Orrin Hatch

Mr. HATCH

Mr. HATCH. I am prepared to yield back time.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to speak briefly in support of H.R. 924, the Victims' Rights Clarification Act of 1997. A companion to this bill was introduced this past Friday by Senator Nickles as S. 447, which is cosponsored by Senator Inhofe, myself, Senator Leahy, and Senator Grassley. I was proud to be an original cosponsor of this vital bill because it advances the rights of crime victims in the criminal justice process. This bill will ensure that victims of a crime who may be victim-impact witnesses at the sentencing phase of a trial are able to attend that trial and still testify at sentencing. Mr. President, too often the victims of crime seem to be forgotten as the wheels of justice turn. In a sense, they are victimized twice-- first by the criminal, and then by a justice system that too frequently treats them as irrelevant to the administration of justice. This legislation clarifies that the victims and survivors of crime who might present testimony at sentencing about the effects of the defendant's act should not be prevented from observing the trial. It also clarifies that, conversely, observing the trial is not grounds for excluding a victim or survivor from presenting impact testimony at sentencing. In 1991, the Supreme Court ruled in Payne v. Tennessee [501 U.S. 808] ruled that victims and survivors may be given the right to provide testimony at sentencing about the victim and the impact of the crime on the victim's family. Since then, Congress has ensured that the Federal Rules of Criminal Procedure provide this right to victims of violent crimes when the defendant is tried in federal court. Recent court decisions have made it evident that some clarification of this right is badly needed. These decisions have excluded from trials victims and survivors who might give impact testimony at sentencing. Generally, witnesses may be excluded from viewing a trial until they have testified. The rationale for this rule, known as the rule on witnesses and embodied in rule 615 of the Federal Rules of Evidence, is the need to prevent witnesses from collaborating on their testimony, as well as the need to prevent each witness from shaping his or her testimony to the testimony that already has been presented. Those rationales do not apply, however, when victims testify at sentencing about the effect of the crime on their own lives. As a result of this bill, victims and survivors will be permitted to observe the trial and still testify about the effect of the crime on their lives, without running afoul of the policy underpinnings for excluding witnesses from viewing a trial. Another rationale for application of the rule on witnesses, and one that has been advanced to prevent victims from both observing the trial and presenting impact testimony, holds that a victim may testify only about the effect of the crime on his or her life, not about the effect of the trial on his life. But, Mr. President, for the victim the trial is one of the effects of the crime and becomes forever a part of the victim's life. Remember, this amendment deals only with victim impact testimony. By that point in the process, the defendant already has been convicted. In my view, it is not unfair for the law to treat the effect on a victim of viewing a trial as part of the effect of the crime, since the trial is a proximate, reasonably foreseeable consequence of the commission of a crime. As the result, a victim should be free to see the trial and still give victim-impact testimony at sentencing. This bill will ensure that victims of crimes have an opportunity to alleviate some of their suffering through witnessing the operation of the criminal justice system. Moreover, this bill will accomplish this salutary result without having forced upon them the cruel choice of observing the trial or giving impact testimony at sentencing. Indeed, the bill before the Senate is a significant improvement over the legislation originally introduced in the other body because, unlike the original House bill, it specifically ensures that victims have the right both to attend the trial and provide impact testimony at sentencing. The opportunity to do both is critical to providing closure to victims and ensuring justice for victims, as well as defendants and society. Mr. President, this provision is not controversial. I hope that it can be passed by the Senate and sent to the President for his approval without delay.

Mr. HATCH

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

Mr. HATCH

Mr. HATCH. Mr. President, I ask unanimous consent that the Committee on Agriculture, Nutrition, and Forestry be allowed to meet during the session of the Senate on Tuesday, March 18, 1997, at 9 a.m. in SR-328A to receive testimony regarding agriculture research reauthorization.

Mr. HATCH. Mr. President, I ask unanimous consent that the Committee on Labor and Human Resources be authorized to meet in executive session during the session of the Senate on Tuesday, March 18, 1997, at 9 a.m.

Mr. HATCH. Mr. President, the Senate Committee on the Judiciary would ask unanimous consent to hold a nominations hearing on Tuesday, March 18, at 2:30 p.m., in Room 226, of the Senate Dirksen Office Building.

Mr. HATCH. Mr. President, I ask unanimous consent that the full Committee on Environment and Public Works be granted permission to conduct a hearing Tuesday, March 18, at 9:30 a.m., Hearing Room (SD- 406) on proposals to authorize State and local governments to enact flow control laws and to regulate the interstate transportation of solid waste.

Mr. HATCH. Mr. President, I ask unanimous consent that the Oceans and Fisheries Subcommittee of the Senate Committee on Commerce, Science, and Transportation be authorized to meet on Tuesday, March 18, 1997, at 2:30 p.m. on review of U.S. Coast Guard fiscal year 1998 budget and reauthorization.

Mr. HATCH. Mr. President, I ask unanimous consent that the Subcommittee on East Asian and Pacific Affairs of the Committee on Foreign Relations be authorized to meet during the session of the Senate on Tuesday, March 18, 1997, at 10 a.m. to hold a hearing.

Mr. HATCH. Mr. President, I ask unanimous consent that the Committee on Labor and Human Resources be authorized to meet for a hearing on the presidential nomination of Alexis M. Herman to be Secretary of Labor, during the session of the Senate on Tuesday, March 18, 1997, at 2 p.m.

Mr. HATCH. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on Tuesday, March 18, 1997, to conduct a markup on S. 318, the ``Homeowners Protection Act of 1997,'' and of certain pending nominations.

Mr. HATCH. Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet on Tuesday, March 18, 1997, at 10 a.m. in open session, to receive testimony from the unified commanders on their military strategies and operational requirements in review of the defense authorization request for fiscal year 1998 and the future years defense program.

Mr. HATCH

Mr. HATCH. Mr. President, there is a right way and a wrong way of reforming our system of campaign finance. The Hollings proposal to amend our Constitution is simply the wrong way. It would, in effect, amend the first amendment to our Constitution to allow any reasonable restrictions to be placed on independent campaign expenditures and contributions. Why does he propose that we amend the first amendment? Because the Supreme Court of the United States has held that restrictions on independent expenditures violate the first amendment's free speech protection and that such restrictions could only be justified upon a showing of a compelling--as opposed to any reasonable--reason. The Hollings amendment would gut the free speech protections of the first amendment. It would allow the curtailing of independent campaign expenditures that could overcome the natural advantage that incumbents have. It would, thus, limit free speech and virtually guarantee that incumbents be reelected. Thus, the Hollings amendment could change the very nature of our constitutional democratic form of Government by establishing what the Founders of the Republic feared most: A permanent elite or ruling oligarchy that dominates us all. Let me explain. The very purpose of the first amendment's free speech clause is to ensure that the people's elected officials effectively and genuinely represent the public. For elections to be a real check on Government, free speech must be guaranteed--both to educate the public about the issues, and to allow differing view points to compete in what Oliver Wendell Holmes called the market place of ideas. Simply put, without free speech, Government cannot be predicated upon, what Thomas Jefferson termed, ``the consent of the governed.'' Without free speech, there can be no government based on consent because consent can never be informed. The Supreme Court of the United States recognized this fundamental principle of democracy in the 1976 case of Buckley versus Valeo, 424 U.S. 1 (1976). The Court in Buckley recognized that free speech is meaningless unless it is effective. In the words of Justice White, ``money talks.'' Unless you can get your ideas into the public domain, all the homilies and hosannas to freedom of speech are just talk. Thus, the Supreme Court held that campaign contributions and expenditures are speech--or intrinsically related to speech--and that regulating of such funds must be restrained by the prohibitions of the first amendment. The Buckley Court made a distinction between campaign contributions and campaign expenditures. The Court found that free speech interests in campaign contributions are marginal at best because they convey only a generalized expression of support. But independent expenditures are another matter. These are given higher first amendment protection because they are direct expressions of speech. Consequently, because contributions are tangential to free speech, Congress has a sizeable latitude to regulate them in order to prevent fraud and corruption. But not so with independent expenditures. In the words of the Court: A restriction on the amount of money a person or group can spend necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached. This is because virtually every means of communicating in today's mass society requires the expenditure of money. The Hollings amendment's allowance of restrictions on expenditures by Congress and State legislatures would impose direct and substantial restraints on the quantity of political speech. It would permit placing drastic limitations on both individuals and groups from spending money to disseminate their own ideas as to which candidate should be supported and what cause is just. The Supreme Court noted that such restrictions on expenditures, even if neutral as to the ideas expressed, limit political expression at the core of our electoral process and of the first amendment freedoms. Indeed, even candidates under the Hollings proposal could be restricted in engaging in protected first amendment expression. Justice Brandeis observed, in Whitney versus California, that in our Republic, ``public discussion is a political duty,'' and that duty will be circumscribed where a candidate is prevented from spending his or her own money to spread the electoral message. That a candidate has a first amendment right to engage in public issues and advocate particular positions was considered by the Buckley Court to be of ``particular importance. . . candidates [must] have the unfettered opportunity to make their views known so that the electorate may intelligently evaluate the candidates' personal qualities and their positions on vital public issues before choosing among them on election day.'' Campaign finance reform should not be at the expense of free speech. This amendment, in trying to reduce the costs of political campaigns--a noble goal, I can say--could cost us so much more; it could cost us our heritage of political liberty. Without free speech, our Republic could become a tyranny. Even the liberal American Civil Liberties Union opposes Senator Hollings-type approaches to campaign reform and calls such approaches a ``recipe for repression.'' Mr. President, the simple truth is that there are just too many on the other side of the aisle that believe that the first amendment is inconsistent with campaign finance reform. That is why they are pushing the Hollings proposal. To quote House minority leader Richard Gephardt, ``[w]hat we have is two important values in direct conflict: freedom of speech and our desire for a healthy campaign in a healthy democracy. You can't have both.'' Well, I strongly disagree. You can have both. We have to have both. Without both, the very idea of representative democracy is imperiled. That is why I oppose the Hollings amendment. I think the distinguished Member of the House, Mr. Gephardt, is just absolutely wrong. I think if we change the Constitution to denigrate the first amendment, we would be absolutely wrong and it would fly in the face of what really ought to be done in campaign finance reform, which all of us would like to have. But until it can be done in a balanced, reasonable way that doesn't prefer one side over the other, it will never be done. That is one of the problems. We cannot get it done in a balanced, decent way that really evens the odds for everybody in our society, rather than stacking them in favor of one side or the other. Having said all this, I want to pay tribute to my colleague, our floor leader on this matter. He has taken a lot of flack from the media that always seems to stand up for first amendment rights and freedoms, until it comes to this issue. Frankly, I have a lot of respect for our colleague from Kentucky and the guts he has had to stand up for free speech and for first amendment rights more than any other single Member of Congress. He did it in his campaign when they made this a major focal effort of the campaign, and he still won by a considerable margin over the opponent who was making this a focal point. I think we can have campaign finance reform, but we won't have it until it is fair, balanced, until it effects all parties and candidates. And we won't have it, as far as I am concerned, unless we protect free speech rights the way they ought to be protected. Again, I compliment my colleague and express my support for his position on the floor at this time. I express regret to my friend from South Carolina that I can't support him on this constitutional amendment. I yield the floor. (Mr. ALLARD assumed the chair.)

Mr. HATCH

Mr. HATCH. We did that with due deliberation, without any desire to hurt anybody and without any desire to do other than to help the Attorney General make this decision. I must confess to a degree of frustration with the Independent Counsel Act. Did I appreciate having to send our letter? Certainly not. However, the law sets forth a specific process by which Congress is to request that the Attorney General begin the process by which an independent counsel is appointed, and this process requires the Judiciary Committee to make what the other party will inevitably characterize as partisan charges in order to trigger the Attorney General's responsibilities. In order for Congress to trigger the most preliminary steps for the Department of Justice to take to consider the need for an independent counsel, the law essentially provides that the party not in control of the executive branch make specific charges when and if the Attorney General fails to act on her own. I would have preferred to have had the Attorney General seek an independent counsel on her own. But she has not done so. At the very least, I would have preferred that she conduct a preliminary investigation on her own. But she has refused to do even this. I would have preferred to have requested that she seek an independent counsel without having to set forth, in such a public manner as the law requires, the specific and credible evidence which warrants such an appointment. But in order for us to require the Attorney General to take certain minimal steps toward investigating whether an independent counsel is warranted, we were required by law to send our letter. In short, the Independent Counsel Act is the law of the land and, notwithstanding its relative flaws, we on the Judiciary Committee have an obligation to abide by it. At last week's Judiciary Committee executive business meeting, I had hoped to vote on a resolution expressing the committee's sense that an independent counsel should be appointed, and directing that I draft and circulate a letter requesting that the Attorney General apply for such an appointment. I had been led to believe that a committee vote on a resolution calling for an independent counsel would have broad bipartisan support. Yet, my colleague, Senator Leahy--the committee's ranking member--indicated that, in light of the short notice they received about the proposed resolution, he and his colleagues wished to hold the resolution over until the committee's next business meeting. I readily acceded to their request. It was not an unreasonable request. And besides, I was asked to begin this process just an evening before myself, and I had not had the opportunity to discuss it with Senator Leahy. So there was absolutely no offense. It was something I was willing to do and readily did because I thought it was a reasonable, decent request. Without getting into the details of our ensuing discussions, it became clear that it would be difficult, if not impossible, to formulate a resolution on which both sides of the aisle could agree. Furthermore, I felt it was best to avoid a prolonged discussion of this matter in committee given that it was unlikely consensus could be reached. Accordingly, I decided to proceed directly to drafting and circulating a letter to the Attorney General as I had originally planned. The letter went through a number of variations. We tried to please people, we tried to resolve problems, and I think we have. Unfortunately, we were unable to reach agreement with our colleagues on the other side of the aisle because we could not reach agreement on whether the committee should actually request the appointment of an independent counsel. Accordingly, I circulated a letter to all members of the committee and a majority of the committee's members signed on. I remain persuaded that the appointment of an independent counsel is both called for under the independent counsel statute and responsive to the views of most Americans, who would like to be assured that these very serious allegations are investigated in a fair and thorough way, and without any real or apparent conflict of interest. I am hopeful that Attorney General Reno, for whom I continue to have great respect, will appreciate the concerns set forth in our letter, and will agree that an independent counsel should be appointed forthwith to investigate these matters. Recent developments have, I believe, made clear that a thorough Justice Department investigation into possible fundraising violations in connection with the 1996 Presidential campaign will raise an inherent conflict of interest, and certainly raises at least the appearance of such a conflict, and that the appointment of an independent counsel is therefore required to ensure public confidence in the integrity of our electoral process and system of justice. Madam President, recent revelations have demonstrated how the DNC was, as the New York Times wrote, ``virtually a subsidiary of the White House.'' That was on February 27, 1997, just a few weeks back. Without restating the points covered in our letter and without questioning in the slightest the integrity, professionalism or independence of the Attorney General or the individuals conducting the present Justice Department fundraising investigation, the fact that the Department's investigation will inescapably take it to the highest levels of the executive branch presents an inherent conflict of interest calling for the appointment of an independent counsel under title 28 United States Code section 591(c)(1). Further, the answer to whether criminal wrongdoing has occurred will of necessity turn on the resolution of disputed factual, legal, and state of mind determinations. In particular, I would note that there remains the significant factual question of the extent to which the allegedly improper fundraising activity was, in fact, directed toward benefiting Federal campaigns, especially when some of this activity was, by admission, paid for by the Clinton-Gore campaign. Because the inquiry necessary to make these determinations will inescapably involve high level executive branch officials, they should, I believe, be left to an independent counsel in order to avoid a real or apparent conflict of interest. Moreover, where individuals covered by the independent counsel statute are involved, as they plainly were here, see title 28 United States Code section 591(b), the Ethics in Government Act requires that these inquiries be conducted by an independent counsel. In any event, both prudence and the American people's ability to have confidence that the investigation remains free of a conflict of interest, warrants the appointment of an independent counsel. More importantly, the emerging story regarding the possibility that foreign contributions were funneled into U.S. election coffers to influence U.S. foreign policy further highlights the conflict of interest the Attorney General's ongoing investigation inescapably confronts. I delivered a floor speech earlier in the week spelling out my concerns, so I will not restate them here. They are detailed in the letter which I have placed in the Record. It is clear, however, that these issues cannot be properly investigated without a conflict of interest, since investigating most of these questions will require inquiring into the knowledge and/ or conduct of individuals at the highest levels of the executive branch. Moreover, several of the principal figures in this investigation, including the Riadys and the Lippo Group and Charlie Trie, reportedly have longstanding ties to our President. Indeed, the conflicts at issue here are precisely the sort of inherent conflict[s] of interest to which the Attorney General testified during Senate hearings in 1993 on the reenactment of the Independent Counsel Act. Avoiding an actual or perceived conflict of interest was the basis, not just for the application for the appointment of an independent counsel to investigate James McDougal, but also for the recent requests to extend that counsel's jurisdiction to include the investigations of Anthony Marceca and Bernard Nussbaum. As the Attorney General herself testified, applying for an independent counsel, and our request that she make such application, in no way detracts from the integrity and independence of the Attorney General or the career prosecutors presently investigating these allegations. A final point should be made. Some of my Democrat colleagues have written to the Attorney General urging her, should she decide to apply for an independent counsel, to request an independent counsel who will investigate the full scope of fundraising irregularities. They argue that she should avoid partisanship by instructing the independent counsel to investigate Republicans who have skirted the spirit of the law. I appreciate what my colleagues are trying to do, and their loyalty to their political party is duly noted by me. But, as I discussed a moment ago, the appointment of an independent counsel is a very serious matter and partisan proportionality should not even be the slightest consideration. Would these Senators have sent this letter had the majority not sent our letter to the Attorney General? I think we all know the answer to that question. Furthermore, they fail to even suggest that the Republican activities to which they refer independently warrant an independent counsel. Accordingly, I expect the Attorney General, who is a woman of integrity, will give their letter the consideration it deserves. In closing, Attorney General Reno has appointed four independent counsels to date. It is the sense of the majority of the members of the Judiciary Committee that the need to avoid even the appearance of a conflict of interest, and thereby to ensure the public's confidence in our system of justice, requires an independent counsel in connection with the 1996 Presidential campaign. Should the Senate vote on Senate Joint Resolution 22, I will be voting in support of the resolution, and I think rightly so. I call upon my friends on the other side of the aisle to consider voting for it as well. Voting that the Attorney General appoint an independent counsel in this case appears to me to be the right thing to do. Keep in mind, I have held off making this request for a lengthy period of time, knowing my constitutional duty and our constitutional duties here, because I wanted the Attorney General to have enough time, and those who are working with her who are people, I believe, of substance and integrity, to investigate and look into this and resolve these matters. But as these matters have accumulated, as the allegations have mounted up, as newspaper upon newspaper has written about them, it is clear that there is at least an appearance of a conflict of interest, and, therefore, it left us with no alternative other than to request this, even though, to repeat, I wish no one any harm. I certainly hope that these allegations are untrue, I hope they can be proven to be untrue, and my prayers will be in that regard. Having said all of that, I do hope that the Attorney General will take the necessary step to apply for the appointment of an independent counsel and that one will be appointed. Then perhaps we can resolve these matters once and for all in an independent, reasonable way that I think will be for the benefit of everybody. Exhibit 1 U.S. Senate, Committee on the Judiciary, Washington, DC, March 13, 1997. Hon. Janet Reno, Attorney General of the United States, U.S. Department of Justice, Washington, DC. Dear Madam Attorney General: This letter serves as a formal request, pursuant to 28 U.S.C. Sec. 592(g)(1), that you apply for the appointment of an independent counsel to investigate possible fundraising violations in connection with the 1996 presidential campaign. The purpose of this letter is not to provide an exhaustive list of the particular allegations that, we believe, warrant further investigation. Indeed, since the Department of Justice has been conducting an extensive investigation into fundraising irregularities for several months now, you presumably have far greater knowledge than do we of the various matters that are being, and will need to be, investigated, and we presume that your judgment as to the necessity of an independent counsel is based on all of the information before you. Rather, the purpose of this letter is to articulate why we believe this investigation should be conducted by an independent counsel. As you know, the Senate Committee on the Judiciary has, to date, refrained from joining the assortment of other individuals who have called upon you to initiate an independent counsel appointment. Recent developments over the past few weeks, however, have persuaded us that such an appointment is now necessary. When you appeared before the Senate in 1993 when we were considering reenactment of the Independent Counsel statute, you stated ``there is an inherent conflict of interest whenever senior Executive Branch officials are to be investigated by the Department of Justice and its appointed head, the Attorney General. The Attorney General serves as the pleasure of the President. Recognition of this conflict does not belittle or demean the impressive professionalism of the Department's career prosecutors, nor does it question the integrity of the Attorney General and his or her political appointees. Instead, it recognizes the importance of public confidence in our system of justice, and the destructive effect in a free democracy of public cynicism.'' You further testified that-- ``It is absolutely essential for the public to have confidence in the system and you cannot do that when there is conflict or an appearance of conflict in the person who is, in effect, the chief prosecutor. * * * The Independent Counsel Act was designed to avoid even the appearance of impropriety in the consideration of allegations of misconduct by high-level Executive Branch officials and to prevent * * * the actual or perceived conflicts of interest. The Act thus served as a vehicle to further the public's perception of fairness and thoroughness in such matters, and to avert even the most subtle influences that may appear in an investigation of highly-placed Executive officials.'' We believe, that, in light of recent developments, a thorough Justice Department investigation into possible fundraising violations in connection with the 1996 presidential campaign will raise an inherent conflict of interest, and that the appointment of an independent counsel is therefore required to ensure public confidence in the integrity of our electoral process and system of justice. First, recent revelations have demonstrated how officials at the highest level of the White House were involved in formulating, coordinating and implementing the DNC's fundraising efforts for the 1996 presidential campaign. Recent press reports, the files released by Mr. Ickes, and public statements by very high ranking present and former Clinton Administration officials indicate how extensively the Administration was involved in planning, coordinating, and implementing DNC fundraising strategy and activities. All this has led The New York Times to a conclusion which we find hard to challenge; namely, that ``the latest documentation shows clearly that the Democratic National Committee was virtually a subsidiary of the White House. Not only was [President] Clinton overseeing its fund-raising efforts, not only was he immersed in its ad campaigns, but D.N.C. employees were installed at the White House, using White House visitors' lists and communicating constantly with [President] Clinton's policy advisers.'' The New York Times, February 27, 1997. As a consequence, we believe that a thorough investigation of all but the most trivial potential campaign fundraising improprieties necessarily includes an inquiry into the possible knowledge and/or complicity of very senior white House officials in these improprieties. We believe that, without questioning in the slightest the integrity, professionalism or independence of the Attorney General or the individuals conducting the present Justice Department fundraising investigation, the fact that the Department's investigation will inescapably take it to the highest levels of the Executive Branch presents an inherent conflict of interest calling for the appointment of an independent counsel under 28 U.S.C. Sec. 591(c). Moreover, these revelations raise new questions of possible wrongdoing by senior White House officials themselves, including but not limited to whether federal officials may have illegally solicited and/or received contributions on federal property; whether specific solicitations were ever made by federal officials at the numerous White House overnights, coffees, and other similar events, and whether these events themselves, often characterized in White House and DNC memoranda as ``fundraising'' events, constituted improper ``solications'' on federal property; whether government property and employees may have been used illegally to further campaign interests; and whether the close coordination by the White House over the raising and spending of ``soft''--and purportedly independent--DNC funds violated federal election laws, and/or had the legal effect of rendering those funds subject to campaign finance limitations they otherwise would not be subject to. It seems to us that, even accepting the narrow constructions of some of the governing statutes that have been suggested--which are not necessarily the constructions an independent counsel would render--the answer to whether criminal wrongdoing has occurred will of necessity turn on the resolution of disputed factual, legal, and state of mind determinations. Because the inquiry necessary to make these determinations will inescapably involve high level Executive Branch officials, we believe they should be left to an independent counsel in order to avoid a real or apparent conflict of interest. Moreover, where individuals covered by the independent counsel statute are involved, as they plainly were here, see 28 U.S.C. Sec. 591(b), the Ethics in Government Act requires that these inquiries be conducted by an independent counsel. Whether the Act simply permits or requires the appointment of an independent counsel, however, we believe that prudence and the American people's ability to have confidence that the investigation remains free of a conflict of interest, requires it. Second, the emerging story regarding the possibility that foreign contributions were funneled into U.S. election coffers to influence U.S. foreign policy further highlights the conflict of interest your ongoing investigation inescapably confronts. A March 9, 1997, Washington Post article quoted ``U.S. government officials--presumably familiar with the Department's ongoing investigation--as stating that investigators have obtained `` `conclusive evidence' '' that Chinese government funds were funneled into the United States last year,'' and quoted one official as stating that ``there is no question that money was laundered.'' This article reported that U.S. officials described a plan by China ``to spend nearly $2 million to buy influence not only in Congress but also within the Clinton Administration.'' If the FBI truly is investigating these allegations, as is reported, and this investigation extends to high level Executive Branch officials, it raises an inherent conflict of interest. Moreover, a closer look at the activities and associations of some of the particular individuals who are reported to be the principal figures in the ongoing investigation further illustrates why this investigation ultimately must involve high levels of the Executive Branch. Especially troubling is the information revealed to date regarding the Riady family and their associate, Mr. John Huang, but serious questions are also raised by the activities and associations of Mr. Charles Yah Lin Trie, Ms. Pauline Kanalanchak, and Mr. Johnny Chung, among others. Taken together, these reported events raise a host of serious questions warranting further investigation: To what extent were illegal contributions from foreign sources, in particular China, being funneled into the United States, and with whose knowledge and involvement? To what extent was U.S. policy influenced by these contributions, and with whose knowledge and/or involvement? To what extent were the decisions to hire Huang at the Commerce Department, to support most-favored-nation status for China and Chinese accession to the World Trade Organization, or to normalize relations with Vietnam, influenced by contributions, and with whose knowledge and/ or involvement? To what extent was the standard NSC screening process for admission to the White House waived or modified so as to permit special access to large donors and their guests where it would ordinarily be denied, and with whose knowledge and/or involvement? To what extent was John Huang placed at the DNC to raise money in exchange for past and future favors, and with whose knowledge and/or investment? It is evident that these questions cannot be properly investigated without a conflict of interest, since investigating most of these questions will require inquiring into the knowledge and/or conduct of individuals at the highest levels of the Executive Branch. Moreover, several of the principal figures in this investigation, including the Riadys and the Lippo Group and Charlie Trie, reportedly have longstanding ties to President Clinton. Indeed, the conflicts at issue here are precisely the sort of ``inherent conflict[s] of interest'' to which you testified during Senate hearings in 1993 on the re-enactment of the Independent Counsel Act. Avoiding an actual or perceived conflict of interest was the basis not just for your application for the appointment of an independent counsel to investigate James McDougal, but also for your recent requests to extend that counsel's jurisdiction to include investigations of Anthony Marceca and Bernard Nussbaum. The same concern warrants your application for an independent counsel here, where public confidence can be assured only by the appointment of an independent counsel to investigate any alleged wrongdoing in connection with DNC, Clinton Administration, and Clinton/Gore Campaign fundraising during the 1994-1996 election cycle. As you yourself testified, applying for an independent counsel, and our request that you make such an application, in no way detracts from the integrity and independence of the Attorney General or the career prosecutors presently investigating these allegations. Pursuant to the statute, please report back to the Committee within 30 days whether you have begun or will begin a preliminary investigation, identifying all of the allegations you are presently investigating or as to which you have received information, and indicating whether you believe each of these allegations are based on specific information from credible sources, and either pertain to a covered individual or present a conflict of interest. Please also provide your reasons for those determinations. See 28 U.S.C. 592(g)(2). In the event you conduct a preliminary investigation, but do not apply for the appointment of an independent counsel, or apply for an independent counsel but only with respect to some of the various allegations on which you have received information, please identify all those allegations which in your view do not warrant appointment of an independent counsel, and explain your view whether those allegations warrant further investigation, pertain to a covered individual, and/or present a conflict of interest See 28 U.S.C. Sec. 592(g)(3). Sincerely, Orrin G. Hatch, Charles E. Grassley, John Ashcroft, Spencer Abraham, Mike DeWine, Strom Thurmond, Arlen Specter, Jon Kyl, Fred Thompson, Jeff Sessions.

Mr. HATCH. Madam President, I rise today to speak on Senate Joint Resolution 22 which expresses the sense of the Congress that the Attorney General should apply for the appointment of an independent counsel to investigate allegations of illegal fundraising in the 1996 Presidential election campaign. Under Federal law, the Attorney General may apply to the special division of the Court of Appeals for the D.C. Circuit for appointment of an independent counsel whenever, after completion of a preliminary investigation, she finds that a conflict of interest exists or when she finds evidence that a specific category of individuals within the executive branch may have violated Federal law. The appointment of an independent counsel is a serious matter and one which the Attorney General should only initiate when necessary. That is why I, and many others, had refrained from joining the assortment of calls for Attorney General Reno to appoint an independent counsel in connection with the 1996 Presidential campaign. Yet, yesterday, all 10 Republicans on the Judiciary Committee felt the time had come to request such an appointment. We sent a letter to the Attorney General, as authorized by the independent counsel statute, requesting that she make an application for an independent counsel. I ask unanimous consent that a copy of our letter to the Attorney General be printed at the appropriate place in the Record.

Mr. HATCH. Madam President, I suggest the absence of a quorum.

Mr. HATCH

Mr. HATCH. Mr. President, on behalf of the majority leader, today the Senate will begin consideration of Senate Joint Resolution 22, the independent counsel resolution. The majority leader has announced that no rollcall votes will occur today or during Monday's session of the Senate. For the information of all Members, the next rollcall vote will be at approximately 2:45 on Tuesday, March 18. That rollcall vote will be on passage of Senate Joint Resolution 18, the Hollings resolution on a constitutional amendment on campaign expenditures. With respect to the order reached last night relative to the independent counsel resolution, no amendments will be in order during today's session to Senate Joint Resolution 22. Amendments may be offered to the independent counsel resolution beginning at 3 p.m. on Monday. Senator Lott has indicated that it is his hope he and the Democratic leader can reach an agreement as to when the Senate will complete action on Senate Joint Resolution 22. I thank my colleagues for their attention. Mr. BAUCUS addressed the Chair.

Mr. HATCH. Will the Senator tell me how much time he will take, approximately?

Mr. HATCH

Mr. HATCH. I suggest the absence of a quorum.

Mr. HATCH. Mr. President, I ask unanimous consent that the previously ordered vote at 12:30 p.m. today now occur at 12:45 p.m.

Mr. HATCH

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

Mr. HATCH

Mr. HATCH. Mr. President, it befalls me to make a few comments here today concerning why this investigation is so important. Before I do, I want to compliment the Rules Committee and the people on the Rules Committee who have handled this very difficult subject matter and have done it in a credible and responsible way. I also personally believe that no two people could handle this matter better than the chairman and ranking member of the Governmental Affairs Committee. Senator Thompson has had extensive experience in these matters and Senator Glenn is known as an eminently fair and worthy person here in this body. I have total confidence in both of them that they will be fair, they will be thorough, they will be tough, and they will do what is right. We simply have to get to the bottom of this. The American people are concerned about it. Certainly the media has written extensively about these matters. It is incumbent upon the Senate in its oversight capacity to investigate these matters fairly and thoroughly. As we take up Senate Resolution 39 today, I would like to just take a few minutes to emphasize one major point: That there is a serious number of very, very troubling matters to investigate, simply at the very core of Senators Thompson's and Glenn's inquiry. Merely in recent press reports--if that is all you had--there are very substantial and troubling questions that must be answered regarding whether foreign money and foreign influence has infiltrated the American political process. While numerous other allegations of improper fundraising at the White House and by the White House have surfaced in the media in the past week or so, that is not what I want to talk about today. Even putting aside all of those allegations, the fact is that we have before us very serious allegations that China funneled funds into American elections in an attempt to influence American policy and policymakers. The gravity of these allegations should not and must not be underestimated. Were our national interests sold out? I hope they were not. But this matter must be pursued, and it must be done in a thorough, fair, and honest manner. Later this week the Judiciary Committee will forward a letter to the Attorney General requesting that she apply for an independent counsel. To date, she has refused to do so in this matter. I do not read anything sinister into that--I believe that the Attorney General is an honorable, ethical person of integrity. She has applied for the appointment of no less than four independent counsels since she has been Attorney General. I think she has shown that she is a person who can act. But to date she has refused to act on this matter. Accordingly, Congress must be all the more vigilant. And given the apparent conflict of interest, the public will be relying on Congress to ascertain the facts and get to the bottom of this whole affair. The Governmental Affairs Committee inquiry into fundraising improprieties is, in my opinion, one of the most important congressional investigations in history and involves some of the most serious allegations we have seen to date about our electoral system and our Government. The press and congressional committees have uncovered material facts that prompt numerous questions: First, did a foreign government try to influence our national elections and our domestic and/or foreign policy? No. 2, were millions of dollars of foreign money laundered through various groups to the Democratic National Committee, particularly by three individuals--Charlie Trie, Johnny Chung, and John Huang, all of whom have some ties to China. No. 3, were there violations of any of our existing laws, such as the Hatch Act, the Ethics in Government Act, and our current Federal elections laws? The breadth of this particular investigation is immense. We cannot allow ourselves, in an attempt to satisfy the tendentious cause for a broad inquiry into congressional campaigns, to interfere with what is a serious matter. Investigating the 1996 Presidential campaign alone will require a very substantial budget and a substantial amount of time--I presume even more time than the Rules Committee has allowed in this instance, which is only until the end of this year or approximately 8 months. I suspect this will go on beyond that and will have to go on beyond that because of what will be brought out. Let us focus for a moment, however, in terms of the breadth of this investigation, on one individual--Mr. John Huang. He was born in China. He worked for the Lippo Group, a huge conglomerate based in Indonesia with large business interests in China. Lippo is owned and controlled by the Riady family-- Mochtar, James, and Stephen. These are also Chinese natives. By 1994, Huang was the top Lippo executive in the United States. Huang was appointed Deputy Assistant Secretary for International Economic Policy in our Department of Commerce in September 1994. Let me just go down through what John Huang did while employed at Commerce--just a quick glance. He was, according to reports, given a top security clearance without the usual background check, which is all but unheard of; 78-plus visits to the White House; 70-plus calls to Lippo during this period of time; 39 classified top secret briefings dwelling on China and other countries in Asia; 30-plus phone conversations with Mark Middleton or associates; 9 phone messages from or calls to Webster Hubbell; 9 phone messages from the Chinese Embassy officials; 5 months of top secret clearance before joining the Commerce Department. In other words, even before he got in this very important position in Government, he had 5 months of top secret clearance. Why? That is a question that is going to be a big question in this matter. Huang enjoyed a top secret clearance for 5 months of top secret clearance before joining Commerce and nearly a year after leaving Commerce to join the Democratic National Committee. Why? Why would those security clearances go with him outside of Government? Why would he be permitted this kind of access to very sensitive information? These are questions that are very important. Taken with the $780,000 severance pay Huang received from Lippo prior to joining the Commerce Department, these facts naturally raise questions. This next chart involves a meeting at the White House to discuss the Huang transfer from the White House to the Democratic National Committee on September 13, 1995. It was an Oval Office meeting. The President was there. James Riady, the Lippo executive was there. Bruce Lindsey, the Deputy White House Counsel, was there. Joseph Giroir, who is, I believe, the former top partner in the Rose Law Firm, the Lippo joint venture partner/adviser, former Rose Law Firm partner, and, if I recall correctly, was the managing partner of that firm, and none other than John Huang, former Lippo executive, Principal Deputy Assistant, Secretary of Commerce. At this meeting, it was decided that John Huang would move from the Commerce Department to the Democratic National Committee as vice chairman of finance. We do not know what happened at this meeting, although some extremely troubling explanations have been reported by the media. Each one of these people, it seems to me, with the possible exception of the President, will have to be questioned regarding just what went on at that meeting, why Huang left Commerce, and why he was immediately transferred to the Democratic National Committee as the finance vice chairman, why James Riady, was even at this meeting. That is a very important meeting. Let me put another chart up here. This is John Huang at the Democratic National Committee. These are examples of illegal funds raised by Huang. The Wiriadinatas raised $450,000, all of which was returned by the DNC. Pauline Kanchanalak, $250,000. She has since left the country. She is now in Thailand. All funds returned by the DNC. Wogesh Gandhi, $250,000. He testified he had no assets. All funds returned by the DNC, the Democratic National Committee. Cheong Am America--or John H.K. Lee--$250,000. Like Kanchanalak and others, Cheong Am America--or John H.K. Lee--has disappeared. All of these funds were returned by the Democratic National Committee. Hsi Lai Buddhist Temple, $166,750: This comes from a temple where the residents take a vow of poverty; $74,000 of the $166,750 was returned by the DNC. All together, that we know of, John Huang raised $3.4 million, $1.6 million of which has been returned by the Democratic National Committee. These are just a few of some of the problems that I think the Governmental Affairs Committee is going to have to go into. I do not see how they can avoid doing it. To give a picture of some of the people who seem to be involved in this, let me just highlight some of the other individuals involved in this affair. We start with John Huang, former top Lippo executive in the United States, who had a $780,000 severance package when he went to Congress. He had multiple contacts while there with Lippo. The former Democratic National Committee vice chairman raised more than $3.4 million, $1.6 million was returned, and he visited the White House during this period more than 75 times. C.J. Giroir, in the Lippo joint ventures, former Rose Law Firm attorney, met with James Riady, President Clinton, and Lindsey on the Huang move to DNC, and donated $25,000 to the DNC. Mark Middleton, former White House aide from Little Rock, met with James Riady and President Clinton on that occasion, Far East business interests, had unlimited access to the White House after his departure. Charles Trie, Little Rock restauranteur, received a $60,000 loan from Lippo, and he arranged with the former Lippo executive Antonio Pan to get a Hong Kong dinner for Ron Brown. Trie also attempted to give $600,000 to the Clinton legal trust fund, and he visited the White House at least 37 times. Mark Grobmyer, Little Rock attorney, close friend of President Clinton, consultant to Lippo, Far East business interests, met with James Riady, Huang and President Clinton. Soraya Wiriadinata, daughter of Hashin Ning, former Lippo executive, contributed $450,000 to the DNC, and it was all returned, according to the committee. Soraya has gone back to Indonesia. S. Wang Jun, Lippo joint ventures, Chinese arms merchant, senior executive at CITIC and COSTIND, Chinese Government entities, and attended a White House conference. Webster Hubbell, former Associate Attorney General, received a $250,000 consulting fee from Lippo--would not say why he got that. Charles DeQueljoe is the president of Lippo Securities in Jakarta, gave $70,000 to the Democratic National Committee and was appointed to the USTR office. Pauline Kanchanalak, a Thai lobbyist who worked with Huang when he was at Lippo, contributed $253,000 to the DNC, and it was all returned. She had frequent contacts with Huang. She visited the White House at least 26 times. And then we come back to John Huang himself. Now, all of these people are going to have to be interviewed. We are going to have to find out what the facts are here. What was going on? Were there illegalities? In that regard, these are key players who have taken the fifth amendment: John Huang, Charlie Trie, Pauline Kanchanalak, Mark Middleton, and Webster Hubbell. I do not see how anybody on the other side of the floor can argue that this set of hearings should not go on, or that this would not take almost every second of any committee's time, and I am only talking about one aspect of it. There are many other aspects to this. The key players who have left the country--and we have not been given reasons why they left the country--are John H.K. Lee--gone. If he is going to be interviewed, it is overseas. Charlie Trie, gone, after taking the fifth. Pauline Kanchanalak, gone--as far as I know, back in Thailand, after having taken the fifth amendment. Arief and Soraya Wiriadinata, gone. Charles DeQueljoe, gone. And James and Mochtar Riady, gone. They left the country. All this is a brief discussion of one aspect of this. There are other aspects of this, but this is a brief glimpse into some of the serious allegations the Government Oversight Committee will have to look into. I emphasize the point with which I opened, just that at the core of this investigation is a vast series of matters which must be looked into. This will be one of the most important congressional investigations in history. I hope it is not obstructed by partisan tactics and politics. I hope with all my heart it is not. I think the American people expect as much. When I found out over the weekend that the FBI--and I did not know this before--had notified seven Members of Congress that they might be receiving laundered funds from a foreign country, mainly China, I was kind of shocked at that, because if they informed those seven Members of Congress, surely the FBI informed the White House. I have been led to believe by the FBI they informed the National Security Council. That being the case, why are all these people having such access to our White House under those circumstances? As chairman of the Judiciary Committee, as chairman of the committee that oversees the Justice Department and the FBI, naturally, I have to be concerned about it. Now, in addition to all of this, there are newer revelations coming out every day. I challenge the Government Affairs Committee to substantiate these allegations, to look into them. Let me just list some of the new revelations about the campaign finance scandals that were first reported after the Governmental Affairs Committee made a request of $6.5 million to investigate the scandal. First, Deputy Chief of Staff Harold Ickes made a telephone call from Air Force One to warn of the wiring of the money to the Democratic National Committee and additional funds to nonprofit organizations. There is some indication they used Air Force One for the purpose of raising funds. I hope that is not the case. Second, questions have been raised concerning whether the White House database was created for official--as opposed to political--purposes, since it contained individuals' Social Security numbers, nicknames, relations to the First Family, pet political issues, and sometimes a photograph. Third, China may have sought to influence U.S. policy through the direction of foreign campaign contributions to the Democratic National Committee and actions taken at the Chinese embassy. It has been disclosed that Huang had contacts with the embassy while he worked at Commerce. Fourth, the NSC, National Security Council, at the White House provided the White House with warnings about Johnny Chung, who has ties to the Chinese Government, who was nonetheless subsequently granted access to the White House on numerous occasions, even though they knew about those ties. Fifth, Huang approached two business associates and offered to pay them $45,000 if they would take $250,000 from him and donate it in their own names to the Democratic National Committee. That is illegal. Sixth, the White House fired four staff members whose salaries were being paid by the Democratic National Committee while they were working at the White House. I don't know whether that has ever been done before, but it should not be done. There are other allegations, but let me just mention a couple of other things. The Democratic National Committee returned another $1.5 million in illegal or questionable campaign funds that have to be looked into. The FBI warned, as I have said, seven Members of Congress that the Chinese Government was laundering money into the United States' election process. The FBI warned the National Security Council as well. We checked that today. And I have to tell you, just this one set of allegations could take more than a year or two just to get into them. It's going to take overseas travel; it's going to be very difficult with people taking the fifth amendment, with people possibly hiding documents and withholding them, and with just this one problem burgeoning and getting bigger every day. So I commend the Rules Committee and the majority leader for getting this thing off dead center and providing the money so the Governmental Affairs Committee can look into these matters and resolve them one way or the other. I wish some of these things were not true. I certainly don't wish anyone any harm. But, unfortunately, if you look at the facts that I have just given to you today, I think it's very unlikely that these matters are going to be disproven. But I hope they can be. It is going to be up to this Governmental Affairs Committee to look into it. I think that committee is very capable of doing this. The two leaders are among the best in the Senate. I expect them to do a terrific job. Senator Thompson, in particular, has had extensive experience because of his experience in the Watergate investigation and other investigations since then. He is an excellent lawyer, one of the best who has ever served in the Congress of the United States. I don't know anybody who will be more fair and more decent to the people who are being investigated. I think the same goes for the distinguished Senator from Ohio, Senator Glenn, for whom I have great friendship and fondness, and who I know will do an honest and decent job here. I don't think we should get so caught up in this context, in some of the issues that are being raised collaterally. I know the distinguished Senator from Ohio is not raising campaign finance reform to take the edge off of these issues. I don't want to get into that today, because I think that is irrelevant to what needs to be looked into by the Governmental Affairs Committee. Now they are going to have a charter to proceed and, I think, a fair amount of money to at least begin these investigations. Hopefully, these investigations can be completed within the time allotted. But, if not, I think the Senate is going to have to look at it and extend the time if this burgeons into what many think it will. With that, I thought some of these matters were important to bring out today in the beginning of this debate, so people realize this isn't just some little erstwhile decision by the Rules Committee; this is a very important, well-thought-out resolution of what has been a very difficult set of problems, which had a tendency to be greatly politicized over the last few weeks. I commend the chairman of the Rules Committee, the majority leader, and the others who have worked so hard on this important matter for the work they have done.

Mr. HATCH

Mr. HATCH. Mr. President, the Senate Committee on the Judiciary and the House Subcommittee on the Constitution will hold a joint hearing on Tuesday, March 11, 1997, at 9:30 a.m. in room G50 of the Senate Dirksen Building, on ``Partial Birth Abortion: The Truth.'' committee on rules and administration

Mr. HATCH

Mr. HATCH. Mr. President, at the request of the Judicial Conference of the United States, I am introducing a bill to increase the current salaries of Federal judges and to establish a procedure for future cost-of-living increases in judicial compensation. This legislation was prepared by the Administrative Office of the United States Courts. I believe that, out of comity to the judicial branch, the Senate should have on record the judiciary's specific proposals with respect to judicial compensation, so that we can give those suggestions a full and fair hearing. These proposals deserve fair consideration. Federal judges have not received a cost-of-living salary adjustment since January 1994. This bill would amend United States Code title 28, sections 5, 44(d), 135, and 252, to provide an immediate, one-time 9.6 percent adjustment in the compensation of Justices of the Supreme Court and Federal circuit court, district court, and international trade court judges appointed under article III of the Constitution. The bill would also have the effect of increasing, by the same percentage, the salaries of Federal court of claims and bankruptcy judges and full-time U.S. magistrate judges, since their salaries are, by statute, fixed based on the salaries of Federal district court judges. With respect to future judicial salary adjustments, the bill would amend section 461 of title 28 to end the current linkage between the judicial, congressional, and Executive Schedule compensation. Instead, judicial salaries would be adjusted automatically on an annual basis, in the same percentage amount as the rate of pay of Federal employees under the General Schedule. Finally, the bill would repeal section 140 of Public Law No. 97-92, thereby removing the current requirement that Congress affirmatively vote for cost-of-living increases for Federal judges. If we are to attract and retain the most capable lawyers to serve as Federal judges, it is vitally important that we ensure that those responsible for the effective functioning of the judicial branch receive fair compensation, including reasonable adjustments which allow judicial salaries to keep pace with increases in the cost of living. As Chief Justice Rehnquist stated in his ``1996 Year-End Report on the Federal Judiciary,'' ``We must insure that judges, who make a lifetime commitment to public service, are able to plan their financial futures based on reasonable expectations.'' This bill, which I am introducing at the request of the Judicial Conference, proposes changes viewed by the Judicial Conference as advancing this objective--an objective with which I believe most Senators would agree. The bill merits serious consideration by the Senate. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. HATCH. Mr. President, today I am proud to introduce a bill to make the current tax credit for increasing research activities permanent with my friend and colleague Max Baucus. We are also joined by Senators D'Amato, Abraham, Boxer, Bingaman, Moseley-Braun, Dorgan, Murray, DeWine, Conrad, Rockefeller. Companion legislation will be introduced today by Representatives Nancy Johnson and Robert Matsui in the House. The Small Business Job Protection Act of 1996 temporarily extended this tax credit until May 31, 1997, when it is set to expire. As the United States is shifting from an industrial based economy to an information and technology based economy, conducting research for tomorrow's products and methods is increasing in importance. In 1981, the Reagan administration and the Congress recognized this need, and the credit for increasing research and experimentation [R&E] activities was first enacted. Unfortunately, the credit has been victim to repeated short term extensions that included a break in the availability of the credit. Mr. President, this nation is the world's undisputed leader in technological innovation. American know-how has given our Nation benefits undreamed of a few years ago. Research and development by U.S. companies has led the way in delivering these benefits, which enhance U.S. competitiveness as well as the quality of life for everyone. And, as the pace of change in our world quickens, the role of research has taken on increased importance. Today, the credit is needed more than ever to keep up with our changing world. The R&E credit has played a key role in placing the United States ahead of its competition in developing and marketing new products. Studies of the credit indicate that the marginal effect of $1 of the R&E credit stimulates approximately $1 of additional private research and development spending over the short-run, and as much as $2 of extra investment in research over the long-run. Mr. President, the benefits of the R&E credit, though certainly very significant, have been limited by the fact that the credit has been temporary. In many fields, particularly pharmaceuticals and biotechnology, there are relatively long periods of development. The more uncertain the long-term future of the R&E credit is, the smaller the potential of the credit to stimulate increased research. This only makes sense, Mr. President. U.S. companies are managed by prudent business men and women. They evaluate their research and development investments by comparing the present value of the expected cash flow from the research over the life of the investment with the initial cash outlay. These estimates take into account the potential availability of tax credits. However, because of the uncertainty of a tax credit that has been allowed to continually expire, many decision makers do not count on the R&E credit as being available in the long-run. This, of course, means that fewer research projects will meet the threshold of viability and results in fewer dollars being spent on research in this country. In the business community, the development of new products, technologies, drugs, and ideas can result in either success or failure. Investments carry a risk. If a project has a high risk of failure, the R&E tax credit will help ease the cost of taking the chance to find the cure for killer diseases such as cancer, to build the next microchip, or the next generation of heart monitoring equipment that can save lives. If the project becomes a success, resulting in a new drug that can cure a disease or a new breakthrough technology, then what happens? Additional investment is made, workers are hired, new jobs are created and many Americans benefit from the initial research and experimentation. In this way, all Americans can benefit from the R&E tax credit. Mr. President, a small investment in R&E today produces dividends and rewards tomorrow. This tax credit is a credit for investment, for economic growth, and for creating new jobs. What if we don't act? As the Peat Marwick study confirms, the benefits of the R&E tax credit reach into the future. Failure to extend the credit beyond May 31, 1997, will weaken our Nation's ability to stay competitive in the future. It is important to note that while U.S. investment in research and development has generally grown since 1970, our international competitors have not stood still. Other nations, such as Japan and Germany are constantly knocking at the door trying to build the better car, the faster computer, or a more effective drug. Uncertainty, about the future of the credit will make firms hesitant to make long-term commitments and investments in the critical long-term research projects that really are the source of the breakthrough drugs and the new technologies. In fact, United States non-defense R&D, as a percentage of gross domestic product [GDP], has been relatively flat since 1985, while Japan's and Germany's have grown. Unlike a few years ago, it is now not always necessary for U.S. firms to perform their research activities within the boundaries of the United States. As more nations have joined the United States as high tech manufacturing centers, with educated work forces, multinational companies have found that moving manufacturing functions overseas is sometimes necessary to stay competitive. The same is often true with basic research activities. In fact, some of our major trading partners now provide generous tax incentives for research and development conducted in those nations. These incentives are more attractive than the R&E credit the United States provides, particularly when the temporary nature of our credit is considered. Therefore, Mr. President, we are at risk of having some of the R&D spending in the United States transferred overseas if we do not keep competitive. President Clinton, when campaigning for the Presidency in 1992, recognized the importance of stimulating private R&D investment and called for a permanent R&E credit. The 1993 tax bill had a 3-year extension. Last year, we extended the credit for only 1 year because of revenue constraints in the small business bill. The President's fiscal year 1998 budget contains another 1-year extension. These proposals for extensions are well and good, Mr. President, but they do nothing to give stability to risky, long-term research and experimentation investments. The certainty of the availability of the tax credit is now almost as important as the credit itself. It might well make the difference between a decision to undertake an expensive multiyear research project and a decision to forego such research. I hope this year we can put our support behind investment in research and make this credit permanent. Mr. President, my home State of Utah is home to a large number of innovative companies who invest a high percentage of their revenue in research and development activities. For example, between Salt Lake City and Provo lies the world's biggest stretch of software and computer engineering firms. This area, which was named ``Software Valley'' by Business Week, is second only to California's Silicon Valley as a thriving high technology commercial area. In addition, Utah is home to about 700 biotechnology and biomedical firms that employ nearly 9,000 workers. These companies were conceived in research and development and will not survive, much less grow, without continuously conducting R&D activities. In all, Mr. President, there are approximately 80,000 employees working in Utah's 1,400 plus and growing technology based companies. Research and development is the lifeblood of these firms, and hundreds of thousands more throughout the Nation that are like them. A permanent and effective tax incentive to increase research is essential to the long-term health of these businesses. I am aware, Mr. President, that not every company that incurs R&D expenditures in the United States can take advantage of the R&E credit. As the credit matures and business cycles change, the current credit can be out of reach for some companies. Thus, as part of the latest extension of the credit Congress enacted an elective alternative credit to broaden the reach of this incentive. However, Congress should continue to examine ways to improve it and to make the credit more effective in delivering incentives to increase R&D activity. In the meantime, however, it is important that this Congress send a strong signal that the current credit should not be allowed to expire. I urge my colleagues to show their support for the concept of a permanent R&E credit by cosponsoring this legislation and support the kind of research activities that will maintain American leadership in the technological developments that will lead us into the next century. I ask unanimous consent that the text of the bill be printed in the Record.