[House Document 110-88]
[From the U.S. Government Publishing Office]
110th Congress, 2d Session - - - - - - - - - - - - - House Document 110-88
88--VETO MESSAGE ON H.R. 1585
__________
MESSAGE
from
THE PRESIDENT OF THE UNITED STATES
transmitting
NOTIFICATION OF THE VETO OF H.R. 1585, THE ``NATIONAL DEFENSE
AUTHORIZATION ACT FOR FISCAL YEAR 2008''
January 16, 2008.--Message and accompanying papers referred to the
Committee on Armed Services and ordered to be printed
Memorandum of Disapproval
I am withholding my approval of H.R. 1585, the ``National
Defense Authorization Act for Fiscal Year 2008,'' because it
would imperil billions of dollars of Iraqi assets at a crucial
juncture in that nation's reconstruction efforts and because it
would undermine the foreign policy and commercial interests of
the United States.
The economic security and successful reconstruction of Iraq
have been top priorities of the United States. Section 1083 of
H.R. 1585 threatens those key objectives. Immediately upon
enactment, section 1083 would risk the freezing of substantial
Iraqi assets in the United States--including those of the
Development Fund for Iraq (DFI), the Central Bank of Iraq
(CBI), and commercial entities in the United States in which
Iraq has an interest. Section 1083 also would expose Iraq to
new liability of at least several billion dollars by undoing
judgments favorable to Iraq, by foreclosing available defenses
on which Iraq is relying in pending litigation, and by creating
a new Federal cause of action backed by the prospect of
punitive damages to support claims that may previously have
been foreclosed. This new liability, in turn, will only
increase the potential for immediate entanglement of Iraqi
assets in the United States. The aggregate financial impact of
these provisions on Iraq would be devastating.
While my Administration objected to an earlier version of
this provision in previous communications about the bill, its
full impact on Iraq and on our relationship with Iraq has
become apparent only in recent days. Members of my
Administration are working with Members of Congress to fix this
flawed provision as soon as possible after the Congress
returns.
Section 1083 would establish unprecedented legal burdens on
the allocation of Iraq's funds to where they are most needed.
Since the fall of Saddam Hussein, I have issued Executive
Orders to shield from entanglement in lawsuits the assets of
the DFI and the CBI. I have taken these steps both to uphold
international legal obligations of the United States and to
remove obstacles to the orderly reconstruction of Iraq. Section
1083 potentially would place these crucial protections of
Iraq's core assets in immediate peril, by including a provision
that might be misconstrued to supersede the protections I have
put in place and to permit the judicial attachment of these
funds. Iraq must not have its crucial reconstruction funds on
judicial hold while lawyers argue and courts decide such legal
assertions.
Moreover, section 1083 would permit plaintiffs to obtain
liens on certain Iraqi property simply by filing a notice of
pending action. Liens under section 1083 would be automatic
upon filing a notice of a pending claim in a judicial district
where Iraq's property is located, and they would reach property
up to the amount of the judgment plaintiffs choose to demand in
their complaints. Such pre-judgment liens, entered before
claims are tested and cases are heard, are extraordinary and
have never previously been available in suits in U.S. courts
against foreign sovereigns. If permitted to become law, even
for a short time, section 1083's attachment and lien provisions
would impose grave--indeed, intolerable--consequences on Iraq.
Section 1083 also includes provisions that would expose
Iraq to increased liability in lawsuits. Contrary to
international legal norms and for the first time in U.S.
history, a foreign sovereign would be liable for punitive
damages under section 1083. Section 1083 removes defenses
common for defendants in the United States--including res
judicata, collateral estoppel, and statutes of limitation--upon
which the Iraqi government has relied. And section 1083 would
attempt to revive a $959 million judgment against the new
democratic Government of Iraq based on the misdeeds of the
Saddam Hussein regime.
Exposing Iraq to such significant financial burdens would
weaken the close partnership between the United States and Iraq
during this critical period in Iraq's history. If Iraq's assets
are frozen, even temporarily, that could reduce confidence in
the Iraqi dinar and undermine the success of Iraq's monetary
policy. By potentially forcing a close U.S. ally to withdraw
significant funds from the U.S. financial system, section 1083
would cast doubt on whether the United States remains a safe
place to invest and to hold financial assets. Iraqi entities
would be deterred from engaging in commercial partnerships with
U.S. businesses for fear of entangling assets in lawsuits.
Section 1083 would be viewed with alarm by the international
community and would invite reciprocal action against United
States assets abroad.
The adjournment of the Congress has prevented my return of
H.R. 1585 within the meaning of Article I, section 7, clause 2
of the Constitution. Accordingly, my withholding of approval
from the bill precludes its becoming law. The Pocket Veto Case,
279 U.S. 655 (1929). In addition to withholding my signature
and thereby invoking my constitutional power to ``pocket veto''
bills during an adjournment of the Congress, I am also sending
H.R. 1585 to the Clerk of the House of Representatives, along
with this memorandum setting forth my objections, to avoid
unnecessary litigation about the non-enactment of the bill that
results from my withholding approval and to leave no doubt that
the bill is being vetoed.
This legislation contains important authorities for the
Department of Defense, including authority to provide certain
additional pay and bonuses to servicemembers. Although I
continue to have serious objections to other provisions of this
bill, including section 1079 relating to intelligence matters,
I urge the Congress to address the flaw in section 1083 as
quickly as possible so I may sign into law the National Defense
Authorization Act for Fiscal Year 2008, as modified. I also
urge the Congress to ensure that any provisions affecting
servicemember pay and bonuses, as well as provisions extending
expiring authorities, are retroactive to January 1, 2008.
George W. Bush.
The White House, December 28, 2007.