Arlen Specter

Mr. SPECTER

Mr. SPECTER. I yield to the Senator on my time.

Mr. SPECTER. I will yield time, reasonably, to the Senator from Massachusetts. Parliamentary inquiry. What are the magic words if I want to regain the floor after yielding the time if the Senator goes too long?

Mr. SPECTER. I say to Senator Kennedy, why not take your time? This is an argument on your behalf.

Mr. SPECTER. I thank the Chair. Mr. President, if the Senator from Massachusetts is correct, that it is not annualized, that it stands for only 49 days, no other funds are added and this money is then spent for education, which I would like to see, it is going to come out of other programs. If the Senator from Massachusetts wants to make a point that we discussed privately, I would like to find a way to do that. I have sat repeatedly, as recently as the day before yesterday, with Congressman Porter, who chairs the House committee, trying to preconference a report covering education. We have not been able to bring this bill to the floor because of a disagreement. I am prepared to accept 50 percent of the responsibility. I would like to divide it equally between the Democrats and the Republicans for a change, instead of arguing that it is all the Democrats because you are filibustering striker replacement, or it is all the Republicans. We have not brought it to the floor, and there is enough blame on all sides. The question I ask the distinguished Senator from Massachusetts is, on the basis of the current allocation for the subcommittee which covers education and also the Departments of Health, Human Services and Labor, if that figure is not increased, and if the amendment stands, if it is adopted and is not rescinded, is it not true that, if you add this money to education and the allocation for the subcommittee stands, there will have to be a $686 million reduction from the AIDS funding for the Ryan White Program? That is my question.

Mr. SPECTER. I thank the Chair. Mr. President, I agree with a great deal of what the distinguished Senator from Massachusetts has had to say. During the course of my tenure in the Senate, I have been a strong supporter of education funding. I am the chairman of the Appropriations Subcommittee which funds education, and when the Senate drew a larger education allocation than the House did, I took the lead, along with Senator Harkin, the distinguished ranking minority member, in putting the $1.5 billion extra all into education. I would like to see education funded at the 1995 level. But the import of this amendment, as I understand it, and I qualify it to that extent because we are dealing in great complexities--one thing I strongly disagree with the Senator from Massachusetts on is when he says this is a simple amendment. If there is anything that I think is plain, it is that this is not simple. As I have gone through the work with very able staff in trying to understand the implications of this matter, because I did not get notice of it until a telephone call from Senator Kennedy last evening, there would be a reduction--if I may have the attention of the Senator from Massachusetts, because I would like to have a dialog with the Senator. We just had one informally before the amendment was called up, and I think we ought to have a discussion to see if we can agree as to what the import of this amendment is or if we can agree to disagree. As I understand the amendment, if these funds came to fruition in the context of what we currently have available, there would be a 10.5- percent reduction across the board in funding on the subcommittee appropriations which covers the Departments of Education and Labor and Health and Human Services. So if we come to employment and training programs--and I know that no one is a stauncher advocate for that than the Senator from Massachusetts, although there are some equally as strong, such as Senator Kassebaum, myself, and others--there would be a reduction of almost $334 million. And if this spending came to fruition without an increase in the allocation, there would be a decrease in spending on NIH, the National Institutes of Health, of $1.253 billion, and on LIHEAP--so necessary in Massachusetts, as well as Pennsylvania and many, many other States; the distinguished Senator from Minnesota, Senator Wellstone, has spoken emphatically on this subject, as well as many others--there would be a decrease in funding of $105 million. When Senator Kennedy says we need to know what funding will be available for education, I agree with him totally. But if his amendment is adopted, there will be a doubt as to what the funding will be for NIH, for employment and training programs, and for many, many programs, so it will all be confused. When he says President Clinton extended his hand to work out an arrangement here, when he extended his hand, I stood up and extended mine when he made that point in his speech about Americans working together. But I suggest that this amendment is not going to accomplish the purposes the Senator from Massachusetts looks for. When he says it is for 49 days, it is not annualized, that is true, but what does it mean? If it only lasts for 49 days and the funds are not expended until July 1 and after, nothing will happen unless there is an increase in the allocation for this subcommittee---- Mr. President, will you call the Senate to order, please?

Mr. SPECTER. How much time remains on each side?

Mr. SPECTER

Mr. SPECTER. Mr. President, in the absence of any other Senator on the floor, I suggest the absence of a quorum.

Mr. SPECTER

Mr. SPECTER. Mr. President, January 29, which is next Monday, will be the 20th anniversary of the decision of Buckley v. Valeo. I had intended to comment on January 29, the anniversary date of that decision which established as a principle of constitutional law that any individual could spend as much of his or her money in a campaign as he or she chose. That issue was a matter of substantial consternation to me when the decision was handed down and, I think, remains a major impediment on public policy in the United States on the way we run our election campaigns, where, realistically viewed, any seat is up for sale. There have been many, many examples of multimillion-dollar expenditures in this body, the U.S. Senate, the U.S. House of Representatives, and in State Government, and now we are witnessing one for the Presidency of the United States. The fact of life is, if you advertise enough on television, if you sell candidacies like you sell soap, the sky is the limit. Even the White House of the United States of America, the Office of the President, may be, in fact, up for sale if someone is willing to start off by announcing a willingness to spend $25 million. If you have $400 million, that is not an enormous sum; you have $375 million left. Somebody might be able to get along on that. You might spend $50 million or even $75 million to promote a candidacy, both to articulate a positive view and then, perhaps even more effectively, to articulate a negative view. This is a subject I have been concerned about for a long time because I filed for the U.S. Senate back in 1975 announcing my candidacy for the U.S. Senate on November 17, 1975, in the first election cycle where the 1974 election law was in effect. At that time the spending limitation applied to what an individual could spend, and, for a State the size of Pennsylvania, it was $35,000. I decided to run for the office of U.S. Senate against a very distinguished American who later became a U.S. Senator, John Heinz. After my election in 1980, he and I formed a very close working partnership and very close friendship. I have only the best things to say about Senator Heinz. But, in the middle of that campaign, on January 29, 1976, the Supreme Court of the United States decided Buckley v. Valeo and said a candidate can spend any amount of money. My later colleague was in a position to do so and did just that. That made an indelible impression upon me, so much so that when the decision came down on January 29, I petitioned for leave to intervene as amicus and filed a set of legal appeals, all of which were denied. But it seemed to me since that time, as I have watched enormous expenditures in campaign financing by individuals, that simply was unsound constitutional law and certainly unsound public policy. There is nothing in the Constitution, in my legal judgement, which guarantees freedom of speech on any reasonable, realistic, logical constitutional interpretation which says you ought to be able to spend as much money that you have to win an elective office. I think it is high time for the Congress of the United States and the 50 States to reexamine that in a constitutional amendment, which is currently pending. Senator Hollings has proposed the amendment for many Congresses, and I have joined with him and sometimes I have proposed individual constitutional amendments. But as we approach the 20th anniversary of Buckley v. Valeo, we ought to take a very serious look at it. And we may have a striking impetus for change in that law by the Presidential campaign which is currently underway. So, in advance of the 29th, I urge my colleagues to take a very close look at this issue which I think has very serious implications for the electoral process in America. I thank the Chair. It is now 3:40. I yield the floor.

Mr. SPECTER. And I do suggest the absence of a quorum.

Mr. SPECTER

Mr. SPECTER. Mr. President, I ask unanimous consent that the time for morning business be extended until 3:40.

Mr. SPECTER

Mr. SPECTER. Mr. President, I have sought recognition to express my concern about our being out of session for the next considerable period of time in the context of the gridlock and breakdown over the negotiations of the budget. It is my hope that the negotiators will continue the budget negotiations because of the importance of reaching a resolution on those subjects, and that we will not have a recurrence of the shutdown of Government, as we have had twice in the course of the past several weeks, or that there will not be a resort to the debt ceiling issue as an instrument of, candidly speaking, political blackmail--which I think will be unsuccessful. If we are not able to resolve the budget disagreements, that we will at least crystallize the issue and make that the election issue in 1996. I made this point back on November 14, on the second day of the first governmental shutdown. It seemed to me from the start that this was bad policy. From the reaction of the American people, that view was confirmed. That is simply not the way to run the Government of the United States. I think the budget negotiators, however, have worked hard and there has been considerable progress made. I have taken a look, in reviewing the issues, and believe that the negotiators with more work can come to a conclusion. The central point is to have a balanced budget--a matter of enormous importance. There has been an agreement in principle by the Republican-controlled Congress and Republican-controlled White--almost a Freudian slip, to make the Republicans control the White House as well. We have a divided Government, but at least there has been agreement on that principle. There is a substantial question as to whether the balanced budget proposal offered by the administration meets the ``fair'' criterion, since so much of it is deferred until the years 2001 and 2002. But I think there is ample room for negotiation, in order to have a realistic agreement made in those terms. I spoke on this matter to some extent yesterday and wish to amplify it today. One set of figures which bear repeating are the statistics on the narrowing of the gap between the parties on major issues such as Medicare, where the rate of increase is reduced in the conference report passed by the Republican-controlled Congress. Note it is not a cut but rather a reduction of the rate of increase by $270 billion, which has since been reduced to $168 billion. The administration first agreed to $102 billion and now recommends reducing the rate of increase by $124 billion. So there is a gap now remaining of $44 billion, considerably closer than what had been initially in the range of $168 billion. Similarly, on Medicare, the original position of the Republican- controlled Congress was $133 billion, since reduced to $85 billion with the administration at $59 billion on a reduction on the rate of increase. So that gap is narrowing. Similarly, on the tax cut, the House figures are in the range of $350 billion and were reduced to $245 billion in the conference report. That has since been reduced further to $203 billion, while the administration proposes $130 billion. I have taken a close look at a number of the structural points in disagreement, while working with others in the House and Senate, to try to report out a bill on the Appropriations Subcommittee for Labor, Health, Human Services and Education, a subcommittee which I chair. I have had extensive negotiations with Donna Shalala, Secretary of Health and Human Services, Richard Riley, Secretary of Education, and Robert Reich, Secretary of Labor and find that the principal issues arise in the Departments of Education and Health and Human Services. As I have taken a look at the various issues, it seems to me that middle ground can be reached. If you take a look at the medical savings account, which is a controversial item, or the Medicare opt-out position as to HMO's back and forth, or the Medicare beneficiary part B payments, or the issue of balance billing by doctors, or the concern which has been expressed over the regulation of doctors' fees--all of those matters--if you take the congressional position as opposed to the administration position, you find there is middle ground available. If you look at the Medicaid issue, in addition to the figures narrowing, the structural matters also are subject to compromise. If you take a look at welfare, there again, compromise is possible. Where the welfare reform bill passed by the Senate with overwhelming numbers, some 87 Senators voting in favor of the measure, there was a great deal of reliance on the block grants. There is an area for compromise on providing the bulk of welfare related programs through block grants but certain specific programs should remain with standards established by the Federal Government. I think the statement made by the very distinguished Senator from Maine, Margaret Chase Smith, is worth repeating, when she distinguished between the issues of the principle of compromise as opposed to the compromise of principle. We are not talking about freedom of speech or freedom of religion or first amendment issues. We are talking about dollars and cents. And we are, really, very, very close together. So it is my hope that the negotiators will continue, because I think agreement is within reach, and when we are talking about the central principle of a balanced budget, that is something that we ought not give up on. We ought to continue to work to try to narrow the gap, and I hope that we will continue to do that.

Mr. SPECTER

Mr. SPECTER. Mr. President, during the course of the past few days, I have been touring Pennsylvania looking at very, very extensive damage from the heavy snows and from the flood. Earlier today I came from Harrisburg, where I was present with my colleague, Senator Santorum, looking over the tremendous damage which has been inflicted at several points from the swollen Susquehanna River. It is a very distressing sight. The walk bridge which spans the Susquehanna from Harrisburg over to the island has been destroyed in part. Many houses have been destroyed. My staff director of northern Pennsylvania, Tom Bowman, in Potter County, has several feet of water in his basement. His furnace is ruined. Appliances are ruined. And that is characteristic as well and has been going on over all of the State. On Saturday early, I flew to Pittsburgh, where I met Pennsylvania Gov. Tom Ridge looking at the tremendous devastation and destruction which is present there. At Three Rivers Stadium, at the confluence of the three rivers in Pittsburgh, water was all the way up to the Hilton Hotel and was extraordinarily serious. Later on Saturday, I saw the swollen Susquehanna in Wilkes-Barre, where some 100,000 people had been evacuated, and the flooding had spread through Pennsylvania, and what a very, very serious situation it is. As of this morning, only 6 counties had been declared disaster areas in Pennsylvania, which I found just a little surprising. On Saturday, I talked to Mr. James Lee Witt, who is the FEMA national director. Mr. Witt was on the job and promised to have the emergency declaration promptly executed. And, in fact, it was done on Sunday morning, with some question, some misunderstanding, perhaps, about how fast the facts and figures got through. But as of this morning, only 6 counties had been declared a disaster area, and 19 counties were added. Yet, we do not have all the appropriate counties identified. In western Pennsylvania, Beaver County, immediately north of Allegheny County, was not declared a disaster area. I can attest personally to the disaster there. Nor was Greene County so declared. It is important that those counties be extended, and that the Federal emergency relief be moved in there very expeditiously on temporary housing, on the grants that are available, on the low SBA loans which are available, and on the extension of unemployment compensation when people lose out on their work because of this flood damage. I might share with you one factor as to how serious the situation is. I declared this with my distinguished colleague, Senator Santorum. But on the banks of the Susquehanna earlier today, Senator Santorum said that he hoped FEMA would be ``liberal.'' But I quickly modified that to ``moderate.'' There we have the ``L'' word from Senator Santorum. May the Record show a smile coming to the face of the distinguished Presiding Officer. But it is that serious that a call has been made for that kind of treatment by the Federal management corps. As I have earlier today on some of the radio networks, I would like to repeat the 800 number which people can call for assistance. They can make application by telephone. It is 1-800-462-9029. I will repeat that. It is 1-800-462-9029, where applications can be made on the phone. Yesterday, I also talked to Secretary of Transportation Pena, who has advanced $1 million for highway cleanup and bridge cleanup, and urged that a more realistic figure be assessed because of the tremendous damage done to the highways and bridges in Pennsylvania. Last year, the Congress appropriated $6.4 billion largely for the earthquakes in California but also for emergencies such as are now plaguing Pennsylvania and many other States in the mid-Atlantic area where we sustained a snowfall 2 weeks ago today of 30 inches. In Philadelphia, it measured 30.7 inches. And then with the high temperatures last Thursday into the sixties, with the tremendous melting and flooding, there is a very serious situation indeed. So I urge FEMA and the Department of Transportation to take all action possible to bring relief to those people who are in need of emergency assistance. I thank the Chair, and in the absence of any other Senator in the Chamber, I suggest the absence of a quorum.

Mr. SPECTER

Mr. SPECTER. Mr. President, during the course of the past several weeks, there has been an opportunity to talk to constituents at home to discuss the problems in Washington, DC, and, as many of my colleagues have reported, I have found great concern about the inability, the failure, of the negotiators to come to an agreement on the budget talks. I urge the negotiators to continue to talk. As I have reviewed the details as to what has been undertaken, talking to my colleagues in the Senate and the House, talking to administration officials, it is my view that the parties are not too far apart. I believe that the absence of an agreement is a lose-lose situation for everyone in Washington. There is no real opportunity, as I see it, for political advantage, and the American people watch what goes on in Washington, DC, with amazement and frequently revulsion at our failure to come to some terms. I go back to a wise statement made by the former distinguished Senator from Maine, Margaret Chase Smith, who said, ``We have to distinguish between the compromise of principle and the principle of compromise,'' and when we are talking about the budget issues, we are talking really about compromising mostly on a dollars-and-cents basis. There are some structural issues which have to be addressed, and it is my sense that they can be solved as well, but we are not talking about first amendment issues, freedom of speech, or freedom of religion, so we are not compromising principle. We do have to have the principle of compromise and accommodation in Washington, DC, to come out of this matter. As I look at the figures overall, the parties have come much closer together than they were at the original stage. With respect to Medicare, initially the conference report adopted by the Congress called for cuts in Medicare of $270 billion, with the administration at one point insisting that the cuts--rather it is not cuts, but it is a reduction in the growth of increase. That is a characterization which is very, very hard to avoid. Before going further on that point, Mr. President, let me cite some statistics which are very, very frequently overlooked as too often the Medicare situation and the Medicaid situation has been characterized as proposals, especially by the Republican Congress, for cuts when the fact of the matter is that there are very, very substantial increases. What we are really talking about is slowing the rate of increase. In fiscal year 1996, for example, Medicare expenditures will be $193 billion. These are figures from the Congressional Budget Office which have been rescored as recently as last month. After an expenditure of $193 billion in 1996, the figures are as follows: 1997, $207 billion; 1998, $218 billion; 1999, $229 billion; the year 2000, $248 billion; 2001, $267 billion; 2002, $289 billion. So that from 1996 until the year 2002, on Medicare expenditures it is projected to move from $193 to $289 billion for a 50-percent increase. Similarly, in Medicaid, where there is frequently talk about cuts, there are, in fact, not cuts but there are increases. What we are dealing with is trying to slow the rate of increase. In fiscal year 1996, Medicaid expenditures totaled $97 billion; 1997, $104 billion; 1998, $109 billion; 1999, $113 billion; the year 2000, $118 billion; the year 2001, $122 billion; the year 2002, $127 billion, for a total increase from 1996 to the year 2002 of some 31 percent. I think it is very important to focus on that basic fact. There are not cuts, but what we are talking about are ways to slow the rate of increase. As the negotiators have discussed the matters, they have come much closer together. In the original conference report agreed to by the House and Senate, the rate of increase on Medicare would have been slowed by some $270 billion. The initial position taken by the administration was to slow the rate of increase by $102 billion. Now, in the most recent proposals advanced by the negotiators for the Congress, as recent as January 6, the figure is cutting the rate of increase to $168 billion, and the administration now talks about cutting the rate of increase to $124 billion. So the gap has been very, very materially narrowed. Originally, the gap was $168 billion. Now it has been narrowed to $44 billion. Similarly, on cutting the rate of increase in Medicaid, the original conference report from the House and Senate placed the curtailment of the rate of growth by $133 billion. In the most recent negotiations advanced by the congressional negotiators, the rate of increase was at $85 billion, with the administration at $59 billion. So, there again, the figures are much, much closer. Similarly, on the tax cut, the original conference report was at $245 billion. That has been reduced to $203 billion, with the administration at a tax cut of $130 billion, so that difference has been narrowed quite considerably. When we talk about the objective of a balanced budget, we are talking about something which is really critical for the future financial stability of this country. That is an objective which is very important to reach and is worth an accommodation. When this body, the U.S. Senate, took up the reconciliation bill, this Senator was very concerned about a number of items in it and disagreed with the majority on many of the items. For example, it seemed to me that there ought not to be a tax cut at all. I took that position not because I did not want a tax cut, because I would very much like to see a tax cut. I favored the IRA's, the independent retirement accounts, when we voted them out, back in 1986. I would like to see a child tax credit. But at a time when we are seeking to balance the budget, it seems to me it is inappropriate, when we are asking so many Americans to tighten their belts, to talk about a tax cut for some Americans at the same time. It is my view that Americans are willing to have shared sacrifice and to balance the budget so long as it is fair. But when we are asking people, with the earned-income tax credit, earning about $20,000, to pay more taxes at a time when we are offering certain tax cuts to those who earn $120,000, then it is bad public policy, and it is very bad politics. So that when many accommodations have been made and many of us have seen the reconciliation bill come for final passage, with many provisions that individually we did not like, nonetheless we supported that with a majority vote. After having voted against many of the individual items, I voted for final passage because I think the balanced budget is that important. I understand there are many in Congress, some in the Senate and even more in the House, who do not like the present arrangement and who want to have more by way of tax cuts and who want to have more by way of decreases in Medicare and Medicaid, on their rate of increase. But I believe that the balanced budget is so important that when the administration agreed to the balanced budget in 7 years with the Congressional Budget Office figures, that was the time to declare a victory, to say we will accept the deal, and then to work out the balance of the arrangements as best we could. But the core of the arrangement was in place. I believe we ought to do that yet. That ought to be our principal objective, to obtain the balanced budget within 7 years. We are talking about structural changes in addition, but I believe that they are not well understood. After talking to key people in the administration as well as my colleagues in the Congress, going through these structural changes, it is my view that there can be a reasonable accommodation. I am in the process of putting together a side-by-side comparison, which I will share with my colleagues in the course of the next several days, with a suggestion as to what ought to be middle ground. There is a philosophical difference between the block grants, where we give more authority to the States, and the categorical requirements, where the Congress of the United States establishes the rules and regulations. My own sense is that it is time to give more authority to the States under the 10th amendment, that the States are much closer to the problems than we are here in Washington, DC. I am going to talk about that in a few minutes under a separate topic on the problems of the disaster across the northeastern part of the United States, and especially my home State of Pennsylvania, why disaster relief could be much better handled at the local level than out of Washington, DC. But I think we see opportunities to do that, especially in the welfare line, where the Senate passed a welfare reform bill with a very, very substantial majority, and we had block grants on AFDC and emergency assistance and the jobs program into a single mandatory block grant. We had separate allocations for child care. We had the maintenance of the foster care and the adoption system which is retained as an entitlement. But I believe as we go through these lines one by one on the many considerations as to how we deal with the illegal immigrants, how we deal with children under SSI, addicts under SSI, teen mothers, how we deal with education under the student loan provisions and the direct lending programs, and what we are going to do with many of these structural matters, that there is middle ground. There is middle ground on allowing flexibility to the States on many of the items and retaining congressional control on specific requirements as to some others. But we are at this point very, very close and yet very, very far. Last week on the Senate floor I made a few comments about the necessity to continue funding the Government with a continuing resolution without another threat of a shutdown on the Government, and that if, in fact, we are ultimately unable to come to terms on a budget agreement, that I believe today, as I articulated on this floor from this podium back on November 14th on the second day of the first shutdown, that we ought to crystallize the issues and submit them to the American people in the 1996 election. But the way to do business is not to have a shutdown of the Federal Government which makes the Congress and the administration really the laughingstock of the country. At that time, I expressed the hope that we would not use the debt ceiling as a lever, as a blackjack, or as blackmail; that the full faith and credit of the United States is too important to be maintained, so that it ought not to be used to try to coerce concessions from the administration in the context of political blackmail; that the American people can well discern the difference between legitimate political pressure and what is political blackmail. One of the illustrations is from the very famous statement by former Supreme Court Justice Potter Stewart about obscenity, saying that he could not define it but that he knew it when he saw it. Or I think of the famous statement by Justice Oliver Wendell Holmes that even a dog knows the difference between being kicked and being stumbled over. When there is inappropriate political pressure, when it is political blackmail by coercing the Federal Government, or political blackmail by attempting to have the debt ceiling as a hostage, the American people are well aware of what is going on. And although some in this body and some in the other body may have thought that there was political advantage to closing the Government, the American people responded with a resounding no. With the polls showing that more people favor the President's handling of the emergency than the Congress, the figures were close. But with the Presidential advantage of 50 to 46--50 percent approved of what the President did, 46 percent disapproved--when it came to the Congress, only 22 percent approved and 78 percent disapproved. So that when we were really articulating bad public policy on closing the Government, we were articulating bad politics as well. So it is my hope that we will not close the Government again, that we will have a continuing resolution which will maintain the status quo, difficult as that is, without cherry picking and trying to fix some programs that some may like better than others, because once we get into that kind of a selection process, there will be no end to it. If the House sends us a bill financing programs which some of them like but eliminating programs that they do not like, when the issue comes to the Senate with our opportunity for unlimited amendments, we will never agree to that kind of cherry picking with financing programs that one group likes and eliminating all others; and that we will keep the Government going as it need be, crystallize the issue for the 1996 election, and not use the debt ceiling as political blackmail. But most fundamentally, Mr. President, as I look over these complex charts and look over the figures, they are very, very close indeed. And even with the structural changes, there is middle ground available. So it is my hope that the negotiators will continue talking. There is a bipartisan group of some 20 U.S. Senators evenly divided--almost evenly divided between Democrats and Republicans--who will seek to come to middle ground and to accommodate these differences of opinion, most of which boil down to dollars and cents, and structural changes themselves boil down to dollars and cents, remembering the foremost point that there is agreement on a balanced budget within 7 years with the real figures, the Congressional Budget Office figures; and we ought to declare victory on both sides, make it a win-win situation, and not try to achieve political advantage in the context where it is a lose- lose for all parties if we continue this stalemate. But, as I say, to repeat very briefly, I intend to put before the Senate a side-by-side comparison showing how close we are on the figures themselves and on the structural changes.

Mr. SPECTER

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

Mr. SPECTER

Mr. SPECTER. There is a great deal that the United States can do to make a success of that venture by pressure to bring those not in custody into custody, with the obligations of Croatia and Serbia to turn them over, once they are observed in those countries, to the United Nations for trial, and with cooperation from our intelligence agencies on corroborative evidence and help from the FBI on protecting the witnesses. I yield the floor. Exhibit 1 The International Criminal Tribunal for the Former Yugoslavia--The Prosecutor of the Tribunal Against Dusan Tadic a/k/a ``Dule'' and Goran Borovnica indictment Richard J Goldstone, Prosecutor of the International Criminal Tribunal for the former Yugoslavia, pursuant to his authority under Article 18 of the Statute of the International Criminal Tribunal for the former Yugoslavia (``The Statute of the Tribunal''), charges: 1. From about 25 May 1992 Serb forces attacked Bosnian Muslim and Croat population centers in the opstina of Prijedor, Bosnia-Herzegovina, forcing most Muslims and Croats from their homes and confining many thousands, including more than 3,000 who were held in the Omarska camp, a former mining complex. The accused Dusan Tadic a/k/a ``Dule'' a/k/a ``Dusko'', participated in the collection and mistreatment, including killings, of Bosnian Muslims and Croats in opstina Prijedor within Omarska camp and outside Omarska camp, as set forth below. The accused Goran Borovnica participated with Dusan TADIC in killings outside of Omarska camp, as set forth below: Background: 2.1. In May, 1992, intensive shelling of Muslim areas in the opstina Prijedor caused the Muslim residents to flee their homes. The majority of them then surrendered or were captured by Serb forces. As the Serb forces rounded up the Muslims and any Croat residents, they forced the Muslims and Croats to march in columns bound for one or another of the prison camps that the Serbs had established in the opstina. The Serb forces pulled many of the Muslims and Croats from the columns and shot or beat them on the spot. 2.2. On about 25 May 1992, about three weeks after Serbs forcibly took control of government authority in the opstina, and two days after the start of large scale military attacks on Muslim population centers, the Serb forces began taking prisoners to the Omarska camp. 2.3. During the next several weeks, the Serb forces continued to round up Muslims and Croats from Kozarac, Prijedor town, and other places in the opstina and interned them in the camps. Many of Prijedor's Muslim and Croat intellectuals, professional and political leaders were sent to Omarska. There were approximately 40 women in the camp, and all the other prisoners in the camp were men. 2.4. Within the area of the Omarska mining complex that was used for the camp, the camp authorities generally confined the prisoners in three different buildings: the administration building, where interrogations took place and most of the women were confined; the garage or hangar building; the ``white house,'' a small building where particularly severe beatings were administered; and on a cement courtyard area between the buildings known as the ``pista''. There was another small building, known as the ``red house'', where prisoners were sometimes taken but most often did not emerge alive. 2.5. Living conditions at Omarska were brutal. Prisoners were crowded together with little or no facilities for personal hygiene. They were fed starvation rations once a day and given only three minutes to get into the canteen area, eat, and get out. The little water they received was ordinarily foul. Prisoners had no changes of clothing and no bedding. They received no medical care. 2.6. Severe beatings were commonplace. The camp guards, and others who came to the camp and physically abused the prisoners, used all manner of weapons during these beatings, including wooden batons, metal rods and tools, lengths of thick industrial cable that had metal balls affixed to the end, rifle butts, and knives. But female and male prisoners were beaten, tortured, raped, sexually assaulted, and humiliated. Many, whose identities are known and unknown, did not survive the camp. After the collection of thousands of Bosnian Muslims and Croats in later May, 1992, groups of Serbs including the accused later entered villages in which Muslims and Croats remained, at which time they killed some villagers and drove others from their homes. The International Criminal Tribunal for the Former Yugoslavia--the Prosecutor of the Tribunal Against Radovan Karadzic and Ratko Mladic indictment Richard J. Goldstone, Prosecutor of the International Criminal Tribunal for the former Yugoslavia, pursuant to his authority under Article 18 of the Statute of the International Criminal Tribunal for the former Yugoslavia (``The Statute of the Tribunal''), charges Ratko Mladic and Radovan Karadzic with genocide, crimes against humanity, and violations of the laws or customs of war, as set forth below: ``Safe Area'' of Srebrenica 1. After war erupted in the Republic of Bosnia and Herzegovina, Bosnian Serb military forces occupied Bosnian Muslim villages in the eastern part of the country, resulting in an exodus of Bosnian Muslims to enclaves in Gorazde, Zepa, Tuzla, and Srebrenica. All of the events referred to in this indictment took place in the Republic of Bosnia and Herzegovina. 2. On 16 April 1993, the Security Council of the United Nations, acting pursuant to Chapter VII of its Charter, adopted resolution 819, in which it demanded that all parties to the conflict in the Republic of Bosnia and Herzegovina treat Srebrenica and its surroundings as a safe area which should be free from any armed attack or any other hostile act. Resolution 819 was reaffirmed by Resolution 824 on 6 May 1993 and by Resolution 836 on 4 June 1993. 3. Before the attack by Bosnian Serb forces, as described in this indictment, the estimated Bosnian Muslim population in the safe area of Srebrenica, was approximately 60,000. Attack on the Safe Area of Srebrenica 4. On or about 6 July 1995, the Bosnian Serb army shelled Srebrenica and attacked United Nations observation posts that were manned by Dutch soldiers and located in the safe area. The attack on the Srebrenica safe area by the Bosnian Serb army continued through 11 July 1995, when the first units of the attacking Bosnian Serb forces entered Srebrenica. 5. The Bosnian Muslim men, women and children who remained in Srebrenica after the beginning of the Bosnian Serb attack took two courses of action. Several thousand women, children and some mostly elderly men fled to the UN compound in Potocari, located within the safe area of Srebrenica, where they sought the protection of the Dutch battalion responsible for the compound. They remained at the compound from 11 July 1995 until 13 July 1995, when they were all evacuated by buses and trucks under the control of and operated by Bosnian Serb military personnel. 6. A second group of approximately 15,000 Bosnian Muslim men, with some women and children, gathered at Susnjari during the evening hours of 11 July 1995 and fled, in a huge column, through the woods towards Tuzla. Approximately one- third of this group consisted of armed Bosnian military personnel and armed civilians. The rest were unarmed civilians. Events in Potocari 7. On 11 July 1995 and 12 July 1995, Ratko Mladic and members of his staff met in Bratunac with Dutch military officers and representatives of the Muslim refugees from Potocari. At these meetings, Ratko Mladic informed them, among other things, that Bosnian Muslim soldiers who surrendered their weapons would be treated as prisoners of war according to the Geneva Conventions and that refugees evacuated from Potocari would not be hurt. 8. On or about 12 July 1995, Bosnian Serb military forces burned and looted Bosnian Muslim houses in and around Potocari. 9. On or about 12, July 1995, in the morning hours, Bosnian Serb military forces arrived at the UN military compound in Potocari and its environs. 10. On or about 12 July 1995, Ratko Mladic arrived in Potocari, accompanied by his military aides and a television crew. He falsely and repeatedly told Bosnian Muslims in and around Potocari that they would not be harmed and that they would be safely transported out of Srebrenica. 11. On or about 12 July 1995, at the direction and in the presence of Ratko Mladic, approximately 50-60 buses and trucks arrived near the UN military compound in Potocari. Shortly after the arrival of these vehicles, the evacuation process of Bosnian Muslim refugees started. As Muslim women, children and men started to board the buses and trucks, Bosnian Serb military personnel separated the men from the women and children. This selection and separation of Muslim men took place in the presence of and at the direction of Ratko Mladic. 12. The Bosnian Muslim men who had been separated from other refugees were taken to diverse locations in and around Potocari. On or about 12 July 1995, Ratko Mladic and Bosnian Serb military personnel under his command, informed some of these Muslim men that they would be evacuated and exchanged for Bosnian Serbs being held in Tuzla. 13. Most of the Muslim men who had been separated from the other refugees in Potocari were transported to Bratunac and then to the area of Karakaj, where they were massacred by Bosnian Serb military personnel. 14. Between 12 July 1995 and 13 July 1995, Bosnian Serb military personnel summarily executed Bosnian Muslim men and women at diverse locations around the UN compound where they had taken refuge. The bodies of those summarily executed were left in fields and buildings in the immediate vicinity of the compound. These arbitrary killings instilled such terror and panic amongst the Muslims remaining there that some of them committed suicide and all the others agreed to leave the enclave. 15. The evacuation of all able-bodied Muslim refugees concluded on 13 July 1995. As a result of the Bosnian Serb attack on the safe area and other actions, the Muslim population of the enclave of Srebrenica was virtually eliminated by Bosnian Serb military personnel. Surrender and Executions 16. Between the evening of 11 July 1995 and the morning of 12 July 1995, the huge column of Muslims which had gathered in Susnjari fled Srebrenica through the woods towards Tuzla. 17. Bosnian Serb military personnel, supported by armoured personnel carriers, tanks, anti-aircraft guns and artillery, positioned themselves along the Bratunac-Milici road in an effort to interdict the column of Bosnian Muslims fleeing towards Tuzla. 18. As soon as the column reached Bosnian Serb held territory in the vicinity of Buljim, Bosnian Serb military forces attacked it. As a result of this and other attacks by Bosnian Serb military forces, many Muslims were killed and wounded and the column divided into several smaller parts which continued towards Tuzla. Approximately one-third of the column, mostly composed of military personnel, crossed the Bratunac-Milici road near Nova Kasaba and reached safety in Tuzla. The remaining Muslims were trapped behind the Bosnian Serb lines. 19. Thousands of Muslims were captured by or surrendered to Bosnian Serb military forces under the command and control of Ratko Mladic and Radovan Karadzic. Many of the Muslims who surrendered did so because they were assured that they would be safe if they surrendered. In many instances, assurances of safety were provided to the Muslims by Bosnian Serb military personnel who were with other Bosnian Serb soldiers wearing stolen UN uniforms, and by Muslims who had been captured and ordered to summon their fellow Muslims from the woods. 20. Many of the Bosnian Muslims who were captured by or surrendered to Bosnian Serb military personnel were summarily executed by Bosnian Serb military personnel at the locations of their surrender or capture, or at other locations shortly thereafter. Incidents of such summary executions include, but are not limited to: 20.1 On or about 13 July 1995, near Nezuk in the Republic of Bosnia and Herzegovina, a group of 10 Bosnian Muslim men were captured. Bosnian Serb soldiers summarily executed some of these men, including Mirsad Alispahic and Hajrudin Mesanovic. 20.2 On or about 13 July 1995, on the banks of the Jadar River between Konjevic Polje and Drinjaca, Bosnian Serb solders summarily executed 15 Bosnian Muslim men who had surrendered or been captured. Amongst those killed were Hamed Omerovic, Azem Mujic and Ismet Ahmetovic. 20.3 On or about 13 July 1995, in the vicinity of Konjevic Polje, Bosnian Serb soldiers summarily executed hundreds of Muslims, including women and children. 20.4 On or about 17 July 1995 or 18 July 1995, in the vicinity of Konjevic Polje, Bosnian Serb soldiers captured about 150-200 Bosnian Muslims and summarily executed about one-half of them. 20.5 On or about 18 July 1995 or 19 July 1995, in the vicinity of Nezuk, about 20 groups, each containing between 5-10 Bosnian Muslim men, surrendered to Bosnian Serb military forces. After the men surrendered, Bosnian Serb soldiers ordered them to line up and summarily executed them. 20.6 On or about 20 July 1995 or 21 July 1995, near the village of Meces, Bosnian Serb military personnel, using megaphones, urged Bosnian Muslim men who had fled Srebrenica to surrender and assured them that they would be safe. Approximately 350 Bosnian Muslim men responded to the entreaties and surrendered. Bosnian Serb soldiers then took approximately 150 of them, instructed them to dig their own graves and then summarily executed them. 20.7 On or about 21 July 1995 or 22 July 1995, near the village of Meces, an excavator dug a large pit and Bosnian Serb soldiers ordered approximately 260 Bosnian Muslim men who had been captured to stand around the hole. The Muslim men were then surrounded by armed Bosnian Serb soldiers and ordered not to move or they would be shot. Some of the men moved and were shot. The remaining men were pushed into the hole and buried alive. 21. Many of the Muslims who surrendered to Bosnian Serb military personnel were not killed at the locations of their surrender, but instead were transported to central assembly points where Bosnian Serb soldiers held them under armed guard. These assembly points included, among others, a hangar in Bratunac; soccer fields in Kasaba, Konjevic Polje, Kravica, and Vlasenica; a meadow behind the bus station in Sandici and other fields and meadows along the Bratunac- Milici road. 22. Between 12 July 1995 and 14 July 1995, at various of these assembly points, including the hangar in Bratunac and the soccer stadium in Kasaba, Ratko Mladic addressed the Bosnian Muslim detainees. He falsely and repeatedly assured them that they would be safe and that they would be exchanged for Bosnian Serb prisoners held by Bosnian government forces. 23. Between 12 July 1995 and 14 July 1995. Bosnian Serb military personnel arbitrarily selected Bosnian Muslim detainees and summarily executed them. Mass Executions Near Karakaj 24. On or about 14 July 1995, Bosnian Serb military personnel transported thousands of Muslim detainees from Bratunac, Kravica and other locations to an assembly point in a school complex near Karakaj. At this assembly point, Bosnian Serb military personnel ordered the Muslim detainees to take off their jackets, coats and other garments and place them in front of the sports hall. They were then crowded into the school building and adjacent sports hall and held under armed guard. 25. On or about 14 July 1995, at this school complex near Karakaj, Ratko Mladic conferred with his military subordinates and addressed some of the Muslims detained there. 26. At various times during 14 July 1995, Bosnian Serb military personnel killed Bosnian Muslim detainees at this school complex. 27. Throughout 14 July 1995, Bosnian Serb military personnel removed all the Muslim detainees, in small groups, from the school building and sports hall and loaded them on trucks guarded and driven by Bosnian Serb soldiers. Before boarding the trucks, many of the detainees had their hands tied behind their backs or were blindfolded. They were then driven to at least two locations in the vicinity of Karakaj. 28. Once the trucks arrived at these locations, Bosnian Serb military personnel ordered the bound or blindfolded Muslim detainees off the trucks and summarily executed them. The summary executions took place from approximately noon to midnight on 14 July 1995. 29. Bosnian Serb military personnel buried the executed Bosnian Muslim men in mass graves near the execution sites. 30. On or about 14 July 1995, Ratko Mladic was present at one of the mass execution sites when Bosnian Serb military personnel summarily executed Bosnian Muslim men. 31. The summary executions of Bosnian Muslim males, which occurred on 14 July 1995 in the vicinity of Karakaj, resulted in the loss of thousands of lives. the accused 32. Radovan Karadzic was born on 19 June 1945 in the municipality of Savnik of the Republic of Montenegro. From on or about 13 May 1992 to the present, he has been president of the Bosnian Serb administration in Pale. 33. Ratko Mladic was born on 12 March 1943 in Kalinovik municipality of the Republic of Bosnia and Herzegovina. He is a career military officer and holds the rank of general in the Bosnian Serb armed forces. From on or about 14 May 1992 to the present, he has been the commander of the army of the Bosnian Serb administration. superior authority Radovan Karadzic 34. Radovan Karadzic was a founding member and president of the Serbian Democratic Party (SDS) of what was then the Socialist Republic of Bosnia and Herzegovina. The SDS was the main political party among the Serbs in Bosnia and Herzegovina. As president of the SDS, he was and is the most powerful official in the party. His duties as president include representing the party, co-ordinating the work of party organs and ensuring the realisation of the programmatic tasks and goals of the party. He continues to hold this post. 35. Radovan Karadzic became the first president of the Bosnian Serb administration in Pale on or about 13 May 1992. At the time he assumed this position, his de jure powers, as described in the constitution of the Bosnian Serb administration, included, but were not limited to, commanding the army of the Bosnian Serb administration in times of war and peace and having the authority to appoint, promote and discharge officers of the army. As president, he was and is a position of superior authority to Ratko Mladic and every member of the Bosnian Serb army and all units and personnel assigned or attached to the Bosnian Serb army. 36. In addition to his powers described in the constitution, Radovan Karadzic's powers as president of the Bosnian Serb administration are augmented by Article 6 of the Bosnian Serb Act on People's Defence. This Act vested in him, among other powers, the authority to supervise the Territorial Defence both in peace and war and the authority to issue orders for the utilisation of the police in case of war, immediate threat and other emergencies. Article 39 of the same Act empowered him, in cases of imminent threat of war and other emergencies, to deploy Territorial Defence units for the maintenance of law and order. 37. Radovan Karadzic's powers are further augmented by Article 33 of the Bosnian Serb Act on Internal Affairs, which authorised him to activate reserve police in emergency situations. 38. Radovan Karadzic has exercised the powers described above and has acted and been dealt with internationally as the president of the Bosnian Serb administration in Pale. In that capacity, he has, inter alia, participated in international negotiations and has personally made agreements on such matters as cease-fires and humanitarian relief, and these agreements have been implemented. Ratko Mladic 39. Ratko Mladic was, in 1991, appointed commander of the 9th Corps of the Yugoslav People's Army (JNA) in Knin in the Republic of Croatia. In May 1992, he assumed command of the forces of the Second Military District of the JNA which then effectively became the Bosnian Serb army. He holds the rank of general and from about 14 May 1992 to the present, has been the commander of the army of the Bosnian Serb administration. In that capacity, he was and is in a position of superior authority to every member of the Bosnian Serb army and all units and personnel assigned or attached to that army. 40. Ratko Mladic has demonstrated his control in military matters by negotiating inter alia, cease-fire and prisoner exchange agreements; agreements relating to the opening of Sarajevo airport; agreements relating to access for humanitarian aid convoys; and anti-sniping agreements, all of which have been implemented. general allegations 41. At all times relevant to this indictment, a state of armed conflict and partial occupation existed in the Republic of Bosnia and Herzegovina in the territory of the former Yugoslavia. 42. In each paragraph charging genocide, a crime recognized by Article 4 of the Statute of the Tribunal, the alleged acts or omissions were committed with the intent to destroy, in whole or in part, a national, ethnical, or religious group, as such. 43. In each paragraph charging crimes against humanity, crimes recognized by Article 5 of the Statute of the Tribunal, the alleged acts or omissions were part of a widespread or systematic or large-scale attack directed against a civilian population. 44. Ratko Mladic and Radovan Karadzic are individually responsible for the crimes alleged against them in this indictment pursuant to Article 7(1) of the Tribunal Statute. Individual criminal responsibility includes committing, planning, instigating, ordering or otherwise aiding and abetting in the planning, preparation or execution of any crimes referred to in Articles 2 to 5 of the Tribunal Statute. 45. Ratko Mladic and Radovan Karadzic are also, or alternatively, criminally responsible as commanders for the acts of their subordinates pursuant to Article 7(3) of the Tribunal Statute. Command criminal responsibility is the responsibility of a superior officer for the acts of his subordinate if he knew or had reason to know that his subordinate was about to commit such acts or had done so and the superior failed to take the necessary and reasonable measures to prevent such acts or to punish the perpetrators thereof. 46. The general allegations contained in paragraphs 41 through 45 are realleged and incorporated into each of the charges set forth below. charges Counts 1-2 (Genocide) (Crime Against Humanity) 47. Between about 12 July 1995 and 13 July 1995, Bosnian Serb military personnel, under the command and control of Ratko Mladic and Radovan Karadzic, arrived in Potocari where thousands of Muslim men, women and children had sought refuge in and around the UN military compound. Bosnian Serb military personnel, under the command and control of Ratko Mladic and Radovan Karadzic, summarily executed many Bosnian Muslim refugees who remained in Potocari. 48. Between about 13 July 1995, Bosnian Serb military personnel, under the command and control of Ratko Mladic and Radovan Karadzic, summarily executed many Bosnian Muslim men who fled to the woods and were later captured or surrendered. 49. Thousands of Bosnian Muslim men, who fled Srebrenica and who surrendered or had been captured, were transported from various assembly locations in and around Srebrenica to a main assembly point at a school complex near Karakaj. 50. On or about 14 July 1995, Bosnian Serb Military personnel, under the command, and control of Ratko Mladic and Radovan Karadzic, transported thousands of Muslim men from this school complex to two locations a short distance away. At these locations, Bosnian Serb soldiers, with the knowledge of Ratko Mladic, summarily executed these Bosnian Muslim detainees and buried them in mass graves. 51. Ratko Mladic and Radovan Karadzic, between about 6 July 1995 and 22 July 1995, individually and in concert with others, planned, instigated, ordered or otherwise aided and abetted in the planning, preparation or execution of the following crimes: (a) summary executions of Bosnian Muslim men and women in and around Potocari on 12 July 1995 and 13 July 1995, (b) summary executions, which occurred between 13 July 1995 and 22 July 1995, of Bosnian Muslims who were hors de combat because of injury, surrender or capture after fleeing into the woods towards Tuzla. (c) summary executions of Bosnian Muslim men, which occurred on or about 14 July 1995 at mass execution sites in and around Karakaj. By their acts and omissions in relation to the events described in paragraphs 13, 14, 20.1-20.7, 23, 26 and 28, Ratko Mladic and Radovan Karadzic committed: Count 1: Genocide as recognised by Article 4(2)(a) (killing members of the group) of the Statute of the Tribunal. Count 2: A crime against humanity as recognised by Article 5(b) (extermination) of the Statute of the Tribunal. Counts 3-4 (Crime Against Humanity) (Violation of the Laws or Customs of War) 52. By their acts and omissions in relation to the summary executions of Bosnian Muslim men and women that occurred in and around Potocari between 12 July 1995 and 13 July 1995, described heretofore in paragraph 13, Ratko Mladic and Radovan Karadzic committed: Count 3: A crime against humanity as recognised by Article 5(a) (murder) of the Statute of the Tribunal. Count 4: A violation of the laws or customs of war as recognised by Article 3 (murder) of the Statute of the Tribunal. Counts 5-18 (Crimes Against Humanity) (Violation of the Laws or Customs of War) 53. By their acts and omissions in relation the summary executions of Bosnian Muslims who fled Srebrenica into the woods between 13 July 1995 and 22 July 1995 as described heretofore in paragraphs 20.1 to 20.7, Ratko Mladic and Radovan Karadzic committed: Count 5: A crime against humanity (in relation to paragraph 20.1) as recognised by Article 5(a) (murder) of the Statute of the Tribunal. Count 6: A violation of the laws or customs of war (in relation to paragraph 20.1) as recognised by Article 3 (murder) of the Statute of the Tribunal. Count 7: A crime against humanity (in relation to paragraph 20.2) as recognised by Article 5(a) (murder) of the Statute of the Tribunal. Count 8: A violation of the laws or customs of war (in relation to paragraph 20.2) as recognised by Article 3 (murder) of the Statute of the Tribunal. Count 9: A crime against humanity (in relation to paragraph 20.3) as recognised by Article 5(a) (murder) of the Statute of the Tribunal. Count 10: A violation of the laws or customs of war (in relation to paragraph 20.3) as recognised by Article 3 (murder) of the Statute of the Tribunal. Count 11: A crime against humanity (in relation to paragraph 20.4) as recognised by Article 5(a) (murder) of the Statute of the Tribunal. Count 12: A violation of the laws or customs of war (in relation to paragraph 20.4) as recognised by Article 3 (murder) of the Statute of the Tribunal. Count 13: A crime against humanity (in relation to paragraph 20.5) as recognised by Article 5(a) (murder) of the Statute of the Tribunal. Count 14: A violation of the laws or customs of war (in relation to paragraph 20.5) as recognised by Article 3 (murder) of the Statute of the Tribunal. Count 15: A crime against humanity (in relation to paragraph 20.6) as recognised by Article 5(a) (murder) of the Statute of the Tribunal. Count 16: A violation of the laws or customs of war (in relation to paragraph 20.6) as recognised by Article 3 (murder) of the Statute of the Tribunal. Count 17: A crime against humanity (in relation to paragraph 20.7) as recognised by Article 5(a) (murder) of the Statute of the Tribunal. Count 18: A violation of the laws or customs of war (in relation to paragraph 20.7) as recognised by Article 3 (murder) of the Statute of the Tribunal. Counts 19-20 (Crime Against Humanity) (Violation of the Laws or Customs of War) 54. By their acts and omissions in relation to the summary executions of Bosnian Muslim men at mass execution sites in and around Karakaj, on or about 14 July 1995, as described in paragraph 28, Ratko Mladic and Radovan Karadzic committed: Count 19: A crime against humanity as recognised by Article 5(a) (murder) of the Statute of the Tribunal. Count 20: A violation of the laws or customs of war as recognised by Article 3 (murder) of the Statute of the Tribunal. Richard J. Goldstone, Prosecutor. The Hague, The Netherlands, 14 November 1995.

Mr. SPECTER. In accordance with my practice to report on foreign travel, this floor statement summarizes a trip which Senator Shelby and I took from December 28, 1995, through January 4, 1996, to South Africa and the Mideast, focusing on Intelligence Committee matters and the Mideast peace process with a stop at the International Criminal Court in The Hague en route back to Washington. Our itinerary was condensed and our trip was cut short to be able to return to Washington on January 4 in anticipation of possible Senate votes. A key purpose was to evaluate the PLO's compliance with the provisions of the Specter-Shelby amendment, enacted in 1994, conditioning United States aid on a change in the PLO charter striking language calling for the destruction of Israel and requiring ending of terrorism by the PLO. We met with PLO Chairman Yasser Arafat in Gaza on January 2, 1996, for approximately 1 hour. He explained his lateness saying he was out campaigning for other candidates. When we commented that he must have felt secure in his own election to be campaigning for others, he responded: ``Who Knows?'' We were told the PLO election procedure had been modified because the number of seats had been expanded from 83 to 88 to accommodate late candidacies of members of Hamas. We then heard that the Hamas candidacies had been withdrawn due to pressure from Hamas leaders abroad. We urged Arafat not to change election procedures at the last minute which looked like rigging the election. When we asked about changing the PLO charter, Arafat said that would be accomplished within 2 months after the election scheduled for January 20, 1996. We emphasized the importance of eliminating the charter language calling for the destruction of Israel. Later on January 2, when we met with Prime Minister Peres, we asked him what he thought of the United States conditioning aid to the PLO on changes in the PLO charter and curtailing terrorism. Mr. Peres responded positively saying those provisions of United States law were supportive of Israeli interests. After our meeting with Mr. Peres, we told Likud leader Benjamin Netanyahu of Arafat's promise to change the charter. Mr. Netanyahu said it was good that United States law had such a requirement, because Israeli law did not. Referring back to the Arafat meeting, we asked him what had happened to the Arabs wanted by Israel on charges of terrorism. The Israeli-PLO agreement required the PLO to turn over such Arabs to Israeli authorities. We had pressed Chairman Arafat on that subject last August 31 when Senator Hank Brown and I met with him in Gaza. Arafat said some such terrorists had been prosecuted in PLO courts and some had been turned over to Israel. Finding that answer insufficient, we urged Arafat to do more on that subject. It was generally agreed by our Embassy that there had been marked improvement on terrorism in Israel during the past several months. Arafat talked at some length about his warnings to Prime Minister Rabin on the assassination risks Mr. Rabin faced. Arafat spoke about his efforts to aid in the Israeli-Syrian negotiations. He referred to a letter he had written to President Assad whom he described as a friend since 1963 when Assad was an Air Force officer. Arafat said he urged Assad to cooperate in the peace process. When asked about Iran, Arafat responded that he thought dialog was possible. He said he had complained to Rafsanjani about Iranian interference in the Israeli-PLO peace process and had told Rafsanjani that he--Arafat--would make internal trouble for Iran if Iranian interference continued. We also questioned Arafat about the PLO's hassling the Palestinian press about unfavorable new coverage. The PLO had detained an editor in custody. Arafat said the press had to respect the Government. We commented that Arafat couldn't get away with that in the United States. Arafat responded that he wasn't in the United States. He added that if he didn't take forceful actions, he would be undercut like the Government was in Algiers. Arafat complained that some donor nations had not fulfilled their commitments to aid the PLO. When asked, ``who?'', he replied that he preferred not to say, but ``instead to thank those who had not given as well as those who had given.'' Arafat appeared poised, in good humor, and in good health. Our meeting later the same day with Prime Minister Peres and Likud leader Netanyahu presented a sharp contrast in style, content, and perspectives. The 1996 Israeli election, the first with the Prime Minister elected separately from the Knesset, will present diametrically opposed approaches to this nation's future. It would be hard to conceive of a more important election historically for any nation--especially a nation where survival is jeopardized by a single mistake. Mr. Peres articulated a vision for the future: peace, while facing substantial risks, with economic development and prospective prosperity as the glue to hold the region together. He said he was more value in 100 hotels than 100 weapons. Mr. Netanyahu said he and his party were firmly opposed to expanded PLO authority which would lead to sovereignty and a Trojan Horse threat within Israeli borders. He decried any deal with Syria and President Assad, saying the Syria keeps only those commitments it cannot get away with breaking. Prime Minister Peres had a different approach saying that it was hard to make a deal with Syria, but once made, Syria kept its commitments. He approached the peace process with ideas as opposed to a concrete plan. He looked to building up rapport with the discussion of ideas before either side could defeat the process by seeing a proposal it felt compelled to reject. It is obvious that the assassination of Prime Minister Rabin has had more than a sobering effect on the region. Chairman Arafat's condolence call on Mrs. Leah Rabin was a symbolic statement that Israel has suffered too much from terrorism--although the ultimate blow came, not from the hand of an Arab, but a Jew. Whatever doubt President Assad had about a real division in Israel, no other proof could have been more persuasive. So, the currently visible battle lines being drawn in Israel are for its 1996 election. My view is the outcome will be determined more by events than personalities, policies, or programs. Throughout our trip, we assessed intelligence missions and capabilities. Terrorism was a dominant topic of conversation. In one African city, we were told of a plan to locate an Iraqi rocket launcher on a hotel roof in 1991 to take out the United States Embassy and our Ambassador. As we looked out the conference room window in the Embassy we could see the hotel roof, the proposed launching site. A vigilant intelligence operation produced information which prevented the attack. We were told that the 1986 U.S. Terrorist Protection Act has provided needed protection for U.S. personnel overseas. That legislation provided extra-territorial U.S. jurisdiction to provide for indictment in our courts for anyone who assaults, murders, or maims a U.S. citizen anywhere in the world. In another African capital, we discussed the recent reign of terror in Nigeria. We discussed the pending legislative proposals to impose sanctions on Nigeria with the consensus that such action would be successful only if supported by united international action. In Cape Town we met with Parliamentarians from the newly formed South African Intelligence Committee. They had many tough questions on the interaction between the Executive and Congress on legislative oversight. They asked bluntly if the CIA had too much power because of the perception that the CIA controlled the world. We responded by detailing our specific oversight actions to curtail excesses without unduly interfering with intelligence initiatives. When our turn came for questions, we asked the opinion of the South African parliamentarians on whether the Government of South Africa would cooperate by imposing sanctions against buying Nigerian oil. They said yes, providing everyone else did. When advised that South Africa bought its oil from Iran, we asked the substitute question as to whether they would join in international sanctions by stopping buying oil from Iran. This question came too close for comfort and the parliamentarians made no commitment on the possibility of South African sanctions against Iran. Wherever we went, there was constant talk about the danger Iran posed by its terrorism and spread of fundamentalism. The discussion frequently boiled down to whether Iran had to be totally ostracized with maximum sanctions to prevent Iran from developing nuclear weapons on whether some dialog was possible or even a combination of both. The suggestion was made that if Israel could make peace with the PLO and Arafat, then it was worthwhile to undertake similar efforts with Iran. That point of view argued that no one would have suspected a few years ago that Yasser Arafat could be a partner for peace with Israel. Who would have expected that Arafat would be honored at the White House in 1993 after being implicated in the murder of the United States charge in the Sudan in 1974 and the murder of Mr. Leon Klinghoffer in the hijacking of the Achille Lauro. Iran probably poses the greatest threat to world peace today. There was general agreement on our travels that more attention needs to be focused on the Iranian threat. En route back to the United States, we stopped at The Hague in the Netherlands to meet with the U.N. team preparing for criminal prosecutions in the War Crimes Tribunal for the former Yugoslavia. This tribunal could make the greatest contribution of the decade--or perhaps the century--by establishing a deterrent to wars of aggression, genocide and crimes against humanity by bringing the perpetrators to justice. Several weeks ago, I had met with Justice Goldstone, the tribunal's chief prosecutor, when he was in Washington, DC. At that time, Justice Goldstone mentioned certain evidence, which might be in the hands of U.S. intelligence agencies, which could be useful and perhaps instrumental in the war crimes prosecution. In meeting with the staff in The Hague we discussed the specific evidence and its importance in their prosecutions. We advised we would pursue their requests with U.S. intelligence agencies. We have discussed these issues with ranking officials of U.S. intelligence agencies who advised that they will cooperate to the maximum extent practical. In addition we discussed the issue of witness protection, because of the obvious dangers posed for the witnesses who remain in that war-torn area. We discussed U.S. procedures for protecting witnesses both before trial and the possibility of creating new identities after trial to best guaranty witness security and obtain their testimony. Several members of the prosecution team were on loan from the FBI. We agreed to take up the issue of witness protection with appropriate officials of the FBI. We also had an extensive discussion about their limited budget and the fact that a number of their investigative team had to delay going into the field because of a limited budget. Concern was also expressed about the adequacy of U.S. participation in the war prosecution team and the problems which might arise if replacements were not obtained for personnel from the Departments of Justice, Defense, and State. We committed to take those issues up with the appropriate department heads. We observed the new courtroom which breaks ground in an international criminal trial. The trial proceedings will be conducted with three judges without a jury and there are booths for simultaneous translation in a number of languages. We commended the prosecution team on their historic efforts and promised to follow through to be of assistance in this most important venture. I ask unanimous consent that the indictments of Dusan Tadic a/ k/a ``Dule'' Goran Borovnica and also Radovan Karadzic and Ratko Mladic be printed in the Congressional Record at the conclusion of this statement to demonstrate the importance of these criminal proceedings. Dusan Tadic is in custody and is scheduled to be tried sometime in the spring. Radovan Karadzic is the President of the Bosnian Serb Administration in Pale, and Ratko Mladic is the commander of the Army of the Bosnian Serbs. Mr. President, the trip was very useful along a number of lines, especially with conversations which Senator Shelby and I had with PLO Chairman Yasser Arafat on the Specter-Shelby amendment which conditions $500 million in United States aid to the PLO curtailing terrorism and changing their charter to eliminate references to the obliteration of Israel. The visit we had at the Hague, in the Netherlands, with the United States prosecution team for the former Yugoslavia, I think, poses a historic event later this spring with the trial of Dusan Tadic. I ask unanimous consent the indictment against Tadic be printed in the Record at conclusion of my presentation, and the pending indictment also as to Radovan Karadzic, who is the President of the Bosnian Serbs, and Ratko Mladic, who is the commander of the Bosnian Serb Army, which really has the potential to establish a historic international precedent for the rule of law.

Mr. SPECTER

Mr. SPECTER. Mr. President, I compliment the distinguished majority leader, Senator Dole, and all parties to the budget negotiations and urge them to continue their talks after hopefully only a brief suspension. It seems to me likely that an agreement can be reached since the parties are reportedly $100 billion apart. While that is a large sum of money in absolute terms, it is relatively a small percentage of the more than $12 trillion of a 7-year budget. It is eight-tenths of 1 percent. If an agreement cannot be reached, it is my strong view that the Government should not be closed because of gridlock. We should not try to run Government by blackmail. If an agreement cannot be reached, I suggest, as strongly as I can, that we should keep the Government running and crystallize the issues and present them to the American people for their decision in the 1996 Presidential and congressional elections. During the first week of the shutdown--actually, on the second day, back on November 14 of last year, I urged this course of action. It is a fundamental principle of U.S. constitutional government that the Congress and the President are partners, really equal partners, unless each House of Congress has a two-thirds majority to override a Presidential veto. And if we can get a two-thirds majority by appealing to the centrists on both sides of the aisle, then we can structure a budget agreement without the President and without closing the Government. But, absent that, it is my strong view that we ought to keep the Government running and crystallize the issue for the 1996 election. I understand those in my party who seek to enact our agenda through the political pressure of gridlock and shutdown. I agree with the majority leader, Senator Dole, who has rejected that approach. I remain totally committed to a balanced budget within 7 years with genuine Congressional Budget Office figures. Since my first vote for the balanced budget amendment in 1983, I have stood fast for this important principle. But it is time to acknowledge that it is a failure with the American people to try political pressure through gridlock and shutdown. It is like Supreme Court Justice Potter Stewart said about obscenity, that he could not define it, but he knew it when he saw it. The American people, similarly, know the difference between Government by blackmail and legitimate political pressure. Had there been any doubt about the difference, it was reduced to plain arithmetic by last night's NBC poll, which showed that 50 percent of the American people approved the President's handling of the budget crisis with 46 percent against, compared with 22 percent who support the Republican handling of the budget crisis with some 78 percent against. One further word on blackmail versus legitimate political pressure. I urge my colleagues not to try to use the debt ceiling to bludgeon the settlement on the budget dispute. I personally have grave legal reservations about the procedures currently being used by the administration to avoid exceeding the debt limit, and I have said that directly to the Deputy Secretary of the Treasury. If they have violated the law by keeping the Government running without raising the debt limit, let them be impeached or subjected to other appropriate legal procedures. When Treasury Secretary Jim Baker borrowed from the Social Security trust fund in the mid-1980's, I spoke up on this floor and objected to the conversion of trust funds for an unintended purpose. If any other person violated the trust fund, they would be subjected to criminal prosecution for fraudulent conversion. But I suggest that is a fundamentally different proposition for Congress to use that kind of a nuclear weapon in the budget battle. It is not proportionate and I suggest it is not proper. The full faith and credit of the United States would be damaged worldwide. So I hope my colleagues will reject that approach.

Mr. SPECTER

Mr. SPECTER. Mr. President, with the time extended, I ask consent to speak for 2 additional minutes.

Mr. SPECTER

Mr. SPECTER. Mr. President, I have sought recognition to amplify some of the comments and some of the issues which I had raised in the question I posed to the distinguished Senator from New Mexico. The narrow issue which has been raised in the President's veto message is one of enormous importance but is generally not understood unless someone has delved into the intricacies of the legal pleadings, which are, candidly, not well known, not of very great interest, but are very, very important. The issue arises in a historical context where at common law lawsuits which had great merit on the substance were thrown out of court because lawyers did not put in an adequate written pleading--a pleading is a document that is filed to start a lawsuit--because lawyers, acting on behalf of clients, did not put enough in the pleading to satisfy the requirements of law. Most people do not really understand what the litigation process, the civil litigation process is all about. There is enormous publicity on the O.J. Simpson case, and television and radio and books talk a lot about criminal trials, but very few really go into detail on what happens in a civil lawsuit. But that is a process where one person sues another, or corporations may be involved as parties, in order to assert a cause of action or a claim for relief based on a civil wrong, where a remedy is sought. It may be money damages or an injunction to stop someone from doing something. In the old common law, many people who had been severely injured were not given a day in court because their lawyers did not put down the proper words. There is a famous textbook, Chitty on Pleading, to tell you how to write the pleadings. These problems have been carried over to the present day. As a younger lawyer, I went to the prothonotary's office in Philadelphia. On many occasions I had my complaints returned for failure to go into the kind of specificity needed. The leading architect, the draftsman of the Federal Rules of Civil Procedure, was a Yale Law School professor named Charles E. Clark. Charles E. Clark later became the dean of the Yale Law School and he later became a distinguished judge on the Court of Appeals for the Second Circuit and ultimately was the Chief Judge there. Judge Clark felt so strongly about civil procedure that he took time from his busy schedule to continue to teach a class at the Yale Law School long after he left as dean and was a distinguished Federal judge. I had the good fortune to have Judge Clark as a professor on civil procedure. Judge Clark, in a very eloquent way--and I wish he were on the floor today to talk about his deep feelings about procedure and the work that he had done--spoke about the unfairness of having highly technical rules of pleadings which stop people who have valid claims from getting into court. He developed, in the Federal Rules of Civil Procedure, what is called ``notice pleading.'' It was a very famous case, DiGuardia versus Gurney, that involved a man who was injured, wrote something on a slip of paper and filed it in Federal court, and that was sufficient to start a lawsuit, start the process. The defendant obviously objected. He wanted a lot more specification. What he really wanted to do was to win the lawsuit. He wanted to get the plaintiff, DiGuardia, out of court. But that is why we have judges who make decisions. The distinguished Senator from New Mexico made a statement that ``the lawyers decide when cases are settled.'' It is not true. These class action cases are not settled until judges decide when the cases are going to be settled and when the cases are going to be concluded. These actions all require court approval. If one person sues another, he can discontinue the lawsuit by simply filing a praecipe, or paper saying the lawsuit is over. But in class actions the lawyers do not decide these matters, they are decided by judges. The Federal Rules of Civil Procedure were set up in an elaborate way to provide fairness, to give both parties a fair chance. There is an interesting editorial in today's USA Today, commenting about this arcane, esoteric subject. The caption of it is, ``Sorry Securities Law.'' The key sentence is, ``President Clinton did something smart this week. He sided with investors and taxpayers in a battle for fair securities litigation reform.'' I ask unanimous consent this editorial be printed in the Congressional Record, following my remarks.

Mr. SPECTER. Is it fair to have that kind of particularity required in that bill?

Mr. SPECTER. He is the proud father of three attorneys. He only talked to me about one, so I will have to find out about the other two. I want to ask the Senator from New Mexico a question which relates to the core problem here about the requirements on proving state of mind, where the President's veto message takes up this question, with the conference report adopting the toughest standard in existence, the standard of the second circuit. But the conference report dropped an amendment which this Senator had offered, which was approved by a substantial majority, 57 to 42, codifying the second circuit's method of proving state of mind. And then the conference report also added the requirement that state of mind be pleaded with particularity, which is a direct contradiction to the general rule of civil procedure that state of mind be averred generally as opposed to fraud, which has to be pleaded with particularity. Now, this is classified as an arcane subject, which means very few people know anything about it. The President called me the night before last because I had written to the President--and I will go into this a little more when I seek the floor on my own behalf--but in the context where you have a short statute of limitations, where you have the unique--not unusual, but unique--provision in the law for a mandatory stay of discovery when a defendant files a motion to dismiss, so that you have a requirement that the plaintiff plead with particularity facts on the defendant's state of mind. Does that not go too far in closing the courthouse door to plaintiffs? I say that without an ax to grind, and with some substantial experience as a practicing lawyer, although not in class action fields for the plaintiff. I represented some defendants in securities act litigation. As I take a look at the current state of the bill, different from the bill passed by the Senate, the President raises three points which would change in the conference report, but they boil down to this extraordinarily high standard of pleading. Is it fair to require investors in a field where we have stock security transactions, approximating $4 trillion in this country each year, bearing in mind the gross national product in this country is----

Mr. SPECTER. The President, in his veto message, focused on one narrow question. Actually, he focused on three, but they boil down to one. That is, on the somewhat arcane question of pleading. The question goes to the distinguished Senator from New Mexico, whom I compliment for his laborious work here. He is an attorney himself, and he is the proud father of an attorney, as am I.

Mr. SPECTER. Will the Senator yield for a question on the President's action?

Mr. SPECTER. Mr. President, in conclusion, the two most popular words of any speech, I ask my colleagues and the staffs just to take a look at what we are doing here. The President is prepared to sign a bill and to sign into law very substantial changes in the securities fields which have been urged and would become law--limitations on joint liability, reforms, so-called, in the safe harbor provisions, the elimination of liability under RICO--and I have had many people, especially the accountants, urge that change be made--procedural changes to ensure plaintiffs, not their attorneys, control the litigation; really very major and enormous changes. But this one provision as to how you state your case is just unfairly, unduly restrictive in this bill because it turns the Federal Rules of Civil Procedure on their head. It turns in a revolutionary way--more than revolutionary, really destructively revolutionary--the established rules of notice pleading. It strikes the amendment which this body had adopted on my introduction telling people how to meet the tough standard of specific pleading and then adds to it a particularity requirement which makes it a virtual impossibility that sufficient facts can be alleged and in a unique way cuts off discovery. The only situation like it that I know about. It mandates the cut off of discovery when a motion to dismiss is pending, because characteristically and especially when you want to get inside somebody's head you cannot do it unless you ask them a question or two. So this is something of really enormous importance. What we would be doing in effect is returning to a common law pleading standard, the common law of ancient England, probably even tougher than common law in ancient England, which would be closing the courthouse doors on millions of Americans who invest their money. And the long-range effect of what it does to the lawyers is minuscule but not what it will do to investors and what it will do to capital formation in the United States. So I think that if we make these changes, simple but critical, as the President has said he will sign this law and we can move forward in a fair way. I thank the Chair. I yield the floor. Exhibit 1 [From USA Today, Dec. 21, 1995] Sorry Securities Law Caught between two big Democratic Party contributors--trial attorneys and new high-tech companies, President Clinton did something smart this week. He sided with investors and taxpayers in a battle for fair securities-litigation reform. Clinton vetoed a bill aimed at limiting frivolous lawsuits against corporations that simply went too far. As passed last week, the legislation gave a deserving slap to a group of trial attorneys who've literally paid people to start class-action suits against companies whose stocks decline dramatically. To defend against such suits, companies on average pay $700,000 in attorney fees and lose nearly a half-year's worth of top managers' time. Such high costs especially threaten new high-tech firms. All of Silicon Valley's young electronics companies report being hit by so-called strike suits. Legitimate investors aren't helped either when lawsuits harass a company in which they've put money. The bill would benefit investors and business by allowing executives to speak more freely about their plans with less fear of suits if the plans go sour. That's what securities reform was supposed to be about. But the legislation Clinton vetoed leapt beyond that with provisions that would open the door to fraud. For example, the bill would allow executives to knowingly deceive investors as long as they included general cautions while hyping products. Thus, a drug company executive talking up a new drug could keep from investors the fact that the government had denied approval of it without risking suit as long as he noted the uncertainty of the drug approval process. Worse, the legislation also would require investors to provide proof of intent to commit fraud when a complaint is filed. That standard would have kept the government from recovering money from Charles Keating and other savings and loan crooks for their billions of dollars in fraud against depositors and taxpayers. Those problems are easily remedied. As Sen. Arlen Specter, R-Pa., argues, plaintiffs aren't mind readers. They should only have to show motive and opportunity to commit fraud to lodge a complaint. And honest executives and businesses don't need a safe harbor for lies. Wednesday, the House foolishly rejected those quick Clinton fixes to the bill and voted to override the veto. The Senate should take Clinton up on them. Securities laws need to be fair to all, starting with investors and taxpayers. Exhibit 2 U.S. Senate, Committee on the Judiciary, Washington, DC, December 8, 1995. The President, The White House, Washington, DC. Dear Mr. President: This week, both the Senate and the House of Representatives passed the conference report to H.R. 1058, the Private Securities Litigation Reform Act of 1995. I urge you to veto this conference report. While the bill contains some reasonable provisions to eliminate frivolous securities suits, it goes too far. The bill fails to extend the statute of limitations shortened by the Supreme Court several years ago. It imposes a highly restrictive method for pleading scienter. It provides a mandatory stay of discovery when a motion to dismiss is filed, thereby preventing plaintiffs from discovering salient facts that would allow them to amend their complaints to satisfy the new pleading standard. It requires mandatory review at the completion of each case for sanctions under Rule 11 of the Federal Rules of Civil Procedure and, in what amounts to fee-shifting, provides a presumption that the remedy for any Rule 11 violation in the complaint is reimbursement of the defendants' attorneys' fees. As a practical matter, this combination of factors will choke off many important law suits to protect innocent investors. In very few cases will either potential plaintiffs or their lawyers have a sufficient interest to justify risking sanctions because, after the fact, a judge decides that they may have violated a stringent and arbitrary pleading standard. I fear that enactment of this bill would represent the end of the private enforcement of the nation's securities laws, which have provided the most stable markets in the world. I assure you that in the event that you veto this bill, I will support your veto and work to defeat any override effort. Thank you for your consideration. Sincerely, Arlen Specter. Exhibit 3 To the House of Representatives: I am returning herewith without my approval H.R. 1058, the ``Private Securities Litigation Reform Act of 1995.'' This legislation is designed to reform portions of the Federal securities laws to end frivolous lawsuits and to ensure that investors receive the best possible information by reducing the litigation risk to companies that make forward-looking statements. I support those goals. Indeed, I made clear my willingness to support the bill passed by the Senate with appropriate ``safe harbor'' language, even though it did not include certain provisions that I favor--such as enhanced provisions with respect to joint and several liability, aider and abettor liability, and statute of limitations. I am not, however, willing up to sign legislation that will have the effect of closing the courthouse door on investors who have legitimate claims. Those who are the victims of fraud should have resource in our courts. Unfortunately, changes made in this bill during conference could well prevent that. This country is blessed by strong and vibrant markets and I believe that they function best when corporations can raise capital by providing investors with their best good-faith assessment of future prospects, without fear of costly, unwarranted litigation. But I also know that our markets are as strong and effective as they are because they operate--and are seen to operate--with integrity. I believe that this bill, as modified in conference, could erode this crucial basis of our markets' strength. Specifically, I object to the following elements of this bill. First, I believe that the pleading requirements of the Conference Report with regard to defendant's state of mind impose an unacceptable procedural hurdle to meritorious claims being heard in Federal courts. I am prepared to support the standards of the Second Circuit, but I am not prepared to go beyond that. Second, remove the language in the Statement of Managers that waters down the nature of the cautionary language that must be included to make the safe harbor safe. Third, restore the Rule 11 language to that of the Senate bill. While it is true that innocent companies are hurt by frivolous lawsuits and that valuable information may be withheld from investors when companies fear the risk of such suits, it is also true that there are innocent investors who are defrauded and who are able to recover their losses only because they can go to court. It is appropriate to change the law to ensure that companies can make reasonable statements and future projections without getting sued every time earnings turn out to be lower than expected or stock prices drop. But it is not appropriate to erect procedural barriers that will keep wrongly injured persons from having their day in court. I ask the Congress to send me a bill promptly that will put an end to litigation abuses while still protecting the legitimate rights of ordinary investors. I will sign such a bill as soon as it reaches my desk. William J. Clinton. The White House, December 19, 1995. Exhibit 4 U.S. Senate, Committee on the Judiciary, Washington, DC, December 20, 1995. Dear Colleague: I urge you to sustain the President's veto on the Securities Bill. The President vetoed the Conference Report because it significantly changed the Senate's version of the Bill. If the Senate changes three provisions, the President has committed to signing a revised Bill which would contain most of the legislative reforms such as: reform of joint liability; safe harbor for forward-looking nonfraudulent statements which turn out to be incorrect; elimination of liability under RICO; procedural changes to insure that plaintiffs, not their attorneys, control cases. The President vetoed the Conference Report because it established virtually impossible pleading requirements. The President accepted the toughest pleading standard of the Second Circuit on the defendant's state of mind, but the President wanted the Bill to include my amendment (adopted by the Senate 57 to 42) which codified the Second Circuit's standard on how that state of mind could be proved. That tough pleading standard becomes even more important in the context that the Bill prohibits discovery while the defendant's motion to dismiss is pending. That means that the plaintiff must specify his entire case without the benefit of discovery. That is a virtually impossible pleading standard which turns the Federal Rules of Civil Procedure on their head. The Conference Report's safe harbor provision excludes liability for knowingly false forward-looking statements. The President would sign a bill which retained the Senate's version. Sustaining the President's veto would retain most of the reform measures in the Conference Report but will not close the courthouse door to legitimate claims by these draconian pleading standards. Transactions on the stock exchanges now approximate $4 trillion annually which is more than half the U.S. gross national product. Fairness to investors requires these revisions in the final bill which would follow the Senate's sustaining the President's veto. Sincerely, Arlen Specter. Exhibit 5 [From the Wall Street Journal, Dec. 21, 1995] House Votes To Override Veto of Securities-Suit Bill (By Jeffrey Taylor) Washington.--The House voted 319-100 to override President Clinton's unexpected veto of a bill restricting investors' securities-fraud lawsuits, but the bill's supporters may find an override harder to come by in the Senate Late Tuesday night, Mr. Clinton stunned a coalition of publicly owned companies, accountants and securities firms advocating the bill by vetoing the legislation--after indicating earlier that he planned to sign it. The bill would make it harder for investors to file lawsuits seeking damages when companies' stock prices drop and would limit the liability of accountants and underwriters for fraud by their corporate clients. An override vote in the Senate may come as early as today. White House aides expressed confidence that Mr. Clinton's legislative staff could muster enough votes to defeat it. The Senate approved the final version of the bill two weeks ago by a 65-30 vote, barely enough for the two-thirds margin needed for an override. Both sides in the debate spent much of yesterday lobbying five senators who voted for the bill but are seen as swing votes. In addition to his usual Republican adversaries, the president faces some unaccustomed opponents in the override fight including Sen. Christopher Dodd (D., Conn.), the Democratic National Committee chairman who aggressively supports the bill. In a speech to House Democrats yesterday morning, Sen. Dodd urged them to vote for their body's override. And in a terse public statement, Mr. Dodd vowed to ``work hard . . . to enact this legislation into law,'' which would amount to a defeat for his own party's president. If the Senate override effort fails, the bill's supporters may be forced to reshape the bill to conform with some of Mr. Clinton's concerns about it. The first of these, the president said in his veto message, was that the bill's so- called pleading standards--or the facts investors must establish so courts will let their lawsuits proceed--impose ``an unacceptable procedural hurdle'' to many worthy lawsuits in the federal-court system. Thus, he concluded, the standards would damage the legal rights of defrauded investors. While supporters weren't admitting it publicly yesterday, only one of the three major interest groups pushing the bill--the high-technology companies often targeted for fraud lawsuits--regards the bill's strict pleading standards as essential. The other two groups--accounting and securities firms--are more interested in other aspects of the lawsuit- limiting bill, such as its limits on their financial liability. Mr. Clinton appears to have counted on that fact in crafting his veto message. In it, he calls for restoration of an amendment introduced by Sen. Arlen Specter (R., Pa.), who opposes the bill, which would have softened the pleading standards. The amendment was approved by the Senate in June but was dropped in subsequent negotiations to merge the Senate bill with its House counterpart. In a letter to Mr. Clinton this month, Sen. Specter urged Mr. Clinton to veto the bill and, if he did, promised to help defeat any override effort in the Senate. Sen. Specter, who like Mr. Clinton is an alumnus of Yale Law School, said in his letter that his former federal-procedure professor at Yale would ``roll over in his grave to see the specific pleading standard in the bill.'' In a statement issued before yesterday's House vote, Rep. Christopher Cox (R., Calif.), one of the bill's architects and most ardent supporters, dismissed the concerns raised in Mr. Clinton's message and painted the veto as a concession to class-action trial lawyers who oppose the bill. Mr. Clinton vetoed the bill, Rep. Cox asserted, ``at the bidding of securities lawyers who are some of his and the Democratic Party's biggest donors.'' The President's message also criticized the managers' statement that accompanied the bill, in which its congressional supporters explained what their intentions were in drafting it. Mr. Clinton complained about how the managers' statement described a key provision of the bill protecting companies from legal liability for their forecasts about earnings and other matters. The statement, he said, ``attempts to weaken the cautionary language'' the bill requires for companies to describe factors that might skew their forecasts. Mr. BENNETT addressed the Chair.

Mr. SPECTER

Mr. SPECTER. Mr. President, I rise to introduce a resolution on behalf of myself, Senator Kerrey of Nebraska, Senator Glenn, Senator Bryan, Senator Robb, Senator Johnston, Senator Chafee, Senator Baucus, Senator Warner, Senator Kerry of Massachusetts, Senator Shelby, Senator Graham of Florida, Senator Kyl, Senator Lugar, Senator Inhofe, Senator Byrd, and Senator DeWine commending the Central Intelligence Agency's statutory Inspector General on his 5-year anniversary in office. Mr. President, the CIA's statutory inspector general is an issue that is near and dear to me, particularly since it was at my initiative that this office was established. I, along with a good number of my Senate colleagues who served both on the Iran-Contra Committee and the Senate Select Committee on Intelligence, had voiced concern with the need for objectivity, authority, and independence on the part of the CIA's Office of Inspector General. And, working in close collaboration with my colleague Senator Glenn, we crafted a provision that in 1989 was included in the Intelligence Authorization Act of fiscal year 1990-- subsequently enacted into law--to establish an independent, Presidentially appointed statutory inspector general at the CIA. In November, 1990, the Honorable Frederick P. Hitz was formally sworn in as the CIA's first statutory inspector general. As chairman of the Senate Select Committee on Intelligence, I am pleased to report to my colleagues that in the 5 years since Fred Hitz was sworn in as the CIA IG, the committee has noted a vast improvement in the effectiveness and objectivity of that office. This has been due in no small measure to the capable leadership of Fred Hitz. While the committee has not always agreed with the judgments of the CIA inspector general's office, the CIA IG has been fearless in taking on difficult and controversial issues such as BCCI, BNL, the Aldrich Ames case, and CIA activities in Guatemala--just to name a few. And the work of Fred Hitz's shop has been an invaluable supplement to our committee's intelligence oversight role. Mr. President, there was fierce resistance to the creation of a statutory inspector general at the Central Intelligence Agency, and there continues to be strong resentment of an independent IG in certain quarters of the CIA to this day. This should come as no surprise. It is hard to think of another Federal agency in the U.S. Government more institutionally resistant to having an independent inspector general than the CIA. Accordingly, I believe that any CIA IG worth his or her salt would be about as popular as Fred Hitz currently is with some of his present and former CIA colleagues. It is a mark of his tenacity and integrity that Fred and his office continue to tackle the IG's mission of serving as an independent fact-finder and, when necessary, a critic of CIA programs and operations. Mr. President, the statutory CIA inspector general has made the Central Intelligence Agency more accountable to the American people. I and my Senate colleagues wish to acknowledge and commend the fine work of this office, and congratulate Fred Hitz on his 5-year anniversary as the first statutory CIA inspector general.