Jon Kyl

Mr. KYL

Mr. KYL. The use of such support services does not change the result assuming the account wagering system meets the requirements for a ``closed loop subscriber-based service that is wholly intrastate.'' As stated previously, the location of the totalizator, path of the phone lines, or the site of other similar support systems is irrelevant. enforcement

Mr. KYL. Senator McConnell, I am confident that the Justice Department and the National Association of Attorneys General will vigorously enforce this legislation.

Mr. KYL. Mr. President, I want to note that an interactive computer service whose facilities or service are used by another person as a means of communication to engage in an activity prohibited by section 1085, and where the interactive computer service does not have the intent that such facilities or service be used for such illegal activity, shall not be considered to violate subsection (b)(1)(B).

Mr. KYL. Senator McConnell, what I stated earlier with respect to simulcasting and commingling of parimutuel pools applies equally to account wagering. This bill is not intended to hamper the future growth of horse racing.

Mr. KYL. Yes, assuming each facility that participates in the pools is duly licensed by the State or approved by the laws of the foreign jurisdiction in which it operates. Subsection (8)(C)(ii) states that ``information exchanged between'' certain racetracks or other parimutuel facilities and ``a support service located in another State or foreign jurisdiction'' is not considered ``information assisting in the placing of a bet or wager'' if ``the information is used only for processing bets or wagers made by or with that facility under applicable law.'' The location of the totalizator or other similar system used to process parimutuel pools is irrelevant if the parimutuel pools are transmitted from and received by facilities each of which is licensed by the State or approved by the laws of the foreign jurisdiction in which it operates. Similarly, commingling may require the use of data transmission or phone lines that pass through numerous states. In such event, it is irrelevant whether parimutuel wagering is legal in all such states. The only relevant inquiry is whether each of which is licensed by the State or approved by the laws of the foreign jurisdiction in which it operates. The term ``support system'' should be read broadly to mean any system or service necessary to transmit or process information related to the commingling of parimutuel pools, including totalizator systems, telephone lines, and other similar technological devices essential to the commingling process.

Mr. KYL. Yes, commingling of wagers as you describe is permitted by S. 474. However, each facility that participates in the pools must be licensed by the state or approved by the laws of the foreign jurisdiction in which it operates.

Mr. KYL. Yes, you are correct.

Mr. KYL. Senator McConnell, I assure you S. 474 is not intended to limit the racing industry's activities in the area of simulcasting and commingling of parimutuel pools.

Mr. KYL. Yes, the bill does not address telephone account wagering.

Mr. KYL. Thank you, Senator McConnell.

Mr. KYL. Senator McConnell, you are correct. account and interactive wagering

Mr. KYL. Mr. President, sports organizations, in particular, are obviously very much afraid of the adulteration of professional and amateur sports. As a result, groups like the National Amateur Athletic Association, Major League Baseball, NFL, NBA, National Hockey League, National Soccer League, and, of course, law enforcement and all 50 States attorneys general support this legislation. In fact, it is because of them that we are proposing it. We can't protect the citizens of our States unless we have legislation of this kind.

Mr. KYL. Yes, assuming of course that the wagering pools are being commingled in accordance with section 2 of the bill and further assuming the account wagering system meets the requirements for a ``closed loop subscriber-based service.''

Mr. KYL

Mr. KYL. Ten minutes per side is fine for me. Five minutes per side is fine with me.

Mr. KYL. Mr. President, I want to make something very clear since the Senator from Delaware is still on the floor. The Senator from Idaho has proposed an amendment that is a poison pill. I want to make it very clear that if by some chance it should pass, I will urge all of my colleagues to vote against my bill, because what it will do is create a monopoly. Indian tribes will be the only people in the country that will be permitted to engage in Internet gambling. Offshore casinos, virtual casinos, and Indian tribes would be able to do it; no other citizen would be allowed to do it. This is not a violation of IGRA. We do not provide for State enforcement unless an Indian tribe has already agreed by compact to do that. So I want to make it clear. I will read to you two sentences from a letter from the National Association of Attorneys General. I want the Senator from Delaware to listen to these words and to appreciate that this activity is illegal; it will be illegal for all Americans, and I think the last thing we want to do is create a situation in which one group of Americans can do this and nobody else can. This is a letter to Acting Chairman Deer and Commissioners Foley and Hogen of the National Indian Gaming Commission with respect to this issue: We are writing to you to express our strong opposition to and legal analysis regarding the use of the Internet for the purpose of engaging in gaming activity allegedly under the Indian Gaming Regulatory Act of 1988 (IGRA). The undersigned have concluded that such gaming is not authorized by IGRA. That is signed by all of the attorneys general, including the attorneys general of Hawaii and Idaho and, as I said, all of the other attorneys general. I have practiced law for 20 years. I am very familiar with the law in this area. I am not misreading the law. With all due respect to our colleagues from Idaho and Hawaii--and I love them both, and they are great and fine Senators--on this matter, in my opinion, they are simply not correct. The effect of their amendment is so bad, as I said, it is a poison pill. It is so bad that I would have to urge all of my colleagues to vote against this amendment that Senator Bryan and I have proposed.

Mr. KYL. We need to have a copy of that, obviously. I will not object.

Mr. KYL. Mr. President, reserving the right to object, I want to ask the Senator from Idaho a question. Is that a technical correction or a substantial change? In other words, we need to know what it is that we are talking about if the Senator has submitted a correction.

Mr. KYL. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. KYL. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. KYL. Mr. President, let me respond, then, to my friend from Idaho. First, let me begin by saying that the Presiding Officer, when he spoke a few minutes ago, I think hit the nail right on the head. The Presiding Officer, the Senator from Wyoming, pointed out that it didn't really matter who conducts the activity on the Internet. Whether it is an Indian tribe or an offshore virtual casino, the result is the same for the people of the State which has established the public policy of protecting its people from such activity. You can't do it. You can't protect your citizens. The State of Wyoming has made that decision, and yet if the Indians were allowed an exemption under this bill, they would be permitted to run Internet gambling operations, they could reach every citizen in every State and every young person in every State, as the Presiding Officer pointed out. No one is allowed to do that today. No one would be allowed to do that under the legislation, but under the Craig amendment, a special exception would be made for the Indians. The Senator from Idaho argues that it is legal for the tribes to do that. In this he is simply wrong. Again, let me quote from a letter from all 50 attorneys general, including the attorney general of Idaho, on this exact point. They are writing to the National Indian Gaming Commission. We are writing to you to express our strong opposition to and legal analysis regarding the use of the Internet for the purpose of engaging in gaming activity allegedly under the Indian Gaming Regulatory Act of 1998. The undersigned have concluded that such gaming is not authorized by IGRA. [One of the reasons, I might say, contained in the next sentence] As you know, under IGRA, gaming activity is allowed only on Indian lands. This goes beyond that. It goes to any State, into any home, to be used by any child who might log on to the Internet. All the people I quoted before who testified before the Judiciary Committee said this is a pernicious activity for young people who get into the Internet and begin gambling. It could become the most addictive way for children and, later, adults to become addicted to gambling. As a result, it is an activity that needs to be stopped before it is allowed to spread. What we should not do is create an exception just for the Indian tribes, because, in effect, that is an exception that precludes us from protecting our children. I urge, tomorrow, that we defeat the Craig amendment.

Mr. KYL. Mr. President, let me briefly describe what this amendment does and indicate the degree of support that exists for it. Before I do that, let me say that this amendment passed out of the Judiciary Committee with one dissenting vote several months ago. It had been our intention to bring the amendment to the floor as a separate, freestanding bill, but because there was not floor time available to do that, we have had to resort to the amendment process under this bill. I regret that we have to do that, but that is the only way we would get this important piece of legislation before the full Senate. Frankly, Mr. President, it has been good because, during the interim, we have been able to work with parties who had concerns about the bill, and I think, for the most part, we have worked the concerns out. I know that one matter remains to be dealt with later. But except for that, we have been able to improve on the bill since it passed out of the Judiciary Committee. As a result of that, I report to my colleagues that some of the groups and organizations that support this legislation--to give you an idea of the breadth of support we have, it came up because of the Attorneys General of the United States; all 50 attorneys general from our States approve of this and support this legislation and, frankly, they are the ones that asked the Judiciary Committee to move forward with the legislation. Jim Doyle, the Democrat attorney general from Wisconsin, testified two times before our committee strongly in support of this legislation. One of the things he said was--I will quote it; I will find the quote. But, in effect, what he said was ordinarily attorneys general don't come to the Federal Government and ask for statutes to be federalized; they like their own jurisdiction. But in this case they had to come before the Congress. The individual attorneys general simply cannot enforce their own State prohibitions. Why is that so? Because, if the State of South Carolina, for example, has made a public determination, as it has done, that this kind of gambling is illegal and ought to be illegal, and a neighboring State--let's say North Carolina--should allow people to broadcast into South Carolina these virtual casino games that people can now find on the Internet, or let's say that comes even from outside the country, which is where these actually emanate from for the most part, then the people of South Carolina cannot be protected even though their State policy is that their people not be subjected to this kind of gambling. That is why all 50 State attorneys general got together and came to us, and said, ``Would you please help us solve this problem?'' We have to be able to have a Federal law that is enforceable through the Federal courts as well as the State courts to prohibit this kind of activity. That was why we introduced the legislation and moved forward with it. But what we soon found was that the support for the legislation was much broader than that. You might expect that Louis Freeh, Director of the FBI, has expressed strong support for it. But we have also had strong support coming from amateur and professional sports organizations. You can understand why, because the integrity of sports depends upon people knowing that the outcome of any sporting event is not determined by someone gaming the system. Unfortunately, we have seen these kinds of stories about point shaving and the like. I will give you an example from my own State of Arizona where a student got deeply into debt. He played basketball and ended up pleading guilty to shaving points and trying to throw games in order to pay off his gambling debt. Neither amateur nor professional athletics can stand that kind of attack on the integrity of sports, and as a result they came to us. We have strong support for this legislation from the NCAA, the Amateur Athletic Association, from the National Football League, the National Collegiate Athletic Association, the National Hockey League, the National Basketball Association, major league baseball, and a lot of different organizations that understand how insidious gambling can be when it is conducted in a medium such as the Internet, and as a result they strongly support this legislation. We also like to say until he moved on that, this legislation is supported all the way from Ralph Reed to Ralph Nader. Ralph Reed has moved on, but the Christian Coalition still supports the legislation; as does Ralph Nader, the Public Citizen organization which he represents, the National Coalition Against Gambling Expansion, the National Coalition Against Legalized Gambling, Focus on the Family, Family Research Council, and many other organizations. The reason I wanted to mention this at the very outset is simply to illustrate the fact that this legislation has broad, widespread support from a variety of organizations and interests around the country. In the meantime, from the time it passed out of the Judiciary Committee, we have been able to work with the so-called horse industry and the pari-mutuel betting to assuage concerns that they had originally expressed. We have also worked with the Internet providers who will be an integral part of the enforcement of this legislation. We have a letter from the main Internet providers indicating that they have no objection to this legislation passing in the form that it has passed. Mr. President, I have kind of given you an idea of the kind of support that we have for it. It is opposed, frankly, by two groups. One you will hear from--at least one Indian tribe. And perhaps some other Indians would like to have a carve-out; they would like to be excepted from this. Second, naturally the gambling interests offshore who stand to make billions of dollars from this illegal activity do not like it. So that is who is against it. Mr. President, I said this ``illegal activity,'' and I did that with a reason. The activity that we are largely prohibiting tonight is already illegal. The Wire Act, so-called, Telephone and Wire Act of 1961, makes it illegal to conduct sports gambling over the telephone, or a wire. So much of what is being prohibited in this legislation is already illegal. For those people who say, ``Well, we would like to be able to conduct this activity,'' their beef is not with our bill. Their beef is with existing law. One of these days wires are not going to be the means of electronic transmission. It is going to be fiber-optic cable or microwave transmission through satellites. We are not at all sure that when that happens that the Telephone and Wire Act will be able to be used by prosecutors in their prosecutions. Just a couple of months ago, the district attorney for the district of New York indicted 14 people for conducting this kind of illegal activity under the Telephone and Wire Act. But, Mr. President, that might not be possible in the future. That is why we want to update the Telephone and Wire Act. In addition to that, the second thing that this bill does is to ensure that, whether it is sports betting or not, the activity is illegal on the Internet because what has cropped up in recent months is something called the ``virtual casino.'' It looks a lot like a casino that you would go to that is perfectly legitimate such as Las Vegas or Atlantic City. It is on the Internet, and it comes outside of the country, because, of course, it is not illegal outside the United States--at least in some countries. But that is being, in effect, sent to American citizens in our country. The attorneys general of Florida, South Carolina, Arizona, and other States have no way to stop it under existing law. Our bill ensures that kind of ``virtual casino'' over the Internet is illegal, and that it is enforced through not only the usual means of enforcement but also with the ability of the prosecutors to go to the court and after a finding that this activity is being conducted over the Internet, to enjoin its further conduct by bringing in the Internet service provider, in most cases, and asking the Internet service provider to cut off the service, to pull the plug on the service from that particular web site. In some cases it will be very easy to do. In other cases, it is more complicated. We provided for that in the legislation. As I said, the Internet service providers--at least some of the largest groups, and I can provide the names if anyone is interested-- are satisfied that the language that we have worked out in the bill for this purpose is at least not objectionable to them. Let me indicate that this is a relatively new phenomenon, but it is pretty clear that we need to stop it now because it is quickly becoming, or will become, a multibillion-dollar activity. A recent ``Nightline'' piece, which was devoted to Internet gambling, reported that there are now an estimated 140 gambling sites online. Two years ago, Internet gambling was a $60 million business. Last year it grew to $700 million, and some believe that by the year 2000 the figure will be $10 billion. Mr. President, if we don't stop this activity now, the money that is generated by this kind of illegal activity is going to, I am afraid, become so influential in our political process that we will never get it stopped. That is why we have to act this year. I might add, Mr. President--and I am so delighted to have the expertise and the support of the Senator from Nevada, Senator Bryan-- that one of the reasons why the legitimate gaming organizations and activities in our country are also in support of this legislation is because they understand. They don't want gambling to get a bad name. A lot of money is made, and a lot of people are employed in the gaming industry in these States. They are highly regulated. When you go to a gaming activity in Las Vegas, you know that you are going to be treated fairly. If you win, you will get the money. You know exactly what the odds are. And there is a regulation commission that ensures that the rules are abided by. But that is not the case on the Internet. Here is the problem. Young children are getting really good at logging onto the Internet. They can log on in the morning. You have to put down a deposit of $100 or $500--whatever it might be. You do that with a credit card, frequently. And this child, in the privacy of the home, without any supervision, can simply gamble away whatever fortune the family had tied up in that particular credit card with no supervision. The kind of gaming that we have legalized in this country is the kind of thing where you have to go to that site. You have to engage in the activity there. It is highly regulated. One of the reasons this kind of activity is so dangerous is because there is nobody there to check the activity. It occurs in the privacy of your own home with nobody there to say, ``Wait a minute. Haven't you done this long enough? Haven't you lost enough money?'' Dr. Howard Schaeffer of the Harvard Center for Addictive Studies predicts that within 10 years youth gambling will be more a problem to society than drug use. And the youth of our society are the most at risk for conducting Internet gambling. First of all, they are the most adept at using the Internet. Secondly, they are in college and school, and this is where a lot of the computers are that our kids start on today. And on every major campus today there is organized gambling activity, according to law enforcement officials. Sports is the preferred subject of the gambling. So it doesn't take any imagination to appreciate that our Nation's children are at risk. And there is much more risk in this Internet gambling activity than in any of the other kinds of legalized gaming, highly regulated gaming, that is authorized in our country today. I won't go into all of the details about bankruptcies and suicide and that kind of thing except just to cite a couple of things here that ought to cause us pause. We know that about 5 percent of the people who gamble will become addicted. It is an addiction. Of those, about 80 percent will contemplate suicide, and about 17 percent of those will commit suicide. Bankruptcies are huge and growing. As a matter of fact, Ted Koppel noted that in his ``Nightline'' program, that last year 1,333,000 American consumers filed for bankruptcy, thereby eliminating about $40 billion in debt. And he talked about the percentage of that which is attributable to gambling, going into some of the statistics about a large percentage of that--in fact, something like 60 percent of people will get gambling debts that they can't pay. In fact, up to 90 percent of pathological gamblers commit crimes to pay off their wagering debts. That is the testimony before our committee. So suicides, bankruptcies, crimes committed to pay off debts, and the effect, of course, on the families. What does this have to do with our bill? This is the kind of activity that, by definition, is not regulated and is susceptible to addiction because there is nobody there. There is no inhibition in your own home; you just log on and you go do it. Of course, these virtual casinos are really good-looking things when you look at them on the screen. You can pull them up tonight, as a matter of fact. So, as I say, what we have done in the Judiciary Committee is to focus on this specific kind of activity as (A) needing to be updated because wire may no longer be the method of transmission of data and (B) because of these virtual casinos offshore. Let me describe a couple of the problems that we have dealt with in the legislation. One of the concerns was that the service providers would have difficulty in stopping the activity. Remember, what we have done here is to say that this activity is illegal, just like the Wire Act does. Theoretically, you could even prosecute the bettor, although that has never been done, and I don't anticipate it being done. What we are after here are the people running these gambling operations. The U.S. attorney in New York has indicted some people, some of whom were in the United States. So they have actually acquired personal jurisdiction over those people. They might be able to prosecute them, fine them, and send them to jail. But for the most part, these activities are going to be abroad, because the activity is illegal in all 50 States. As a result, you are not going to be able to get personal jurisdiction over the offender. How do we, therefore, stop the activity? That is where the service providers come in. And after, as I say, a finding of illegality has occurred, they will be brought in to appear before the court and be asked to pull the plug on a service that they are providing or, through them, is being provided to people on the net here in the United States. As I said, in the case of a direct provider, it is a little more technical than this but almost as easy as pulling the plug, because each of these sites has an identifier, an identifying number for billing purposes. Of course, you know that and you can simply cut off that particular service. In other cases, it will be more complicated than that. So what we have done is to provide a complex series of protections for the Internet provider to ensure, for example, that if they are asked to participate in this law enforcement activity, first of all, there won't be any injunction issue against them if it is not technically feasible; and, secondly, that they can demonstrate, if it is the case, it is not economically feasible for them. Then the injunction could not issue. This isn't a matter of what they are permitted to argue; these are actually conditions for the imposition of the injunction. I want to make it perfectly clear to my colleagues, up until a few days ago, you may have been contacted by various Internet providers, people like America Online, for example, or U.S. West. Their representatives, who are all over this town, may have told you that there were certain problems with this language. But they are among the organizations that have bought off on the language that I have painstakingly negotiated with them to ensure that, while they are helping law enforcement, we are not imposing an impossible burden on them. They are not going to have to do something that is not technically feasible, and they are not going to have to face unreasonable costs in complying with law enforcement. I know some people say they are part of the problem because they are actually transmitting this illegal information. But I don't think it is fair to ask them to monitor this activity or to stop it unless law enforcement deems it sufficiently serious to stop. And that is why we have only provided for them to be involved in this process in that eventuality. I think that is very, very fair. A second group that we have had discussions with is the virtual casino networks and operators. I know that Senator Bryan is going to talk to that because that is a part of his amendment. I must say that I totally support the amendment of Senator Bryan to add the protections in this legislation to those who are providing the games involving, for example, baseball where you get together with other people and you create your own baseball team and you then are judged by how well those teams and players do in the future. Sometimes there are prizes awarded, and sometimes there are not. But in any case, you usually pay a fee to do that, and if you win, you can win the prize. Now, the people who operate these kinds of activities on the Internet have variously claimed that it is not gambling or that no prizes are awarded. And if that is the case, then they have nothing to worry about under this legislation because both of those are requirements for it to be considered gambling. We also make it clear, if they charge administrative fees rather than collecting money to pay off bets, they would be exempt. I indicated before that we had solved the problems of the horse- racing industry. We essentially said with respect to that industry that this legislation does nothing to take away from any of the activity that they can do today, and, in fact, given the fact they are going to be using computers in their operation, and also in their advertising in the future, we make sure that activity is not prohibited. So, as I said, they are supportive of the legislation. I want to make it clear to anybody who has heard from anybody with respect to first amendment rights that the first amendment is totally protected here. All advertising is permitted. Any kind of advertising of legal activity is absolutely legal, and it would not even be constitutional for us to try to prohibit it. We have not done that. That leads me, Mr. President, to the last point which has to do with the treatment of the Native Americans. Now, under the IGRA, the Indian Gaming Regulatory Act, Native Americans are permitted to enter into compacts with States to conduct the same kind of gambling or gaming that is legal in those States. They can't do any more than what is legal in the States, but they can compact to do that which is legal. We have provided in this legislation an explicit recognition of the Indian tribes to conduct that kind of activity on their reservations. We have also made it clear that they can engage in the kind of pooling arrangements that many of them will engage in and that that would not be illegal. So everything that is done by every tribe except one, which may be violating the law today and that you will hear more about here-- everything that is currently being done and can be done legally is treated as legal in this legislation and would be permitted to continue. To the extent that the tribes were also concerned about enforcement by States attorneys general, we have made it clear that the States attorneys general are not to enforce this law against Indian tribes; that the only time a State attorney general could be involved is if the tribe itself compacted for that, so the tribe would have had to have agreed to it in the first instance. So we have satisfied all of the concerns of the tribes except one, and what you will hear is that they want to be able to do anything that is so-called legal or lawful under IGRA. But the problem with that is this. This legislation, just like the Wire Act that is still the law today, makes it illegal to conduct these kinds of activities. So since the Wire Act exists, a tribe could not conduct this activity claiming it to be legal under IGRA, because IGRA says you cannot do it if you do not have a compact, and you cannot have a compact unless it is legal. So, because this legislation and the Telephone and Wire Act both make it illegal to conduct this kind of activity, or continue to make it illegal, then, by definition, it would not be possible for a tribe to conduct this activity. What I am concerned about is that trying to add any other language that suggests that, if it is lawful under IGRA it would still be OK, would very much confuse and complicate the issue and raise a question about what the basic intent of this legislation is. And, at worst, it would actually permit the Native Americans or Indian tribes who wish to do so, to do something that nobody else in the country would be able to do, that would be illegal for every other American. What we have done is to treat the Native Americans fairly, to treat them like everybody else--no better, no worse. It would be, I think, a grave injustice to everyone else to allow a special exception for the Indians that nobody else in the country would have. Mr. President, I will have some more to say about a couple of the details of what we do, especially if there are questions, and also to further talk about the kind of testimony that was presented to the Judiciary Committee in support of this legislation. As you might imagine, there was a wide variety of testimony provided by law enforcement officials, people familiar with gaming and with addiction, people who understood the Internet and wanted to advise us about that. Frankly, we just had a lot of great testimony that supports this. I will just close with this one comment that I think helps to make the point. I mentioned the attorney general from Wisconsin--I was going to quote this before--James Doyle. He is the head of the Attorneys General Association. He said: Gambling on the Internet is a very dumb bet because it is unregulated. Odds can be easily manipulated and there is no guarantee that fair payouts will occur. Internet gambling threatens to disrupt the system. It crosses State or national borders with little or no regulatory control. Federal authorities must take the lead in this area. I close where I began. For State attorneys general to urge the Federal Government to take Federal jurisdiction over something like this is almost unprecedented. They wouldn't do it if they didn't feel that the problem societally justified it and, from a law enforcement standpoint, that it was the only way to ensure that this illegal activity could not be continued. So, as a result of that, we have adopted this legislation out of the committee and brought it to the floor under this mechanism because, as I said, it is really the only way we could bring it to the floor. I urge my colleagues to support the legislation and to support the amendment offered by the Senator from Nevada.

Mr. KYL

Mr. KYL. Mr. President, I would like to announce for the public that a field hearing has been scheduled before the Subcommittee on Water and Power of the Committee on Energy and Natural Resources. The hearing will take place on Tuesday, August 4 at 9:30 a.m. at the Pendleton Convention Center located at 1601 Westgate, Pendleton, OR 97801. The purpose of the hearing is to receive testimony on S. 2111, to establish the conditions under which the Bonneville Power Administration and certain Federal agencies may enter into a memorandum of agreement concerning management of the Columbia/Snake River Basin, to direct the Secretary of the Interior to appoint an advisory committee to make recommendations regarding activities under the memorandum of understanding, and for other purposes. Those who wish to submit written statements should write to the Committee on Energy and Natural Resources. U.S. Senate, Washington, D.C. 20510. For further information, please contact Ms. Julia McCaul or Mr. Howard Useem at 202-224-7875.

Mr. KYL

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

Mr. KYL. Mr. President, the Grassley amendment that is before us today expresses the sense of the Senate about a wide array of issues, about nine different issues in all. I agree with some of the ideas expressed in the amendment, but I have serious reservations about others. Mr. President, among the ideas I favor are the provisions of the amendment that express support for additional capital-gains and death- tax relief. Although it is unclear from the language of the amendment what form that relief should take, I hope Senator Grassley would agree with me that a good approach on capital gains would be something like the 70- percent exclusion that would be allowed by S. 73, the Capital Gains Reform Act, which I introduced last year. That is the same exclusion proposed by President John Kennedy some 35 years ago. Preferably, death-tax relief would mean outright elimination of the death tax, as proposed in S. 75, the Family Heritage Preservation Act. That bill, which I introduced last year, is cosponsored by 30 other Senators. Fast-track trade authority is something that I have voted for in the past, and I will vote for it again. Hopefully, we will have the chance to do that before the year is out. And I have long supported legislation that would provide full deductibility for health insurance for the self-employed. There is no good reason why people who are self-employed are singled out for disparate treatment when full deductibility is allowed for all other employees. We ought to provide 100 percent deductibility, and do it now, not several years from now. Unfortunately, there is more to the amendment than capital-gains and death-tax relief, health insurance, and fast track. There are other issues, too, and some of them are quite controversial. For example, the amendment expresses the support of the Senate for full funding for the International Monetary Fund (IMF). But what does full funding mean? Is it $3.5 billion or $18 billion--or will it be more, now that the IMF and Russia are talking about another bailout? Will the funding be conditioned on meaningful reform of the way the IMF does business? We do not know the answers to these questions from the language of the amendment. It is not designed to answer them, because it is merely a sense of the Senate amendment. But without knowing the answers, I believe it would be imprudent to go on record in support of ``full funding for the IMF.'' In fact, many of us have serious reservations about providing more money for the IMF, particularly it if is not accompanied by meaningful reform of the way the international agency does business. Many of us question the fundamental wisdom of having taxpayers bail out bad business practices and bad investment decisions abroad. Therefore, I would have to object to the IMF-related provisions we are considering here. There is also language in this amendment on economic sanctions. We addressed that issue yesterday when we considered the Lugar, Dodd, and Torricelli amendments, so I am not sure why we are considering it again, particularly since the amendment does not specify what kind of sanctions reform is in order. Most Favored Nation status for China is another controversial issue, and I believe we need to focus on it separately, more deliberately. There are far too many issues at stake this year to be considering MFN status along with myriad others in this sense of the Senate amendment. Mr. President, as I said at the outset, this is only a sense of the Senate amendment. It has no force of law, no effect, regardless of whether it passes. But I think it does cloud the record when issues like the IMF, economic sanctions, and MFN status for China are coupled with things like capital-gains and estate-tax reform, fast track, and health insurance. I would not want support for the latter set of issues to be construed as support for the former set. Since we will still need to act on separate legislation to accomplish the things raised by the Senator from Iowa in his amendment, and since there are some key elements of the amendment to which I object, I am going to vote against the amendment. It accomplishes nothing, and it adds confusion by suggesting that members either oppose or support everything in it. My ``no'' vote should be construed as a vote against this irrelevant and confusing procedure.

Mr. KYL

Mr. KYL. Mr. President, I was disappointed by some of the actions of the majority leader's statement the day before yesterday in which he provided an update on the Senate inquiry into U.S. policy on satellite exports to China. In particular, some charged that the majority leader was engaging in partisan politics when he simply presented some of the things that we have learned in the 13 hearings and the numerous briefings and meetings held on that subject to date. As a member of the task force appointed by the leader, I can state conclusively, Mr. President, that this investigation is driven by a desire to safeguard our Nation's security, and it is not motivated by partisan politics. Let's examine the five main points that the leader raised in his remarks. Point one: The Clinton administration's export controls for satellites are inadequate and have not protected U.S. security. Many of us have been dismayed at the lax implementation and the irregular application of safeguards during launches of American satellites in China. For example, the Clinton administration has failed to require Defense Department monitors for every Chinese launch of U.S. satellites. Monitors are typically Air Force officers who are required to be present at all meetings with the Chinese launch service provider and the American satellite exporter. The monitor's presence is necessary because sensitive know-how can be inadvertently disclosed. Chinese officials make no secret of their desire to obtain high-tech information, and the incentive for an American company to provide information necessary for a successful launch of a multimillion-dollar satellite is great, therefore a monitor can be extremely helpful in reducing the amount of information that is shared with Chinese engineers and scientists. Although Clinton administration officials routinely note the importance of monitors in testimony and briefings, under the current system, monitors are not required by statute, regulation, or international agreement. In fact, during three satellite launch campaigns conducted in China since 1995, monitors have not been present at any stage of the process. In three other launch campaigns in China, though not required by the government, monitors have been present only for the launch, but not the important technical exchange meetings dealing with mating the satellite to the launch vehicle and ensuring that it survives the stressful launch environment and is delivered intact to the intended orbit. The majority leader's point that export controls on satellites are inadequate is not merely endorsed by the members of the task force. As the New York Times said in an editorial on the issue on May 26, ``In its eagerness to improve relations with Beijing and expand American commerce in China, the White House has been careless about enforcing security protections.'' One month later, the New York Times again commented on the subject in another editorial on June 19 which stated, Evidence keeps mounting that the Chinese Army is exploiting flawed American export controls to acquire sophisticated satellite communications technology for military and intelligence use. The Pentagon and State Department are now questioning the pending sale of a Hughes communications satellite whose upgraded design would let Chinese authorities eavesdrop on mobile telephone conversations at home and abroad. President Clinton should suspend this sale and the licensing of any more satellite deals with China until export control rules are tightened. In particular, he needs to put the State and Defense Departments back in charge of export approvals and diminish the role of the Commerce Department. That is the New York Times speaking. That is not the majority leader. It is obviously a sentiment he shares. This sentiment is shared on a bipartisan basis. During a hearing of the Governmental Affairs Subcommittee on International Security, Senator Cleland criticized the administration for shifting responsibility for regulating satellite exports from the State Department to the Commerce Department stating, ``I've got more and more concern about Commerce becoming the lead dog here. I'd rather hedge my bets and put national security first and commerce second.'' The second point made by the leader day before yesterday was that in violation of stated United States policy, sensitive technology related to satellite exports has been transferred to China. Mr. President, this is also an accurate, objective statement that is widely shared. Additional hearings will be necessary to continue to gauge how much damage has been done to United States national security, but several launches have occurred in China without the necessary safeguards and at least two analyses conducted by American companies of failed launches have been sent to China without first being reviewed by the State or Defense Departments. As the Washington Post said on May 31, There is little dispute that some American know-how inevitably seeped across to the Chinese, despite strict rules covering what technology United States companies could share with the Chinese and despite the monitoring of contracts by United States Air Force specialists. The argument is over how much seepage occurred and whether any of it helped China improve its military rockets. Again, the majority leaders' comments are vindicated by the press. The third point made by the leader day before yesterday was that China has received military benefit from United States satellite exports. Additional information in this regard may be uncovered as the Senate's inquiry continues, but some key information has already come to light. Last month, in a front page story published on June 13, the New York Times broke the news that, For the past two years, China's military has relied on American-made satellites sold for civilian purposes to transmit messages to its far-flung army garrisons, according to highly classified intelligence reports. The reports are the most powerful evidence to date that the American Government knew that China's Army was taking advantage of the Bush and Clinton Administrations' decisions to encourage sales of American high technology to Asian companies. Again, the majority leader was not wrong. He is right. The fourth point made by the majority leader was that the administration has ignored overwhelming information regarding Chinese proliferation and has embarked on a de facto policy designed to protect China and United States satellite companies from sanctions under United States nonproliferation law. This is another objective observation about what we have learned from the hearings conducted so far. And again I turn to reports in the media in confirmation of the majority leader's point. As the Washington Post reported on June 12, The former chief of the Central Intelligence Agency's weapons counter-proliferation efforts told a Senate committee yesterday that the Clinton Administration's determination not to impose economic sanctions on China led it to play down persuasive evidence that Beijing sold nuclear-capable M-11 missiles to Pakistan. ``There's no question in my mind'' that China sold 34 M-11 missiles to Pakistan in November 1992, Gordon Oehler, former director of the CIA's Nonproliferation Center, told the Senate Foreign Relations Committee. Intelligence agencies are ``virtually certain'' the sale occurred he said, but ``intelligence analysts were very discouraged to see their work was regularly dismissed'' by Clinton aides. Yet despite this overwhelming evidence, the Clinton administration has not imposed sanctions and as a result of the transfer of authority over satellite exports from the State Department to the Commerce Department, satellite exports have been shielded from the effects of sanctions. Prof. Gary Milhollin made this point in testimony to the Armed Services Committee on July 9, stating, One of the main effects of this transfer has been to remove satellites from the list of items that are subject to U.S. sanctions for missile proliferation. In effect, the transfer has given Chinese firms a green light to sell missile technology to Iran and Pakistan. Chinese companies can now sell components for nuclear-capable missiles without worrying about losing U.S. satellite contracts. The administration has been interested in shielding China from the effects of United States nonproliferation sanctions for some time. According to a classified National Security Council memo reprinted in the Washington Times in March, the administration believed one of the benefits of United States support for China's membership in the Missile Technology Control Regime would be ``substantial protection from future U.S. missile sanctions.'' And again what the majority leader said is on the record. It is vindicated. It is not wrong. The fifth and final point made by the majority leader day before yesterday was that new information has come to light about China's efforts to influence the American political process and that the Attorney General should name an independent counsel to investigate. I serve on the Intelligence Committee which recently received classified testimony from the Attorney General and the Director of Central Intelligence on this subject. While obviously I will not comment on that testimony here, I simply point out that over the past few months a great deal of troubling information has been published on the subject in the press. As the Senate investigation proceeds we may uncover additional information in this area, but in my view the appointment of an independent counsel to investigate these allegations is already long overdue. As I have tried to demonstrate today, attempts to portray the majority leader's statement or the work of the task force as partisan politics are simply invalid. The protection of our nation's security has been--and should be--our only concern. I urge my colleagues to examine the Record before leveling such charges. Although the Senate investigation will continue, it is clear that we must change the way we handle export controls on sensitive technology or risk further jeopardizing America's security. The bottom line, Mr. President, is that when the majority leader made his controversial remarks, he was right and the record needs to reflect that. Mr. President, I suggest the absence of a quorum.