Mark Foley

Mr. FOLEY

Mr. FOLEY. Mr. Chairman, will the gentleman yield?

Mr. FOLEY. Mr. Chairman, one only need to pick up the morning newspapers to support the amendment to freeze funding for the Community Development Financial Institutions funded at current levels, not a cut, maintaining funding at 1997 levels. Today's Wall Street Journal: ``Treasury Aides Trumped Up Papers To Defend Awards As Probe Drew Near.'' ``A Treasury investigation as to whether agency officials created misleading documents to deal with a congressional probe found that they did, and just in the nick of time, too.'' The assistance went to community development lenders with ties to South Shore Bank, also known as Shorebank, a Chicago-based institution with long ties to the Clintons. A recipient of $2 million in assistance was Southern Development, Inc., an Arkansas firm that Hillary Rodham Clinton set up with help from Shorebank founders.'' In the Arkansas Democrat Gazette: ``Among the banks Bachus named as being part of a suspected `old boys' network' of community lending institutions with ties to President Clinton and his wife is Arkadelphia-based Southern Development Bancorporation, Inc. It received a $2 million award from the Community Development Financial Institutions Fund last year. Mrs. Clinton, then a partner in Little Rock's Rose Law Firm, and presidential counselor Thomas F. `Mack' McLarty, a former executive of Arkla, Inc., were charter members of the holding company that founded Southern Development in August 1986.'' In the Rocky Mountain News: The chairman suggests, Mr. Bachus, that nearly a third of the money designated in the Community Development Financial Institutions fund went to interlocked institutions that all have well-documented links to Hillary Clinton. ``Government Investigates CDFI Program,'' in the National Mortgage News Journal, details the same story. Reuters this morning: ``Treasury Admits Misdoings At U.S. Small Business Fund.'' May doubt the articles? Read this: ``A top administrator at a small business program touted by President Clinton wrote spurious memos to justify loans that had already been made, Treasury Department officials confirmed Tuesday.'' Now my colleagues, what we are asking you to do is freeze funding until we can investigate the facts of this case. The Treasury Department may be making improvements now as a result of the oversight inquiry, but the department has not shown it knows how to run a grant program. In this era of government belt tightening, where even programs that are models of efficient administration face significant cuts in funding, it makes absolutely no sense, no sense, to increase by more than twofold the amount the taxpayers will allocate to this program. Only in Washington would we be sitting here debating a 150 percent increase in funding for a program that is judged, by any objective standard, a monument to bureaucratic bungling and administrative inefficiency. In the real world, heads would be rolling, customers would be demanding refunds, and the budget ax would be swinging. In Washington we appropriate more taxpayers' money for this program. This perverse incentive structure needs to be dismantled, and a message needs to go out to our Federal bureaucracy that we will no longer reward mismanagement abuse with ever-increasing levels of funding. By the CDFI's own admission, at least $11 million in taxpayer funds were awarded in its last round of funding without anybody bothering to memorialize in a written document any of the factors upon which the agency based its recommendation. Not a word. Then when the gentleman from Alabama [Mr. Bachus], the chairman, approaches the committee and asks for reports, at midnight they work on the documents. My colleagues will hear more about that later. Any claims that the Treasury Department may make regarding real world success for the CDFI program are purely speculative at this time. The fund originated July 1996. As of March of this year they had only distributed $4 million the $37 million that was awarded in the first round. Now at this point I understand we have up to one half that has been sent out. The Treasury wants Congress to raise funding 150 percent on this untested program with serious administrative problems. The Foley-Bachus amendment will not zero out CDFI funds, I want to reemphasize. It simply maintains fiscal 1997 funding levels pending further review of the program. Now it bears emphasizing that this amendment, again, does not zero it out. But I would call the attention of my colleagues, the Senate is never known for cutting many programs. The Senate VA-HUD approps zeroed out the CDFI fund yesterday. The Senate zeroed it out. Now we are asking for a freeze. Now clearly, some people may doubt these articles in our major newspapers. But as the chairman will tell my colleagues in the next few minutes, this investigation has unearthed some rather disturbing things. There is no distancing from these companies the relationship that had existed in the late 1980's. So clearly, if we are going to ask the American taxpayers to foot the bill for this program or any other, we should make certain that there are certain standards. Point of Order

Mr. FOLEY. Mr. Chairman, I offer an amendment.

Mr. FOLEY. Mr. Chairman, will the gentleman yield?

Mr. FOLEY. Mr. Chairman, I ask unanimous consent to temporarily withdraw the amendment pending negotiations. If we do not conclude successfully in the next few moments, Mr. Chairman, the language that I believe we have agreed to, then I would resubmit the amendment.

Mr. FOLEY. Mr. Chairman, will the gentleman yield?

Mr. FOLEY. Mr. Chairman, we are lacking an agreement at this moment. The other side has felt, and I probably would tend to concur, that we cannot arrive at sufficient language at this time. So I would be prepared to recall my amendment at the desk, the original amendment, and have an up or down vote on it.

Mr. FOLEY. Mr. Chairman, will the gentleman yield?

Mr. FOLEY. Mr. Chairman, we started out with something very simple. We were willing to allocate another $50 million for the appropriation for this program. We have significant concerns. We laid out what I thought was very simple language: investigation, enumerating guidelines for the agency. I did not think anything was so complicated that we could not agree and insert it in the bill as language. I have been told, no, we do not know who is going to investigate, who should investigate, what sanctions may be meted out. We cannot get people to agree. The White House is not in the room so we cannot negotiate for them. So, quite simply, I am trying to protect what I believe is my right on an amendment to say $50 million is as much as I am willing to go at this time until we clear up these issues. Now, again, if I could get the assurances and we can add this amendment as I drafted and as is in the record.

Mr. FOLEY. Mr. Chairman, will the gentleman yield?

Mr. FOLEY. Mr. Chairman, again I want to state I think these programs can do some good in the community. I have stood up for minority business development grants and other things in my community and fought for them. What we are saying in this amendment: Currently there still exists $33 million in current accounts to spend. With this amendment we will continue and add another $50 million to the account to do their good work. All we are asking before we up the account to $125 million, is we get some answers.

Mr. FOLEY. I thank the gentleman for yielding. We are engaged in what I hope is fruitful conversations with the other side of the aisle on this issue. I think clearly the discussion has centered on some concerns that we have regarding the program. I think statements made by Members of the minority have indicated they too are concerned with some of the aspects of the program. I would be agreeable to creating a mechanism by which we freeze, or at least accept, the $50 million offer on our amendment if we would have within the next 90 or whatever days, until October 1, an investigation, to indicate the problems, a set of guidelines that would be adhered to in future grants. If we can adopt those types of standards as the gentleman from Illinois [Mr. Jackson] and I have been discussing, if we can discuss those standards, then we would allow the amendment to enact $125 million on completion of those issues.

Mr. FOLEY. Mr. Chairman, will the gentleman yield?

Mr. FOLEY. If the gentleman would continue to yield, and may I also stress the Senate VA-HUD passed out a zero funding for this category out of their committee yesterday. They zeroed out the account. So we clearly do not want to do that. We do not want to go backward in time.

Mr. FOLEY. Let me just reiterate. Fifty percent of the money still remains in the account to be given out. This amendment would allow an additional $50 million to continue to loan out to communities.

Mr. FOLEY. If the gentleman would continue to yield, I am hearing that, sir.

Mr. FOLEY. I understand that.

Mr. FOLEY. Mr. Chairman, will the gentleman yield?

Mr. FOLEY. Mr. Chairman, the bigger question is, we are talking about four loans in question totaling $11 million that went to Shorebank Corp. of Chicago and three related companies. A college roommate of President Clinton worked there in the 1980's. They came down and set up a corporation in Arkansas which Mrs. Clinton became a director of and formed through the Rose Law Firm. The one firm, the group of companies that got $11 million from this fund are the only ones we cannot find documentation towards. So we are urgently concerned with the way this particular grant was authorized. There may be nothing inappropriate about it.

Mr. FOLEY. Mr. Chairman, will the gentleman yield?

Mr. FOLEY. Mr. Chairman, clearly it is my intent to obviously make certain that the language I have asked for is agreed to. I would trust the chairman would give me the assurances that what we have discussed would become part of the bill as we move forward on the floor.

Mr. FOLEY. Mr. Chairman, will the gentleman yield?

Mr. FOLEY. Mr. Chairman, I want to know I have some assurance. Otherwise I will press my amendment that is pending at the desk, and allow the gentleman to perfect an amendment that will come back to me, in my direction. I preserve my right to have a vote on my amendment.

Mr. FOLEY. I want to make certain. I will withdraw the amendment. I want to make certain this language is attached to the bill as I read and outlined, that the $125 million appropriation will be conditional upon a full investigation by an appropriate body, objective evaluation of program now and in the future, that the uniform standards for awarding grants using an objective numeric scoring system is included; and the final thing that I did not add before, that anybody found guilty of a violation of law as a result, a violation, would be dealt with appropriate to law.

Mr. FOLEY. Mr. Chairman, will the gentleman yield?