement these provisions through an interim notice in the Federal Register. HUD will also be required to proceed with formal notice and comment rulemaking and issue a final rule within 90 days. If needed to meet the 90-day target, HUD may provide an abbreviated public comment period.

Mr. D'AMATO. Mr. President, I ask unanimous consent that Lehn Benjamin be admitted to the floor for the purposes of this legislation.

Mr. D'AMATO. Mr. President, I know of no one else in the majority who seeks to speak to this issue. We would yield back all of our time.

Mr. D'AMATO. Mr. President, I move to reconsider the vote by which the bill was passed.

Mr. D'AMATO. Mr. President, I rise today to support the legislation known as the Senior Citizens Home Equity Protection Act. Now, that is legal jargon for saying that we have a real problem, one that is, on a daily basis, getting worse and worse, one that is exposing our most vulnerable homeowner population--our senior citizens--to very, very serious abuses. Let me, if I might, just explain to you the problem without going through all of the intricacies of this legislation, which I might add is supported and cosponsored by approximately 25 of my colleagues. The bill's cosponsors are about equally divided, Republicans and Democrats, and include just about the entire Banking Committee. Who are these people who are being scammed, who are being victimized? They are our parents, our grandparents, our senior citizens. They are elderly homeowners in America who are being induced by some people who masquerade as estate planners. This is not an attack on estate planners. This is not an attack on those financial consultants who give people advice. This is an attempt to stop thieves, con artists and swindlers, masquerading as helpers to the elderly, but who are nothing more than rip-off artists. What do they do? Congress, through HUD, has initiated a program of reverse mortgages whereby many seniors who are cash poor and who have equity in their homes, people who have paid off their homes, and find themselves without the ability to pay their taxes, to keep up their home, or to take care of their daily needs, people have utilized reverse mortgages whereby they can go to the bank. They might have $100,000 value in their home and may receive a $50,000 mortgage which they may take out on a monthly basis or they may take out the entire amount and thereby budget for themselves their needs. Now who is a typical borrower of this reverse mortgage plan? What is the profile? They are 76 years old. They are with less means than a typical elderly home owner. Their annual income is $10,400 per annum. One-quarter of them have incomes of less than $7,700. Mr. President, 78 percent of the total income that they have comes from Social Security. What do the scam artists do? Today, because of the availability of so much credit information and information with respect to the lives of every citizen, they solicit those people who are elderly, who own their own home. Many of them are living alone. Sixty percent of these people that use the HUD reverse mortgage program need to use it because they do not want to be forced to sell their homes and leave their communities. That is where their friends and neighbors and relatives live. Sixty percent are females living alone, 12 percent are males living alone. So, fully over 70 percent are elderly who are living alone. So they get a profile on these people and they literally go door-to- door and say, ``We are in the business of financial consulting. If you would like, we could help you obtain a mortgage, a reverse mortgage, one you do not have to pay back. Only when you eventually sell your home or if you pass away, will the proceeds come due, and we can get you $50,000 or $60,000 or $70,000.'' For this advice, they often charge these people 10 percent of the mortgage loan amount. Most times they never tell them that there will be any kind of a fee, nor do they advise them that this information is available free, or that HUD will make this available, or send them the information. So literally, because they know of this program, they are able to go out and take as much as 10 percent for a $50,000 mortgage for information that is available at no cost, and literally do nothing but relieve the people of their money. Here is, Mr. President, an advertisement. They are not happy just going door-to-door or by telemarketing themselves. They are now franchising, franchising, this kind of thievery. Here is an advertisement called ``America's Trust, Inc.--Tap into a totally new market of opportunity. Duplicate the system that allowed us to expand by 400 percent in 60 days.'' It goes on to say if you want to become one of our door-to-door solicitors or one of our telemarketers, why, you can earn a 3-percent commission, and, by the way, you can do literally dozens of these referrals on a weekly basis and we will give to you a 3-percent commission, because they give them 3 percent and they keep 7 percent. And this poor homeowner is paying money for a service that virtually gives them nothing, but just refers them to a Government program. That is wrong. Mr. President, that is why we are seeking to pass this legislation that would stop unscrupulous high-pressure middle men from preying on elderly homeowners by exploiting the reverse mortgage program. I have explained to you what the problem is. The bill will put an immediate stop to the practice of predators taking advantage of senior citizens. HUD's Federal Housing Administration Conversion Mortgage Program, known as HECM, is a reverse mortgage program. It allows seniors age 62 and older to borrow against the equity in their homes. It is a great program; it has assisted approximately 20,000 people. But, again, we find the masquerader coming and preying on the elderly. The average person is 76 years old and has an average income of $10,400. These homeowners are tracked down and enticed to apply for a reverse mortgage and conned into paying thousands of dollars for this service, which HUD provides for free. They are totally unregulated companies, often changing names and locations. The following are true examples: One 75-year-old woman who resides in southern California read a brochure about reverse mortgages at a senior citizens center. She contacted the so-called information service, one of these scam artists, who met with her and referred her to a lender. The FHA-approved lender then handled the loan for her. She was surprised and shocked to learn that she now had to pay $5,200 to the so-called information service for that referral. That is just wrong. Another elderly woman, also in California, was called by a telemarketer who persuaded her to apply for the HUD reverse mortgage program. This person called himself an estate planner. She paid the planner $5,500 just for the referral--no other services. She paid a 10-percent fee just for them saying, ``Here, call HUD.'' Here is another heartbreaking story. A 91-year-old California widow with cataracts was solicited for a reverse mortgage. While she originally refused, she said she was eventually worn down and agreed. Due to her cataracts, she was unable to read the mortgage documents, and nobody explained to her what she was signing, and she ended up paying a 10-percent fee. She states that she would not have applied for the mortgage had she known she would be paying a 10-percent fee. This is what goes on and on and on. There are stories about people who are literally coerced, because of their age, to invest their mortgage proceeds in annuities they had no real reason to want or need. These practices must be stopped. This bill will provide HUD the ability to issue an immediate interim order, setting rules and regulations so that legitimate estate planners can continue, and those high-jinx artists who are abusing and defrauding--and actually franchising--what is left of senior citizens' assets will be precluded from doing so. HUD--and I have spoken to Secretary Cuomo who, within an hour of the final passage of this legislation, will enact those rules and regulations that will prevent these scam artists from dealing with FHA- approved lenders. They will no longer be permitted to do that. The lender will be precluded from working with anyone who is receiving these types of commissions. Now, HUD has attempted to do this. The court system has said, no, you must follow proper rulemaking procedures. That is why we are here. That is why it is a situation of some exigency, because every day, every hour, we have more and more seniors who are potentially being victimized. So it is an urgent question of time.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, let me speak, if I might, to an issue of critical national importance--an issue that has plagued the people of the State of New York, most particularly those in Long Island. I am talking about Nassau and Suffolk County, the communities of Long Island. A major county is described legally as a county that has more than 250,000 women, for the purposes of compiling these statistics. And they are dreadful statistics because we are talking about the incidence of breast cancer. Long Island has had an unenviable position of being ranked No. 1 in the incidence rates of breast cancer in years gone by. It is incredible. As a result, the National Institutes of Health has undertaken a very comprehensive study, one of the first of its kind, which says we will look to see what environmental factors may be contributing to these high rates of breast cancer. They are undertaking that study. Some $5 million has been allocated. Mr. President, that $5 million is not enough, even though it is among the most sophisticated studies being undertaken. Recently, some very real questions have arisen as it relates to what impact there may be as it relates to radioactive materials, radio nuclides, and other materials that may have gained entry into the groundwater system, or that may, as a result of being dispersed in the air, some of these radioactive materials out in Brookhaven, Long Island. What impact has this had, if any? Indeed, it seems to me, if we were to spend $5 million, that is not an inconsequential sum. But one of the most comprehensive studies undertaken--this is a study that will take over 5 years; not to complete this study, addressing all concerns, as it relates to the high rate of breast cancer on Long Island, would be wrong. The scientific community will not have completed its chore. And part of that is to be able to say to the public we have examined the situation. Brookhaven National Lab--and it seems we may have an additional responsibility--has been run under the aegis of the Department of Energy. May I say here and now that it has been run abysmally as it relates to the impact of its operation on the community. Over the years, there has been a litany of abuses of burying of waste materials, hazardous waste, of creating almost a dump site of indifference to the operation of this lab where, indeed, the water tables have been impacted and have actually had radioactive materials-- tritium--discharged; and the reports of leaks, and the reports of these discharges have been systematically withheld from the public. The lab has operated with an indifference to public health--``The public be damned'' attitude. I commend the Assistant Secretary for Energy, who has come in to look at what can be done to straighten this fiasco out. The scientists have been more concerned with the success of their project than they have in terms of what the operational impact is. You would think some of the world's leading scientists would know that to even pose a threat to contaminate the drinking water, the drinking supply system, is just unconscionable. Yet they have been there with total indifference. So I mention this because there is a real reason why that study should be expanded. The NIH has done an outstanding job with the funds available. They have not had sufficient funds. That is why it was last Wednesday I spoke to Senator Stevens, chairman of the Appropriations Committee. We are going to be undertaking a supplemental appropriations on this floor. By gosh, let me tell you when we have disasters, we should take care of them. This is a disaster. We should see to it that there are the necessary funds. Not only on Long Island, but we have another facility in Seneca, NY. It is a small community with an incredibly high incidence of breast cancer. Why do I mention Seneca? There is very direct Government responsibility because we operated a huge storage depot there for all kinds of materials, such as atomic, et cetera. Some of them are still classified and are stored there. It has one of the highest rates of breast cancer in the Nation. They should be included. The people of that community should have a comprehensive study. I have requested of Senator Stevens consideration that we increase the NIH funding. We are not talking hundreds of millions. But we are asking, and I have asked him. Hopefully they will include some $15 million so that Long Island's study can be brought to a successful conclusion so that they can monitor the operation as it relates to whether radioactive materials have had any impact on the groundwater and in the incidence of breast cancer and to the health of Long Island. So whether it be Seneca, or whether it be my colleagues who seek funding from other parts of the country, California, New Jersey, or wherever it might be, the State of Florida, where people would come and say, ``We want to know. Are there environmental factors that are contributing to the higher rates?'' We should be doing this. I want to commend Senator Stevens for his looking at this. I hope that we will all be supportive. So it is not a question of us appropriating money just so that we can do this for Long Island. I am concerned about that, and Seneca in upstate New York, but, indeed, the people of this Nation. I can't think of a better allocation of resources than to use this to ascertain with definitiveness with the best science available so the communities can raise their children with a piece of mind that there are hazards that can be avoided and are identified. I just leave you with one chilling statistic as it relates to the 3 million people who live in Nassau County and Suffolk County. More than half of them are women. Women who live on Long Island for more than 40 years are 70 percent more likely to come down with breast cancer than a woman of comparable age, et cetera, and background who lives there for 20 years. Why? That is why there are so many of us who think there are some very real environmental factors that must be considered. So I hope that all of my colleagues could support this increase of $15 million, which is a very modest sum, to expand the NIH; and, yes, to earmark for breast cancer research to ascertain what impact the environment may have in causing the higher incidence. I thank the Chair. I thank my colleagues for being so generous in permitting me the opportunity of making this presentation in morning business. I yield the floor. Mr. DORGAN addressed the Chair.