Alfonse D’Amato

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I am going to keep my remarks, as I have indicated to the chairman, to a minimum. I am compelled to respond. No. 1, the question in terms of relevance. I think it is absolutely, totally relevant. Here we are talking about--as the Senator from Massachusetts raised--the issue of cutting programs for women, children, and others. And I am saying, what about the American taxpayers? What about the hard-working middle class? We are sending money to programs of dubious value, reclaiming tesobonos for speculators, for people who made investments, which does not seem to me to be the right way to go. As it relates to the question of $5 billion, I deliberately kept it that high. Let me tell you, in the history of this fund, never once has it gone over $550 million for any other country other than Mexico. Not Israel. Not Italy. Not Ireland. Let us bring in Greece and every ethnic community there is, including Russia. Not once. Mexico, one time, $1 billion. Only Mexico. So we went to $5 billion. Now if we want to make it Mexico specifically, I have no problem with doing that. The principle is whether or not this is a delegation of our constitutional authority. That is what we are down to. I am more than willing to put the matter over. But in terms of relevance, I think it is very relevant. Here we are cutting 12, 14, 17 billion dollars' worth of programs, and some of them arguably are good programs. Yet, we are shipping off at the same time, watching it take place--by the way, in several weeks, maybe another $5, $6, $7, $8 billion will go down to Mexico. So I am saying, hey, fellows, let us look at this. Members of the Congress, let us look at this and see whether we want to continue the delegation of our authority in this matter. I yield the floor.

Mr. D'AMATO. Italy.

Mr. D'AMATO. Is that for a question, Mr. President? If it is not, I will object.

Mr. D'AMATO. Senator Dodd had the floor.

Mr. D'AMATO. Mr. President, first of all, I do not recall having used the word ``illegality.'' I used the word ``circumvention.'' I certainly think that is appropriate, and I certainly think that is exactly what has taken place. I have used language in terms of the abdication of our responsibility, and I believe that to be the case. The fact of the matter is we are talking about spending $20 billion plus. The fact of the matter is this is foreign aid, and it is a loan, and there is a real question as to whether or not those loans can be repaid. If careful reading of those memoranda of law that have been submitted justify and give to the administration its ability to go forward and is the basis, it really talks about that on page 6. It says: Although loans and credit are clearly permitted under ESF, their purpose must be to maintain orderly exchange arrangements and a stable system of exchange rates and not to serve as foreign aid. We may begin splitting hairs, but let me tell you something. When you are paying off the obligations of banks, when you are paying off the obligations of a government, you are going far beyond just maintaining exchange stabilization rates. If anybody wants to say they know we are going to get paid back, that is wrong. Indeed, that is why they set up the collateral system. Indeed, when one begins to examine and look at the nature of that collateral system, there is no lien on that oil. And if there is a default, those revenues that are in the bank at the time can be utilized, but let me suggest they are not going to be nearly sufficient to cover the kinds of defaults as we get deeper and deeper into this with loan repayments not scheduled in some areas for 7 years out. Look, it may very well be there is no better option. I doubt that. When the question is raised, ``Do you have a plan?'' we put forth an idea. The administration rejected it. We had hearings. We had hearings where Mr. Perl testified, where Bill Seidman testified. We said we will get involved in some workout. You just do not pay people dollar for dollar. You come in, here they are. Let me read what Tom Friedman, New York Times, March 8, 1995, wrote. It is very, very interesting: that has happened is that the foreign bondholders are cashing in their bonds. That is what they are doing. They cashed them in. And where do you think the money came from to guarantee the repayment, to get them the repayment? Plus they got all their interest. Nothing renegotiated; nobody said to them, ``Listen, we will roll this over for 10 years.'' That is how you do it. You want to say I am micromanaging? We brought this to the attention of the administration, the Banking Committee, and asked them why, long before this. It is not just 7 weeks have gone by and there is a wonderful plan. It is 7 weeks and $5 billion of American taxpayers' dollars. Now Congress has an obligation to look and see what is taking place down there--everybody. You are happy with what is going on? Then go ahead and vote no. If you believe that we are engaged in a plan that will achieve economic stability for Mexico, that is being administered correctly, that will bring about the desired results for the United States as well, then fine. I have not seen it. I know the printing presses are still turning out pesos. I know the political stability necessary to carry out that kind of plan never can work. Do you think people are really going to continue to sit back and allow interest rates at 80 percent? Cannot pay their mortgages? Banks being run out of capital? Do you think this is going to work? What kind of idea is this? And the printing presses turn it out. The pesos are still coming off the mill. But we are not supposed to raise anything because, you see, then you will be accused of being the person who blew up the economy of Mexico. I did not do it. This Congress did not do it. The American people did not do it. And by sending $20 billion plus down there we are not going to rescue them, save them. It was like the fable about the king who had no clothes, no suit. It took a kid saying, ``You have no suit.'' Everybody was around saying, ``Hurray, hurray.'' They were all afraid to say the king had no suit. We are all afraid to say this program is not working. You have not demonstrated it and we have an obligation to see it, to know how these dollars are being spent. We do. We have an obligation to see whether or not this plan is going to work. I have not seen that proof to date. I do not insert myself in here lightly. I waited and I waited. I wanted to offer legislation prior. I have not seen anything, but I have learned things that are very distressing. I learned that the so-called underlying collateral may not be there in sufficiency to see to it that we can assure this revenue stream. I have seen that the people of Mexico have said, ``Over our dead body are you going to take our oil.'' I have seen the public relations and the polls, as it relates to the people of Mexico, blaming us for their catastrophe. Look, this is a tough problem, but I do not think we are going about it the right way and I do not think we have the right to delegate our authority. That is what we have done. We put our votes, as it relates to appropriations, in a blind trust and have given it to the administration. If we want to do that, let us vote to do it. That is really what it comes down to. I am not accusing people of illegality in the sense that we normally use that word. But I am saying it is an abrogation of our authority, and I am saying we have an obligation to either vote for or against the methodology in which we are proceeding in Mexico. I yield the floor.

Mr. D'AMATO. Mr. President, I in no way dispute the fact that there were negotiations held by the administration, I think in good faith, with the leadership of the Congress and indeed with the Congress. The fact is, they could not build a consensus. The fact is that the congressional leaders, notwithstanding their readiness to help--and, indeed, on January 11, I did indicate that we must help Mexico stabilize the peso, the peso, to renegotiate their debt. And I say to renegotiate their debt. I have never believed that we were going to pay off everybody dollar for dollar, speculators, investors, without knowing who they were, just to turn it over to them and say, ``Here, come on in to renegotiate this debt.'' A guy has a bond that is coming due, and we come in and give him everything, dollar for dollar? That is not renegotiating a debt. Is that the way we manage the money of the people? I daresay, the impressive list of names who said yes, we have to help, all of them that were read--impressive. Is that what they would have done if they were representing their interests, their economic interests? Is that how they would renegotiate a debt? I do not think so. My colleague, Senator Faircloth, has pointed out to me that not one of them would sign a note. Would they sign a note under these terms? I do not think so. It is wonderful to say we want to help our neighbors. And, yes, I did send this--and I support it--January 11. And I said, because it is a long-term investment in growth that will improve the quality of life of all Mexicans and, by extension, the quality of life here in America, this Senator went into this with an open view, as did Senator Dole. Let us talk about what Senator Dole did a month ago, because he was concerned. He was concerned in terms of how his initial readiness to come to the support of his country, in doing what was right, and his President--and it is our President. In a letter dated March 10, he said: ``My good-faith effort in January''--and I am reading parts of it; I will put the whole letter in the Record. My good-faith effort in January to cooperate with the administration in no way should be interpreted as any protection from legitimate and responsible congressional oversight. Congress and its committees have every right, and the constitutional duty, to examine it thoroughly. He said very specifically on January 31: In an effort to avoid the complete financial collapse, I participated with other leaders in a statement supporting the President's use of ESF. However, this expression was not intended and should not be construed, to convey my blanket support for the underlying policies of the administration or for the economic and legal agreements that the administration will enter into. To the contrary, I reserve these judgments, and I have since cautioned the administration to be careful in its use of ESF. I have expressed deep reservations about the shortcomings of the agreement. That was March 10. This is from February 24. I will read into the Record what Senator Dole said from part of the Congressional Record: The primary focus of the stabilization plan is not aimed at reversing the fundamental mistakes of devaluation--not now and not over time. The measures described in the agreement to firm up the price of the peso seems almost an afterthought. He is being critical of what the administration was now telling him. It is one thing to say we want to strengthen the peso, give them an opportunity, give them a term to convert their short- term debt, to restructure. And then to hear they are just paying off this debt. They are paying this off. They do not address the problems of extinguishing-- This is Dole-- The excess pesos that have been coming off the Mexican printing presses even as recently as last week. The heart of the problem is the Mexican Government was printing up pesos. Sure, you are going to devalue it. Those printing presses are continuing today. Who is benefiting? The Mexican people are not benefiting. I would not brag that we have increased the consumption tax on working people, poor people in Mexico, by 50 percent and increased the energy tax on the Mexican people. They hold us responsible. I want to know how that helps us. Let us not take the fact that the congressional leaders were willing to undertake and say, yes, Mr. President, go forward. Now 60 days have followed and what have we found out? We know that $5 billion has been spent. We were told initially that this plan would not necessitate our putting out any money. And indeed, Alan Greenspan said, ``If you have to draw down our money, the plan is not working.'' I am suggesting to you now that the plan is not working. They are drawing down on U.S. money. Let us look at what this bill does. This bill does not say you cannot help anybody else to stabilize their dollar. I think, by the way, that goes beyond what was intended. I am not going to debate that. It says you can only do it to the extent of $5 billion. I hope that, later on, we will reexamine that, because I think $5 billion gives far too much authority to the administration, to the President, utilizing it as he has as a foreign aid package or as a loan package in contravention of the law. Again, we have an obligation. Let me say, whether or not the leaders have agreed and said, ``Yes, we support you,'' they do not bind us. Congress has to vote, with all due respect. Senator Dole is a colleague and a friend whose opinion I value. But he went on the record and said, listen, you are not doing what you told us. You are not doing it. You are not extinguishing those pesos. The printing presses are still rolling on. Let us not abdicate our responsibility. In the next several weeks, another 30 days, there will be x number of dollars committed--another $3, $4, $5 billion--and we have reason to believe it is in that nature and it is going to be invested. I have to tell you that I did not put my vote into a blind trust based upon good will. And when we examine the good will, we find absent the facts that would have any prudent person making this kind of investment. I daresay it is pretty good for some people as respected economists, former officials, to say they would advise that the United States do this. But it is not their money. It is easy to be frivolous with other people's moneys--taxpayers' moneys. That is what is taking place here. So, the fact of the matter is, I could not care a whit if, at some point in time, the leaders of the Congress said, ``We will let the President handle this; he will sink or swim on it.'' I think it is more important, and I think the Constitution of the United States is important, I think the delegation of our authority--everybody here knows what is happening. Do we want to delegate our authority? Are we saying that, for all times, whoever is the President, he or she does not have to come to the Congress with this kind of appropriation that will mean $20 billion? In a rescission bill, we are looking to cut $13 or $14 billion. Here is $20-plus billion with no congressional approval. Oh, yes, the leaders came together and said, ``We think it is a good idea, and, by the way, we do not want our people to have to vote on it, so you go ahead and do it.'' Does that absolve us of our responsibilities? Is this weighty? Sure. I know I am going to be savaged and pilloried. The investment houses are going to be up there beating me up, saying, ``It is the Senator's fault.'' I did not create the corruption in Mexico or the devaluation in Mexico. I did not make the megabillionaires down there. I did not create that aristocracy that has robbed from the people for years and years. I did not create the myth that Salinas was a tremendous leader. We were told that for years by administration after administration. They said he is terrific. What terrific? His brother is involved in a killing. His Deputy Attorney General is running away with $24 million in the bank. Drugs are coming in here at unprecedented rates. Sixty percent of the narcotraffic is coming in from Mexico. The son of the former Agriculture Minister, a billionaire, is dealing in drugs. What is going on? They say, if it collapses, they will blame you. It has collapsed. It has collapsed. When you talk about a rescue of the market that goes up 10 percent--10 percent from what? From the bottom, from the floor? It should go up. The dummies up north are sending the money in. Do we know who we are helping to restructure the debt? No. What kind of restructuring is this? Did you take Senator Dole as saying we want to help and we understand the importance of Mexico strategically as an ally in our political hemisphere with the borders we share and the commonality of interest, our desire for freedom, and you do whatever you want? Oh, no, nobody assigned that. Senator Dole or Congressman Gingrich did not assign that. Ultimately, we have a responsibility, whether we like it or not. We better well vote on this, one way or the other. If you say that you are happy with the administration, with what they are doing in committee and you want to delegate your authority, then, by gosh, vote against this. If you say, I do not want to be responsible because they will blame me for the collapse, that is up to you. The fact of the matter is they have collapsed. The people of Mexico are angry at the United States and at their corrupt government. If Zedillo is as good as people say, let us work with him. Let us not give a blank check, as we have and as we are. Those conditions do not meet what is merely necessary. Can you imagine we take pride in the fact that Mexico, as a result of the loan we made to them, increased their tax by 50 percent on consumption? They increased their prices for energy to the poor. They brought in wage and price controls in certain sectors. Terrific. That we should be happy for? The people already have taken billions of dollars, in terms of those notes, the tesobonos, and European notes; they have come in and gotten all of the taxpayers' money, plus 20 percent--in some cases, 25 percent--and we do not even know who they are. How did that benefit the Mexican people? I want to know. How did that benefit the workers when these foreign speculators came in, took their money, and left? How did that keep Mexico and its economy from collapsing? There is some report that says the congressional leadership breathed a sigh of relief. Is that why we are sent here? Is that why we were sent here? To duck our responsibilities? When we know darn well that the carrying out of this loan promise, as it is being done, violates the law, that it is being done in circumvention of what we, the Congress of the United States--not the leaders of the Congress, plus the administration plus the President, but the Congress of the United States has the responsibility as it relates to the authorization and appropriation of money. money shall be drawn from the Treasury but in consequence of appropriations made by law.'' I yield the floor.

Mr. D'AMATO. Mr. President, the fact of the matter is the article goes on to talk about how the Mexican people are feeling toward Americans, and the great pain. There are other articles that in graphic detail talk about the incredible burdens as it relates to the interest rates that now have gone up on small business owners, on the homeowners, on the savage price they are paying. While we may be attempting to help our neighbors to the south, we have enraged their citizens. While we may be well-intentioned, what we have done is seen to it that a select group of investors have been bailed out. They have been bailed out by the American taxpayers, by the Mexican people, who resent our intrusion. They have every right to resent that intrusion, given the sorry, dismal performance of their Government in giving out laudatory expressions over the past years, going back to past administrations, that had the United States believe that Mr. Salinas and his people were the answer to all their problems, and represented, truly, free markets and democracy, when that was, obviously, now, a myth. Mr. President, I see my colleague on the floor who wishes to make his statement. I yield the floor. Mr. SARBANES addressed the Chair.

Mr. D'AMATO. Mr. President, I see that a number of my colleagues who may share a difference of opinion on this are on the floor and if they wish to speak, I would be happy to yield the floor. I ask unanimous consent that an article from the Wall Street Journal, entitled ``Americans Grow Ugly in Mexicans' Eyes,'' dated March 21, 1995, be printed in the Record.

Mr. D'AMATO. Mr. President, I thank Senator Faircloth not only for his support and cosponsorship of this legislation but for his persistence in asking for the facts. Mr. President, I prepared a statement and I am going to stick to it and read it at this point. The Mexican bailout is a failure. The rights of the American people have been ignored and disregarded. Might I add, I also believe the rights of the Mexican people, who we claim we are interested in, have been injured as well. People of this Nation clearly do not want to send $20 billion to Mexico even when there are the implied threats that there will be huge immigration masses illegally coming across our borders. The administration and the President have arrogantly disregarded the men and women of America. They have gone around Congress. The President took money that was supposed to be used to stabilize the American dollar, and we are giving it to Mexico, make no mistake about it. We are never going to get this money back. And the question as to the use of this money is a very real and legitimate question that should be answered. Who are we bailing out? The President has rewarded a corrupt dictatorial Mexican regime and saved global speculators from massive losses. Already, $5 billion--$5 billion--of American taxpayers' money is gone. Yesterday, the Mexican market still fell. The collapse of the Mexican stock market continues unabated. It was a terrible mistake for the President to use $20 billion of the exchange stabilization fund. That fund was intended to stabilize and to protect the American dollar, not the peso. This is an outrage. It is shocking. It is wrong. The President has made conditions in Mexico worse for the Mexican people. Just think of it. The $5 billion already sent to Mexico has been used to repay the Mexican public debt to bail out currency speculators and Mexican banks. American taxpayers should not have to repay Mexico's public debt and prop up Mexican banks. And that is exactly what is happening. Never before has an administration or an American President taken such large amounts--$20 billion--from our economic stabilization fund to bail out before has an administration sent more than $1 billion or used more than $1 billion from the ESF fund for a foreign country. Never before has a President given a loan to a foreign country for more than 1 year from this fund. He should not give a loan at all. That is illegal. But the administration has ignored precedent and did an end-run around the Congress. He has given the Mexican regime a line of credit from the ESF for 5 years, and in some cases up to 7 years. That has never been done before. It is totally unprecedented. It is wrong. Even the Treasury Department recognized that the ESF may not be used for foreign aid. In an opinion to Treasury Secretary Robert Rubin, the general counsel of Treasury advised, and I quote from page 6: Although loans and credits are clearly permitted under the ESF, their purpose must be to maintain orderly exchange arrangements and a stable system of exchange rates, and not to serve as foreign aid. This is clear. ESF money cannot be used as foreign aid. And that is exactly what is taking place. Treasury also admits that ESF may not be used if American taxpayers' money is at risk. I want one person to tell me that the American taxpayers' money is not at risk. No one can say that. Treasury officials cannot say that. They cannot say that privately, they cannot say that publicly, that the American taxpayers' money is not at risk. Now that is the law. That comes from their interpretation. Treasury admits that ESF may not be used if American taxpayers' money is at risk. Now, Mr. President, we have to be kidding ourselves if we are going to be saying that that is not the case. We have been told that Mexico has pledged its oil reserves as collateral for repayment. But Mexico can shut off the oil. And, the Mexicans can sell it elsewhere. The bottom line is that we have no real assurance that America will be repaid. What will we do? Will we send in the 82d Airborne to collect our money if they default? Are we going to seize the oil wells? Are we going to prohibit them, somehow, from an agreement that is made with one administration today with another administration down there tomorrow if they decide, when interest rates at 80 to 100 percent are forcing a revolution, that they can no longer continue this austerity program? Imagine what the middle class is doing and saying right now. How long do you think they can maintain this austerity program? And this is the only chance they have to make it. So what happens when they say, ``We cannot meet these onerous repayment schedules''? Are we going to cut off all their foreign aid? Are we going to seize all the money that comes through the Federal bank in New York? For how long? How long before they make a new arrangements for the sale and disregard the fact that money was supposed to go through the Federal bank? Are we going to sue them? Are we going to get judgments against them? If you are going to do that, they will sell their oil abroad. If you take a man's life away from him, you take away his ability to make a living, he will stop working, and that is what they will do. You do not think that they are just going to pump oil for the sake of paying this debt if they need the money? It is preposterous. Mr. President, given the unprecedented size and scope of the President's bailout, it is clear to this Senator, and to a dozen others who have cosponsored this legislation, that it is foreign aid for Mexico; that it is making a loan and, indeed, a loan which is not sufficiently collateralized, and that there is a good chance American taxpayers will suffer. And, giving Mexico $20 billion of American foreign aid without congressional approval is wrong. Giving them $5 billion without congressional approval is wrong. Giving them $1 billion is wrong. But this Senator said, ``All right. You have given them $5 billion. Let us hold it. And if, indeed, you can make a case to the American people, to the Congress, that they should continue to get aid, they should continue to get support, then let us have that legislation, let us have the ability to review how those dollars will be used, for what purposes, who will benefit.'' And that is the reason this Congress should be brought into this process. It happens to be the law. As elected representatives of the people, the Congress must approve the appropriation of taxpayers' funds. It is our constitutional duty. Instead of allowing the free market to decide Mexico's fate, the politicians in Mexico City and in Washington misled the markets. All during 1994, the administration told us that the Mexican economy was a model for the free world. We supported Mexican President Salinas' candidacy to head the World Trade Organization. President Clinton praised Mexico at the Summit of the America's, just days before the devaluation of the peso in December. This administration has made the situation in Mexico far worse than it needed to become. The peso will rise and fall because of market forces--free market forces--and not because $5, $10, or $20 billion in American taxpayers' dollars goes south of the border. What is going on in Mexico rivals any soap opera. There were reports of rampant Mexican corruption and collusion with drug traffickers. The former President of Mexico has left the country; his brother is under arrest for masterminding a political assassination. The Mexican Army is fighting rebellion in the southern region. The peso printing press is still continuing--as we talk, they are printing pesos--and the peso continues to fall against other currencies, taking the dollar with it. The inflation rate in Mexico is almost 70 percent, and bank interest rates in some cases are close to 100 percent. Mr. President, where is the voice of the people? Do the people want us to make a loan in this situation? We have an obligation--a duty--to bring this issue into the light. This Senator will not just stand by and allow this obligation to be buried under political considerations. Maybe President Clinton does not understand that hard-working American people do not want their money being used in this manner, but I do. I was sent here to fight for them--not the international speculators, not corrupt foreign governments, as nice as we want to paint a coat of fresh paint on them to dress them up. If this administration truly wants to help Mexico, we should do so by demanding fundamental free-market reforms. The first thing the Mexican Government can do, if it wants to pay off all its debts, is privatize PEMEX, the Mexican national oil monopoly that has been used as a Mexican piggy bank for corrupt officials year after year after year after year. You have a former agricultural administrator, the Secretary, just retired there. He is a billionaire. He earned $50,000 a year, yet he is a billionaire. And his sons are tied to drug dealings. Sixty percent of all the drugs that come into this country in terms of cocaine are from Mexico as a transshipment place, from top to bottom filled with corruption. Do you think they are going to treat our money like it is their own? They will take their cut. They will treat it like their own. They will make it their own. Incredible. Let the Mexican Government eliminate wage and price controls. Let them see to it that they do not impose false and arbitrary standards. Let them clean up the corruption that is destroying their country and the ability of their people to believe in it. We should not make ourselves the international welfare house, certainly not on this scale. Welfare has failed dismally in those countries in which we have made it the cornerstone of our policy. When will we learn? The road to economic growth is less government, not more government. Let us do the people of Mexico a favor. Let us demand free market reforms. Let us not get into the business of international welfare. Now, when Congress must cut domestic programs to balance our Federal budget, is not the time to send $20-plus billion to Mexico. We cannot afford to be Mexico's banker. The ESF is not the President's personal piggy bank, and it is our duty to protect American taxpayers. Who will bail us out if the dollar continues to fall? The Japanese? The Germans? The Mexicans? I doubt it. American taxpayers. So today, on behalf of the hard-working men and women of America, I have offered this legislation. This legislation reasserts Congress' rights and responsibilities with regard to this matter. Some of my colleagues may not be happy with this, but I think it is their obligation. They have an obligation to vote ``yes.'' If you believe that Congress is ultimately responsible for the appropriation of funds, you have an obligation to vote ``yes'' if you think these funds are not being used appropriately. On the other hand, if you think that the administration is correct under the law; that these funds can be used for this purpose; that these funds are not being made as foreign aid; that these funds are not being made as a loan which may not be repaid, or is in jeopardy of not being repaid, then vote against this. My bill would amend the ESF statute to provide--I think it is far too generous, but to deal with this situation, I have limited it to $5 billion. I think it should be much lower than that, a lower floor; but the President cannot give a foreign country in excess of $5 billion without congressional approval. I think that is reasonable. Some have said that I should not introduce this amendment. But I say let us look at the facts. Mexico is in a quagmire. And American taxpayers have been drawn into the quicksand without any authorization by their elected representatives. The only long-term financial commitments being made in Mexico right now are being made by the United States of America, using American taxpayer money without their consent. We have dragged in an unwilling IMF and an unwilling World Bank. That is not right. If my colleagues think this bailout is appropriate, then let us vote on the record. It is Congress' constitutional responsibility to determine whether to send American tax dollars to a foreign country. We should use the $20 billion that the President has sent Mexico, or intends to send Mexico, to help balance the Federal budget. I would rather spend the money to help New York, Orange County, or the District of Columbia, and whatever is left over, use it to reduce the budget, which is far more appropriate. Congress could approve more than $5 billion in aid to Mexico. But if so, let us do it the right way, in the open, on the record. It is not good enough to say, well, we have congressional leaders who have approved. That may be, but that is not the full House, and that is not the full Senate. I am tired of hearing that. I am tired of hearing, oh, well, the leadership agreed. Yes, they agreed in good faith. I do not think good faith was kept with them. They were not told how these dollars were going to be used or about the implications in terms of the interest rates that would be imposed on the Mexican people. They were not told about the ability to repay. I was there at the last of the briefings when the Chief of Staff came in from Mexico to the President. He was honest. I have to tell you, he shocked me. I was skeptical up to that time. After he finished briefing us, I said, there is no way this works. I felt sorry for him because at least he was honest and told us the problem: 70 billion dollars' worth of short-term debt coming through within 12 months. Let me tell you something. You do not stop $70 billion with all of the financing that we have talked about; it is insufficient. They can roll it over and roll it over, but you have to pay it back. The interest rates are going to be higher, and there is going to be less investment in there. You are going to have more money flowing out. Oh, for the short term you will keep it and make this mirage and things will sound better. But that is not right. Mr. President, I submit that Congress must have the final say on spending of taxpayer dollars on foreign aid or foreign loans. We owe it to the hard-working men and women of this country we represent to stand up and do what is right. Sometimes it may take some political courage. We are the Senate of the United States. We have a responsibility to the people of the United States. We cannot be cowards. Now is the time for action. I urge approval of this amendment. I yield the floor.

Mr. D'AMATO. I thank my friend and colleague from Alaska for really I think focusing in on the central theme. We talk about free markets. We are not allowing them to work. Then we come in and we pledge United States taxpayers and Mexican taxpayers to bail out unknown speculators, unknown investors. I would like to know who they are. And in contravention of the statute of the Constitution which says that elected representatives of the people of funds, it is our constitutional duty. It is spelled out in article I, section 9 of the U.S. Constitution. It says no money shall be drawn from the Treasury but in consequence of appropriations made by law. That exactly is not what is taking place. Mr. President, I see my colleague from North Carolina is here. I know he has a statement. He is a cosponsor of this legislation. So I am going to yield the floor. Mr. FAIRCLOTH addressed the Chair.

Mr. D'AMATO. I believe the Senator is absolutely correct. It is foreign aid when we become involved in not short-term propping up of the currency for 3 months or 6 months, which was traditionally used, and it is questionable whether or not it was ever intended to prop up foreign currencies. But if you want the argument that it helps us and that it helps our own currency fund, never before have we made a loan under a situation which has gone beyond a year, and in that one case we went the year. That was Mexico; in no other case. Once again, back in 1982 we participated to the extent of $1 billion. We are now talking about $20 billion. I think the Senator from Oklahoma is absolutely correct. We are not talking about $20 billion. We are talking about $20 billion from the ESF fund, we are talking another $20 billion from the IMF fund, another unsubstantiated participation in the World Bank. We are talking about other economic swaps. We are talking about closer to $40 billion of taxpayers' money to maybe drawn down on.

Mr. D'AMATO. To a very limited extent there has been some participation in this area. One country I believe joined with $3 billion as it relates to short-term--very short-term--credit swaps. They have not been engaged in a massive kind of relief effort that we are involved in for loans up to 7 or 10 years. Then, of course, through their participation through the International Monetary Fund, which in the final analysis we will be called upon to help replenish--this is not just a $20 billion bailout. This is $20 billion plus the participation we owe the IMF, plus whatever it might be from the World Bank. So with the exception of some limited credit swaps, there has been no kind of coming forth on the scale of the magnitude which have been expected.

Mr. D'AMATO. Production is in decline, and no one is going to give them the capital to get their production up because it is run by who?-- a bunch of robber barons, a corrupt government.

Mr. D'AMATO. Absolutely not, notwithstanding every dollar that is supposed to go through the New York Fed as it relates to foreign imports. The fact is they are using these dollars. They desperately need these dollars now for their economy to support their social programs, and to support their other programs. The fact of the matter is that their exports are going down.

Mr. D'AMATO. And who would benefit. I say to Senator Murkowski, you never really did a finer job than bringing us right to the essence of this. What kind of free market are we talking about when the people who invested in the free market system had the Mexican people in Government, and the U.S. people in Government, guaranteeing their investment? That is not a free market system. You invest; you take a chance. You win or you lose. You do not have the Government coming to say we are going to bail you out. And that is what we are doing. By the way, to get the facts is incredible. Do you think it is easy to try to get the facts from the administration as to what they are doing? ``Oh, we cannot tell you because if we tell you, they will have a thing and they will up.'' Or the tesobono will go down or the dollar will go even higher; the peso will go to even 7 or 8 or 9. The damage has been done. Let us wake up. You can just keep the charade up for so long. And after we pay off all the obligations and all the speculators, and all the people who invested get their money, what do you think is going to happen?

Mr. D'AMATO. No more, unless you come to the Congress. And then let the Congress have the courage, let them tell the American people why they are sending money, where they are sending it, and under what conditions they are sending it.

Mr. D'AMATO. Absolutely.

Mr. D'AMATO. Who have taken their money out. They are not going to be reinvesting. I think the Senator raised the point before. If you were a pension fund and you had invested $10 million or $1 million in these securities in Mexico, and now you got your money out, as a fiduciary-- or if you were a bank or, again, an investment advisor--under no circumstances would you be permitted, without exposing yourself to tremendous liability in terms of investing the dollars in that situation. That would not be the act of a prudent investment manager. So to hope you are now going to stimulate a recapitalization of Mexico with foreign dollars coming in is ridiculous. It is just not going to happen. However, Senator Murkowski is absolutely correct, people throughout the world are getting paid back on the moneys that they invested. We are paying them back, the American taxpayers. Look around: Working middle-class families, our farmers, our plant operators, our small businessmen--we are seeing to it that the people who invested in high risks, we are bailing them out. Terrific. Are the Mexican people saying thank you? They are not. I would not, if I were them. If my house mortgage went from 20 percent to 80 percent, who do you think I would hate? The banks that are collapsing down there? We are going to bail them out. You want to talk about a bailout--sure. So the German speculators, they were there; the Japanese speculators, they were there; the Wall Street interests, they were there--they got bailed out. Not the Mexican people. The economy is worse, much worse. Now they talk about, ``Don't worry, they are going to come across the borders.'' They are coming across the borders now. Every time we offer a bill on legislation or we fail to send money down, we are going to be threatened that we are going to be invaded? We are. Let us do a job. We have a job to do. Because the immigration people are not doing a job--this administration or the past one--adequately, do not come to the American taxpayer and add to it, compound it, hit them now with $20 billion. And this is just the beginning, and it is not going to work.

Mr. D'AMATO. As a matter of fact, tied to the repayment schedule, which they will never be able to carry out, has come the most austere measures placed upon the Mexican people. The Mexican middle class has collapsed. We are now viewed as truly the ``Ugly American'' in the eyes of the Mexican people. They are aghast at our intervention in their national sovereignty. And they happen to be right. It is one thing to help a neighbor in need. It is another thing to just simply take dollars, throw them down, and then tie their people, without the permission of their people, to the most incredible tax increases and interest rate increases, and create the business failures and collapses that will be blamed upon the United States of America.

Mr. D'AMATO. Not to its people.

Mr. D'AMATO. And other foreign investors.

Mr. D'AMATO. There is no doubt, Mr. President, that this is one that goes down in history as one of the most misguided operations to rescue the Mexican economy. It is not working. It is not working. Again, if we read the reports now, it is stabilized. The peso, at 6.7, approximately, to $1, where it used to be 3.5. It really has not recaptured any ground. It hit a high of 7. The fact of whether it is 6.7 or 8 or 9 is not in the final analysis going to rescue the economy. I will say, all the drums are already beating. My legislation, oh, horrible things--the Mexican economy has collapsed. The Mexican people have been injured as a result of what we have done. They hold us in disdain. We are in complicity with the group of corrupt politicians who have--we were sold a bill of goods about how great and decent and wonderful Mr. Salinas--how his administration was different, how free markets were working. I will say, the megaspeculator did well. The people in that government who sold out early in terms of the currency in the billions of dollars of currency transactions, they made out. I will say, that this administration, the President, the Secretary of the Treasury, withheld vital information and seduced the world and the American people into believing that everything was hunky-dory last year. Do not believe me, read the Washington Post. I will quote them. ``Despite warnings, U.S. failed to see magnitude of Mexico's problems.'' We not only failed to see, we covered it up. Now, it is one thing not to reveal the problems and the failings of an ally, particularly when so important, and it is another thing to be totally disingenuous and untruthful with the American people. Here we have, back in April, May, August, September, people in the administration, when they knew that there were serious problems, when the intelligence agencies of this country said, ``You got real problems there.'' policies of the Zedillo government, after he is elected--September, last year. In July and August, we had serious misgivings and warned--warned--the Mexican Government and officials that there were real problems. We knew what was taking place. We knew that there was a drain on the foreign exchange. But we did nothing. Yet, the Secretary of the Treasury, when he met with President Zedillo, said he supported his policies. In November, President Zedillo met with President Clinton and Secretary Bentsen in Washington. Nothing was said. In December, he is sworn in; December 9, the President of the United States touts Mexico. Listen to this. December 9--we knew that they were a basket case. The administration knew it. Do you mean to tell me the Secretary of Treasury did not tell the President of the United States what was going on? And they said--this is an article, not me, the Washington Post: President Clinton touts Mexico as a case study in successful economic development at the Summit of the Americas. This article was February 13, 1995. It is quite comprehensive. By the way, that was just less than 2 weeks before the Mexican Government then went through the devaluation, on December 20. So here we are, all during that period--August, September, October, November, December--our administration knowing, and we are telling everybody everything is wonderful, a case study in success. Let us talk about complicity. This is absolutely something that was horrendous. Now, to compound it by sending $20 billion down to people who do not have the ability--and not even ask who are we bailing out? Who are the people who are reaping the dividends? That is immoral. I have to tell you something else. If we in the Congress of the United States, for whatever political reasons, are seeking political cover, look the other way--we are absolutely deviating from what we should be doing. We are in dereliction of our duty and responsibilities.

Mr. D'AMATO. Senator, an interesting point is raised. I will digress, as I do very often. We rightfully come under great criticism related to the savings and loan collapse and the bailout. In that case, people still think that we bailed out wealthy bankers, et cetera. They were the people--we can identify every one of them--and the average amount of money was in the nature, and I am hazarding a guess, of under $20,000. They were the small, middle-class depositors. They were the people who held harmless because the Federal Government made a guarantee. Our different case here, we are talking about sophisticated investors. We are talking about large brokerage houses. We are talking about mutual fund situations where we came in and did not even ask. In the case of the failed banks we obviously asked to see--these are our own citizens. We had to identify the banks, every single citizen, before he or she got back his money. Let me say, if some of them had over $100,000, they had multiple checking accounts. And we had a case of a charity in New York who did not know. They thought because they had multiple checking accounts and each was under $100,000, they are covered. They would be wiped out. We had to get special legislation by the Congress to see that our own citizens got back their money. Forget about interest--just got back their money. Here we are paying off foreign speculators who invested in foreign obligations 100 percent on the dollar, plus their interest on top of that, and we are told, ``We couldn't find out who they were.'' Can you imagine? Of course we could have. We should have insisted on it. We should have insisted that they negotiate. Maybe we would want to make certain rules if some of the institutions that invested were people, pensioners, et cetera. We might say, ``Let's give them a break.'' If some of them were not, we would say we have no legitimate claim and maybe we will pay them 20 cents on the dollar, 30 cents on the dollar. No, we ship this money around like it does not belong to us. Well, it does more than belong to us.

Mr. D'AMATO. At some point in time, that is absolutely right, when the reported year for that transaction takes place they will be able to assert. Having said that, the IRS will--that will take some time, probably run into the next calendar year--but the IRS will be able to get an idea. It seems to me, though, that the Treasury people themselves have an obligation, before allowing these dollars to be used, to say we want to identify with specificity exactly ``who,'' when people come in and get paid off on the institutions. We have an obligation to know that. They never do this.

Mr. D'AMATO. Because our administration did not take the time to say, in negotiating in this agreement--and again we are rushing down to make this money available--look, we are not going to pay back dollar for dollar, and we want to identify who these people are, have them come in, and we will negotiate with them. I would like to know how much further the market would have collapsed. It went from 10 to 2 on a relative scale. I mean, would it have gone down to 1\1/2\? All this business about the damage being done--the Americans are hated there in Mexico now because interest rates have gone up. Home interest mortgages have gone from 20 to 80 percent. The Mexican people are blaming us, the bad Yankee. We are looked upon with disdain. We are not getting any credit for making American taxpayer dollars available. Meantime, provide a better way of life for their families, and we just willy- nilly turn the other way and send this money down to Mexico and we pay off speculators. I think maybe some would have been embarrassed. I do not know how many large institutions who invested money there were bailed out and made substantial profits. But I think the American people have a right to know whether they are American, whether they are Japanese, or whether they are German. But who were they, and who are we bailing out?