Brad Sherman

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, I join with the gentleman from Vermont in opposing the disastrous trade policies that the United States has employed over the last decade. They have led to the largest trade deficit in the history of mammalian life. The trade deficit affects people; $300 billion and more of trade deficit with a rough approximation of 40,000 jobs lost for every $1 billion of deficit. We do not live in a perfect world. We live in a world in which Europe and Japan subsidize their exporters, and the only thing worse than us subsidizing ours through the Export-Import Bank, would be our failure to do so to partially balance what Japan and Europe do for theirs. I also want to commend the conference committee for leaving a provision that was added by amendment in the House bill to require that when the Export-Import Bank makes its decisions, it include as an important criteria: whether the country involved is one that is cooperating with us in the war on terror. I think increasingly in all of our trade and foreign aid, we ought to ask that question. I might add that the Export-Import Bank has to be contrasted with the World Bank, which is planning right now to loan $755 million to Iran. Iran was branded just two week ago by the State Department as the number one sponsor of terrorism among all the governments in the world. So let us support the reauthorization of the Export-Import Bank, and let us be wary when the World Bank appropriation comes to this floor.

Mr. SHERMAN

Mr. SHERMAN. Mr. Chairman, I will insert in the Record at this point my letter to Ambassador Burns confirming my earlier conversation with him in which he represented before the administration that none of the funds provided by this bill will be made available for the United Nations Relief and Works Agency, UNRWA, but would rather go to NGOs and contractors working directly with the United States. Congressman Brad Sherman, 24th District, California, Las Virgenes and Malibu, CA., May 23, 2002. Hon. William Burns, Assistant Secretary of State for the Near East, The State Department, Washington, DC. Dear Ambassador Burns: Thank you very much for your telephone call this evening. I want to confirm with you that the $50 million in Economic Support Funds for humanitarian and refugee assistance provided for the Palestinian people in HR 4775, the Supplemental Appropriations bill, will be distributed to NGOs and contractors operating in Palestinian areas to help provide for the critical needs of Palestinians. Thank you for confirming that none of the funds in this bill will be made available by the Administration for the United Nations Relief and Works Agency (UNRWA). Sincerely, Brad Sherman, Member of Congress.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, yesterday evening I came to the floor to bring up a subject that has gotten far less attention than it deserves. And that is the plan of the World Bank, an organization funded substantially with your tax dollars in mind, to lend up to $755 million to the Islamic Republic of Iran. Last night I put into the Record of this House an article that was published by the Dow Jones International News that reviewed the facts, and I would like to review that article with you tonight along with some additional commentary. The article begins: ``The World Bank undeterred by President George W. Bush's condemnation of Iran as part of the axis of evil, undeterred by the fact that it is arming itself to threaten a peaceful world, the World Bank is pressing ahead with a plan that would provide as much as $755 million in loans to that government over the next 2 years.'' Mr. Speaker, there are a few apologists for the government in Iran who note that there are reformers who play front roles, a president of Iran who exercises no power, it is almost an honorary position, who claims to have different views than those actually carried out by the government. But the reports of the American State Department say that reformers have been silenced, that there are public executions, public floggings which increased last year. And just on Monday the State Department announced that Iran is the number one governmental sponsor of terrorism. Now, in January President Bush identified Iran as a key threat to American security. But as he was doing that, a team of bank directors from the World Bank returned from a visit to Tehran, and they made a clear recommendation to the bank, ``deeper and faster involvement in Iran.'' That is the quotation attributed to Jean-Louis Sarbib, the bank's vice president for Middle Eastern and North African affairs. Now, the bank staff is reported by the Dow Jones International News to be planning first a loan of $150 million by the end of this year, and then as an element of a tentative plan, endorsed already by the bank's board of directors, the bank would proceed with up to $755 million to Iran in fiscal years 2002 and 2003. Now, keep in mind the United States contributes 29 percent of the World Bank's capital. We are given only 16 percent of the World's votes. But do not believe that our 16 percent of votes will be sufficient to block this loan, because 2 years ago the World Bank over America's strenuous objections loaned $232 million to Iran. And let us not believe that this is just for humanitarian purposes. Because as the article continues, and I am quoted in the article as saying, and I think I said it right, ``The government of Iran will engage in the minimum domestic expenditures necessary to cling to power. Whatever is left over they are going to spend on terrorism and nuclear weapons.'' When the World Bank finances those minimum amounts of expenditure that the Iranian Government needs to hold on to power, it is freeing up oil revenues for terrorism and for a nuclear weapons program. It will certainly not be sufficient for us to do business as usual and to simply vote against these loans. That is why, Mr. Speaker, I hope that others will join me in crafting legislation that I am working on now and will present to this House just as soon as we return from Memorial Day. And under that legislation we would draw a line in the sand and tell the World Bank that if they approve any additional loans to Iran that no additional American money would be given to that bank. We are planning to give them $877 million. We should not give them a penny after any day when they approve a loan to Iran.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on the Special Orders on the 61st anniversary of the Battle of Crete.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, where you sit now or stand now, the President of the United States told this Nation right after September 11 that there are those who are with us and those who are with the terrorists. I was not surprised to hear our President indicate that the government of Iran is on the side of the terrorists. Yes, it is true that there is a nominal, though impotent, figurehead reformist posing as President of Iran, but, of course, the real power is exercised by unelected officials who take the most extreme pro-terrorist views. So I was not surprised when our President used the term ``axis of evil'' and included the government of Iran, not the people of Iran who have given us one of the world's great civilizations, but the current unelected real power in the government of Iran. I was not surprised today when the United States State Department identified the Iranian government as the number one sponsor of terrorism, but there was something that surprised me. I am surprised that we are about to finance those who finance terrorism. Yes, we do not have to comb the mountains of Afghanistan to find Mohammed Omar, because here in Washington down on K Street are those who are ready to finance those in the government of Iran who are the number one sponsors of terrorism. This entity does not only enjoy the protection of the American government, but surprise further, they are about to receive over 800 million of our tax dollars this year, just as they did in prior years. I refer to the World Bank, an organization that does many worthy projects. Of course, Osama bin Laden built hospitals as well. Now they are about to fund the number one sponsor of terrorism. Let us reflect that money is fungible. The government in Tehran spends the minimum they have to on domestic affairs in order to secure their power. Whatever is left over goes for nuclear weapons development and to finance terrorism, and to help meet those domestic needs the World Bank financed by our taxpayers. I want to skip a little ahead in my speech to make sure I identify this point. I am currently working on legislation, and I hope others will join me in drafting it, not as mere cosponsors, but as genuine coauthors, to say to the World Bank: Enough is enough. That if you make further loans to Iran, you will not be allowed to receive any additional monies from the United States and, perhaps further, that if you make additional loans to Iran, we will withdraw the capital that we have already invested. This is because weak protests, a mere vote and voice, virtually guarantees that the World Bank will send over $700 million, $755 million, to be more precise, over the next year to the government in Tehran. Two years ago when the World Bank proposed a loan, we weakly voted against it. We told them we were against it. We voted all of our shares. It did not matter. And if this House is willing to settle for nothing more than a weak protest, then let us remember that when Iran develops nuclear weapons, they are not going to be smuggling them in to Paris or Rome; those nuclear weapons, scarcely the size of a human being, will be smuggled into Washington or New York or Los Angeles. And those European governments that stood with Tehran and demanded that they get funded will not be the immediate targets of Iranian nuclear terrorism. We will. So perhaps we need to do more than weakly protest and get outvoted than have tea with the diplomats who are sending our money to Tehran. Now, we will be told that the World Bank is 5 different entities and we are funding the right hand and the money to Tehran is coming out of the left hand. Let us not be fooled. There is one staff, there is one president, there is one group of directors making one group of decisions, and if we are going to send over $800 million this fiscal year alone in this upcoming appropriations bill, not the supplemental, but the annual, if we are going to send that money to the very people who delight in the financing of the Tehran regime, and we can get outvoted as to how it is spent, a mere change in the bylaws, then even the right hand could send money to Tehran or to Khartoum in Sudan. Mr. Speaker, let us hope that this Congress has the courage to upset the diplomats at their tea parties and say no money for the World Bank if that World Bank is financing the government in Iran. [From Dow Jones International News, May 17, 2002] World Bank, Over US Objections, Plans More Loans To Iran (By Joseph Rebello) Washington (Dow Jones).--The World Bank, undeterred by President George W. Bush's condemnation of Iran as part of an ``axis of evil, arming to threaten the peace of the world,'' is pressing ahead with a plan that would provide as much as $755 million in loans to the country over the next two years. Since the bank began preparing the plan, Iran has mostly disappointed Western expectations that political reformers would succeed in making it more democratic and liberal. Reformers were silenced, and public executions and public floggings increased last year, according to Human Rights Watch. Iran remained the world's ``most active'' state sponsor of terrorism, according to the U.S. government. But inside the bank support for more loans to Iran has only grown, officials say. In January, just as Bush identified Iran as a key threat to U.S. security in his State of the Union address, a team of bank directors returned from a visit to Tehran. Its recommendation: ``deeper and faster involvement of the bank'' in Iran, said Jean-Louis Sarbib, the bank's vice president for the Middle East and North Africa. Staff Expects To Seek Approval For New Loan By Dec. ``We have been quite impressed with the way they have gone about some of their macroeconomic reforms,'' said Sarbib, citing the country's success in building its foreign reserves, in reducing poverty and in ensuring basis education for all Iranian girls. ``What we see on the economic side are people who are really trying to build economic democracy, who are trying to build a market system.'' The bank's staff intends to seek approval for a new loan-- worth about $150 million--by the end of the year. That loan is an element of a tentative plan, endorsed last year by the bank's board of directors, that advocates the approval of $755 million in loans to Iran in fiscal 2002 and 2003. Iran could eventually be eligible for more than $500 million a year, if it continues to satisfy the bank's requirements, officials said. For the U.S. government, the bank's biggest shareholder, the courtship of Iran has been a lingering source of embarrassment. The U.S. contributes 29% of the bank's capital. It control 16% of the votes cast by the bank's directors--usually a decisive share. It is forbidden by Congress from supporting loans to Iran. But it has been powerless to stop them in recent years. U.S. Hasn't Been Able to Stop Loans To Iran Recently Two years ago, the bank's directors ended a seven-year lull in lending to Iran and approved two loans worth $232 million. The U.S. objected strenuously. Madeline Albright, the secretary of state, lobbied leaders of other governments, asking them to oppose the loans because of Iran's human- rights record. She made little headway: the U.S. cast the sole no vote. Canada and France abstained. James Wolfensohn, the bank's president, told U.S. officials at the time that the loans addressed ``basic human needs'' and were designed to support the reform efforts of Mohammad Khatami, a moderate cleric who had been elected Iranian president in a landslide in 1997. But any future loans, he told the bank's U.S. representative, would be considered only after a ``review of all aspects of the economic and governance programs of his government.'' Iran's performance since then has been mixed. Khatami was reelected to a second four-year term last June. His government briefly warmed toward the U.S. after the terrorist attacks of Sept. 11--it offered, at one point, to rescue U.S. pilots downed in the war in Afghanistan. But Khatami's influence soon faded amid a crackdown by the country's conservative clerics, who control Iran's judiciary and security forces. ``Even after his sweeping election victory in June, when he increased his share of the popular vote, (Khatami) continued to shy away from open confrontation with his opponents and made no discernible progress in implementing his promised reforms,'' Human Rights Watch said in a report in January that warned of ``mounting'' social and economic problems. ``Increasingly . . . he appeared to represent more of a safety valve than an agent of tangible change,'' it said. The World Bank, however, measures Iran's performance differently. It considers itself apolitical: The bank's mandate, officials say, is simply to reduce poverty and promote sustainable economic development among poorer countries. In deciding to make loans, accordingly, it avoids making official judgments abut the borrower's stance on human rights, terrorism or nuclear weapons. Instead it keeps a close eye on economic and social indicators and the speed with which governments improve those statistics. By those measures, Iran has performed splendidly. The poverty rate has fallen to 15.5% from 47% in 1978. The infant mortality rate dropped to 26 for every 1,000 births from 47 in 1990. Iran has also built up $17 billion in foreign reserves, partly because of the recent rebound in oil prices and partly because it has paid off much of its debt. It has lowered tariffs, removed most non-tariff trade barriers and unified its system of multiple exchange rates--all well ahead of schedule. ``We are seeing concrete results--in terms of economic and social reforms,'' Sarbib said. Last year, the bank's staff completed the review that Wolfensohn and the bank directors had called for, and advanced a short-term plan calling for the launch of a half-dozen development projects in 2002 and 2003. With the exception of the bank's U.S. representative, all of the bank's 24 directors supported the proposal. The bank's staff plans to present a long-term lending plan to the directors next year. ``The general sense among executive directors is that they are supportive of the bank's engagement with Iran, with the exception of the U.S.,'' said one director who asked not to be named. ``It's difficult to see how the U.S. position could influence other countries. My sense is there is not widespread support for the U.S. position.'' U.S. Lawmaker Criticizes Bank; Says U.S. Lackadaisical At least one U.S. lawmaker is incensed, saying the loans will merely bolster Iran's repressive leadership. ``Money is fungible,'' said Rep. Brad Sherman, D-Calif. ``The money that the World Bank is providing to Iran's government is not particularly benefiting its people. That government will engage in the minimum domestic expenditures necessary to maintain power. Whatever is left over they'll spend on terrorism and nuclear weapons.'' Sherman said he has been trying to get the Bush administration to take a harder line with World Bank, with little success. ``Nobody's blood pressure is up on this,'' he said. ``The problem is the U.S. bureaucracy. They say, `Oh, gee, we'll vote no. If we get outvoted, que sera sera.' It's as if they hadn't listened to the State of the Union address. It's as if they were unaware of what happened on Sept. 11.'' A Treasury Department spokeswoman, Michele Davis, said the U.S. government has regularly expressed its displeasure with the World Bank's plans for Iran. ``The U.S. opposes World Bank lending to Iran and has consistently communicated this position to Bank management, including in May of 2002, when the World Bank approved two loans to Iran despite U.S. opposition,'' she said. World Bank officials, meanwhile, said they can see no reason why Iran should be deprived of loans. Sarbib rejects the argument that World Bank loans for humanitarian and development purposes allow Iran to spend its own resources to develop nuclear weapons and promote terrorism. ``Look, they have $17 billion of reserves,'' he says. ``If they want to do all these things, they can do it. They don't need World bank funds to do that kind of stuff.'' Besides, he said, ``Iran is a member in good standing of the World Bank. They are current on all their obligations. As a member in good standing of the cooperative, they are entitled to the services of the cooperative.''

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, today Israel faces an attack on its continued existence by those who reject a two-state solution. Now is the time for us to demonstrate our solidarity with those under terrorist attack. We should not be balanced between those who target civilians for death and those seeking to protect themselves from terror. For those who thirst for balance, recognize that this resolution is but a drop in the bucket of world commentary, and this resolution will help balance, will help offset the rash of anti-Israel diatribes and anti-Semitic violence. Some will disagree with the exact drafting of this or that clause in this resolution, but the world will little notice the exact text however. The vote total, will blaze in headlines worldwide. Let that vote total demonstrate that no one can drive a wedge between the United States and Israel, and no one can drive a wedge between Democrats and the pro-Israel community. Vote yes!

Mr. SHERMAN

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

Mr. SHERMAN. Mr. Chairman, I yield myself such as I may consume. Mr. Chairman, I know there are others that would like to speak in favor of this amendment, but this whole process has gone more quickly than expected, so we will see if they can make it here to the floor. Mr. Chairman, the financial auditing system is the only one where the umpire is paid by one of the teams. That is to say, we have a situation where the auditor must make tough judgment calls, particularly as to how to apply generally accepted accounting principals which are not mechanical but, rather, require judgment. And the firm must make those judgments relative to the client, sometimes being the difference between whether the stock sells for $20 a share or $40 a share. The auditing firm must make that decision affecting the clients when they are being paid by that client. The one financial check on this is the fact that if the auditor does not make the right decision, but is rather negligent, they may be sued. The other check on this, of course, is the integrity and the professionalism of the individual auditors involved in the process. But our system, our capitalist system works well when we rely on the good spirit of people but also on financial incentives, financial checks and balances. Those financial checks and balances, however, ring hollow in the present system. Back when I was practicing--and, Mr. Chairman, that was a long time ago, I had hair when I was doing it, that tells us how long ago it was--we had general partnerships that were the Big Eight, now the Big Five accounting firms. That meant that every partner's personal assets were on the line if the firm committed malpractice. So of course the firms purchased malpractice insurance. And it meant that if an investor was hurt by malpractice, that that investor would at least get some compensation. Now our corporate laws have changed. There are professional corporations, limited liability companies, and limited liability partnerships. As a result, those investors hurt by auditor malpractice can only look to the assets of the firm. It makes sense that we make sure that there are at least some assets there so that investors hurt by accounting malpractice at least get some compensation. That is not the case at the present time. Arthur Andersen is supposed to be paying $217 million, not in relation to Enron, but in relation to the Baptist Foundation of Arizona audit in which they also committed malpractice. And now it looks like those investors are not going to be paid. It looks like the Enron investors are not going to get a penny from Arthur Andersen. Why? Because Arthur Andersen has virtually no malpractice insurance and virtually no reserves. Mr. Chairman, if you are going to drive your car, you might hurt somebody. And that is why every State in this Union requires you to have some sort of reserve or auto insurance. If you are going to operate a fleet of thousands of taxis, certainly you would have insurance, because driving down Main Street you might make a mistake and hurt somebody. Well, driving on Wall Street is also potentially dangerous. And those who drive down Wall Street and can cause billions of dollars of harm if they are not careful, should also have the same insurance required of every driver in this country. Wall Street is as dangerous for pedestrians as Main Street, and that is why I have proposed this amendment. I want to be very clear on what it does not do. It does not have an effect on the 99 percent of CPA firms that do not audit public companies. It has virtually no effect on the regional firms that do a very few SEC audits. It requires them to have such minimal capital reserves that if they just own their own computers, they meet the test. They probably would have malpractice insurance anyway. This bill affects the Big Five firms. It says that those firms that do 99.5 percent of all the SEC auditing have to have reserves or they have to have malpractice insurance. It ensures that if investors are hit on Wall Street, they will at least get some recompense. We provide that assurances to pedestrians. We ought to provide it to investors as well. Mr. Chairman, I reserve the balance of my time.

Mr. SHERMAN. Mr. Chairman, how much time do I have remaining?

Mr. SHERMAN. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, let me respond to the comments of our distinguished chairman. This is hardly a sledgehammer. Keep in mind that 20 years ago, every one of the accounting firms, big and small, had far more reserves available to those who were affected by accounting malpractice. Twenty, 30 years ago, they were all general partnerships, so they had malpractice insurance. One of the reasons they had it is that the personal assets of every partner were on the line. The assets available to the creditors of Arthur Andersen 30 years ago would have been tens of billions of dollars, adjusted for inflation, talking about 2002 dollars. Today we have an empty shell. I remind the House that when they ask poor people in each district who need to drive somewhere to work to earn the minimum wage, we insist they have liability insurance, because while we are concerned about their ability to drive, we are also concerned that those who are hurt by negligence get at least something. And yet we turn to what will probably be the Big Four accounting firms, each with many billions of dollars of revenue, and say that they do not have to have any liability insurance. Is that a fair society? Do we really believe that driving down Wall Street is not as hazardous as driving down any street in America? Certainly all the automobile accidents in this country will not add up to the losses suffered by Enron investors. If we require those who drive to have insurance and we do not regard that as an undue burden on driving, how can we say that auditing publicly traded corporations, an activity engaged in by only five accounting firms for the most part, maybe two or three others, are we going to say that the five or eight or nine largest accounting firms in the country do not need any liability insurance? I do not think we should. I think at this time it is reasonable to say that if you are engaging in activity that only exists because the securities law requires it, if you are receiving billions of dollars in fees because publicly-traded companies are required by Federal law to have an audit, then you ought to have liability insurance. I will give another example. If a small plumbing contractor wishes to do the plumbing on a Federal building or a State construction project, surely we would require a completion bond or other insurance that the work will be done appropriately. How can we turn to individual drivers and say they must have insurance, the smallest companies who do construction work, and say they must have insurance, and then turn to the Big Four accounting firms and say they can walk away scot-free no matter what liability a court imposes on them? It is an illusory liability. The Enron investors will probably get nothing from Arthur Andersen. I do not think that is a fair system. I think instead it is reasonable to require that those who engage in activities which may make them liable to someone else have reasonable amounts of insurance. I want to repeat, this bill will affect only the Big Four or, today, Big Five accounting firms. It will have no effect on the 99 percent of firms who do no SEC auditing and will have no effect or virtually no effect on the four, five, or six other regional firms who may have a very few SEC audits. Only when a firm is deriving a very large percentage of its revenue from SEC audit does this bill have any effect. So I ask my colleagues to require that investors who are mamed on Wall Street at least be able to get some amounts of compensation, as they would if they were hurt walking across the street in their hometown. Mr. Chairman, I reserve the balance of my time.

Mr. SHERMAN. Mr. Chairman, I yield myself the remaining time. This bill will not adversely affect small accounting firms. It restores a system similar to what we had 30 years ago when every firm had malpractice insurance because the LLC and LLP structures had yet to be invented under State law. We in the federal government require that an audit be conducted because of the securities law, and we ought to require that those who will rely on those financial statements will get some compensation in the event that auditor malpractice takes place. State governments require insurance to drive a car. We ought to require insurance to drive on Wall Street.

Mr. SHERMAN. Mr. Chairman, Enron not only cost its own shareholders tens of billions of dollars, but our markets would be selling at trillions of dollars more in net capitalization if investors around the world did not have to wonder whether the next Enron was right around the corner. All three of our institutions failed our investors. The SEC failed to even read the Enron financial statements, let alone demand clarification of their incomprehensible footnotes. And when the SEC reauthorization bill comes to this floor, it should come in regular order so that we can propose amendments to improve the SEC. The stock analysts and the auditors both failed as well; and they failed in part because the current system clouds their judgment with excessive conflicts of interest. The stock analysts are affected by the huge investment banking fees so that they now not only recommended Enron as an investment, but they recommend a hold or a buy on virtually every stock on the board. The auditors received not only their audit fee from their clients, but huge and unlimited fees for other services, sometimes five or 10 times the fees they received for auditing; and this bill, while providing a list of services that they are not to provide, does nothing to cap the total fee that they receive. We need to restore confidence in our markets. If Congress does its job, our capital markets will once again be the envy of the world. But we cannot do it just by passing this bill. The LaFalce substitute at least takes us further down the road toward reform; and then we need to do even more to deal with the SEC, the stock analysts, and the total amount of fees received by auditors for nonaudit services.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, I join with my colleagues from the Armenia Issues Caucus to recognize the obvious and uncontestable fact that during World War I and its aftermath, as many as 1.5 million Armenians died in the first genocide of the 20th century. The question is not whether we should recognize this genocide, but why we have not done so already. The evidence is overwhelming. It has been set forth today by the previous speakers, as it has been set forth every April 24th, year after year, on the floor of this House. Why do we not recognize that which is uncontestable? We are told that there are geopolitical reasons why the truth must be shrouded. Well, Turkey would be a much better ally of America if Turkey recognized the truth. What kind of ally would Germany be if it had a government that denied the Holocaust? What kind of ally would America be if we denied that slavery occurred or claimed that we had not created great injustices to the Native American population, including, frankly, the genocide of certain Native American Tribes? Turkey is an ally of America, but America has no greater ally than the truth. Nothing is more important than that America be recognized as being guided by the truth, and eternal truth, and not the geopolitics of the hour. History will record that there are very few occasions in which the world consents or even a region of the world consents to the existence of a single superpower, and the world will not consent to our leadership unless that leadership is guided by principle. We must put the truth first. What if, for example, a new regime should arise in Germany and disclaim the Holocaust and demand that we here in Washington marched down to the Holocaust Museum and rip it apart brick by brick? The response should not be, oh, Germany, is an important and powerful country. The response should be that there is nothing more important to America than the truth. We must recognize the genocide, and we must recognize the needs of those who survived the genocide. Last year when the President asked us for $70 million in aid to Armenia, this Congress responded with $90 million of aid, additional aid to help meet Armenia's security needs. Since its independence, this Congress has provided $1.3 billion of aid to that new democracy, and this year again we must respond by providing the aid that Armenia needs, more than the President provides in his budget. We must make sure that we do not aid Azerbaijan as long as that country continues to blockade Armenia. Finally, with regard to the proposed pipeline, the Baku-Ceyhan pipeline, we must make sure that is a pipeline of peace that unites Azerbaijan and Armenia as it flows through both of those countries into the Mediterranean Sea; and we must make sure that the Export-Import Bank does not risk our capital in creating a pipeline of war, a pipeline that deliberately circumvents Armenia and tries to create a new geopolitical situation in the Caucasus. We must recognize the truth. We must build toward peace, prosperity, and progress for Armenia and for the entire Caucasus region.

Mr. SHERMAN

Mr. SHERMAN. Mr. Chairman, last week there was discussion as to what the effective date should be, and the gentleman from Connecticut describes his thought process. It might have been reasonable to have an effective date as early as the date of enactment, the date the President signs the bill. Maybe it would have been reasonable to have it 30 days or 60 days thereafter. The most reasonable outcome is to make it effective for the next election. But all of those alternatives would be reasonable approaches. What is clearly unreasonable is to make this bill effective today, before the Senate acts, before the President acts. Not only is that impractical, it is clearly unconstitutional. Article 1, section 9, clause 3 tells this House not to pass an ex post facto law. Yet this bill imposes criminal penalties on acts taken tomorrow, which are legal tomorrow, but which would become retroactively illegal when the President signs this bill. Tomorrow soft money will be used for issue ads naming candidates on the March 5 ballot in the primary in California and other early March primaries around this country. These ads were legal yesterday. They will be legal tomorrow. They will become illegal when the President signs this bill. And if they become retroactively illegal, then people can be put in jail for doing things which were legal at the time they did them. Our Founding Fathers made it clear that this Congress should never pass such a criminal statute. We have passed retroactive tax laws providing benefits, but never have we Constitutionally passed a retroactive bill imposing new criminal penalties. We cannot adopt an ex post facto bill, nor should we. This amendment is not a good faith effort to insulate the 2002 elections from soft money. It is, instead, an act designed to kill the bill, and in doing so it violates the Constitution. Let us vote ``no'' on this amendment.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, I bring you another Christmas story. Long ago, many highly profitable corporations paid zero in Federal income tax. Ebenezer Scrooge rejoiced. But the American people insisted that we pass a corporate alternative minimum tax so that no matter what loopholes a profitable corporation exploited, it still had to pay a minimum tax of 20 percent of its economic income. Today, Ebenezer cynically dresses as Santa Claus. He is pretending to bring relief for Tiny Tim. But actually he is delivering the virtual repeal of the corporate alternative minimum tax, delivering presents to the largest and richest corporations in America. In doing so, he will take $13 billion away from Social Security and imperil the retirement of Mr. Cratchit. Bah, humbug.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, let me tell my colleagues a Christmas story. It is the dead of night. Congress is anxious to adjourn. Members can hear Christmas carols in their heads. Some are so anxious to leave town that they are willing to vote for a so-called stimulus bill, even though it was revealed just an hour ago--a quarter trillion dollar program that virtually none of us, or any of our staffs, have had a chance to fully analyze. Ah, but the tale goes on. One party, acting alone, ignoring Democrats even at a time when national crisis demands bipartisan and bicameral consultation. One party reveals a $250 billion program that they are understandably reluctant to debate under the regular rules, or to reveal in the light of day. Because, Mr. Speaker, two-thirds of the cost of this program, two-thirds of the transfers from the U.S. Treasury to the private sector, occur in fiscal years 2003 and 2004 and 2005 and 2006. Long after there is any perceived need for stimulus, we will be stimulating an economy which at that time may already be overstimulated. For this is not a stimulus bill, designed to deal with a short term economic downturn. Rather, it is a permanent transfer of enormous wealth to giant corporations, cynically disguised as an attempt to help the victims of September 11. Thank God for the United States Senate.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, over the last decades, we have moved from the largest creditor Nation to the largest debtor Nation in the world. We now run a trade deficit of nearly half a trillion dollars every year. The dollar is on the road to crashing sometime in the next decade or so, and this bill makes it all more certain and makes it happen faster. It provides access to the American markets to those with the very lowest labor standards and the lowest environmental standards. It will pressure us to see our trade deficit even get larger, or to cut our own environmental standards, labor standards and wage rates in order to compete. It deprives us of the opportunity to demand trade bills that are fair and to involve Congress in making sure that the trade bills do not simply increase trade, but increase exports more than imports. The nonlegal barriers imposed, particularly by China, but other countries as well, will ensure large trade deficits if we pass Fast Track now.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, we rise today to pay tribute to Cathy Maguire as she completes her tenure as Chairman of the Valley Industry and Commerce Association (VICA). Fifty-two years ago, when VICA was founded, the San Fernardo Valley was a predominantly rural and agricultural area north of Los Angeles; today, the Valley is a vital part of our nation's second-largest metropolitan area--thanks in part to the leadership of VICA. Since Cathy Maguire was elected Chairman of VICA in 1999, the Valley business community has benefitted from having a tenacious, committed and vocal advocate with representation at all levels of government from L.A. City Hall to Capitol Hill. Cathy Maguire has led two delegations of business leaders to our nation's capitol to meet with United States Senators, Members of Congress, Cabinet Secretaries and senior staff of both the Clintons and Bush Administrations. VICA has taken a leadership role on Social Security reform, small business development, aviation and airports, water quality and reliability, a patient's bill of rights and telecommunications issues under the keen leadership of Cathy Maguire. As California faced an energy crisis this year, VICA played an important role in discussing solutions with the Administration as well as with our colleagues in Congress--working to ensure that California had reliable, affordable supplies of energy. And while our nation mourned the losses of September 11, 2001, VICA and its Chairman have worked to minimize the impacts on Southern California's economy, convening the region's first Economic Impacts Summit and advocating in Washington on behalf of an economic stimulus for local businesses impacted by the tragic events. Mr. Speaker and distinguished colleagues, please join us in honoring Cathy Maguire for her leadership and accomplishments as Chairman of the Valley Industry and Commerce Association.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, I am sure you have visited Rayburn 2128, the room in which the Committee on Financial Services meets. It is a large and beautiful room, and I would propose that we make that room available to provide housing for the homeless. Because what went on in that room in crafting this bill has nothing to do with the bill that reaches the floor. Mr. Speaker, if all of our financial services bills are to be written in the Committee on Rules on the third floor of this building, why must people sleep out in the cold when they could be provided housing in room 2128? In fact, we are presented this bill on very short notice, basically 24 hours' notice, and it has so many changes from the bill that left our committee. One of the flaws in this bill is that it provides first dollar coverage with no deductible. What does this mean? It means that if there is a terrorist event that causes a billion dollars in damage, less one penny, comes within 1 cent of causing a billion dollars of damage, the Federal Government does nothing. But if instead the damage is a billion dollars, plus one penny, then the taxpayers come forward with $900 million. Never has 1 cent mattered so much, and that is clearly absurd. We need instead a bill that says that the first billion dollars is absorbed by the insurance and reinsurance industry, and only then should taxpayer dollars be involved. What, after all, is the insurance industry if it cannot absorb in total, with all of its companies and all of the reinsurance companies, a billion dollars in risk? If insurance companies cannot take the first billion of risk, then why do they exist? They are, after all, in the risk-sharing and risk- absorption business. We need a bill. Many speakers who have come forward have explained why it is so important that we pass a bill so that those who own businesses are able to get terrorism insurance; or, rather, continue to get the kind of insurance that they have now without an exception for terrorist damage. That is why it is so important that those who want a bill vote for the Democratic substitute, because that is a bill that could be passed by both Houses, that is a bill that could be signed into law before we adjourn. That is serious economic policy. Instead, we have a bill with loathsome, absurd, highly partisan, quote, tort-reform provisions; provisions which everyone knows cannot be passed on a bipartisan basis. I would point out that they deprive those that lose a child of any recourse at all, not one penny, to the parents who lose their child to terrorism.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, I rise along with the gentleman from Michigan (Mr. Conyers) and the gentlewoman from California (Ms. Woolsey) and 199 cosponsors in support of a Federal hate crimes statute. We must show the world that we are not engaged in a war on Islam, but instead are forming our laws to reflect the fact that we are building the most diverse country in the history of the world. Mr. Speaker, it is said that a single act of violence should not be subject to different levels of punishment. But the fact is that we often enhance punishment due to the motivations of the perpetrator, and racial and religious hatred is one motivation that deserves enhanced punishment. We also adjust punishment when the perpetrator causes a greater harm; and hate crimes not only hurt the physical victim, but also tear at the fabric of our society. There was a hate crime in my district 2 years ago. The Jewish Community Center was invaded and children were shot. Not only were their families victims of this act, but there was fear at Jewish community centers from one end of this country to the other. It is time that we reflect this higher level of harm with a higher level of punishment by passing the Federal hate crimes statute.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, following the terrorist attacks of September 11, the United States received a tremendous outpouring of sympathy from nations all over the world. One particular nation that has truly responded to the September 11 attack with an offer of real help for the United States is Kazakhstan. Kazakhstan declared that it would support measures taken by the United States to combat terrorism and has offered the United States use of Kazakhstan airspace and the military infrastructure needed to wage the war against terrorism. With its strategic location, Kazakhstan's help is invaluable. I would like to add a statement made on September 15 by President Nursultan Nazarbayev of Kazakhstan to the record. After declaring independence in 1991, Kazakhstan successfully dismantled what was once the fourth largest nuclear arsenal in the world. Additionally, Kazakhstan continues to serve as a model to the global community in its leadership on disarmament and nonproliferation. I believe that it is in our nation's interest to continue to support Kazakhstan--a country whose actions have demonstrated a commitment to global stability, non-proliferation, and tolerance for ethnic and religious minorities. Kazakhstan plays an important role in maintaining and ensuring stability in the region of Central Asia, and is dedicated to playing a role in the fight against terrorism. For these reasons, the United States should do its part to support Kazakhstan. Mr. Speaker, I believe we have an important ally in Kazakhstan, and I call on my colleagues to show their support for this Nation. Statement By President Nursultan Nazarbayev Of Kazakhstan, September 15, 2001 In these tragic days for America, the people of Kazakhstan are grieving together with the American people about the death of thousands of innocent people. I am closely following the situation as it unfolds. We stand on the position that the terrorists must be punished, as well as those harboring the terrorists. The United Nations and its Security Council have condemned the barbarian act of terrorism and called upon the world community to take resolute actions. Therefore, Kazakhstan is ready to support the measures undertaken by the United States to fight against terrorism, with all the means available. Kazakhstan has always been standing against terrorism and is ready to participate in creation of a real international coalition of countries to fight against the international terrorism. We proceed from the assumption that retaliation should not only be effective, but also should be just. This requires that the state should act with great deal of responsibility. And we rely upon the wisdom of the American leadership. We were pleased to learn that the United States wants to know for sure who has perpetrated these barbaric acts and helped the terrorists before taking actions. Today I sent a letter to U.S President George Bush. I expressed Kazakhstan's support for the U.S actions aimed at fighting against the international terrorism, the global evil that has developed across the entire world. We hope that the American people will be able to quickly cope with the heaviest psychological blow and remain committed to their great historical values.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, I rise today to honor Tri-anim Health Services, Inc. of Sylmar, California. On October 12, 2001, this unique organization will receive the ``Outstanding Corporate Contributor of Health Education'' award from the Olive View-UCLA Medical Center Foundation in Woodland Hills, California. Tri-anim Health Services, Inc. is the nation's largest provider of specialty health care products used in respiratory, anesthesia and critical care. Employing over 220 people nationwide with annual sales exceeding 100 million in revenue, Tri-anim prides itself on quality employees who continuously exceed the expectations of customers. The Tri-anim corporate commitment to exceptional service extends beyond the boundaries of the company. The organization frequently donates medical equipment and supplies throughout the world benefiting thousands of people in Armenia, China, Columbia, Equador, Nicaragua and Russia to name a few. Tri-anim is also active in numerous local philanthropic endeavors. In particular, the company provides strong financial support to the American Cancer Society, Braille Institute and SHARE. Most recently, Tri-anim donated 13 notebook computers to a Los Angeles school for children with autism. These computers allowed the students to enhance their ability to communicate and learn. In fact, the special software provided enables some students to communicate in sentences for the first time. Tri-anim is recognized industry-wide for its renowned technological advances. The company's award-winning website was the first one dedicated to respiratory, anesthesia and critical care. The site offers approximately 32,000 products from more than 250 manufacturers. Tri-anim Health Services, Inc. has risen above and beyond any other organization of its kind through the extraordinary dedication of each employee to providing exceptional service in the health care arena. It is a pleasure to ask my colleagues to join me in saluting Tri-anim on their outstanding achievements.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, I rise today to honor Dr. Vena Ricketts for her tremendous contributions to our local and global communities. On October 12, 2001, Olive View-UCLA Medical Center Foundation will honor Dr. Vena Ricketts with the ``Nelle Reagan Award for Distinguished Community Service'' in Woodland Hills, California. Dr. Ricketts stands out among physicians as a dedicated volunteer whose efforts reach those in medical need worldwide. She serves as a team leader on missions which provide impoverished people throughout the world with vital medical and dental care. These philanthropic missions have taken Dr. Ricketts to Nepal, Ghana, Bulgaria, Bethlehem, Palestine, Gambia, and most recently, Cambodia. Dr. Ricketts has also been extremely dedicated to serving her local community throughout her years in practice. She has served as a volunteer physician at the Hollywood Centrum Organization and the local House of Magdalene. In addition, Dr. Ricketts is the Medical Director at the Church on the Way in Van Nuys, California. Currently, Dr. Ricketts is a professor at the UCLA School of Medicine and Assistant Chair of the Department of Emergency Medicine at the Olive View-UCLA Medical Center. She founded and heads up the hospital's Health Career Day in which hundreds of local students have been provided the opportunity to learn about career options in the medical field. The innovative teaching methods used by Dr. Ricketts at this career expo have received significant national attention. She received the Department of Emergency Medicine ``Golden Award for Excellence in Teaching'' as well as the National Emergency Residents Association ``Augustine D'Orta Award for Excellence in Health Policy and Community Service''. Dr. Ricketts serves as an inspiration to all of us through her tireless dedication to providing exceptional medical care to people in need around the world. It is a distinct pleasure to ask my colleagues to join me in saluting Dr. Vena Ricketts on her outstanding achievements.

Mr. SHERMAN

Mr. SHERMAN. Mr. Chairman, on rollcall No. 379, had I been present, I would have voted ``no.'' Amendment Offered by Mr. Istook

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, let me begin with a commentary on the comments from the gentlewoman from Georgia, who quoted French sources as criticizing as inadequate our relief supplies to the people of Afghanistan. I agree we should do as much as we can to feed the people of Afghanistan and to get that food to them. And I admire the courage of American pilots who are doing just that, but let us put this into context. During World War I and World War II, the French did very little to deliver food to the Germans. In fact, it really was not part of our strategy during World War II to drop food onto German cities; and in fact, the French, aspiring for their own freedom, cheered as we bombed Dresden, not with food but with bombs. America has reached a new level of humaneness in its decision that not only does it wage war against a government, the Taliban, but it also wages food aid to the civilians under the control of that government. And I think that we should first give America credit for reaching this new plateau in humaneness before we criticize the fact that we are not doing enough, and I am sure that we will do more. I rise chiefly to deal with the economic effects of the September 11 catastrophe. I urge that what we do be temporary, be fast, and be consistent with our Nation's long-term budgetary and fiscal needs. Keep in mind, that on September 10, before this disaster, we faced a tough budgetary situation, that next decade the baby boomers will be retiring and Social Security will have to pay out benefits, and in order to do that, we cannot abandon our long-term efforts of fiscal responsibility to deal with the short-term economic downturn. We need to adopt fixes to stimulate the economy that are fast, like providing $300 or $600 of tax relief to those Americans of the most modest means who did not get any tax relief out of the bill we passed earlier this year. Why? Because those Americans will spend that money. They will buy things. In contrast, we should not provide a capital gains cut because that is a cut not for people who buy stock but for people who sell it. At this point, a capital gains tax cut could only be called the ``Panic- Selling Facilitation Act'' in that it provides tax relief not to those who can keep their investments in America but those who dump their stocks. It is important that our relief be temporary so that we can demonstrate to investors around the world that we will return to fiscal responsibility and pay off the national debt at least by 2015 or 2016. Doing that is not only critical for being able to meet Social Security's commitments to the baby boomer generation, but also to bring long-term interest rates down because no one will lend money for 10- and 20- and 30-year terms. Investors will not provide mortgages and long-term financing unless they are certain that long term the dollar will be valuable and will be stable because the Federal Government will return to the effort to pay down the national debt. Our departure from fiscal responsibility must be temporary. If we institute permanent changes, we will be in trouble. I might also add that, in building infrastructure, we should build the infrastructure that we need to provide for homeland security. We need to build security structures near our reservoirs and nuclear plants, and that is where we should focus our infrastructure building, as much as I would like to see us focus on the other needs of the country, the needs that existed before this event such as dealing with congestion on freeways in Los Angeles, the most congested city in our country. We ought to be careful, Mr. Speaker, in adopting the fiscal policies that will guide this country through this difficult period. If we adopt major changes in our spending and taxation and get out of town by the end of October we will not have been careful. We will have simply rushed something through. We cannot get it done in October, and we cannot wait till February. And so we in Congress ought to be willing to be here through the month of November to do what this country needs but to do it carefully.