Alfonse D’Amato

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I rise today to recognize the sacrifices of the many hundreds of thousands of American servicemen who bravely fought the forces of communism in that far-off peninsula of Korea. As the primary contingent of an international force that succeeded in halting the tide of Soviet and Chinese expansion and influence, Korean war veterans won what many have seen as the first battle of the cold war. The experience of the Korean war forever changed the nature of the superpower relationship as well as America's bilateral relations with its overseas allies. In defending the democratic South Korean Government against the aggression of the communist North, America won the friendship of a government committed to furthering American values and ideals. Today we look at South Korea as a important ally and model of political, social, and economic development. Many have referred to the Korean war as the forgotten war because its significance has only been truly realized after our eventual triumph over totalitarianism. With today's dedication of the Korean War Veterans Memorial by President Clinton and South Korean President Kim Young Sam, the sacrifices of the over 54,000 Americans killed and the 1.5 million men and women who served will finally be recognized. The memorial will serve to forever preserve a place of honor that these heroes have always deserved. Let these America's Korean war veterans never again be forgotten.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I rise to support the swift approval of S. 641, the Ryan White CARE Act reauthorization. The Ryan White program is a key element of the safety net for persons with HIV-AIDS--funding critical medical care, support services, and prescription drug assistance to prolong and improve the lives of those living with this disease. This program is particularly important to New York, which, unfortunately, continues to be the epicenter of this deadly epidemic. Of the 442,000 AIDS cases reported to the U.S. Centers for Disease Control as of December 1994, 83,000--or almost 19 percent--occurred in New York State, and 72,000--about 16 percent--occurred in the New York City metropolitan area. In New York City alone, an estimated 200,000 individuals are thought to be infected with HIV. Tragically, since 1988, AIDS has been and continues to be the leading cause of death for men and women aged 25-34. Ryan White has provided critical support to help mitigate the horrible impact of this epidemic in my State. The following are just a few of the positive effects resulting from the first 3 years of Ryan White funding in New York State, according to an analysis by the New York State AIDS Institute: First, the proportion of hospital admissions for patients in early stages of HIV disease were significantly reduced compared to control hospitals not receiving Ryan White funds. On average the proportion of early stage patients at Ryan White funded sites was 24 percent lower than at control sites at hospitals with primary care funded by Ryan White. Second, as a result of reduced utilization of inpatient services at the 19 hospitals funded by Ryan White to provide primary care, estimated gross savings were achieved in excess of $25 million a year. Finally, it has been estimated that without CARE Act-funded programs, HIV-related Medicaid expenditures in New York would have been 71 percent higher. This represents a cost-savings of over $300 million. According to New York's AIDS Institute, the CARE Act-funded reimbursement pools for primary care and home care saved approximately $3 for every $1 invested. It is critical to remember that, by helping people with HIV to remain healthy and productive for as long as possible, the Ryan White CARE Act is helping us save both lives and money. The Ryan White CARE Act has proven effective in meeting the needs of States and communities affected by the HIV epidemic, and it deserves to be reauthorized without delay.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I rise today in strong support of S. 21, Senator Dole's bill to lift the United States arms embargo against the Republic of Bosnia and Herzegovina. As the so-called U.N. safe zones fall one by one to Serbian rebel assaults, and their civilian inhabitants face the horrors of ethnic cleansing, we must stand up for the sovereign right of Bosnia to defend itself against this armed aggression. The U.N. protected areas were initially created to actually protect their inhabitants from ethnic cleansing. The plan was that the U.N. Protection Force, backed by NATO air power, would actually use force to stop the population of these areas from coming to harm. The implicit deal was that the United Nations, through UNPROFOR and NATO, would assume Bosnia's sovereign responsibility to defend its people and its territory, in return for Bosnian cooperation in pursuit of a diplomatic solution to the conflict. Mr. President, Bosnia has cooperated. Bosnia accepted the contact group's plan that would have left the Bosnian Serb rebels in control of half of their country. Bosnia, in return, had every right to expect the United Nations and NATO to uphold their end of the bargain, and use armed force to defend the Bosnian people in the protected areas from Serbian assault. We have now seen that neither the United Nations nor NATO is willing to meet its obligations under this arrangement. After the disastrously misguided air attacks on unmanned Serb ammunition bunkers near Pale, the Serbs did again what they have done before--they seized UNPROFOR members as hostages and, in a new violation of the laws of war, chained them to potential targets. Some charge that our allies in UNPROFOR deliberately deployed their forces in militarily untenable positions so that they would serve as de facto hostages, effectively barring the use of force in response to Serb outrages. Whether or not this unsound deployment was deliberate and the actual taking of hostages was foreseen, neither the United Nations nor NATO is now free to use force against the Serbs even if they had the political will to do so. In fact, the West lacks the political will to use force to protect the safe zones and the people living in them. Srebrenica has fallen and Zepa is about to fall. In my opinion, any of the publicly discussed plans to protect Gorazde are doomed to failure. The United States Senate should vote today to return to the Bosnian Government the capability to exercise its sovereign right of self defense. The recent attacks to lift the siege of Sarajevo show that the Bosnian Government is not afraid to use force in its own self defense, and that its people are ready to make tremendous sacrifices for their country. We need to allow them to obtain the tools they need to convert their political resolve and courage into military success. While I believe that the French plan to insert additional troops in the besieged Gorazde zone is the height of folly--someone wrote that the French have forgotten Dien Bien Phu--I agree with President Chirac's assessment of the performance of the West in this crisis as being the worst since the late 1930's, when we faltered and compromised in the face of Nazi aggression. It is time and past time for us to get out of the Bosnians' way and allow them to obtain the means to defend themselves. Accordingly, I will vote for this measure and I strongly urge my colleagues to give it their wholehearted support.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I am today introducing the Financial Instruments Anti-Fraud Act of 1995. This legislation combats the use of factitious financial instruments to defraud individual investors, banks, pension funds, and charities. These fictitious instruments have been called many names, including prime bank notes, prime bank derivatives, prime bank guarantees, Japanese yen bonds, Indonesian promissory notes, U.S. Treasury warrants, and U.S. dollar notes. Fictitious financial instruments have caused hundreds of millions of dollars in losses. Mr. President, these frauds have been perpetrated by antigovernment groups such as the Posse Comitatus and ``We the People,'' which use fictitious financial instruments to fund their violent activities. In the wake of the terrible tragedy in Oklahoma City, I hope my colleagues will support legislation that will cut the purse strings of these organizations. Because these fictitious instruments are not counterfeits of any existing negotiable instrument, Federal prosecutors have determined that the manufacture, possession, or utterance of these instruments does not violate the counterfeit or bank fraud provisions contained in chapters 25 and 65 of title 18 of the United States Code. The perpetrators of these frauds can be prosecuted under existing Federal law only if they used the mails or wires, or violated the bank fraud statute. Mr. President, we have worked closely with the Treasury Department and various U.S. Attorneys' Offices to prepare the Financial Instruments Anti-Fraud Act of 1995. This bill makes it a violation of Federal law to possess, pass, utter, publish, or sell, with intent to defraud, any items purporting to be negotiable instruments of the U.S. Government, a foreign government, a State entity, or a private entity. It closes a loophole in Federal counterfeiting law. Fictitious financial instruments are typically produced in very large denominations and purport to offer very high rates of return. Promoters of these schemes claim that they have exclusive access to secret wholesale markets paying 25 percent or more to investors. The June 13, 1994, issue of Business Week reported that innocent investors, including the National Council of Churches and Salvation Army, lost hundreds of millions of dollars in a scam involving bogus guarantees issued by the Czech Republic's Banka Bohemia. Mr. President, organized terrorist and militia groups are distributing do-it-yourself kits that provide the materials and instructions for members of such organizations to produce phony money order and securities. These antisocial groups seek to undermine the soundness of the U.S. financial system, and to raise funds to advance their violent, radical agenda. They claim, for example, that the IRS is a tool of Zionist international bankers and advocate violent confrontation with Federal law enforcement agents. Drug traffickers also rely on fictitious financial investment instruments. Some West African organized criminal syndicates, for instance, use these instruments to fund their thriving heroin trade. In addition to combating the use of fictitious financial investment instruments, this legislation correct a technical error that occurred when the Congress enacted the Counterfeit Deterrence Act of 1992. Congress intended this bill to increase penalties for counterfeit violations. As a result of a drafting error, however, the 1992 legislation actually lowered criminal penalties for counterfeiting. This bill imposes criminal penalties for the production and sale of fictitious instruments. These penalties are identical to those imposed for counterfeiting. Criminals found guilty under these sections will fact up to 25 years in prison. Mr. President, I strongly urge passage of the Financial Instruments Anti-Fraud Act of 1995.

Mr. D'AMATO. Mr. President, I rise today to introduce legislation with my friend and colleague, Senator Moynihan, that will keep two hydroelectric projects in upstate New York on track. Our legislation will extend the time limitations on two Federal Energy Regulatory Commission [FERC] licensed hydroelectric projects located on two existing dam sites on the Hudson River--the Northumberland project and the Waterford project. The Northumberland Hydroelectric project, when completed, will generate 48 million kilowatt hours of electricity while the Waterford Hydroelectric project will produce 42 million kilowatt hours. The development of these two dams will provide a clean alternative energy source. In addition, the construction and operation of these projects will provide jobs for this upstate region of New York. As many of my colleagues who are familiar with similar projects know, the Federal Power Act sets a time limit for the beginning of construction on a hydropower project once FERC has issued a license. Once a license is issued, construction must occur 2 years from the licensing date unless FERC extends the initial two year deadline. The Federal Power Act allows only one extension for up to 2 years. Failure to commerce construction within the time allotted opens the license to termination. In the case of these two projects, FERC has already extended the deadline--the Northumberland deadline is January 16, 1996, while the Waterford deadline is June 7, 1997. The bill that we are introducing today is identical to legislation introduced in the House by Representatives Solomon and McNulty. Both bills give FERC the authority to extend the construction deadline for each project for up to a total of 6 years. The current licensees for these projects are moving steadily toward development, however, they recognize that they may not be able to achieve their goals within the prescribed deadlines. By enacting this legislation, the extra time necessary to realize the potential of these projects will be granted. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, let me thank my colleague from South Carolina and my colleague from Utah. I wish to be able to proceed as if in morning business and not interrupt the flow of agenda, and I will attempt to make my remarks succinct.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, since February, I have repeatedly voiced my concern over the Clinton administration's bailout of Mexico. Today, I am releasing a comprehensive report and chronology of the Mexican economic crisis. Since January, the Senate Banking Committee has held three hearings to examine this crisis. This report and chronology is based on testimony from these hearings and from information contained in numerous internal administration documents. It brings together for the first time a full description of the United States Government's internal and external communications regarding Mexico. My office will have available the complete report and chronology. We cleared the releases and declassification of many internal documents for use in this report. It does not include or refer to any classified documents. [[Page S 9350]] It does include the background of the Mexican economic crisis; the administration's monitoring of the crisis; the contradictions between the administration's rosy public statements about Mexico during 1994 and the private, far more negative, views the administration and officials had; the failure of the administration taxpayer-funded bailout; and we conclude that the administration should not--the administration should not--send another $10 billion of taxpayers' money to Mexico. The report and chronology culminates weeks of work and a review of hundreds of documents and testimony. I appreciate the cooperation of Secretary Rubin and Chairman Greenspan in producing the documents used to prepare this report and chronology. Mr. President, on February 7, 1995, I spoke in this Chamber about the economic crisis in Mexico. I asked the question: What did the administration know about the situation in Mexico and when did they know it? After reviewing the information, the answer is clear. The administration's own records indicate that key officials, including Under Secretary Summers, knew about the deteriorated economic condition of Mexico as early as February 1994. Administration officials, however, repeatedly painted a rosy public picture of the Mexican economy. Again, sadly, this will appear as a pattern of this administration. It has a history of not leveling with the American public. This report and the chronology and the administration's own internal documents sadly demonstrate that this has taken place over and over and over again. The administration's repeat of public praise of the Mexican economy during 1994 stands in stark contrast to the looming signs of economic disaster reflected in internal administration documents. The underlying documents demonstrate that the administration was aware that Mexico was on the road to economic disaster, but the administration did not tell the truth to the American people. That was wrong. The administration did not tell the truth to the American economists. And that was wrong. The administration has placed $20 billion of American taxpayer dollars at risk to bail out the Mexican Government. The Mexican Government is using these dollars to reward local speculators who bought high-interest-rate short-term Mexican Government notes or tesobonos. The administration has already sent $10 billion to Mexico and beginning on July 1--July 1 we will be out of session--the administration will begin to send another $10 billion to Mexico. Now, Mr. President, the administration and the Mexican Government officials repeatedly assured Congress and the American people that the second $10 billion would not be needed this year. But again, they have a pattern of saying one thing and doing another, painting one picture and then discovering another. The Mexican Government financial plan expressly states, ``The second $10 billion of the U.S. Government funds is not''--is not --``intended to be used in 1995, but will be available for unforeseen contingencies.'' This Senator said a long time ago that you are kidding the people. That $10 billion is gone. The next $10 billion is gone. You will have the same disastrous result. The administration should not sink the United States and the American taxpayer any deeper into this Mexican quagmire. The first $10 billion has not solved the economic crisis. The only people who benefited are speculators. Global speculators, not the Mexican people, not the Mexican economy. In July and August Mexico faces a payment bubble of more than $6 billion to pay off tesobonos that are coming due. Now, where is that money going to come from? Guess. The United States taxpayer. That is where. The U.S. taxpayers' money to Mexico to pay off, who? Private speculators, private investors who bought high-risk, high-return investments. And now we are going to pay that off. The United States does not do that for our own citizens. Why should we do this for private speculators who support Mexican tesobonos? Mexico's basic economic problems have not been solved. It is clear that the administration's bailout has not benefited the Mexican people. The Mexican people are worse off because of the austerity measures demanded by the administration. Middle-class Mexicans and small business owners have been devastated. And in the past few months inflation in Mexico has skyrocketed to almost 80 percent. Mortgage interest rates have risen to 75 percent. Consumer credit card interest rates increased from 90 percent to 100 percent. The peso 6 months after the administration bailout stands at 6.28 to the dollar, still near record highs. Last month Mexican citizens and business leaders told the Banking Committee that the Mexican bailout is a failure and that the Mexican economy is in shambles. When the Clinton administration first tried to sell the Mexican bailout to Congress they told us they would commit $40 billion in loan guarantees to help Mexico through its short-term liquidity crisis. They reassured Congress that taxpayer funds would not be at risk. After Congress refused to support a bailout, the administration then unilaterally decided to give Mexico $20 billion through the United States exchange stabilization fund, an unprecedented and legally doubtful use of this fund. The problems with the Mexican economy are not new. They are well- known to administration officials. Throughout 1994, as the documents and the chronology demonstrate, over and over again, the administration officials were alerted to unmistakable signs of economic distress in Mexico. Yet throughout the year the same administration officials continue to issue glowing public statements about the Mexican economic condition and strong support for the Mexican economic policies. The record is clear. Let me give you a few brief highlights. On March 24, 1994, Under Secretary of Treasury Summers informed that the Mexican Government ``is looking for some comforting Treasury words to soothe the press.'' Secretary Bentsen then issued a statement saying: ``We have every confidence that Mexico is on the right economic path.'' Mr. President, clearly again, a pattern of the administration not leveling with the American people, not leveling with the Congress. In a news conference that same day President Clinton said, ``Mexico's institutions are fundamentally strong * * * they have a great future and we do not expect any long-term damage.'' Mr. President, clearly the statement is at variance with the facts in the record. Again, a pattern of not leveling with the American people. Again on April 26, 1994, Under Secretary Summers said publicly, ``Mexico is fundamentally sound and has a fundamentally sound currency.'' Earlier that same day however in an internal memo, the same day that he talks about a sound economy, a sound currency, Summers informs Secretary Bensten that the Bank of Mexico had been intervening to support the peso and that ``Mexico's dependency on the financing of its large account deficit from largely volatile investment remains a serious problem.'' Again, a pattern of deception of saying one thing when the facts are clearly different. Now, how can you come and say that the economy is fundamentally sound, publicly, when at the same time you are informing the Secretary of the Treasury that there are severe problems? In the fall of 1994 the Mexican Government policies were the cause of concern among administration officials. In an internal memo on September 27, Under Secretary Summers questioned the Mexican Government's decision to maintain a highly overvalued peso. And November 18, 1994, another Treasury Department memorandum discusses the weakening of the peso and that Mexicans commitment of their dwindling resources to prop up the peso. Nevertheless, on the same day, the United States Ambassador to Mexico, Jim Jones, told a group of American investors that those journalists who were predicting financial problems in Mexico were alarmists. Again, a pattern of deception. Just wrong. Just wrong. Despite the administration's obvious internal concerns and knowledge, on November 21, 1994, Under Secretary Summers said ``Mexicans would very much like for Bentsen to make a statement today.'' Summers told the Secretary that he ``has worked out'' a proposed press statement for him for the [[Page S 9351]] Government of Mexico. Why were officials of the United States Government working on public relations for the Mexican Government, and I might add, putting out false information, aligning themselves to false information being circulated? The letter to the Washington Post, my colleagues, Senators Specter and Kerrey, advised, ``We believe--based on a reading of United States analysis since last spring, that policymakers were adequately forewarned of Mexico's declining financial position and of domestic political pressures that made it difficult for the Mexican Government to take timely action in the economic sphere.'' Mr. President, internal administration documents make clear that Under Secretary Summers and other treasury officials were not forthcoming to the Congress and the American people. I agree with A.M. Rosenthal of the New York Times who wrote on April 4, 1995, in a column entitled ``Cover-Up Chronology,'' ``Real concern for Mexico would have meant public warnings from Washington as soon as trouble was discovered. Legitimate confidentiality does not include deceiving the world.'' I think that bears repeating: ``Legitimate confidentiality does not include deceiving the world.'' That is what we have a pattern of, deception. There are vital lessons to be learned from the handling of the Mexican crisis. The American people and their elected representatives were entitled to the truth about Mexico's precarious and deteriorating condition during 1994. Mr. President, the official reports by the Mexican Government and the positive public statements made by the United States administration were completely contradictory to the true condition of Mexico's economy. The American taxpayers should not be forced to bear further financial risk. U.S. dollars should not be used to bail out private investors who gambled on high-risk, high-return instruments. We should not be sending another $10 billion in American taxpayer dollars based upon a web of half-truths, distortions, and concealments. That is wrong. The American people have a right to be outraged that their tax dollars are going to bail out local speculators and not improve the plight of the Mexican people. Congress should be outraged as well. Mr. President, I thank my colleagues for giving me this opportunity to make this report to the American people. I yield the floor. Mr. HATCH addressed the Chair.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I move to reconsider the vote by which the motion to lay on the table was agreed to.

Mr. D'AMATO. Mr. President, we have heard a lot said about this bill. I want to first commend Senators Domenici and Dodd for their stewardship. Senator Domenici outlined how he detected a system that was more interested in making huge profits for lawyers and not give a whit about the so-called victims. In many cases, there were no victims until the small investors, people who had invested in companies that these lawsuits were manufactured against, became the victims. Let me tell you about the people who brought these suits. About 30 percent of these suits were brought by one law firm--by one law firm. They went out and they hired their plaintiffs. Sixty-five plaintiffs appeared in two cases, 12 plaintiffs appeared in three cases, 3 plaintiffs appeared in four cases. They appeared to get their bonuses, $10,000, $15,000, $20,000--and by allowing their names to be used these plaintiffs allow the lawyers to race to the courthouse. Let me tell you what this bill does. It ends the use of professional plaintiffs. I have not heard anybody say anything about that. It forces lawyers to work for real clients. We say the pension funds, the little guys who have invested in them, they should select who the lawyers are. This bill will empower courts to weed out frivolous cases. It gives defendants the leverage to fight cases when they did nothing wrong. Now they cannot fight, they have to surrender, otherwise they are hit for millions of dollars in costs or damages, so even if you win you lose. S. 240 will require accountants to report fraud to authorities. Nobody says anything about that. It gives the SEC the ability to go after bad guys, a power which they do not have today. It will get more information to investors by making it so that people can make projections without being sued. It is a good bill, and it is long overdue. We would rectify a terrible situation that exists at the present time by passing this bill. Mr. President, I urge the adoption of S. 240. I yield back the remainder of my time. Mr. President, I ask for the yeas and nays.

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

Mr. D'AMATO. Mr. President, I send an amendment to the title to the desk and ask for its consideration.

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

Mr. D'AMATO. Mr. President, I ask unanimous consent that S. 240 be placed back on the calendar.

Mr. D'AMATO. Mr. President, I would like to take just a few seconds to thank a very dedicated staff. Laura Unger, for the dedicated job she has done in a very complex bill--really, without her work, not only during the process on the floor but in committee, we would not have had this legislation. And our staff director, Howard Menell. Let me also say it was a pleasure working with the ranking member, Senator Sarbanes, handling a complex piece of legislation like this with a divergence of opinions. I think we demonstrated the process can work when people are willing to work at it in good will. Notwithstanding differences of opinion, I could not ask, I think, for fairer debate, et cetera, as we tried to keep this moving. So I thank my colleagues. And certainly Senator Domenici and Senator Dodd did an excellent job on this bill, bringing it to the point we could bring it to the floor. I yield the floor.

Mr. D'AMATO. Mr. President, I yield 5 minutes to the distinguished Senator from Utah.

Mr. D'AMATO. Mr. President, I yield 4 minutes to the Senator from New Mexico.

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

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

Mr. D'AMATO. Mr. President, I yield 5 minutes to the Senator from Connecticut.

Mr. D'AMATO. Mr. President, I move to table the Specter amendment, numbered 1483, and I ask for the yeas and nays.

Mr. D'AMATO. Let me say, first of all, insider trading is prohibited by section 10(B) and rule 10b-5 of the Federal securities laws. What this amendment does is destroy the safe harbor, absolutely destroys it. Any small company that pays a director with stock options will be effectively excluded from the safe harbor. All the plaintiff would have to do is allege wrongdoing to bring a suit, which will open up this whole area to continued litigation. This is a carefully crafted amendment which would destroy what we are attempting to do, which is to free corporate America from a group of bandits. Mr. President, I move to table, and I ask for the yeas and nays.

Mr. D'AMATO. Mr. President, I yield 1\1/2\ minutes to the Senator from Utah.

Mr. D'AMATO. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 1480

Mr. D'AMATO. Mr. President, if we are going to talk about the securities industry we should talk about its role in capital formation, in fact the securities industry is an integral part of the American system--and that system is now being ripped off. As a matter of fact, one law firm does handle about 30 percent of all this litigation. They go out and hire plaintiffs, they have lists of plaintiffs to chose from, and then they race to the courthouse. Let me tell you, once they bring the suit, firms feel they have to surrender. In 93 percent of the cases brought, people give up. Do you know why? Because the average case costs you $6 million to defend; so even if you win you lose. So the defendants are forced to settle before costs get too high. The people, the small investors get nothing back. The law firm rakes in the settlement. No wonder the lawyers want to keep the system the same. Now, let me tell you something what this legislation says on staying discovery. When a person makes a motion to dismiss, ``discovery and other proceedings shall be stayed unless the Court finds, upon the motion of any other party, that particularized discovery is necessary to preserve evidence.'' So you can stay discovery unless the court rules against that motion. If you cannot stay discover, however, then they are in there fishing, fishing, fishing, until they find any piece of evidence to force corporate America to give up, to surrender. The little guy is not protected by this process. The interest of a group of entrepreneurial lawyers is advanced. This amendment would continue that system and let those lawyers continue to go out fishing and keep corporate America held hostage. It is about time we freed them. Mr. President, if all time has been yielded back, I move to table, and I ask for the yeas and nays.

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