Henry Hyde

Mr. HYDE

Mr. HYDE. I yield to the gentleman from New Jersey.

Mr. HYDE. I yield to the gentlewoman from California.

Mr. HYDE. Mr. Chairman, I congratulate the gentleman from New Jersey for his leadership in this very difficult and complicated issue, but actually this issue we are dealing with today is not all that complicated. The difference is between two words, perform and promote. The amendment that the gentlewoman from California and the distinguished gentleman, and I do not see him here now, from New York [Mr. Gilman] is offering goes halfway. It denies funds to organizations that promote abortion. Unfortunately, it does not use the word ``perform,'' and I do not care what they promote, it is the performance that counts. That is where the homicides occur or the feticides occur, that is where the unborn children are destroyed, in the womb.

Mr. HYDE. Mr. Chairman, I just want to take issue with a line in the Planned Parenthood fact sheet that says there is no evidence that abortions exist for gender selection, a problem that does not exist. I recently read a news article about families in British Columbia of the Sikh religion who when the females get pregnant they have a determination as to whether it is a little male or a female. If it is a female, they travel into the State of Washington where an abortionist has a clinic, a mobile clinic, to perform gender-selection abortions, because their custom is to have a rather large dowry with the little female girl when she gets married and they cannot afford it so they have a gender-selection abortion.

Mr. HYDE. Mr. Chairman, I would rather the gentlewoman from California use her time. Mr. Chairman, how much time have I got left?

Mr. HYDE

Mr. HYDE. Mr. Speaker, as chairman of the House Judiciary Committee, I am interested in matters concerning Federal court jurisdiction. For many years, citizens of Illinois and other States were solicited in their States to invest in Lloyd's of London insurance syndicates. In many instances, these investors have been denied access to the Federal courts where they attempted to assert their rights and remedies under the Federal securities statutes. Investors asserting securities claims against Lloyd's have seen their cases thrown out of court based on clauses in Lloyd's investment contracts which provide for the application of English law and the forum of the English courts. (Choice Clauses). I am heartened, however, by the recent appeals court ruling in Richards v. Lloyd's of London and strong pronouncements by the Securities and Exchange Commission in that appeal, which recognize the statutory bar against agreements which waive compliance with the Federal securities laws. The Richards decision, unless set aside by the full ninth circuit court of appeals or the Supreme Court, clears the way for the investors to have the chance to prove their case where it belongs--in U.S. district court. The plaintiffs in Richards--known as ``Names''--allege that Lloyd's defrauded them by concealing that the insurance syndicates to which they furnished capital were saddled with massive asbestos and toxic waste liabilities. They assert that, for two decades, Lloyd's undertook a major recruitment program in the United States by offering investment contracts by which residents of the United States could become ``External Names'' at Lloyd's--passive investors who were prohibited from being involved with the operations and management of Lloyd's syndicates or business operations. Plaintiffs in Richards claim that Lloyd's alleged fraud cost them many million of dollars. They also seek rescission of their agreements with Lloyd's on the grounds that Lloyd's allegedly sold them unregistered, nonexempt securities and made material representatives or omitted material facts. Mr. Speaker, for over 60 years there has been a statutory bar against contracts with investors that waive compliance with the Federal securities laws. Section 14 of the Securities Act of 1933 provides: Any condition, stipulation, or provision binding any person acquiring any security to waive compliance with any provision of this title or of the rules and regulations of the Commission [the SEC] shall be void. 15 U.S.C. Sec. 77 n. The bar of Section 29(a) of the 1934 Act is substantially the same. 15 U.S.C. Sec. 78cc(a). In Richards, a panel of the Ninth Circuit ruled, 2-1, that because of the Choice Clauses would strip plaintiffs of all their rights under the Federal securities laws, they violate the anti-waiver statutes and are thus void. The court remanded the case to the federal district court where the plaintiffs will have the opportunity to present a case that Lloyd's fraudulently sold them unregistered securities and that the court should order rescission of their investment contacts with Lloyd's and other relief. I would like to cite several portions of the Richards opinion which show the eminent logic of this result: The district court made an error of law in supposing that the Choice Clauses were unenforceable only if unreasonable. Congress had already determined that such clauses were void. It was not for a court to weigh their reasonableness, not for a court to say whether they offended any policy of the United States. The policy decision had been made by the legislature. * * * * * Is there a significant difference between a policy objection to enforcement of the anti-waiver bars and a statutory obstacle to such enforcement? We believe there is. Where a statute exists, a policy has been given form and focus and precise force. A statute represents a decision by the elected representatives of the people as to what particular policy should prevail, and how. * * * * * There is no question that the Choice Clauses operate in tandem as a prospective waiver of the plaintiffs' remedies under the 1933 and 1934 Acts. If the Supreme Court would condemn such clauses where they work against a public policy embodied in statutes even through the statutes themselves do not void the clauses, a fortiori the Supreme Court would condemn similar clauses when the run in the teeth of two precise statutory provisions making them void. * * * * * Congress was no ignorant of the potential international character of securities transactions. Congress specifically modified the 1933 Act to cover transactions in foreign commerce. S. Rep. No. 47, 73d Cong., 1st Sess. (1933) (accompanying S. 875.) A court should not apply the reasonableness test or say whether the clauses offended any policy of the United States when Congress has expressly made that determination. We do not believe that we should turn the clock back to 1929 or introduce caveat emptor as a rule governing the solicitation in the United States of investments in securities by residents of the United States. In addition, the SEC filed two briefs, amicus curiae in Richards and participated in oral argument in favor of reversing the district court's enforcement of the Choice Clauses. The SEC's position is correct in my view, and I would like to share some of the SEC's compelling statements: The issue addressed is an important one to the enforcement of the federal securities laws. The district court's decision, if upheld, would allow foreign promoters of securities undertaking large scale selling efforts in the United States to avoid private liability under the securities laws simply by requiring the American investors to agree to resolve disputes in a foreign jurisdiction under foreign law, even if the remedies available under the foreign law were far less effective than those available under United States law. Such a holding would seriously impair the ability of defrauded investors to obtain compensation for their losses, and would hamper the deterrent function of the federal securities laws by discouraging private actions. The Commission strongly urges this court to reverse the district court's erroneous dismissal of this action. * * * * * The fact that the investors agreed to these provision is irrelevant, since the very objective of the antiwaiver provisions is to invalidate such agreements. As the Supreme Court held in Shearson/American Express Inc. v. McMahon, 482 U.S. 220, 230 (1987), ``[t]he voluntariness of the agreement is irrelevant to this inquiry: if a stipulation waives compliance with a statutory duty, it is void under [the antiwaiver provisions], whether voluntary or not. * * * * * In this case, in contrast, the requirement that investors litigate in England, coupled with the requirement that they do so under English law, not only ``weakens'' the investors' ability to recover, but in fact precludes any possibility of recovery under the federal securities laws. These clauses are directly contrary to express statutory prohibitions in the antiwaiver provisions and should be held void. * * * * * The antiwaiver provisions, however, are not simply an expression of public policy that favors United States securities laws unless other comparable laws are available. Rather, they are an express and unequivocal directive that the rights and obligations under the securities laws cannot be waived. This determination has been made by Congress, and the courts are not free to substitute their own public policy determinations. The Richards court is not alone in its interpretation of this statutory bar to waiver. In Leslie v. Lloyd's of London, a Federal district court, after hearing evidence, struck down the Choice Clauses, stating that they were procured by fraud and violated public policy. The case is currently on appeal to the Fifth Circuit, where the SEC has participated in oral argument, arguing that the Choice Clauses are void. Mr. Speaker, what is involved here is a very basic proposition. When foreign promoters come into Illinois and other States to raise capital, they cannot effectuate waivers of substantive rights under the securities laws that belong to those form whom they solicit capital. Congress has said no and that should be the end of the story.

Mr. HYDE

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

Mr. HYDE. Mr. Chairman, I will be brief. I just want to say to my friend, the gentleman from Washington [Mr. Dicks], who surprises me that he is for disclosing this amount of money, the truth is, of course, the aggregate figures do not tell us anything. They give us a rough idea, but the next step is who is getting what? If we want to know the aggregate, we want to know who is spending it and for what purpose. What is the National Reconnaissance Office spending? What is the CIA spending? What is the DIA spending? And we want to break it down so it means something. That is the next step. The aggregate figure does not really inform us. But the gentleman and I know it is the opening wedge in a total lay it on the table strategy, what agency is spending how much money, for what systems, and for what covert activity and for what satellites, and what are we spending overseas? And it never ends. And so that is why it ought to remain secret, in my opinion.

Mr. HYDE. Mr. Chairman, with some but not a great deal of reluctance, I rise to oppose the amendment of my good friend from Michigan. Traditionally, the aggregate amount of funds spent to support our intelligence agencies has not been disseminated publicly. It is a classified amount. However, it is not unavailable to this House. There are six committees in Congress that have access to that number, three in the House, three in the other body: The Permanent Select Committee on Intelligence, the Committee on Appropriations, and the Committee on National Security. Those committees are set up to receive this information, they are cleared for top secret, and they have the ability to absorb it and to do with it whatever is necessary in our democratic process. The classified records are available to be looked at. The gentleman from Michigan [Mr. Conyers] objects to that because you are then bound by an oath of secrecy. Well, then do not go look at it, but you have got six committees in this Congress to get that information. Why do we keep it secret? It is a mistake to think that the intelligence budgets of these agencies is a static thing. There are bumps. Sometimes it goes up, sometimes it goes down. What does that signify? It means we may be working on an expensive new weapons system, and that information ought not to be made available to those who wish us harm. There is no urgency, there is no need for this to be made public other than to tell the rest of the world or give them a hint as to what we are doing and perhaps even why we are doing it. The amount of money is overseen by six congressional committees bipartisanly. It is available to anybody who has a burning need to know by going and reviewing the classified annex. And so there is no need to violate what has traditionally been the case; that is, keep the aggregate amount confidential, keep it classified so that our adversaries, and believe me there are some out there, do not have an idea or a clue as to what we are working on. With good wishes to my friend from Michigan, I just think his amendment is wrong and I hope it is defeated.

Mr. HYDE

Mr. HYDE. I hope more than I am interested in that because the impact, the emotional impact on seeing it at Normandy or in Arlington is powerful, and it ought to be reproduced, in my opinion, in Punchbowl. Mr. Speaker, I yield as much time as he may consume to the gentleman from Arizona [Mr. Stump]. (Mr. STUMP asked and was given permission to revise and extend his remarks.)

Mr. HYDE. Mr. Speaker, I yield back the balance of my time.

Mr. HYDE. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1532) to amend title 18, United States Code, to create criminal penalties for theft and willful vandalism at national cemeteries, as amended.

Mr. HYDE. Mr. Speaker, I yield myself such time as I may consume. (Mr. HYDE asked and was given permission to revise and extend his remarks.)

Mr. HYDE. Mr. Speaker, the goal of H.R. 1532, the Veterans' Cemetery Protection Act, is one which I wholeheartedly support, sending a strong message to criminals who would desecrate or destroy property at a national cemetery, that the United States will not tolerate such disrespect of its veterans. Such cowardly crimes can only be performed by people who choose to ignore the sacrifices of those men and women who have served proudly and bravely in the U.S. Armed Forces. As originally introduced by the gentleman from California [Mr. Calvert], H.R. 1532 created a new Federal crime of vandalism and theft at a national cemetery. The Committee on the Judiciary adopted an amendment which instructs the Sentencing Commission to review and amend its guidelines to provide a sentencing enhancement for any offense against property of a national cemetery. Under this approach, vandals who destroy national cemetery property will still receive the strong, swift punishment they deserve. This issue strikes a national nerve, and I am grateful to the gentleman from California [Mr. Calvert] for his dedication and concern for our veterans. He introduced H.R. 1532 on May 6, 1997, only 1\1/2\ months ago, and today his bill has nearly 250 cosponsors. The gentleman from Hawaii [Mr. Abercrombie] has also been actively supporting this legislation. The bill, as amended, directs the Sentencing Commission to increase a sentence by at least four levels if property of a national cemetery is injured or defaced, and by at least six levels if such property is stolen or unlawfully sold. Criminals will still be charged and convicted under the existing sections of the criminal code. However, in the case of theft or damage of property at a national cemetery, the Sentencing Commission will ensure that those persons are punished more severely than if the damage was to less significant and sacred Federal property. I believe this approach is the most effective way to express Congress's disgust with vandals and thieves who have no regard for the sacrifices made by this country's veterans. Many of our veterans gave their lives to protect our cherished freedoms, and when their grave sites are desecrated by foul words and pictures and graffiti, it offends the dignity and sense of honor shared by all Americans. In a speech called ``Vision of War'' given in Indianapolis in 1876, Robert Green Ingersoll eloquently honored our veterans when he said: These heroes are dead. They died for liberty; they died for us. They are at rest. They sleep in a land they made free, under the flag they rendered stainless, under the solemn pines, the tearful willows, the embracing vines. They sleep beneath the shadows of the clouds, each in a windowless palace of rest. Earth may run red with other wars; they are at peace. In the midst of battles, in the roar of conflict, they found the serenity of death. Mr. Speaker, when our national cemeteries are desecrated and destroyed, the peace that our veterans, their spouses, children, and friends so richly deserve, is disturbed. We honor our Nation's heroes today by passing this legislation which underscores our intolerance of damage and theft at our national cemeteries. Mr. Speaker, I reserve the balance of my time.

Mr. HYDE. Mr. Speaker, I yield 5 minutes to the distinguished gentleman from California [Mr. Calvert].

Mr. HYDE. Mr. Speaker, I yield myself such time as I may consume before yielding to the gentleman from Arizona [Mr. Stump] simply to say that while we are on the subject of the Punchbowl Cemetery, which is one of the most beautiful places in the world, it seems to me we ought to have at the grave sites crucifixes and Stars of David and other appropriate markers. They have a flat marker on the ground, and if one stands there and look, they would not know it was a cemetery because they cannot see the graves. One has to walk up and look at each marker. Mr. Speaker, if we go to Normandy or we go out here to Arlington, we know that we are in a very special place and the emotions that are reached by looking at the proper grave markers; I think the people buried at Punchbowl ought to have those too. Mr. Speaker, I look forward to the day when whoever is in charge of that agrees with me, and instead of flat, unseeable grave stones we will see either a cross or a Star of David or whatever is appropriate.

Mr. HYDE. I yield to the gentleman from Hawaii.

Mr. HYDE

Mr. HYDE. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1901) to clarify that the protections of the Federal Tort Claims Act apply to the members and personnel of the National Gambling Impact Study Commission.

Mr. HYDE. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, today the House considers H.R. 1901, a bill to clarify that the protections of the Federal Tort Claims Act apply to members and employees of the National Gambling Impact Study Commission. Last year, we authorized the Commission to conduct a comprehensive 2- year study of the impact of gambling on the United States. The members of the commission have now been appointed and the commission held its first meeting last Friday. Two members of the commission have called me regarding their concerns about incurring personal liability as a result of their work on the commission. Normally, under the Federal Tort Claims Act, when someone sues a Federal employee for acts occurring within the scope of his or her employment, the United States substitutes itself as the party, defends the action, and pays any judgment. I believe that the commission is covered under the FTCA because it is an independent establishment of the United States. For that reason, I initially believed we could resolve this matter by an exchange of letters with the Department of Justice. After several weeks of study, the Department has not been able to come to a clear resolution of whether the commission is or is not covered by the FTCA. With the commission having already begun its work, I believe we must move forward with a legislative solution. H.R. 1901 simply provides that for purposes of the Federal Tort Claims Act, the commission is a Federal agency and its members and employees are Federal employees. At the suggestion of the gentleman from Michigan, Mr. John Conyers, we have added language that makes it clear that by acting explicitly in this case we will not by implication affect the FTCA's status of any other commission. As it does in all FTCA cases, the Department of Justice will still make the determination of whether the particular conduct at issue is within the scope of employment. Thus, members and employees of the commission will not receive any special treatment; rather, they will receive the same treatment as all other Federal employees. This treatment will apply equally to all members and employees of the commission. The members and employees should not have to put their personal assets at risk in order to serve their country. For that reason, I urge the house to suspend the rules and pass the bill. Mr. Speaker, I reserve the balance of my time.

Mr. HYDE. Mr. Speaker, I have no further requests for time and I yield back the balance my time.

Mr. HYDE

Mr. HYDE. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1902) to immunize donations made in the form of charitable gift annuities and charitable remainder trusts from the antitrust laws and State laws similar to the antitrust laws.

Mr. HYDE. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days to revise and extend their remarks on the bill under consideration.

Mr. HYDE. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I would state that in 1995, Congress learned of an assault on charitable giving that was being waged in a class action lawsuit underway in the Federal court in Texas. The defendants in the case, a collection of charitable organizations which included the Lutheran Church, the United Way, and Northwestern University, stood accused of violating the antitrust laws by agreeing to use the same annuity rate when is offering donors charitable gift annuities. Charitable gift annuities are a vehicle for charitable giving. The donor gives a charitable organization a sum of money. In return, the donor receives a charitable deduction and the agreement of the donee to pay back a fixed income for life. Depending on the annuity rate used, the value of the life income in relation to the total donation fluctuates, as does the amount of the charitable deduction. Finding that there were strong public policy reasons to protect charitable organizations from antitrust suits in this context, the 104th Congress enacted the Charitable Gift Annuity Antitrust Relief Act of 1995. That act specifies that it is not a violation of the antitrust laws for section 501(c)(3) organizations to agree to use the same annuity rate when issuing charitable gift annuities. The bill was unanimously approved in the House by a vote of 427 to 0; the Senate passed the House bill by voice vote. The expectation was that the act would lead to the dismissal of the class action suit and an end to the Texas case. Alas, this has not been the result. When the 1995 act was asserted as a defense in the case, the judge denied the motion to dismiss, citing new allegations and issues of fact which were allegedly raised under the act. The Court's rulings make it clear that in order to achieve the goal we originally intended, that is, to protect this kind of charitable fundraising from the antitrust laws, we must act again. Two issues in particular must be clarified: that all activity related to the issuance of a charitable gift annuity is protected, and that the Internal Revenue Service, not the district court, is the arbiter of whether a particular annuity meets the criteria of a charitable gift annuity. The bill before us today, the Charitable Donation Antitrust Immunity Act of 1997, amends the 1995 act for that purpose. H.R. 1902 provides antitrust protection for charitable gift annuities and charitable remainder trusts, and grants immunity from antitrust suit to any person involved in issuing or selling those annuities or trusts. It establishes a conclusive presumption that a particular instrument is a charitable gift annuity or charitable remainder trust if the donor has treated it as one in filings with the Internal Revenue Service, or if the donee has treated it as one in documents provided to the donor. However, the conclusive presumption would not be available if the Internal Revenue Service has made a final determination that the annuity or trust was not qualified under the revenue laws. H.R. 1902 is a bipartisan effort to redraft legislation to ensure that the courts will interpret the law in a manner consistent with congressional intent. The gentleman from Michigan [Mr. Conyers], the ranking member, and I have worked closely on this legislation to ensure that the exemption is drawn as narrowly as possible while still achieving our goal. A companion bill has been introduced in the Senate by Senators Coverdell, Dodd, and DeWine, and I anticipate it will receive swift consideration in that body. I also should mention the Antitrust Division of the Department of Justice has indicated they have no objection to the new language. Mr. Speaker, in these days of fiscal conservatism we are asking our communities to do more and more. With the help of charitable organizations, we stretch our government dollars to feed more hungry people, build homes for the poor, and care for the less fortunate. Every dollar raised by these organizations is needed to help in the mission of the charity. By enacting H.R. 1902, we are making sure that these scarce resources are not used to pay lawyers to defend a lawsuit that Congress has deemed meritless, but instead to contribute to the strength of our communities.

Mr. HYDE. Mr. Speaker, I yield back the balance of my time. The SPEAKER pro tempore [Mr. Petri]. The question is on the motion offered by the gentleman from Illinois [Mr. Hyde] that the House suspend the rules and pass the bill, H.R. 1902.

Mr. HYDE

Mr. HYDE. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on H.R. 1901.