Alfonse D’Amato

Mr. D'AMATO

Mr. D'AMATO. I yield 3 minutes and 40 seconds to the Senator from New Mexico.

Mr. D'AMATO. I have 3 minutes and 19 seconds? Madam President, why are we here? December 20, getting close, maybe a day or two, during this holiday time? Great events, budget pressures, Government technically shut down in some areas? It has been suggested-- politics, injure the President. Madam President, if one were to examine the facts, the facts will put that contention to rest. It is unfair. That is unfair. On August 25, 4 months ago, we requested this information. Let me tell you when we got what I considered to be the first really bona fide reply to our offer to say, ``You do not waive the lawyer-client relationship.'' That was us. We did that, the committee. We did not have to. We said, ``You do not have to waive it.'' We did not get a reply--and then here is the reply, and it was a conditioned acceptance with all kinds of conditions: No. 1, that we had to concede that the meeting was privileged. We do not. The White House could not even accept our proposal, the one that they are now attempting to get the House to accept, until 6 days ago. So why are we here now? Because, without us pushing forward, we would not have even had a conditional acceptance of our proposal. We would not have even had it. Six days ago was the first time. When did they finally accept our proposal that they are now trying to push through? Two days ago. So, when someone says, ``Why are you here December 20,'' it is because the White House has stonewalled us--stonewalled. The American people have a right to know. President Clinton made promises. He said, ``I will not raise privilege, I will not hide behind that.'' And he has broken those promises. The Senate has a right to know and we have a right to be dealt with in good faith. I do not lay this over to my colleagues on the other side. They have attempted to work together to get this information. But it is the White House. Madam President, those notes simply are not privileged. The people who took those notes were Government employees. Mr. Lindsey was not working in the White House counsel's office. Yet, notwithstanding that, we are still willing to say, fine, we will not say that any privilege that you might have would be waived. Give us the notes. I make an offer here, and I repeat it again. Mr. President, give us the notes. We will continue--even after we vote, I am willing to drop this matter, regardless of what the House does. We do not have to go and test this out. But keep your commitment to the people of this country. Keep your commitment. We should not be here. You, Mr. President, have created this problem that necessitates us going forth.

Mr. D'AMATO. Madam President, I inquire how much time remains?

Mr. D'AMATO. Mr. President, how much time do we have on each side?

Mr. D'AMATO. Mr. President, first, let me say that I am forced to oppose the amendment for a number of reasons. I certainly do not question the sincerity of my colleague, Senator Sarbanes, in an attempt to bring about a successful mediation, successful in that it would result in the notes being turned over. I absolutely had no doubt from the beginning he has pursued this and worked to achieve this end. I am forced to oppose this, though, because there are a number of problems that I could see taking place. No. 1. I believe that this amendment could result, if passed--if adopted, this approach could result in prolonging what has really been a very long, now unnecessary, delay. This issue of these records and other records really goes back to August 25 and reaches a high point, begins to reach a high point in November, starting November 2 and culminates in December when we actually issue subpoenas. One actually has to understand that we did, in fairness again to the committee, issue these subpoenas on a bipartisan basis. We attempted to avoid it, attempted to mediate this before we finally came to the conclusion that we had to issue the subpoenas. And it was only then, when the White House raised the issue of privilege, the attorney-client privilege, that we kind of parted ways. When I say we parted ways, there was a recognition by the majority that this privilege, on our part we felt, did not apply, and there was a concern on the part of the minority that the White House was within its realm. But, notwithstanding the differences of opinion, I must say that my colleagues on the Democratic side urged an attempt to work this out. The fact is, though, we have been working toward this, I think, for several weeks very intensively. When I say ``we,'' I am talking about counsel--majority counsel, minority counsel--working to attempt to resolve this. We had offered basically to say we will not intrude into Mr. Kendall, we will not ask or seek a waiver. We say that this sets no precedent, so therefore you will not be bound in other areas. We will agree to those things. And that is basically now the position that the White House counsel finally came around to. But understand, it only came around to that after we indicated we would go forward and push this issue on the subpoenas. Very, very grudgingly did they come to this position, and they came to this position very late in the game. Notwithstanding that, we indicated that we would accept. Now, the problem we have is when we get into this language and we say that this committee will exhaust all available avenues of negotiation, cooperation, or other joint activity with the White House, the committee would have to attend more meetings, have endless negotiations--it could possibly take us, we do not know how long-- ignores what we have done, good faith work and negotiation starting in August and culminating finally when we have said basically enough is enough. If we cannot resolve the matter--reasonable people disagree; you contend it is privileged material; we do not believe that to be the case--we are going forward. And that is how we come here. If we were to adopt the amendment that is now being considered, we would put off the time when the committee could enforce the subpoena for Lord knows how long. I believe that my colleague really wants good faith negotiations and wants those notes. I do not know when the House may or may not agree to this. We have been told that the independent counsel has agreed. I have no doubt that, if that is the representation that has come from the White House, that is the case. But this amendment could literally require the committee to negotiate on behalf of the House, and this would be unprecedented and would require the committee to delay even more. Now, let me go to the merits of this. This amendment, if we read lines 1 through 19, says, ``Where the White House has made a well- founded assertion, supported by respected legal authorities, that the November 5, 1993, meeting is protected by the attorney-client privilege.'' Let me say, No. 1, no President has ever raised the attorney-client privilege. He just has not done it. It is unprecedented. No. 2, we would have to be conceding that this is well-founded. And notwithstanding that there may be a legal scholar or some who would give testimony to this who might believe this to be the case, I have to tell you that I do not believe that this is a well-founded assertion, as Senator Thompson, I believe, so scholarly and so powerfully argued; that the attorney-client privilege certainly did not apply to this meeting even given the limited circumstances that we understand as to how this meeting came about, even conceding--and I think if we were to go further, we would find out there would be ample testimony and proof that there is no way that that privilege should attach to this meeting. Notwithstanding, we offered to say there would be no deem, no waiver, of any attorney-client privilege. We did that. That was not the White House that came forth. They rejected that. It was only when we said we were going to issue a subpoena that they then said, well, here we are coming forth. Again, I think we have to discern the legitimate attempts at compromising, which absolutely comes from my colleagues on the Democratic side on the Banking Committee but was not supported by the actions and activities of the White House. That we have to distinguish. I am very much concerned that we would be prevented from pursuing other avenues of investigation in regard to White House contacts with the President's personal lawyers and we would not be able to see if there were other Whitewater joint defense meetings, and that is a very critical point. Now, Mr. President, let me go to something that I do not take lightly, but I have mentioned it and I will mention it again. There are political overtones. Make no mistake about it, there absolutely are. But you see, Mr. President, when the President of the United States says, as he has on a number of occasions, on March 8, in a press conference in connection with the appointment of Mr. Cutler, during that press conference the President was asked about the possibility of asserting privilege, and he gave the following response. He said, ``It is hard for me to imagine a circumstance in which that would be an appropriate thing for me to do.'' I believe Senator Thompson answered quite compellingly, and argued that, what does he do, he goes and raises a privilege that has never been raised because he did not want to be in an embarrassing position when he said ``executive privilege,'' when he spoke quite clearly on this on a number of occasions. By the way, March 8, 1994, is a very important date. Let me tell you why. Because that was 4 months after this meeting. He knew about that meeting. Understand what he said. ``It is hard for me to imagine circumstances in which that would be an appropriate thing for me to do.'' This was not an event that transpired after March 8. This took place 4 months before. This is not the first time that the President made that assertion. Indeed, on April 5, 1994, I believe in North Carolina, again in response to a question, the President said, ``I look for no procedural ways to get around this. And I tell you, you want to know, I'll give you the information. I have done nothing, and I will be open and above board. I have claimed no executive privilege.'' Indeed, he did not claim that, and obviously the interpretation is, ``nor will he.'' Remember, this was 5 months to the day after this meeting. So this is not a circumstance that occurs after something that will be extraordinary, not anticipated. So, Mr. President, I have to say that we have gone that extra step. We have gone that extra mile. We have gone to the point that we may have even--and I believe we have, because if you look at the points that we have conceded in that letter, which I do not have here, a letter where the five points initially were submitted to us, that we have indicated that we are not going to say this is a waiver of privilege, although we do not believe there is a privilege, nor will we raise and look to examine Mr. Kendall. I believe if you look at all the constitutional authorities where privilege has been waived by the actions of the parties, that is, by those who are nonlawyers or those who are nonparticipants or outside of the scope of the legal arguments, you waive that privilege. Where people who attended that meeting speak about that meeting, a waiver of that privilege is, notwithstanding that we agreed on points 2 and 3, that we suggested that the committee would limit its testimony and inquiry about this meeting to the White House officials who attended it, that we would not seek to examine Mr. Kendall. I believe that constitutionally we have a right to actually examine Mr. Kendall, absolutely. If that meeting was not privileged, we have a right to examine him. But we said, ``Look, we want the notes. We don't want to create a situation where you have this argument.'' That is why we came up with this offer. Understand, this is not the White House's offer. It was our offer. Now, they have accepted, and they attempted to put additional conditions. Indeed, if my House colleagues go along with this, fine. We will go forward. But I would only suggest if the effort was made, and the effort has been made and has been made by both the minority and the majority on this committee for months now, and as it relates to these specific notes for 3 weeks, hard bargaining, working at it, giving suggestions, that that which we put forth in good faith could have been and should have been accepted. That is unfortunately the kind of situation that we have encountered as we attempt to gather the facts and the information. So I put it to you that I would hope that we would get these notes, that we would get them without the necessity of having to go to court. I hope that the White House will make them available. If our brethren in the House agree, then that resolves it, then so be it. But I do not believe, in good conscience, I could recommend to my colleagues that we delay the implementation mechanism with the caveat that the door will be open. It is open, even after we pass this, if we do pass this resolution, to go forward and seek enforcement of it. I made the commitment that I would move to withdraw that enforcement action upon the proffer of the notes of Mr. Kennedy. I yield the floor. Mr. BUMPERS addressed the Chair.

Mr. D'AMATO. Mr. President, could I ask just for a moment, so we might be able to hotline a resolution of this matter and I will yield the floor right back to my colleague?

Mr. D'AMATO. Mr. President, I ask for the yeas and nays on the pending amendment.

Mr. D'AMATO. Madam President, I ask for the yeas and nays.

Mr. D'AMATO. Mr. President, I move to reconsider the vote.

Mr. D'AMATO

Mr. D'AMATO. Absolutely. First of all, I thank the ranking member, Senator Sarbanes, as well as Senator Pryor, for giving Senator Specter an opportunity to proceed. He is going to use about 10 minutes. Thereafter, I ask unanimous consent that Senator Pryor be recognized following Senator Specter.

Mr. D'AMATO

Mr. D'AMATO. And then followed by Senator Glenn.

Mr. D'AMATO. Mr. President, in order to attempt to move the flow, I would ask unanimous consent that following Senator Mack, Senator Simon be recognized, and following Senator Simon, Senator Thompson be recognized.

Mr. D'AMATO

Mr. D'AMATO. I thank my friend.

Mr. D'AMATO. This meeting took place well before, in November, and he made the statement in March. So he was aware of the meeting. It was not a circumstance that took place after the meeting.

Mr. D'AMATO. Mr. President, I intend to yield to my friend and colleague who has been on the floor for quite a while. If I might, without prejudicing anybody, ask my colleague----

Mr. D'AMATO. Might I ask my colleague to give me a minute?

Mr. D'AMATO

Mr. D'AMATO. Madam President, I rise in support of the Kennedy- D'Amato amendment to S. 1228, the Iran Oil Sanctions Act of 1995. What can one say about Libya. It has now been over 4 years since the United States indicted two Libyan agents, Lamen Khalifa Fhimah and Abdel Basset Ali Megrahi, for responsibility in the bombing of Pan Am Flight 103 in December 1988. So far there has been no action, no surrender of these men. We must answer the cry for justice by the families of the 270 victims of this terrorist attack, 189 of them Americans, with 35 from New York State. For us to add Libya to a bill placing sanctions on those countries which seek to develop Iran's petroleum resources is, I feel, a justified action. We must send the message that terrorism, sponsorship of terrorism, and those who subsidize terrorism will not be ignored. Mu'ammar Qadhafi brazenly dismisses the indictment while at the same time pounding his chest, bragging to the world that he has again withstood American aggression. His offer to try the two agents in a Libyan court is a mockery of justice and an insult to the families of the victims. Just yesterday, a Scottish businessman was charged in a Boston court with violating the U.S. embargo on Libya by attempting to export over 250,000 dollars' worth of computers and related equipment. This is only further proof that Qadhafi is still up to his old games and is trying to flaunt our sanctions against him. I want to discuss, very briefly, the amount of oil that the Organization for Economic Cooperation and Development [OECD] countries buy from Libya. According to the Energy Department, OECD countries bought over $7 billion in oil from Libya in 1994. The worst offenders were Italy, with over $3 billion and Germany with over $1 billion. As far as how this legislation would effect Libya, one need only look at the contracts signed by European firms in the last few years. Just in August, a Spanish company Repsol, awarded a Cypriot company a $155 million contract to build a crude oil pipeline in Libya. Furthermore, European companies such as Agip--Italy, Total--France, Petrofina-- Belgium, OMV--Austria, and Veba--Germany, have all signed contracts for upstream activities in Libya and would be affected by this bill. While the focus of the underlying bill has been Iran and an attempt to stop the subsidizing of Iranian terrorism, I cannot see why we should not seek to prevent the subsidizing of Libyan terrorism at the same time? More importantly, who is to say that the attack on Pan Am 103 was not directed by Iran and conducted by the Libyans. If this were the case, than we will get two terrorist states with one bill. There can be no rest until the individuals who ordered, directed, and paid for the commission of the terrible crime of the bombing of Pan Am Fight 103 are brought to justice, no matter where they may be located. The investigation of the bombing must continue to be vigorously and intensively pursued. Libya, with a long and documented history of obscene violations of human rights and international law, must pay the price for its part in this slaughter and its past support for other international terrorist acts. It is for this reason, that I enthusiastically agree with the Senator from Massachusetts and am glad to have worked with him on this issue.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, today marks the 1-year anniversary of a sad chapter in Mexico's history and a sad chapter in American financial management by the Clinton administration. After the sudden devaluation of the Mexican peso on December 19, 1994, the Mexican economy continued to collapse. In response to the economic crisis, the Clinton administration circumvented Congress and unilaterally committed $20 billion of United States taxpayer funds to bail out Mexico. The public relations campaign conducted by the Clinton administration and the Mexican Government have attempted to portray the Mexican bailout as a success and that, given enough time and enough money-- United States taxpayers' money--conditions in Mexico will eventually improve. Public relations campaigns and publicity stunts aside, the facts are that the Clinton administration's taxpayer funded bailout of Mexico is a colossal failure. In early 1994, Mexico was hailed by the administration as a hallmark of success and was embraced as a partner in the North American Free- Trade Agreement. The subsequent 2 years have revealed that this image was a costly mirage forced upon the American and Mexican citizens. Mexico has become a dependent of the United States, looking north for more money to bail out its failed economic and social policies. But the answer to Mexico's problems is, and always has been, in Mexico City, not Washington, DC. I have been saying for almost 1 year that the Clinton administration's bailout was an ill-conceived disaster. It is not just my opinion, it is the cold hard facts--evidenced by the Mexican economic figures. The last few months have demonstrated that the Mexican financial sector can no longer disguise what is happening in Mexico. Mexico's economic crisis is now 1 year old and there is no indication of any meaningful improvement in Mexico's real economy: Record numbers of Mexicans are out of work, interest rates are soaring, the people are starving, and the country is reeling under increasing social and political unrest. Mr. President, we must look at the objective facts, and the performance of the Mexican peso is an excellent starting point. On December 20, 1994, the peso was trading at 3.97. Yesterday the peso closed at 7.54 against the dollar--that is a 50-percent drop in 1 year. Mr. President, no one wants to hold pesos because they are considered worthless. As reported by the New York Times on November 11, 1995, ``In the land of the peso, the dollar is common coin.'' But the Mexican Government continues to spend United States taxpayer dollars in their frantic and futile attempt to support the peso. Money from our Exchange Stabilization Fund--the ESF--that was supposed to be used to support the dollar. The Clinton administration's use of the ESF was unprecedented, and legally tenuous. In August of this year, I sponsored the Senate passed an amendment to the ESF statute which will prevent this administration from using the ESF as the President's personal piggybank again. The currency speculators will continue to reap huge profits from the fluctuating peso. On December 22, 1994, Mexico adopted a floating rate regime, which can only be successful if people have confidence in the Mexican Central Bank. The Central Bank's performance so far has failed to inspire such confidence. These problems are exacerbated by the continuing dismal condition of the Mexican banking system. I have been saying all year that the Mexican banking system is the weak link in any financial recovery. In May of this year, the Banking Committee held a hearing to review the condition of the banks and their apparent inaccurate reports. The end result in that the Mexican Government is bailing our Mexican banks. On December 15, 1995, the Mexican Government announced that it was buying $2 billion of bad loans from Banamex, Mexico's largest financial groups. Where is the Meixcan Government getting this money? From the U.S. taxpayers? In the year since the peso's collapse, Mexico has received over $23 billion from the United States and the IMF and it has not solved anything. American taxpayer dollars have been spent paying off private investors and not one dime of it is staying in Mexico or helping the Mexican people. Over 1 million jobs have been lost and annual inflation has exceeded 50 percent. It is clear the bailout is a failure, so I hope that this administration will not consider throwing more good money after bad. Mr. President, I want to address a related matter concerning the IMF. On October 18, I sent a letter to the Managing Director of the IMF, Mr. Camdessus, requesting the public release of the so-called ``Whittome Report''. Two months later, the Congress and the American public still have not seen the Report. The Whittome Report is the result of an internal study by the IMF of its surveillance and response to the Mexican crisis. According to news articles, the Whittome Report concluded that the IMF distorted its own reporting on Mexico in response to political pressure from the Mexican Government. The Report apparently provides a comprehensive analysis of the IMF's monitoring and response to the Mexican Economic Crisis. The Congress and the American people need all the information we can get on this multi- billion dollar bailout. The United States is the single largest financial contributor to the IMF, almost \1/4\ of their funds, and we deserve some answers. The IMF has sent $11.4 billion to Mexico this year and they will disburse $1.6 billion more every 3 months until August of next year. So when you add the indirect contributions the United States has made from the IMF to the $12.5 billion the United States has given directly to Mexico, it is obvious that we all have a very large stake in this game. When we have questions--we deserve answers. It is unconscionable that full disclosure has not been given the Congress--or the American taxpayer--about what happened in this Mexican bailout. The Treasury Department has classified the Whittome Report so the American people cannot read it and make their own judgment about how this crisis was handled. That's wrong. In October I introduced a resolution calling for the IMF to release the Whittome Report and requesting that the Treasury Department declassify it so that the American public can judge it for themselves. If this report is not declassified and made available to the public and the Congress by the start of the next session, I will ask my colleagues to vote for this resolution and take further steps to obtain the information we deserve. Mr. President, the Mexican peso crisis is now 1 year old. It is time to reassess the situation and learn all we can from the mistakes that were made. At a time when we are struggling to balance our own budget, and make necessary cuts in social programs, we must think long and hard about spending United States tax dollars to bail out Mexico's financial problems.

Mr. D'AMATO

Mr. D'AMATO. Madam President, I rise today to comment on the passage of S. 1228, the Iran Oil Sanctions Act of 1995. Now, we have a bill with teeth, that will say to those companies that provide investment in Iran's oil and natural gas sectors, ``you can trade with us, or trade with them.'' And more importantly the bill is extraterritorial. This precedent is important because now for the first time, we will be establishing the concept that the economic development of the Iranian regime is a threat to our national security. As I have said many times, this point is vital to understanding the fact that Iran uses its hard currency to fund its aggression. This, in fact, is the primary goal, namely to deprive Iran of the hard currency needed to obtain weapons of mass destruction and to fund its vast terrorist network. The administration has indicated that it will support this version of the bill and that the President will sign it. For far too long the United States had been subsidizing Iranian terrorism through our trade with Iran. Following our lead, President Clinton issued an Executive order on May 6, 1995, banning all trade with Iran. Now, the United States no longer is doing business with Iran. Unfortunately, the other nations of the world have failed to join us in this embargo. While Iran is racing to obtain weapons of mass destruction, many other countries of the world are subsidizing them through their development of the Iranian oil fields. This kind of business gives Iran hard currency to fund terrorism and its quest for nuclear weapons. Undersecretary of State Peter Tarnoff said it best, when at a hearing before this committee he stated: A straight line links Iran's oil income and its ability to sponsor terrorism, build weapons of mass destruction, and acquire sophisticated armaments. Any government or private company that helps Iran to expand its oil [production] must accept that it is . . . contributing to this menace. This cannot continue and this is why I and my colleagues introduced S. 1228, which now has 43 cosponsors. I thank them for their support for this important bill. We can wait no longer. We must put real teeth in our policy of economically isolating and undermining a regime which has embarked on policies of terrorism and aggression that impose a clear and present danger to the vital security interests of our own Nation. Without such a policy there is no doubt that Iran will continue to get the benefit of doing business with companies that put their own desire for profits ahead of the interests of the international community in preventing Iran from joining the nuclear weapons club and continuing its vast support for terrorist groups. With such a policy, there would be a real chance of convincing Iran that its attempt to acquire weapons of mass destruction and its promotion of international terrorism is entirely counterproductive. If foreign companies are to understand that they are subsidizing Iranian terrorism they should heed the words of Secretary of State Warren Christopher's statement before the U.N. General Assembly on October 25, 1995, when he stated: Every dollar that goes into the coffers of a state sponsor of terrorism makes its secret quest for weapons of mass destruction even more alarming. We must stand together to prevent Iran from acquiring such threatening capabilities. No one could have said it better. I hope that our friends overseas understand this as well, but if they fail to do so, this bill will serve as a reminder.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I rise today to discuss a matter that has not received much public attention during the course of our discussions of the United States role in the Balkans and specifically in Bosnia. While administration officials have discussed how we would respond if we encountered indicted war criminals in Bosnia, they have been silent on the equally important question of collecting and protecting evidence of violations of international humanitarian law. This is a very basic point. You can indict and arrest suspects, but for convictions, you need solid, admissible evidence. The International Criminal tribunal for the Former Yugoslavia has been doing excellent work, considering the resource limitations it operates under and its lack of direct access to many crime scenes. It now lies within the power of the United States to advance the tribunal's work and the cause of justice in the former Yugoslavia. The United States has supported the Tribunal's efforts to acquire more resources. Now, the United States and our NATO allies in the implementation force will have direct access to the scenes of the alleged crimes. The question we face is what do we do with this access? I strongly believe that we have a moral obligation to seek out, collect, protect, and provide to the tribunal such evidence of violations of international humanitarian law as we are able to discover within the United States zone in Bosnia. Let me be specific. Last Wednesday, December 6, 1995, the Commission on Security and Cooperation in Europe, better known as the Helsinki Commission, of which I am cochairman, held a hearing entitled ``Mass Graves and Other Atrocities in Bosnia.'' The witnesses at this hearing were Mr. Ivan Lupis, of Human Rights Watch, Mr. David Rohde of the Christian Science Monitor, and Dr. Barbara C. Wolf, M.D., a forensic pathologist who participated in an AmeriCares exhumation project in Bosnia. Mr. Rohde and Mr. Lupis both testified to events leading up to and following the fall of the United Nations-declared safe area of Srbrenica on July 11, 1995. According to their testimony, perhaps as many as 8,000 Bosnian moslems were massacred by Bosnian Serbs following the storming of Srebrenica. Their remains were buried in an area between Srebrenica and Tuzla, the headquarters of the United States forces that will be assigned to the implementation force [IFOR]. Possible mass grave sites identified following the fall of Srebrenica are at or near the following locations: Zabrde, Kravica, Burnice, Nova Kasaba, Kuslat, Sahanici, Rasica Gai, and Karakaj. These sites all lie within the U.S. zone. Mr. Rohde personally visited four sites, at Nova Kasaba and Sahanici, and confirmed that they were in fact mass graves. It is vitally important that the United States act to secure these sites and facilitate access to them by international investigators. Under the Dayton Peace Agreement, the United States has the right to do this. I strongly believe that we must exercise that right, and promptly, before evidence that is potentially vital to the prosecution of the killers can be destroyed. At last Wednesday's hearing, Mr. Rohde testified as follows in that regard, according to an uncorrected transcript of the hearing: ``The U.S. intelligence said this last month: They have aerial photos of backhoes being in the area digging it up, taking out some kind of material which could be bodies. And there's a possibility the Bosnian Serbs are pouring acid onto the bodies and destroying evidence.'' Now, I want to review specifically what the Dayton Peace Agreement says and how its provisions apply in this situation, so that there can be no misunderstanding of the duties of the parties to the agreement. These provisions now take effect because the agreement was signed in Paris earlier today. The Dayton agreement provides as follows in article VII: ``Recognizing that the observance of human rights and the protection of refugees and displaced persons are of vital importance in achieving a lasting peace, the Parties agree to and shall comply fully with the provisions concerning human rights set forth in Chapter One of the Agreement at Annex 6, as well as the provisions concerning refugees and displaced persons set forth in Chapter One of the Agreement at Annex 7.'' Article VII thus commits all of the parties, including the Bosnian Serbs, to comply fully with the following provision, among others: In particular, annex 6, article XIII, paragraph 4 of the Dayton agreement provides as follows: ``All competent authorities in Bosnia and Herzegovina shall cooperate with and provide unrestricted access to the organizations established in this Agreement; any international human rights monitoring mechanisms established for Bosnia and Herzegovina; the supervisory bodies established by any of the international agreements listed in the Appendix to this Annex; the International Tribunal for the Former Yugoslavia; and any other organization authorized by the U.N. Security Council with a mandate concerning human rights or humanitarian law.'' In other words, the Dayton agreement singles out the International Tribunal for the Former Yugoslavia as one of the organizations with which all competent authorities in Bosnia and Herzegovina must cooperate. This means that the Bosnian Serbs may not prevent investigators from reaching these mass grave sites or exhuming the remains or doing any of the other tasks necessary to a full and complete investigation of the crimes committed there. Annex 1-A, ``Agreement on the Military Aspects of the Peace Settlement,'' article II, ``Cessation of Hostilities,'' paragraph 4 further provides as follows: ``The Parties shall cooperate fully with any international personnel including investigators, advisors, monitors, observers, or other personnel in Bosnia and Herzegovina pursuant to the General Framework Agreement, including facilitating free and unimpeded access and movement and by providing such status as is necessary for the effective conduct of their tasks.'' This provision is even more specific. It requires that the parties facilitate ``free and unimpeded access and movement.'' This means that road blocks, security zones, military areas, or any of the other excuses, ruses, or tricks that were formerly the Serb's stock in trade to prevent international observation or investigation of their actions are no longer permitted. Now, let us look more closely at the rules covering United States forces as part of IFOR in Bosnia. Annex 1-A, article VI, ``Deployment of the Implementation Force,'' paragraph 3 provides as follows: ``The Parties understand and agree that the IFOR shall have the right to fulfill its supporting tasks, within the limits of its assigned principal tasks and available resources, and on request, which include the following: * * * (b) to assist the movement of organizations in the accomplishment of humanitarian missions; (c) to assist the UNHCR and other international organizations in their humanitarian missions; (d) to observe and prevent interference with the movement of civilian populations, refugees, and displaced persons, and to respond appropriately to deliberate violence to life and person * * *'' Paragraph 5 provides as follows: ``The Parties understand and agree that the IFOR Commander shall have the authority, without interference or permission of any Party, to do all that the Commander judges necessary and proper, including the use of military force, to protect the IFOR and to carry out the responsibilities listed above in paragraphs 2, 3 and 4, and they shall comply in all respects with the IFOR requirements.'' This is a key provision, when read with paragraph 3. In essence, it means that the United States does not have to ask the Bosnian Serbs for permission to assist the movement of tribunal investigators or to help them with exhumations or other heavy work. In addition, it means that any resistance can be met with military force. Paragraph 9 provides as follows: ``Air and surface movements in Bosnia and Herzegovina shall be governed by the following provisions: (a) The IFOR shall have complete and unimpeded freedom of movement by ground, air, and water throughout Bosnia and Herzegovina. It shall have the right to bivouac, maneuver, billet, and utilize any areas or facilities to carry out its responsibilities as required for its support, training, and operations, with such advance notice as may be practicable. The IFOR and its personnel shall not be liable for any damages to civilian or government property caused by combat or combat related activities. Roadblocks, checkpoints or other impediments to IFOR freedom of movement shall constitute a breach of this Annex and the violating Party shall be subject to military action by the IFOR, including the use of necessary force to ensure compliance with this Annex.'' This is another key provision. It puts teeth into the requirement of annex 1-A, article II, paragraph 4, quoted in full above, that ``[t]he Parties shall cooperate fully with any international personnel including investigators * * * including facilitating free and unimpeded access and movement. * * *'' It permits the use of military force to overcome roadblocks, checkpoints, or other impediments to IFOR freedom of movement, even when escorting, for example, tribunal investigators. I have just described the legal foundation for United States action in support of investigations of violations of international humanitarian law in Bosnia and Herzegovina. That legal foundation comes into force now that the Dayton Peace Agreement has been signed in Paris earlier today. Now, the issue for the United States is what we are actually going to do, given that we now appear to have, and I would argue that we clearly do have, the legal right to support, assist, and facilitate these investigations. Mr. President, the distinguished chairman of the Commission on Security and Cooperation in Europe, Representative Christopher H. Smith of New Jersey, and I, sent a joint letter to Secretary of Defense William J. Perry last Friday, asking just that question. In fact, it is a long letter and it asks detailed questions about the entire United States approach to the issue of violations of international humanitarian law in Bosnia and the United States response to those violations. While it is much too soon to expect a response, I urge the Secretary to put his staff to work on the questions contained in the letter so that we can have answers before we make serious mistakes. Mr. President, I ask unanimous consent that our joint letter to Secretary Perry be printed in the Record. I plan to speak again on this topic as more information is received and the situation develops.

Mr. D'AMATO

Mr. D'AMATO. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I rise today to discuss a vital, bicameral effort to combat drugs in this country. The Task Force on National Drug Policy, of which I am a proud member, was announced today to work to solve a serious problem: narcotics. Despite efforts by Congress to curtail the flow of drugs into this country and its use by Americans, it seems as though the results have been lost with this administration. The intent of this task force is to focus the White House on a problem that is far from being resolved, and where much attention needs to be paid. This is particularly important in light of recent studies that have indicated a growing trend in illicit drug use among teenagers. Studies indicate that, despite a decline in drug use among teens during the 1980's, drug use has risen sharply in the past few years. Cocaine use by high school students increased 36 percent since 1991-92, which was the period of lowest use. Marijuana use increased as well. Between the 1990-92 school year and 1994, marijuana use among junior high school students rose 111 percent and rose 67 percent in high schools. Now, one in three high school students admit to smoking marijuana. Even without being armed with these statistics, Americans see the rise of drug use in their communities. It is on their streets and in their schools. Understandably, citizens view narcotics as one of the most pressing problems facing our country. According to a Gallup poll released yesterday, 94 percent of Americans see drug use as a serious problem or a crisis. These recent reports are a wake-up call to the administration to take action. It has served as the impetus for this Task Force on National Drug Policy to set a framework for policy and establish strategic plans to combat the drug epidemic. This, in turn, should move the White House to realize that this is a pressing issue that they can no longer neglect. Action must be taken now. Our children cannot afford to wait any longer. Efforts must be stepped up to get at the drug suppliers, especially the drug kingpins. They are profiting while the rest of us suffer. There presence is being tolerated and should not be tolerated anymore. In order to control the proliferation of illegal narcotics, law enforcement efforts must play a leading role in the Federal strategy. Law enforcement agencies, experts in this field, have been able to develop innovative techniques to respond to the spread of drugs in our communities. They are on the frontlines of this war against drugs and have the knowledge to fight its recent rise. The members of this task force have the ability to establish policy and to take the initiative through legislative action. An example of this could be the implementation of a system such as the Automated Fingerprint Identification System [AFIS]. Using this biometric system, drug smugglers will not be able to repeatedly enter this country using fictitious identification with anonymity and impunity. Recidivistic drug felons could be immediately identified, detained, and prosecuted or deported before their heinous acts impact upon our children, families, and communities. This is at least one way to reduce the flow of drugs over our borders. Another way to deter drug dealers is to raise sentencing guidelines and enact mandatory minimums to guarantee longer sentences. These will also act as a deterrent to potential offenders. We should be attacking their trade, not ignoring their presence. It is evident that the illegal drug trade has profited with the focus shifted away from their activities. But this task force will change that. With the emphasis placed back on narcotics and the harm it spreads, this task force may be able to concentrate efforts to rekindle the decline of drug use that was noted prior to this administration. I would also like to take this opportunity to commend my colleagues for their leadership and initiative in the effort to control illicit drugs in the United States.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, let me conclude by simply saying that this bill may not be the perfect solution and, indeed, there may be some unintended consequences that create problems. This Senator and, I know, Senator Dodd and Senator Domenici and all of my colleagues are ready to deal with any problems that may come about. But let me say this, too. First, in this bill we go after the greatest abuse that is taking place, which is lawyers who do not represent the general public but represent themselves. They have for hire plaintiffs who are not really aggrieved, who own minimal, in some cases as little as 10 shares, of stock. As soon as there is a price variation, these lawyers race to the courthouse so that they can file a claim so they will control the case. There is little regard for the company, little regard for the real aggrieved investors. We have changed that significantly. No longer will there be permitted professional plaintiffs. Second, for the first time we say that the court shall look at the facts as they relate to the questions: Is there a pension fund? Is there a large investor involved whose interests should be protected? The court will look at these questions as they relate to the lawyer's representation so that we have lawyers, who really represent the aggrieved investors, controlling the case, not a string of professional, sharks, sharks for hire. Third, we have made it more difficult to bring suits that are aimed at forcing settlements. Fourth, we answer questions which are long overdue. Should we hold somebody responsible for the total loss, if there is a loss, if they have been minor participants and if they have been responsible for 1 or 2 or 3 or 4 percent of the loss, because they are wealthy or have a member of the board of directors who has deep pockets? Do we want to encourage people to participate in corporate governance, or do we want to discourage it; do we want to make it impossible for large firms to come in and use their expertise because they are afraid of being sued so they say, ``No, I do not want to audit your books; the exposure is too great''? Do we really want to have a system where people are forced--forced-- to [[Page S 17936]] give up and settle a case because if there is even the slightest doubt as it relates to liability, they may be facing huge, huge losses. These companies, therefore, are forced to settle even when they know they have not committed any tortious acts, but the risk of the jury finding any evidence in the way of negligence, even a small, minute amount, might jeopardize the company with huge claims? So what you literally have is a group of bandits who force companies into settlements of millions and millions of dollars. Is that fair to those companies? Is that fair to the shareholders? I do not think so. What we have said in this conference report is, if you are negligent, if you have committed a tortious act, you should be held responsible for the percentage of losses due to your tortious act, not that the full consequences of somebody else's actions should fall on you simply because you are a person who has some money and some resources. That is wrong. That is not fair. If you are intentionally defrauding investors? That is a different matter. You will be held. I think this is fair. I think this is reasonable. I understand that there are some provisions that some of my colleagues have some differences with, but I think overall we have moved forward in a very conscientious manner in the attempt to have a fair and balanced system, so that those who truly have committed tortious actions will be held accountable for their actions, and they will not be held accountable for other people's actions, nor will they be forced to make settlements that are indeed unfair. We have eliminated a terribly unscrupulous practice that I believe is a stain on the legal profession. I have stood up and I have battled on behalf of litigants and on behalf of the attorneys who represent them, so that they may have a level playing field. But the law as it exists today is not a level playing field. And there have been and there are a handful who have abused the system. We are attempting to deal with those abuses. I want to thank my colleagues for their participation. I certainly want to thank Senator Bennett for his job in terms of working with us. I urge my colleagues to vote in favor of the final passage. And I thank the Chair. Mr. SARBANES addressed the Chair.

Mr. D'AMATO. Mr. President, today, the Senate will vote on the conference report to H.R. 1058, the Private Securities Litigation Reform Act of 1995. This legislation has been 4 years in the making. It is a thoughtful and carefully crafted bill. The provisions in the conference report are balanced to make the legal system fairer and better for investors. The current system does not protect investors, it exploits them. Now, the system is not fair to investors and is not fair to American business. Plaintiffs' lawyers know that and take advantage. It is time to reform the securities class action litigation from a moneymaking enterprise for lawyers into a better means of recovery for investors. The present system is a feeding frenzy for plaintiffs' lawyers who prey on companies with volatile stock prices, eat up the companies' profits with a strike suit and move on to the next victim. Lawyers are now able to file a baseless securities class action lawsuit against a company, claiming millions of dollars in damages, and coerce huge settlements. About 300 securities class action lawsuits are filed each year. The same lawyers, and in some cases the same plaintiffs, the world's unluckiest investors, show up in these lawsuits time after time. Frequently, the same complaint comes out of a word processor barely changed. In one infamous case, a lawsuit against Philip Morris claimed fraud in the ``toy industry.'' In other words, the forms are set, the stock price drops, and bang, the suit is filed with the same plaintiffs hired--in many cases, the plaintiff owns only 10 shares of stock. We have seen some cases where the same plaintiffs appears in as many as 13 lawsuits. They are professional plaintiffs. A drop in a public company's stock price, a failed product development project, or even adverse market conditions that affect earnings, can trigger one or more securities fraud lawsuits. Many times the complaint simply alleges that management's predictions about the company's future did not come true. Once discovery begins, plaintiffs' counsel begins a fishing expedition for evidence. One witness told a securities subcommittee that his company produced 1,500 boxes of documents during discovery in this type of case. The discovery ended up costing the company $1.4 million. The threat of a protracted securities class action lawsuit is powerful. Companies pony up huge settlements rather [[Page S 17934]] than face the time and expense of a class action lawsuit. The lawyers do not just go after the money in the company's pockets, they also name other deep pockets--the company's lawyers, accountants, underwriters and directors--as defendants to assure a hefty settlement will be paid out. The plaintiffs' lawyers are rarely disappointed. Almost 93 percent of the cases settle at an average settlement cost of $8.6 million. In 1994 alone, companies or their insurers paid out $1.4 billion to settle these cases. The so-called victims of the fraud recover pennies on the dollar and the lawyers pocket the rest. While the lawyer's share is taken out, the class members get about 6 cents on the dollar. Frequently, the only egregious offense is committed when the company's shareholders are forced to pick up the tab. The conference report reforms the system for securities litigation. First, the conference report makes it harder to file frivolous complaints and sanctions attorneys who do. The conference report stops abusive securities litigation before it starts. It will help to weed out frivolous complaints before companies have to start paying enormous legal bills. The legislation creates a uniform standard for complaints that allege securities fraud. This standard is already the law in New York. It requires a plaintiff plead facts giving rise to a strong inference of the defendant's fraudulent intent. The conference report also provides a strong disincentive for lawyers to file abusive lawsuits. The legislation does not contain a loser pays provision, which would go too far. Instead, the bill requires courts to make findings about whether an attorney filed a frivolous complaint, motion or responsive pleading and to sanction attorneys who do. Second, the conference report makes sure that the victims of securities fraud bring the lawsuit--not professional plaintiffs. The conference report puts control of the lawsuit into the hands of the victims. Right now, there often is no victim, just a professional plaintiff whose name appears in lawsuit after lawsuit. Professional plaintiffs are paid well for their services, usually in the form of a bounty payment. News accounts report that one individual, a retired lawyer, appeared as lead plaintiff in 300-400 lawsuits. Last year, an Ohio judge refused to permit class certification, noting that the lead defendant had filed 182 class actions in the last 12 years. The conference report discourages the use of professional plaintiffs by eliminating bonus payments to name plaintiffs and prohibiting referral fees. The conference report encourages real investors, especially pension funds and other institutional investors, to take control of the lawsuit. It provides that the plaintiff with the largest financial interest in the outcome of the case should be the lead plaintiff. Third, the conference report allows companies to talk about the future of the company without the threat of a lawsuit. The conference report will get more information to shareholders about the future prospects of a company. The conference report codifies existing law to provide a safe harbor to companies that make forward- looking statements accompanied by meaningful cautionary statements. Now, corporate management is afraid to make statements about the future of the company, knowing that incorrect projections will inevitably lead to a lawsuit. One study found that over two-thirds of venture capital firms were reluctant to discuss their performance with analysts or the public because of the threat of litigation. The conference report includes a safe harbor that fairly balances the need for a free flow of information to the marketplace and the need for investor protection. The conference report creates a two-pronged safe harbor. The first prong gives safe harbor protection if there is a good enough warning about why the forward-looking statement may not come true. The safe harbor does not give a license to lie. The second prong does not give safe harbor protection when forward-looking statements are made with actual knowledge that the statement is false or misleading. The conference report safe harbor does not cover areas where there is potential for abuse. For example, the safe harbor does not cover IPO's, financial statement information, penny stocks or limited partnerships. There is no safe harbor for brokers. The conference report safe harbor is balanced. The conference committee worked with the SEC to make sure the safe harbor is safe for investors as well as companies. I would like to include in the Record as if read in its entirety, a letter from the SEC to me, dated November 16, 1995, supporting the safe harbor provision. Fourth, the conference report modifies the system of liability so that deep pocket peripheral defendants cannot be coerced into paying more than their share of the damages. The conference report reduces the coercive effect of unlimited liability by making peripheral defendants liable only for the share of damages they caused. Now, all defendants are on the hook for 100 percent of the damages--even if they are only responsible for 1 percent. In class action lawsuits with hundreds of plaintiffs, the potential liability can be staggering. Deep pocket defendants who may only be 1 percent liable routinely settle for much more rather than face paying 100 percent of the damages. The conference report changes that by requiring peripheral defendants to pay for only the share of damages they caused under a system of proportionate liability. This bill does not leave small investors out in the cold. Small investors are always compensated for 100 percent of their damages if they have a net worth of $200,000 or less. The conference report does not change the system of liability for defendants who knowingly commit securities violations. Anyone who has knowingly committed a securities violation will still be liable for 100 percent of the damages. That's fair. Fifth, the conference report improves the settlement process by getting more information to investors about a proposed settlement and restricting the amount attorneys may recover in fees. The conference report enables the plaintiffs to receive a favorable settlement rather that the attorneys. All too often, plaintiffs' lawyers take the money and run. The legislation requires counsel to the class to inform investors about the terms of a proposed settlement and to be available to answer questions about the settlement. The conference report also restricts the percentage of the recovery that goes to the lawyers. Lawyers fees now sometimes add up to more than 50 percent of the entire settlement. This legislation puts more of the settlement money into the pockets of investors by limiting the lawyers portion to a reasonable percentage of the settlement amount. Sixth, the conference report also contains other provisions that make the system for securities litigation reform fairer and better for investors. The legislation requires auditors to be on the lookout for wrongdoing and report any evidence of fraud to the SEC. The conference report also reinstates the SEC's authority--which the Supreme Court put into question in the Central Bank of Denver case--to bring actions against defendants who knowingly aid and abet securities fraud. The bill prohibits document destruction by making it unlawful for a party to destroy documents once a complaint is filed. Finally, the bill makes sure that small investors are always compensated for 100 percent of their damages if they have a net worth of $200,000 or less. In summary, the bill will put a stop to abusive securities litigation. It will curtail the use of professional plaintiffs. It will empower real investors, especially pension funds and other institutional investors, to take control of the lawsuit. This legislation is aimed at weeding out frivolous cases by making it harder to file factually baseless complaints. It also provides that each defendant is liable for only his or her fair share of the damages, making it more difficult for lawyers to coerce settlements from the deep pocket defendants--that is, the defendant that has some assets or money. At the same time, it will make accountants report fraud to the authorities. [[Page S 17935]] Finally, this bill creates a safe harbor from private lawsuits about forward-looking statements. The legislation will solve the problem of abusive securities litigation without preventing investors from bringing meritorious lawsuits. I congratulate my Senate colleagues for all the time and effort they have put into this important legislation. I particularly would like to thank Senators Dodd and Domenici, who introduced this legislation more than 4 years ago. I thank Senator Gramm, the chairman of the Securities Subcommittee, for his leadership. And I thank the staff who has worked so hard on this bill. Our staff director, Howard Menell; the Banking Committee staff: Laura Unger, Bob Giuffra, Wayne Abernathy, Mitchell Feuer, and Andrew Lowenthal; Senator Domenici's staff: Denise Ramonas and Brian Benczkowski, and the other key staff members, including Robert Cresanti, Dave Berson, Peter Hong, and Carol Grunberg, who have been indispensable to this process. I also want to thank the SEC, the Security and Exchange Commission, its staff, and the judicial conference, and all the others who have made this piece of legislation successful. The conference report is balanced. It hits the bullseye of the target, curtailing abusive securities litigation, while allowing investors to bring meritorious lawsuits. Once this bill becomes law, investors will have a system of redress that serves them and not entrepreneurial lawyers. Mr. President, let me take the time now to indicate that on November 15 I received a letter from the Securities and Exchange Commission, signed by Chairman Levitt, and Steve Wallman, a Commissioner. And let me ask that I be permitted to read the letter into the Record. Dear Mr. Chairman: As we approach the end of the long road traveled on securities litigation reform, you have asked we provide our views of the current draft of the legislation. At the outset, let us express our appreciation for your willingness to heed the concerns of the Commission regarding the draft conference report October 23, 1995. Together we have sought to achieve the most responsible reform possible. While the Commission has raised a number of concerns about earlier versions of this legislation, we believe the draft conference report dated November 9th responds to our principal concerns. We understand the need for a greater flow of useful information to investors in the markets and we share your desire to protect companies and their shareholders from the costs of frivolous litigation. The safe harbor provisions of the draft bill have been of particular interest to us. While we could not support earlier attempts at a safe harbor compromise, the current version represents a workable balance that we can support since it should encourage companies to provide valuable forward- looking information to investors while, at the same time, it limits the opportunity for abuse. The need of legitimate businesses to have a mechanism for early dismissal of frivolous lawsuits argues in favor of codification of the ``bespeaks caution'' doctrine that has developed under the case law. While the trade-off requires that class action attorneys must have well written and carefully researched pleadings at the outset of the lawsuit, we feel this is necessary to create a viable safe harbor, given that it does not prevent Commission enforcement actions, and excludes the greatest opportunities for harm to investors. Outside of the safe harbor provisions, we have consistently advocated reversal of Supreme Court decisions of Lampf and Central Bank. It is unfortunate that Congress has not restored these investor protections that were removed by the Supreme Court; however, we recognize that amendments on both subjects were defeated in the course of this legislative effort, thereby making it difficult to include such provisions in the bill. The conference bill raises other minor issues, but the language in the conference report hopefully will prevent any unintended consequences. We remain grateful to you and your staff, as well as the other members and their staffs, for the willingness to engage in a dialogue with us aimed at getting a better deal for investors. Thank you for your consideration. Signed Arthur Levitt, chairman. Mr. President, I ask unanimous consent that this letter be printed in the Record.

Mr. D'AMATO. Mr. President, I submit a report of the committee of conference on H.R. 1058 and ask for its immediate consideration.