Lee Terry

Mr. TERRY

Mr. TERRY. Mr. Speaker, I yield myself 3 minutes. Mr. Speaker, the recent drumbeat of criticism coming from the White House has been hard to miss. Simply put, the President does not like the fact that Congress will not go along with his tax increases to pay for new government spending. It is disappointing that all this noise has drowned out the attention to all of these new taxes and fees the President himself has proposed, more than $19 billion for this next fiscal year and about $240 billion over the next 10 years. I introduced this bill so Members would have the formal opportunity to express their views on the President's new taxes and fees and so instruct our leadership. Now, in fact, the taxes and fees included in this bill are only the offsets to the President's new discretionary spending. I should also note that he has proposed other taxes on nonprofit organizations, life insurance, bond insurers, and other businesses. Well, it is time to put up or shut up. Let me tell my colleagues some of the things that are in this bill. At a time when our hospitals and seniors are being squeezed, the President wants to charge a $1 filing fee for claims submitted to HCFA and cut services to seniors by another $1.3 billion. The President also wants to impose $504 million in new livestock, poultry, and egg inspection fees. Airline carriers and passengers would pay an additional $1.3 billion in new user fees. I can go on and on. It is sad enough that the President vetoed the bill that would have given back taxpayers a small part of the amount that they are overcharged to run this Federal Government. The veto, along with all of these new taxes and fees, shows the mantra of the administration is more, more taxes, more user fees, more government. Over the next 10 years, it is a trillion-dollar swing, $792 billion in tax cuts added on with $238 billion in new taxes. I, for one, plan to signal the appropriators that they should reject the President's new taxes and fees. If they find the President's proposals as ludicrous as I do, I urge them to vote ``no'' on this bill. Mr. Speaker, I reserve the balance of my time.

Mr. TERRY. Mr. Speaker, I yield the balance of our time for closing to the gentleman from Illinois (Mr. Weller).

Mr. TERRY. Mr. Speaker, I yield 1 minute to the gentleman from Delaware (Mr. Castle).

Mr. TERRY

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

Mr. TERRY. Mr. Chairman, I rise today to offer this amendment in hopes that I can bring much needed accountability to OPIC's operations. I believe that government should exercise a high degree of discretion in becoming involved in essentially private sector business functions. At the same time, I understand that OPIC exists to fill a void by providing political risk insurance in countries where private insurers may hesitate to go. The appropriate balance is for an agency such as OPIC to be scrupulous in maintaining a businesslike approach to its dealings, yet be constantly aware of its duty to maintain public confidence and trust. The House Foreign Operations Committee has noted, ``OPIC must be aware that private parties with legitimate claims face financial obligations that cannot be deferred indefinitely.'' Companies that have disputes before OPIC have the right to know where they stand. It is reasonable for businesses to have a full understanding of the status of their claims. Mr. Chairman, my amendment adds a statement of policy that OPIC should be more sensitive about the impact of its delays on private businesses. I urge its approval.

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

Mr. TERRY. Mr. Chairman, I thank the gentleman from Alabama for that offer, and I should have offered him the courtesy. A member of the gentleman's committee has been participating in several discussions of which I have been involved with Mr. Munoz and OPIC concerning the status of several claims and their unwillingness to deal with them in a timely manner, and I will meet with the gentleman as soon as this colloquy and amendment are over, and I will give him the details of that, and I apologize for not doing that in advance.

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

Mr. TERRY. Mr. Chairman, I ask unanimous consent to modify Amendment No. 10.

Mr. TERRY. Mr. Chairman, this is an amendment that would apply some reasonable time limits to OPIC's claim settlement procedures. Private parties that have paid substantial premiums to OPIC, in some cases millions of dollars, are finding that they are literally at OPIC's mercy which it comes to the resolution of their claim. They lose real dollars every day OPIC delays settling these claims. Yet, under current law, OPIC does not even have to pay interest on its claims' obligations no matter how long it is delayed. Moments ago we passed a policy that said that they have to expedite their claims or treat them expeditiously. Now, this is the implementation of that policy. This amendment proposes a 90-day initial period in which they can review the claim. If additional information is required, they can have 60 additional days for a total of 150 days to review the claim to make their decision. If they are unable to make their decision within that time frame, then at the beginning of the 150 days, in essence, interest starts running if the claim is found to be valid. I know that the Chairman of OPIC has some concerns with the mechanics of the operation of this amendment. I have talked to Mr. Munoz about those, and I think some of them are valid concerns. It does place a burden on the applicant. The applicant, because of a shortened time frame, has to get their ducks in a row before submitting a claim. One cannot simply write the letter submitting the claim without then having their documentation to back it up. So it does place that burden on the applicant. But, on the other hand, there is nothing in the system right now that prevents OPIC once that information is submitted to act on it expeditiously. This puts the policy into action with specific time periods and a remedy when they fail to adhere to those time periods. Mr. Chairman, I urge approval of this amendment.

Mr. TERRY

Mr. TERRY. Mr. Chairman, I move to strike the last word. Mr. Chairman, first of all, I want to be clear on what this amendment does. It is, in essence, a substitute amendment to mine. It statutorily incorporates the status quo. It basically says that OPIC has 6 months next to never to resolve claims. That is no improvement. There are examples where OPIC has drug their feet on claims for a variety of different reasons, but the fact that they have taken substantial time to resolve claims is unrefuted. The issue then is if they are going to act like a private insurance company, they have to treat claims with good faith. If we review insurance laws of every State, we will see provisions that outline how insurance companies have to act in good faith. One of those provisions in every State is that they have to handle claims expeditiously. If they do not, the remedy is usually pre-judgment interest. This is what my amendment does, is simply put into the system some accountability. That accountability is if they are going to drag their feet on claims, on valid claims, then after 150 days they should have to pay interest on the amount of that claim. The world does not operate in a vacuum. If Indonesia takes over a power plant and kicks out the U.S. citizen that built that and threatens to jail them if they return, that is expropriation. OPIC knows when that happens. Now, the applicant has to document those activities, and will take the time to properly put their case together before they submit that. It is reasonable, then, because OPIC, if they are diligent at all, should already know what is going on, for them to be able to review that within a certain short period of time. If additional information is necessary, as is outlined in mine, and that request is reasonable, then they should be afforded an extra 60 days, for a total of 150 days. My amendment is reasonable. The substitute amendment offered by the gentleman from New Jersey (Mr. Menendez) guts mine entirely, and basically, as I said, incorporates the status quo. A couple of points raised; one, that OPIC resolves 94 percent of the claims. I am sure under the current leadership that that will not change. What may change, though, is another category of the timeliness of those resolutions. That is what we are requesting, is simply that OPIC have a set time frame to resolve those claims. I am sure they will act expeditiously under the current leadership. The fact that they want to go after, for example, Indonesia for reimbursement, they should not hold up a claim until they get some commitments for reimbursement. In the private sector, that is bad faith. Surely they should have the right. This amendment in no way quashes or harms or prevents their opportunity to go after a country that has expropriated an asset at all. All this simply does is say, for the victim of that expropriation, that they have to handle that claim in a timely manner. Mr. Chairman, I urge the defeat of the substitute amendment, and again request passage of my amendment.

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

Mr. TERRY. To answer the gentleman's question, Mr. Chairman, on specifically what happens next, the issue is yes, then they can go to arbitration. There are specific examples in existence where OPIC has not resolved the claim in a timely manner. It has drug on for months. If OPIC would have either accepted or denied their claim, let us say in a denial, probably in the time frame that OPIC has sat on the claim they could have had a determination from the arbitration board in the international arena. In fact, in the incident in Indonesia when they expropriated the power company, there was already an arbitration of whether or not they had seized those assets. In an international arbitration court of three, it was a three-zero decision that the country had acted in a way to expropriate.

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

Mr. TERRY. Mr. Chairman, I thank the gentleman from Illinois for yielding. Frankly, the gentleman raised some of the points I wanted to when the gentleman yielded, and I had an opportunity to tell what the process was and how. When OPIC does not act in a timely manner, they also shut the door to those other remedies that are available. When they sit on a claim, and they have, and I am sorry that we do not get the opportunity, like in a court of law, to call witnesses to produce evidence, but if we can get some hearings on the way OPIC has acted on a certain amount of claims, especially the Indonesian claims, we will see that, for whatever reason, and I am not saying that they are bad faith reasons, but without question, they have admitted that they have had all the facts of what happened in Indonesia for months, and in a meeting last week, when they said that they would have a decision months ago, and when asked why they have not, they said, yes, we have all of the facts, but the lawyers have not made their decisions yet. Well, when I was in the private practice of law, that would be frequently the answer of the insurance companies that were ultimately responsible: We know all of the facts, we have done the investigation, we just have not made our decision yet. This simply says, you have all the facts. Make your decision. Quit using excuses to delay it. If that is an admirable policy, then what we need to do is to put some teeth into it. I think just a simple private sector remedy of prejudgment interest is probably the easiest solution. The gentleman from Illinois (Mr. Manzullo) is exactly right, it is a simple solution that incentivizes both parties to move in a timely manner. That is the whole purpose of this amendment.

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

Mr. TERRY. Mr. Chairman, this amendment addresses a serious concern that I have regarding OPIC. We have alluded to some of it here in our discussions on the last amendment. It is that basic business decisions at OPIC have, I fear, become politicized. When an American business comes to its government and purchases a political risk insurance policy, it is doing so because in certain countries it cannot rely on a transparent political process or the sanctity of those contracts. Based on the comments that I have heard directly from OPIC officials, I have reason to believe that officials from cabinet agencies are intervening in the business operations of OPIC because of other foreign policy goals. That is, it is turning the purpose of OPIC on its head. The fact that American companies have suffered as a result of capriciousness abroad is bad enough; but when they turn to their own government for help contractually, they should not expect even more political capriciousness. My amendment seeks to get to the bottom by requiring any intervention by a Federal agency on a pending claim at OPIC to be disclosed. It is as simple as that: disclose it. Let us recognize that OPIC is a governmental agency. Its head is appointed by the President, confirmed by the Senate. So it does have to have relations with the State Department and the Treasury. So if there are foreign policy considerations that are holding up a claim or influencing the resolution of a claim, which I think is wrong, considering the insurance contract should be different than that, but at least recognizing the government relationship, the least that they should do is disclose that intervention. Now, by intervention I mean simply take the common everyday usage of that word. I mean any formal or informal communication by an official of another agency at OPIC that seeks to affect or could reasonably be expected to have an impact on OPIC's decision on the merits of the case. There is concern about whether a simple call of inquiry, a Treasury head calling up and saying, George, how are the claims in Indonesia coming, that is a simple inquiry. That is not intervention. If they say we have some real foreign policy issues there, we cannot upset the government of Indonesia right now, so how are those claims coming, I think the true intent might have been to intervene in the process. I expect an amendment that will change the definition of ``intervention,'' and we will have a continuing debate on that, but I think we owe it to those who are purchasing these contracts that if their claim is being influenced that they at least know it. I urge support for this amendment. Amendment Offered by Mr. Menendez to Amendment No. 11 Offered by Mr. Terry

Mr. TERRY. Mr. Chairman, will the gentleman yield for a response?

Mr. TERRY. Mr. Chairman, first of all, what needs to be recorded is that one of our government agencies has requested OPIC to make a decision based on politics. The details of that are not necessarily needed to be disclosed in the record.

Mr. TERRY. Mr. Chairman, let me ask the same level of rhetorical question back. Does it not provide more confidence in the insurance contract if the purchaser of that contract has some assurances that, if decisions are not going to be made on the merits of the claim but on politics, that they at least be told?

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

Mr. TERRY. Mr. Chairman, the issue is that OPIC should be making those decisions on the outcome of claims, not other agencies.

Mr. TERRY

Mr. TERRY. I yield to the gentleman from Kentucky.

Mr. TERRY. Mr. Chairman, reclaiming my time, I thank the gentleman for his comments. Mr. Chairman, in conclusion, I urge support for this amendment.

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