[Senate Hearing 107-199]
[From the U.S. Government Publishing Office]
S. Hrg. 107-199
GUAM WAR CLAIMS REVIEW COMMISSION;
AND GUAM INCOME TAX
=======================================================================
HEARING
before the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
on
H.R. 308
TO ESTABLISH THE GUAM WAR CLAIMS REVIEW COMMISSION
H.R. 309
TO PROVIDE FOR THE DETERMINATION OF WITHHOLDING TAX RATES UNDER THE
GUAM INCOME TAX
__________
JULY 27, 2001
Printed for the use of the
Committee on Energy and Natural Resources
_______
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
JEFF BINGAMAN, New Mexico, Chairman
DANIEL K. AKAKA, Hawaii FRANK H. MURKOWSKI, Alaska
BYRON L. DORGAN, North Dakota PETE V. DOMENICI, New Mexico
BOB GRAHAM, Florida DON NICKLES, Oklahoma
RON WYDEN, Oregon LARRY E. CRAIG, Idaho
TIM JOHNSON, South Dakota BEN NIGHTHORSE CAMPBELL, Colorado
MARY L. LANDRIEU, Louisiana CRAIG THOMAS, Wyoming
EVAN BAYH, Indiana RICHARD C. SHELBY, Alabama
DIANNE FEINSTEIN, California CONRAD BURNS, Montana
CHARLES E. SCHUMER, New York JON KYL, Arizona
MARIA CANTWELL, Washington CHUCK HAGEL, Nebraska
THOMAS R. CARPER, Delaware GORDON SMITH, Oregon
Robert M. Simon, Staff Director
Sam E. Fowler, Chief Counsel
Brian P. Malnak, Republican Staff Director
James P. Beirne, Republican Chief Counsel
Kira Kinkler, Counsel
C O N T E N T S
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STATEMENTS
Page
Akaka, Hon. Daniel K., U.S. Senator from Hawaii.................. 1
Blaz, Hon. Ben Garrido, Former Delegate from Guam................ 19
Carper, Hon. Thomas R., U.S. Senator from Delaware............... 19
Gutierrez, Hannah, Representing the Governor of Guam; accompanied
by Clifford Guzman, Director of the Bureau of Planning; and
John Witt, Legislative Director, the Governor of Guam's
Washington Office.............................................. 6
Gutierrez, Hon. Carl T.C., Governor of Guam...................... 8
Kearney, Christopher, Deputy Assistant Secretary for Policy and
International Affairs, Department of the Interior.............. 13
Michels, Thomas P., Chairman, Board of Directors, Guam Chamber of
Commerce....................................................... 23
Murkowski, Hon. Frank H., U.S. Senator from Alaska............... 18
Underwood, Hon. Robert A., U.S. Delegate from Guam............... 2
APPENDIX
Additional material submitted for the record..................... 33
GUAM WAR CLAIMS REVIEW COMMISSION; AND GUAM INCOME TAX
----------
FRIDAY, JULY 27, 2001
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The committee met, pursuant to notice, at 9:45 a.m. in room
SD-366, Dirksen Senate Office Building, Hon. Daniel K. Akaka
presiding.
OPENING STATEMENT OF HON. DANIEL K. AKAKA,
U.S. SENATOR FROM HAWAII
Senator Akaka. I would like to at this time turn to the
consideration of two Guam bills. This part of the hearing will
focus on H.R. 308, the Guam War Claims Review Commission Act,
and H.R. 309, the Guam Foreign Investment Equity Act. While I
am giving my statement, will the Congressman please come to the
table.
H.R. 308 establishes a five-member Federal commission to
review the facts and circumstances surrounding the
implementation and administration of the Guam Meritorious
Claims Act. The commission will also review the effectiveness
of the act in addressing the war claims of American nationals
residing on Guam between December 8, 1941, and July 21, 1944,
who suffered compensable injury during the Japanese occupation
of the island in World War II. The commission will make
recommendations to Congress.
H.R. 309, the Guam Foreign Investment Equity Act, provides
the Government of Guam with the authority to tax foreign
investors at the same rates as States under the U.S. tax
treaties with foreign countries. Both bills passed the House of
Representatives during the 106th Congress, and were passed
again earlier this year by the House. I am pleased, therefore,
that Chairman Bingaman and Senator Murkowski provided this
opportunity for the committee to hold this hearing prior to the
August recess.
As a longstanding friend of the Pacific Islands and Guam, I
am very familiar with the efforts of Congressman Underwood,
former Congressman Ben Blaz, former Congressman Antonio Won
Pat, and local Guam leaders in pursuing justice and equity for
war claims arising out of the Japanese occupation of Guam.
Given the long history on this matter, I urge leaders at both
the local and Federal levels to do what is right for Guam's
World War II generation, many of whom have already passed away.
I am also aware of the impact of the Asian financial crisis
on Guam's economy, the island's 15 percent unemployment rate,
and the effort by Guam's leaders to provide greater economic
opportunities on the island. I look forward to hearing from our
witnesses today as we consider these issues. It is my hope that
we can move forward on today's bills to provide justice to
Guam's World War II generation and to increase foreign
investment opportunities in Guam.
We have one of our colleagues from the House scheduled to
testify today, Congressman Underwood. I am glad you are here
this morning early, and I want you to know that we will place
your full statement in the record, so please feel free to
summarize your remarks. I wish you well, and your family well,
Congressman Underwood, and look forward to your statement.
STATEMENT OF HON. ROBERT A. UNDERWOOD,
U.S. DELEGATE FROM GUAM
Mr. Underwood. Thank you very much, Mr. Chairman.
[Greetings given].
Aloha and good morning. I am here to testify before the
Senate Energy and Natural Resources Committee on the bills you
have mentioned, two bills very important to the people of Guam,
and I would like to extend my gratitude to Chairman Bingaman
and Senators Akaka and Murkowski for their continuing support
and interest in matters pertaining to the territories.
I know how difficult it was to hold this hearing in light
of pressing energy issues before the Nation, and so I greatly
appreciate this opportunity that you have extended to speak
about two very important Guam issues.
H.R. 308, the Guam War Claims Review Commission Act. As you
have indicated, Mr. Chairman, this is a long quest by the
people of Guam. Not as many Americans as I hope would know
about the experiences of the people of Guam during the Japanese
occupation, and how basically they have fallen through the
cracks in terms of trying to deal with compensable injury and
compensable activities that occurred under the Japanese
occupation.
I have a full statement in the record that outlines many of
those items, and I am sure that the people who will be
testifying later, including Hannah Gutierrez, the daughter of
the Governor of Guam, as well as my immediate predecessor, Ben
Blaz, who personally experienced the occupation, will have very
stirring and important testimony on that issue.
Basically, what we are seeking is a commission to study and
to make a report, make a series of recommendations to Congress
about how the people of Guam have been dealt with on issues
pertaining to war claims. We originally had the Guam
Meritorious Claims Act which was passed in the immediate post
war period, which extended the opportunity for war claims for a
period of 1 year at a time when the people of Guam were simply
trying to find food and shelter, so that act was clearly
inadequate.
Most of the claims submitted were for property damage only.
Any claims in excess of $5,000 had to be addressed to Congress
directly, which was nearly an impossibility in the context of
the immediate post war period in Guam. Subsequent legislation
in Congress in 1948 did not deal with Guam for U.S. citizens,
because the people of Guam were not yet U.S. citizens, they
were U.S. nationals.
In 1951, the United States signed a peace treaty with
Japan, thereby ceding the opportunity for any U.S. citizens to
make further claims against Japan. In 1950, the people of Guam
had become U.S. citizens, further complicating the matter. In
1962, another revision was done by Congress in terms of war
claims legislation. The people of Guam were not included in
that particular piece of legislation, under the mistaken
assumption that they had been dealt within the 1948
legislation.
So it is a story basically of a very proud people, people
who are proud to be associated with America, people who
suffered to a great extent because of their circumstances they
found themselves in and their loyalty to the United States, so
in this particular approach we are hoping that a war claims
commission, one to be selected by the Secretary of the
Interior, will come to a quick resolution, understanding the
history. There is lots and lots of documentation about what has
happened both legislatively and in terms of the actual Japanese
occupation of Guam.
The Congressional Budget Office has estimated that the cost
of this bill is minimal, would not affect direct spending or
receipts and, given the fact that most of the people of Guam
who experienced the occupation have since passed away, any
succeeding recommendations would likely not be as significant
as it would have been had it been taken up 20 or 30 years ago.
With this particular piece of legislation, I want to
express my gratitude to the administration, the Bush
administration for their very strong statement and very
comprehensive review of the historical record of the people of
Guam. Such attention given to the people of Guam in connection
with this particular issue has not been given in the past, so I
am very appreciative of the new administration and their
interest and support for H.R. 308.
H.R. 309, the Guam Foreign Investment Equity Act, is an act
that almost basically I do not know of anyone who thinks that
this act should not be passed. There is very little controversy
surrounding it, and I know that we will also hear testimony
from members of the chamber of commerce from Guam on this
particular act, including the current chairman, Tom Michels.
Basically, the act seeks to deal with an anomaly, again
related to Guam, and basically it has to do with the mirror tax
code that the people of Guam live under, which is that current
Federal law holds that foreign investment is taxed at 30
percent, subject to whatever tax treaties are signed by the
United States. Guam must adhere to the 30 percent because in
succeeding tax treaties it is unclear whether Guam is included
in the definition of the United States.
As a consequence, when the United States signs a tax
treaty, for example, with Japan, and the tax rate is reduced to
10 percent, as it is today, Guam must assess a 30-percent tax
on foreign investment with Japan. As a consequence, it puts us
at a distinct disadvantage with places like Hawaii, meaning no
disrespect, Mr. Chairman, but it does put us at a disadvantage
in terms of attracting foreign investment, but this is a good,
common-sense measure.
The people of Guam are experiencing significant economic
problems today, and this will be part of our effort to try to
economically recover from the tough times we are having today,
so I look forward to your support, as I you have indicated, and
the support of the committee, and again I want to thank you and
Senator Murkowski and Chairman Bingaman, as well as the
administration for their strong support and interest in these
issues.
Thank you.
[The prepared statement of Mr. Underwood follows:]
Prepared Statement of Hon. Robert A. Underwood, U.S. Delegate
From Guam
Good morning and Hafa Adai. I am pleased to testify before the
Senate Energy and Natural Resources Committee on H.R. 308 and H.R. 309,
two bills very important to the people of Guam. I would also like to
extend my gratitude to Chairman Bingaman and Senators Akaka and
Murkowski for their support and interest in matters pertaining to the
insular areas. I know how difficult it was to hold this hearing in
light of the pressing energy issues confronting the nation, so I
greatly appreciate this opportunity to speak about Guam issues.
h.r. 308, the guam war claims review commission act
Very few Americans are aware that Guam was the only U.S. territory
or state with a civilian population during World War II that was
occupied by enemy forces.
Legislation regarding Guam war claims has been introduced by every
Guam Delegate to Congress, beginning with Guam's first Delegate Antonio
Won Pat, and including my predecessor, General Ben Blaz. H.R. 308 is a
careful compromise that incorporates many Congressional and Department
of the Interior recommendations that have been made over the years. The
measure establishes a federal commission to review relevant historical
facts and circumstances surrounding war claims of Guamanians who
suffered as a result of the Japanese occupation of the island during
World War II. This process will determine eligible claimants,
eligibility requirements, and the total amount necessary for
compensation for the people of Guam who experienced death, personal
injury, forced labor, forced march, and internment.
There is a lot of historical information available to show that the
United States had every intention of remedying the issue of war
restitution for the people of Guam. In 1945, at the urging of the
Acting Secretary of the Navy to the House of Representatives, the Guam
Meritorious Claims Act was enacted which authorized the Navy to
adjudicate and settle war claims in Guam for property damage for a
period of one year. Claims in excess of $5,000 for personal injury or
death were to be forwarded to Congress. Unfortunately, the act never
fulfilled its intended purposes due to the limited time frame for
claims and the preoccupation with the local population to recover from
the war, resettle their homes, and rebuild their lives.
On March 25, 1947, the Hopkins Commission, a civilian commission
appointed by the U.S. Navy Secretary, issued a report which revealed
the flaws of the 1945 Guam Meritorious Claims Act and recommended that
the Act be amended to provide on the spot settlement and payment of all
claims, both property and for death and personal injury.
Despite the recommendations of the Hopkins Commission, the U.S.
government failed to remedy the flaws of the Guam Meritorious Act when
it enacted the War Claims Act of 1948, legislation which provided
compensation for U.S. citizens who were victims of the Japanese war
effort during World War II. Because Guamanians were not U.S. citizens
when the act was enacted, but were U.S. nationals, they were not
eligible for compensation. Guamanians finally became U.S. citizens in
1950 under the Organic Act of Guam.
In 1962, there was another attempt by Congress to address the
remaining U.S. citizens and nationals that had not received reparations
from previous enacted laws. Once again, however, Guamanians were
inadvertently made ineligible because policymakers assumed that the War
Claims Act of 1948 included them. Thus, Guam was left out of the 1962
act.
The reason H.R. 308 continues to involve the U.S. government is
because under the 1951 Treaty of Peace between the U.S. and Japan, the
treaty effectively barred claims by U.S. citizens against Japan. As a
consequence, the U.S. inherited these claims, which was acknowledged by
Secretary of State John Foster Dulles when the issue was raised during
consideration of the treaty before the Committee on Foreign Relations
in 1952.
For more than two decades, war claims has been aggressively pursued
by Guam's leaders both locally and at the federal level. In 1980, the
Government of Guam created a Guam Reparations Commission which, among
its other duties, compiled war damage claims for death, forced labor,
forced march, internment, or injury, from survivors or descendants who
did not receive any or full reparations under the Guam Meritorious
Claims Act. On the federal level, each of my predecessors also
introduced legislation to address this issue. These combined efforts
have helped bring us to where we are today and I am hopeful that once
the work of the commission is completed, we can finally heal this very
painful memory in Guam's history.
The Congressional Budget Office estimated that the cost of my bill
would be minimal and would not affect direct spending or receipts.
Moreover, considering that the island of Guam had a small population of
22,290 during the war occupation, and given the available territorial
and federal records on this matter, I anticipate that any federal
commission that is established under my bill would be able to complete
its work expeditiously and provide the Congress with the necessary
recommendations to resolve this longstanding issue in a timely fashion.
h.r. 309, the guam foreign investment equity act
H.R. 309 provides the Government of Guam with the authority to tax
foreign investors at the same rates as states under U.S. tax treaties
with other countries.
The legislation is direly needed, given Guam's struggling economy
and 15% unemployment rate, which is more than three times the national
average. Unlike the rest of the nation, which has experienced
unprecedented economic growth and low unemployment rates the last few
years, Guam's economy and tourism industry continues to recover from
the Asian financial crisis, given our island's close proximity to Asia.
Moreover, given the impact of the new federal tax cut law on the
Government of Guam's revenue stream, because Guam's tax code
``mirrors'' the U.S. tax code, I believe that H.R. 309 is also good
public policy. The revenues from foreign investment that this
legislation will generate for the Government of Guam is one way to
ameliorate the reduction in local revenues anticipated under the new
tax cuts.
Currently, foreign investors in Guam are taxed at 30% in Guam. That
is because under the U.S. Internal Revenue Code, there is a 30%
withholding tax rate for foreign investors in the United States. Since
Guam's tax law ``mirrors'' the rate established under the U.S. Code,
the standard rate for foreign investors in Guam is 30%. Under U.S. tax
treaties, it is a common feature for countries to negotiate lower
withholding rates on investment returns. Unfortunately, while there are
different definitions for the term ``United States'' under these
treaties, Guam is not included. As an example, with Japan, the U.S.
rate for foreign investors is 10%. That means while Japanese investors
are taxed at a 10% withholding tax rate on their investments in the
fifty states, those same investors are taxed at a 30% withholding rate
on Guam.
While the long-term solution is for U.S. negotiators to include
Guam in the definition of the term ``United States'' for all future tax
treaties, the immediate solution is to amend the Organic Act of Guam
and authorize the Government of Guam to tax foreign investors at the
same rates as the fifty states since the U.S. cannot unilaterally amend
treaties to include Guam in its definition of United States. Guam's
Organic Act has an entire tax section that mirrors the U.S. tax code.
Other territories under U.S. jurisdiction have already remedied
this problem or are able to offer alternative tax benefits to foreign
investors through delinkage, their unique covenant agreements with the
federal government, or through federal statute. Guam, therefore, is the
only state or territory in the United States which is unable to provide
this tax benefit or to offer alternative tax benefits for foreign
investors.
The Congressional Budget Office has estimated that the legislation
would not have any effect on the federal budget. It simply allows the
Government of Guam to lower its withholding rate for foreign investors.
While the bill will result in the loss of revenue for the Government of
Guam in the short term, those losses are expected to be offset by the
generation of increased tax revenues through increased foreign
investments in the long term. 75% of Guam's commercial development is
funded by foreign investors.
H.R. 309 incorporates changes recommended by the Treasury
Department to ensure that a foreign investor who benefits from this
legislation cannot simultaneously benefit from tax rebates under Guam
territorial law.
I urge support for both H.R. 309 and H.R. 308 from the members of
the Senate Energy and Natural Resources Committee.
Senator Akaka. Thank you very much for your testimony. I
want to tell you, you covered it so well I do not have any
questions for you.
[Laughter.]
Senator Akaka. But I have a feeling for what you and the
people of Guam want, and as I reiterate, you have my support,
and we will take it as quickly as we can forward.
Mr. Underwood. Well, I appreciate that very much, Senator,
and of course today, during the month of July is the fifty-
seventh anniversary of the liberation of Guam, so it is very
significant that we had this hearing at this time.
Unfortunately, I will not be able to be here for the rest of
the hearing. My wife is having a knee operation and my marriage
is at stake, so I think that is even more important than these
two bills.
Senator Akaka. Congressman Underwood, please relay my aloha
to your wife, and best wishes for a full recovery.
Mr. Underwood. Thank you very much.
Senator Akaka. Thank you.
Hannah Gutierrez, representing the Governor of Guam, is the
witness in this next panel. Hafa adai, Hannah.
Ms. Gutierrez. Hafa adai, Senator.
Senator Akaka. Welcome to the committee. I know your dad
very well, the Governor of Guam, and welcome you here to the
committee. I want you to feel as comfortable as you can.
Ms. Gutierrez. Thank you.
Senator Akaka. And tell us what you think about the bills
that are before you. I also want you to know that your full
statement will be placed in the record, so please feel free to
summarize your remarks.
STATEMENT OF HANNAH GUTIERREZ, REPRESENTING THE GOVERNOR OF
GUAM; ACCOMPANIED BY CLIFFORD GUZMAN, DIRECTOR OF THE BUREAU OF
PLANNING; AND JOHN WITT, LEGISLATIVE DIRECTOR, THE GOVERNOR OF
GUAM'S WASHINGTON OFFICE
Ms. Gutierrez. Thank you very much, Mr. Chairman, for
holding this hearing. Thank you also to Chairman Bingaman and
Senator Murkowski for their support as well. My name is Hannah
Gutierrez. I am here this morning representing Governor Carl
Gutierrez. I am very honored to be here this morning to present
his testimony on H.R. 308, the Guam War Claims Review
Commission Act.
I am joined here by Mr. Clifford Guzman, the director of
the Bureau of Planning for the Government of Guam, Mr. John
Witt, the Governor's Washington staff, my sister, Carla Stahl,
my niece, Lilly. I would like to thank you for entering the
Governor's full testimony into the record. I will not read his
testimony. I would like to give a short summary of a few
highlights of his written statement.
Let me first say that Governor Gutierrez supports H.R. 308
and the establishment of a commission to review Guam's War
claims experience. This is a long overdue issue. If there is to
be any resolution to this long overdue issue, it is going to
require action from Congress.
The historical record is well-established. Congressman
Underwood has established that record very well. I would just
like to say that the Hawkins commission report is very
significant in that it reviewed and evaluated these problems at
the time that they were happening. Congress did not heed the
recommendations of the commission. Had they done so, these
injustices would have been resolved long ago, yet here we are,
57 years after the liberation of Guam, and the people of Guam
still seek resolution to their war claims.
I would like to call attention to the Governor's testimony,
and I would like to read a small portion of it. ``This is the
heart of the issue, whether the people of Guam were treated
with the same fairness accorded to other Americans for war
claims in the aftermath of World War II. What happened on Guam
during the enemy occupation of our island is regrettable and
tragic. How Guam has been treated for war claims requires
redress.
``Let us review briefly the record of what happened on
Guam, not to open old wounds, but to remind this Congress about
the magnitude of the injustice. During the occupation of Guam
from December 8, 1941, to July 21, 1944, our people were
subjected to torture, forced labor, forced marches, internment,
beatings, and death. Every single Chamorro family on Guam has a
parent, uncle, aunt, sibling, or close relative that was
subjected to the brutal occupation.''
The Governor continues, ``for my family, the atrocities of
war are very close to home. Just 5 days before the landing of
the Americans, my future wife, Geri Torres, then a 15-month-old
infant, was passed from her mother's arms to her father's
during a forced march. Hannah Chance Torres, Geri's mother, had
been so badly beaten by soldiers that she could barely endure
the march to the concentration camp. Hannah did not live
through her first night of internment at Manengon. This
occupation was all the more brutal because of the loyalty of
the people of Guam to the United States. It is not ancient
history for us. It is a living history.
``While many survivors of the occupation have since passed
away, the memory of the atrocities is kept alive by the
thousands of witnesses who still live, and their descendants,
who have been told the story of the occupation. We cannot close
the door on this part of our history until the history of war
restitution is resolved.''
I am Hannah Torres' granddaughter and her namesake. I am 26
years old, just one year younger than she was when she was
killed. That 15-month-old-infant, the same age as my niece,
Lilly, is my mother. For all of us on Guam, the story of the
occupation is a personal story, and it is a personal tragedy.
Our story is nothing special. It is the story of thousands
and thousands of families on Guam. It is the story of our
parents, in my case my grandparents, and when the Governor says
that it is a living history, it truly is. It lives on for those
who survived the concentration camps and survived the beating,
for those who watched their family and their loved ones beaten
and killed, for those like my mom who will never know their
loved ones because of the occupation, and it lives on through
my generation as well, because of their stories.
We cannot be true to who we are as a people if we forget
our heritage and if we forget our tragic history. The sad part
of it all is that we feel that Congress does not have a sense
of the injustices that we have suffered, that our sacrifices in
the occupation, and the brutality that was visited on us by our
oppressor is trivial, or something that can easily be
forgotten. It will never be forgotten, because this is our
family, our fathers, our mothers, our grandparents.
As I said earlier, my family's tragedy is no different from
those suffered by many other families on Guam, those who were
forced into forced labor, marches, beatings, and death.
We were civilians who were beaten and executed, forced into
concentration camps, decimated by hunger, disease, and
brutality, yet we are proud Americans, and we would not be
seeking redress from the U.S. Government if the door had not
been closed to reparations from Japan because of the treaty of
peace with Japan. This is just not right, and only Congress can
make this right.
I would like to thank you for supporting H.R. 308, and if
there are any questions or concerns about H.R. 309, Mr.
Clifford Guzman is here to address those concerns.
Thank you very much, and thank you again for giving us the
opportunity to be heard this morning.
[The prepared statement of Governor Gutierrez follows:]
Prepared Statement of Hon. Carl T.C. Gutierrez, Governor of Guam
Mr. Chairman and Members of the Committee: Si Yu'os Ma'ase (thank
you) for holding this hearing on H.R. 308, the Guam War Claims Review
Commission Act and on H.R. 309, the Guam Foreign Investment Equity Act.
The People of Guam are grateful for the expedient manner in which these
bills are being considered by the Committee, and we commend Senator
Akaka and Senator Murkowski for their leadership in the Senate on
Guam's issues.
h.r. 308, the guam war claims review commission act
We support H.R. 308 and the establishment of a commission to be
appointed by the Secretary of the Interior to review the facts and
circumstances surrounding the administration of the Guam Meritorious
Claims Act of 1945 (Public law 79-224) and the effectiveness of such
Act in addressing the war claims of the American nationals residing on
Guam between December 8, 1941 and July 21, 1944.
The Guam War Claims Review Commission will hold hearings, gather
information from federal and local sources, and issue a report to the
Secretary of the Interior and to the Congress on its findings within
nine months. This is an ambitious timetable, but we believe that it can
be met and that resolving Guam's war claims in a timely manner is the
right goal for the Commission.
The Commission shall determine whether there was parity of war
claims paid to the residents of Guam under the Guam Meritorious Claims
Act as compared with awards made to other similarly affected United
States citizens or nationals in territory occupied by the Imperial
Japanese military forces during World War II. The Commission shall
advise on any additional compensation that may be necessary to
compensate the People of Guam for death, personal injury, forced labor,
forced march and internment.
This is the heart of the issue--whether the people of Guam were
treated with the same fairness accorded to other Americans for war
claims in the aftermath of World War II. What happened on Guam during
the enemy occupation of our island is regrettable and tragic. How Guam
has been treated for war claims requires redress.
Let us review briefly the record of what happened on Guam, not to
open old wounds, but to remind this Congress what the magnitude of the
injustice is. During the occupation of Guam from December 8, 1941 to
July 21, 1944, our people were subjected to torture, forced labor,
forced marches, internment, beatings and death. Every single Chamorro
family on Guam has a parent, uncle, aunt, sibling or close relative
that was subjected to the brutal occupation.
For my family, the atrocities of war are very close to home. Just
five days before the landing of the Americans my future wife Geri
Torres--then a 15 month old infant--was passed from her mother's arms
to her father's during a forced march. Hannah Chance Torres, Geri's
mother, had been so badly beaten by soldiers that she could barely
endure the march to the concentration camp. Hannah Torres did not live
through her first night of internment at Manengon.
This occupation was all the more brutal because of the loyalty of
the people of Guam to the United States. It is not ancient history for
us, it is living history. While many survivors of the occupation have
since passed away, the memory of the atrocities is kept alive by the
thousands of witnesses who still live and their descendants who have
been told the story of the occupation. We cannot close the door on this
part of our history until the issue of war restitution is resolved.
After Guam was liberated by the American forces, wholesale
displacement of our people continued as villages were relocated to make
room for much needed military bases to continue the war effort and
ensure Imperial Japan's defeat. In 1945 and 1946, while our people were
still displaced and resettlement continued, the United States Navy
administered a war claims program that was seriously flawed and that
intentionally downplayed the suffering of our people. Naval
administrators focused on material damage, asking such questions as,
``How many coconut trees did you lose?'' A vast number of people, due
to the displacement, were never contacted by Naval administrators of
the war claims program.
In August 1950, the Organic Act of Guam was passed by Congress
conferring United States citizenship on Guam's residents. On September
8, 1951, the United States signed the Treaty of Peace with Japan. The
timing of these two events was unfortunate. The Treaty of Peace
precluded direct claims against Japan by American citizens. In
testimony before the Senate, Secretary of State John Foster Dulles
explained that it would be Congress's responsibility to provide for
those Americans who have not been satisfied in the war claims against
Japan. In 1962, Congress amended the War Claims Act of 1948 to reopen
claims for victims of World War II, due to pressure from veterans
groups. The 1962 amendment (Public Law 87-846) did not include Guam.
In 1947, a commission was sent by the Secretary of the Navy James
Forrestal to Guam to review the Navy's handling of the war claims. It
concluded that the Navy's administration of the war claims was
inadequate and an embarrassment to the United States in light of the
loyalty of the people of Guam. The Hopkins Commission (chaired by
Ernest M. Hopkins) recommended that Congress reopen war claims for the
people of Guam.
In the years since these events, a number of survivors of the
Occupation of Guam have died. In 1995, Mrs. Beatrice Flores Emsley
passed away. She was an ardent and eloquent spokeswoman for those
seeking war restitution justice, and she had testified to Congress on
two occasions. Her story is incredible. In the closing days of the
occupation, Mrs. Emsley survived an attempted beheading and was left
for dead in a mass grave. She awakened a couple of days after she
passed out, and crawled out of the mass grave to safety. She was never
compensated for her injuries, and, as I mentioned earlier, she died
before Congress ever took action to redress this grievance. We have
other stories of heroism and suffering. We have thousands of stories.
All of which brings us to today's hearing. Congress seems bound by
its inertia on this matter. It is almost as if there is institutional
amnesia about its role in denying war reparations to Guam and its sole
responsibility to resolve this matter. Because of the United States
Government's peace treaty with our former oppressors, and Congress's
own negligence in amending the War Claims Act, that justice can only
come from Congress.
I urge Congress to pass H.R. 308 and to establish the Commission
envisioned in this bill to get the process started for a resolution of
the war claims issue. We have no time to spare if we want the survivors
of the occupation to see justice in their lifetime. The Commission can
help us educate Members of Congress on an unfulfilled moral duty and be
instrumental in the future passage of legislation that fulfills the
nation's responsibility to the people of Guam.
Mr. Chairman, we support H.R. 308 and we again thank you for your
leadership on this issue.
H.R. 309, THE GUAM FOREIGN INVESTMENT EQUITY ACT
Si Yu'os Ma'ase (thank you) for holding this hearing on H.R. 309,
the Guam Foreign Investment Equity Act. This is an important piece of
legislation that is a priority for Guam's economic recovery. We are
grateful that you have accommodated a hearing on H.R. 309 and that the
Committee on Energy and Natural Resources is helping us to address our
economic situation.
The Guam Foreign Investment Equity Act will amend the Organic Act
of Guam to define that for income tax purposes, the tax rate shall be
the same as the rate that would apply if Guam were treated as part of
the United States for purposes of treaty obligations. This provision
would not apply to tax payers whose taxes are rebated under Guam law.
H.R. 309 levels the playing field for Guam so that we may compete
effectively for foreign investors. Guam would no longer be
disadvantaged by any favorable tax treaty provisions that currently
apply only to the fifty states and the other four territories. H.R. 309
removes the disincentive that exists that discourages foreign
investment in Guam vis-a-vis investing in another state or territory.
Furthermore, H.R. 309 would ensure Guam's inclusion in any tax treaty
negotiated between the United States and our Asian neighbors. As
America in Asia, Guam stands to benefit whenever tax treaties are
enacted that encourage investment, trade and new economic activity.
Guam's economy is essentially an Asian economy. Our visitor
industry relies heavily on visitors from Japan, Korea, the Philippines,
Thailand, Taiwan and China. Our visitor industry infrastructure
includes hotels, resorts and tourist attractions that represent
substantial investments of foreign capital. These investments speak to
the confidence of foreign businesses in Guam's future.
While we have been impacted by the Asian economic crisis, we have
weathered the crisis and we have made the necessary adjustments to
maintain our quality of life. We are anticipating that we will exceed
1.5 million visitors this year, and that modest growth in visitor
arrivals will continue. A strong visitor industry encourages foreign
investment.
To diversify our economy, we have been actively promoting Guam as a
telecommunications hub for American companies doing business in Asia
and for Asian companies hoping to expand into the American market. Guam
is literally the crossroads of Asia, and our location makes us an ideal
choice for new telemarketing ventures.
H.R. 309 gives us a new marketing tool that would help us to
promote Guam in Asia. It allows us to offer tax benefits that many
Asian businesses may already be familiar with, while preserving our
ability to market investment incentives unique to Guam. Most
importantly, H.R. 309 would remove any disadvantage that may be
perceived by a foreign investor when comparing Guam with other
potential investment opportunities.
This legislation restores fairness to the income tax code. Since
Guam is a mirror code jurisdiction, it only makes sense that Guam
should mirror whatever advantages the U.S. Code offers to foreign
investors.
We have been doing all that is within our means to create the
conditions for economic growth. In the past few years, we were
challenged by the downsizing of the military presence on Guam and the
Asian economic crisis. While these events were beyond our control, the
federal government seems to be disinterested in our economic condition.
At a minimum, we would expect the federal government to address its
funding shortfall in the Medicaid program due to the Medicaid cap in
effect in all the territories. In a time of unprecedented federal
surpluses, it is incomprehensible to us that Guam must carry the lion's
share of Medicaid funding, a federal entitlement program that is in
effect an unfunded federal mandate.
We believe that the federal government ought to do more to address
the Compact-impact issue, both in direct reimbursement to Guam and in
addressing the impact of unrestricted immigration to Guam. This issue
has assumed an urgency in recent years as our economy has been weighted
down by 15% unemployment. The Government of Guam estimates over $150
million in unreimbursed Compact-impact costs from 1986 to 2000.
This Committee, and in particular, Senators Akaka and Murkowski,
has been supportive of Guam's efforts to have excess federal lands
returned to our people. The return of lands no longer needed by the
military helps spur private investment on Guam, and returns those idle
lands to productive use. This is an issue that requires constant
vigilance, because, it seems, when it comes to Guam's land, there is
always an inordinate amount of interest by federal agencies.
It is unfortunate that the recent federal tax cuts made no
accommodation for those mirror code jurisdictions that have been
negatively impacted by a tax cut. We have no surplus from which to give
a rebate. Any rebate will have to be paid for by curtailing government
services, enlarging class sizes, reducing health care coverage, and
making choices that are the result of decreased government revenues. It
would have been better had Congress also appropriated the funds for the
tax cuts in mirror code jurisdictions that have no surplus.
Federal policy does have a direct effect on our lives and our
standard of living. We welcome the federal policy change that H.R. 309
represents, because it means not only that we have another tool to
encourage investment in Guam, it also means that Congress is interested
in assisting us by making policies that would provide economic relief.
We are pleased that H.R. 309 also represents an ongoing discussion
between Guam and the Congress over what federal policies have been
harmful to us. Most importantly, we hope that we remain engaged on
these economic issues. H.R. 309 is not a cure-all nor is it an
immediate remedy. It is merely a tool that we find useful and necessary
in bringing investments to Guam and encouraging economic growth. In
that sense, it is very helpful and we hope to see this bill become law.
Senator Akaka. Well, thank you very much, Hannah. You have
a bright future ahead of you.
Ms. Gutierrez. Thank you.
Senator Akaka. I am jealous because you are 26. I wish you
well when you go on for your future education in law, and you
have certainly demonstrated yourself well before the committee.
Ms. Gutierrez. Thank you very much.
Senator Akaka. I thank you very much for that.
Ms. Gutierrez. Thank you.
Senator Akaka. Do you have any statements to make, Mr.
Guzman? I have a question for you later.
Mr. Guzman. All right, sir. Certainly the only statement I
would like to say is to thank you for your continuing support
and advocacy for Guam issues, particularly with Federal access
lands as well as the compact impact, your attention to H.R.
309, the Guam Foreign Investment Equity Act. It is about time,
and we are very pleased to be here and very proud to be part of
this process, part of the American process, but certainly if
there are just questions you would like to have answered on it,
I have statements but I know that all the different colors have
gone out.
Senator Akaka. Thank you very much. Hannah, so I do not
forget, please convey my aloha to your mother.
Ms. Gutierrez. I will, thank you.
Senator Akaka. And to your dad.
Ms. Gutierrez. I will, thank you.
Senator Akaka. I have a couple of questions for you,
Hannah. Should H.R. 308 become law, what qualifications do you
believe commissioners should possess?
Ms. Gutierrez. May I refer these questions to John?
Mr. Witt. Mr. Chairman, I am the Governor's legislative
director in Washington. We believe that the general statement
in H.R. 308 is adequate, and that is, a familiarity with the
issue and with the history. Certainly, for the Secretary's
nominations we would hope that there would be people of stature
so that there would be some weight to the report of the
commission, and of course with the Governor's nominations we
would anticipate local Chamorros who could bring some of the
institutional history to the commission.
Senator Akaka. Thank you very much for that, and thank you,
Hannah. If you want to make any further statements, you are
welcome to do that, but my next question is to Mr. Guzman, who
is the Director of Guam's Bureau of Planning.
Mr. Guzman. Yes, sir.
Senator Akaka. Mr. Guzman, do you believe the Federal
Government could be doing more to help Guam's economy? If so,
please elaborate.
Mr. Guzman. Well, thank you for that question. I know our
time is short, and I will try to make this as brief as
possible, but actually I do believe there is quite a but more,
beyond just H.R. 309. I think H.R. 309 is a very wonderful
step. It is a first step forward for us in trying to get some
parity with the U.S. tax treaties across the world.
Certainly this, again, to us represents a first positive
step. There are many other issues out there. As you know, our
economy is an Asian economy, and we market ourselves as Asian
American, and we are very proud of that. It is a very positive
step for us.
It does bring in more investment opportunities, it does
bring in more people, and tourism being our main economic
engine it helps us in marketing that, but however, on the
social side we do have some problems. On the budgetary side we
do have some problems. As you are quite aware, Hawaii has
experienced the same thing. There has been reduced visitor
industry spending, particularly from Japan, Korea, and Taiwan,
which is our mainstay, and that has decreased our revenues on
our general fund.
Added to that is, although we embrace it wholeheartedly,
has been the tax relief Act that was recently passed. We do not
enjoy the surpluses that the U.S. mainstream economy does. We
are an Asian economy, and so therefore that becomes more of a
direct hit to us.
Basically, it going to cost us about $31 million out of
that general fund, then we have got Medicaid caps and welfare
caps. We match $5 million that is provided and capped by the
Federal Government. In Medicaid alone it costs us $28 million
above that $5 million that comes out of our own treasury, if
you will, our general fund. The same thing with welfare.
Welfare costs are increasing. It looks like we are going to be
at $30 million this year.
So the total would be $35 million, which includes the $5
million contribution from the Federal Government, and then the
EITC, the earned income tax credits, these are generally tax
credits that are usually deducted and taken and paid for out of
social security and Medicaid, but when we mirrored the U.S.
income tax code, unfortunately some of the language did not
translate as easily, or at all, and so therefore that is
another $20 million a year very easily that we have to contend
with, as well as educational tax credits.
Again, we do not enjoy the surpluses or the opportunities
that the U.S. economy in the 50 States do because of that
robust economy, and so therefore that becomes another problem
for us.
There is a whole litany of things that occurs. Of course,
we do enjoy Federal grants, and we appreciate that, and we work
very hard to try to fill those grants to the best of our
ability. However, in some of those grants the matching formulas
are a lot different for the territories than they would be for
any State, and so therefore we are subject to quite honestly
whatever is left over after the States have taken their share,
and our matching is generally higher in most of the formula
grants than it would be for any State out there, and so there
is a whole litany of things that we have to deal with.
We appreciate the interest, again, that the U.S. military
has given to Guam. We are doing everything we can to encourage
that. We are basically a two-horse town, tourism and military,
and we are doing our best now to diversify our economy. The
bill, H.R. 309, is going to give us more tools to be able to do
that, to expand into telecommunications and financial services,
and we are working our best to do that.
However, I think on the general side our concern is that
this year alone in our general fund budget we are going to have
to slash about $91 million out of $468 million, which is a
large chunk, and unfortunately it is forcing us to consolidate
schools, so as opposed to following the U.S. national trend to
reduce class sizes, we have to increase class sizes.
The compact impact, which costs us about $31.5 million a
year, again those are things, costs that we have to bear, and
again your support on that has been marvelous, and we
appreciate that support and the attention that you have given
it.
There are a whole litany of pressures that are brought to
bear on our economy that are outside of our control, and any
opportunity we have to bring these to light in any questions
such as yours that are brought up in these kinds of forums are
very much appreciated, and certainly we are here to provide any
other additional information, either at this forum or any forum
beyond this, or even in just discussions amongst staff members,
or whatever the case might be.
But suffice it to say that just with compact impact, the
tax relief act, the issues of welfare and the issues of caps
and Medicaid caps, it is close to about $100 million, and
basically, although they are positive, we have to consider them
unfunded Federal mandates at a time when our economy is taking
a major hit because of the decrease in visitor spending, and so
it is a very difficult time. We are doing the best that we can
with the tools that we have.
H.R. 309 is going to be provide us more tools, and we
appreciate any power tools you can send our way, but again, any
time that we have an opportunity to express some of these
things we certainly look forward to it.
I think that is quite a bit.
Senator Akaka. Thank you very much. You have elaborated
very well. I thank you, Mr. Guzman, and also Hannah Gutierrez
for your statements, and thank you for appearing before the
committee this morning.
Mr. Guzman. Thank you very much.
Senator Akaka. Mr. Christopher Kearney, Deputy Secretary of
Interior for Policy and International Affairs, is the next
witness. Will you please come to the table?
Mr. Kearney, welcome to the committee.
STATEMENT OF CHRISTOPHER KEARNEY, DEPUTY ASSISTANT SECRETARY
FOR POLICY AND INTERNATIONAL AFFAIRS, DEPARTMENT OF THE
INTERIOR
Mr. Kearney. Good morning. Thank you, Mr. Chairman.
Senator Akaka. We will include your full statement on each
bill in the hearing record, so please feel free to summarize
your remarks.
Mr. Kearney. I will. Thank you very much.
Senator Akaka. Please proceed with your statements in both
bills.
Mr. Kearney. Yes, sir.
Senator Akaka. In whatever order you would like, and then
we will go to questions from the committee. Thank you.
Mr. Kearney. Thank you, Mr. Chairman. Good morning. It is a
pleasure for me to appear before you today to discuss the
administration's view on H.R. 308, the Guam War Claims Review
Commission Act, and H.R. 309, the Guam Foreign Investment
Equity Act. I will first discuss H.R. 308, a little bit of
background, some of which you have heard today, but I think it
is valuable for us to revisit some of it as well.
Hours after the December 7, 1941 attack on Pearl Harbor,
the Japanese attacked and captured Guam. The people of Guam
suffered greatly, yet they remained loyal to the United States,
often risking their own personal safety to aid the American
effort.
In recognition of the suffering of these U.S. nationals,
the first War Claims Act passed by Congress was for Guam. It
authorized payments not to exceed $5,000 for damage, loss, or
destruction of public or private property, and if a claim
exceeded $5,000, or was for death or personal injury, it was to
be forwarded to the Congress for payment out of appropriations.
In early 1947, a delegation headed by Ernest Hopkins was
sent to assess the war claims payment situation on Guam. The
Hopkins delegation called for legislation to pay all claims
``on the spot'' in Guam, including death and personal injury,
raising the limit to $10,000, and recommended further relief
for any person who had voluntarily reduced his claim to $5,000.
However, no action was taken on the Hopkins report.
A year later, the Congress passed the War Claims Act of
1948 to compensate civilian American citizens. Residents of
Guam, however, were nationals at the time, and not citizens,
thus, the 1948 Act did not apply to most World War II residents
of Guam.
The 1962 amendment to the War Claims Act of 1948 provided
for payments to ``nationals of the United States'' except the
island of Guam. So what we have here is a patchwork of war
claims laws focusing on different groups of persons at
differing times, with relief for differing categories of
suffering.
The administration supports H.R. 308, with a change that I
will address shortly. I want to take just a moment to talk
about what we see as the central reason for the legislation,
and then as reflected in item 4 of section 5 of the bill, which
calls for the commission to determine whether or not there is
parity of war claims paid to residents of Guam, as compared to
awards paid to other similarly affected U.S. citizens.
By examining the payments under the various acts, the
commission will be able to determine how claimants on Guam
fared vis-a-vis U.S. citizens. We will have, then, the answer
to the fairness question.
Now I would like to turn to item 5, or section 5, which is
the area of concern for the administration. The term, people of
Guam, as used in the legislation, and the listing of categories
in item 5 would introduce new language not included in existing
World War II War Claims Acts. Moreover, item 5 is indeed
redundant of item 6, which directs the commission to issue a
report, including any comments and recommendations for actions.
If the commission believes that additional compensation
should be paid based on analysis of World War II claims laws
and information from Guam, it can include such a recommendation
in its report. Therefore, the administration respectfully
submits that item 5 of section 5 of H.R. 308 be removed from
the bill.
I will turn now to H.R. 309, the Guam Foreign Investment
Equities Act. Foreign investors who do not reside in Guam
contribute significantly to the economy. Such investors pay tax
to Guam at a rate of 30 percent on their gross amount of
interest, dividend, rent, and royalty, and other periodic
income derived from their investments. However, with respect to
investment within the 50 States, foreign nonresident investors
pay U.S. tax, but the rate of such tax is often reduced
significantly. This disparity in tax rates has proven to be a
disincentive for investment in Guam by foreign investors.
Under the bill, foreign investment in Guam would be subject
to tax at the rate that would apply were Guam covered by the
U.S. tax treaties. The statute would, in effect, level the
playing field for Guam and bolster its economy, which we
support. The administration supports the enactment of H.R. 309.
That concludes my statement. I would be happy to answer any
questions that you might have.
[The prepared statement of Mr. Kearney follows:]
Prepared Statement of Christopher Kearney, Deputy Assistant Secretary
for Policy and International Affairs, Department of the Interior
Mr. Chairman and members of the Committee, it is a pleasure for me
to appear before you today to discuss the Administration's views on
H.R. 308--the Guam War Claims Review Commission Act, and H.R. 309--the
Guam Foreign Investment Equity Act.
H.R. 308--GUAM WAR CLAIMS REVIEW COMMISSION ACT
H.R. 308, the Guam War Claims Review Commission Act, would
establish a five-member commission to: (1) examine whether or not Guam
War Claims compensation paid to residents of Guam was on parity with
compensation provided to United States citizens or nationals in
territory occupied by the Imperial Japanese military forces during
World War II, (2) advise on additional compensation for the people of
Guam, and (3) submit a report, including comments and recommendations,
within nine months to the Secretary of the Interior and relevant
congressional committees.
Background
Hours after the December 7, 1941 attack on Pearl Harbor, the
Japanese attacked and captured Guam. The Japanese were in full control
of Guam until 1944. The people of Guam suffered during the occupation.
Yet, they remained loyal to the United States, often risking their own
personal safety to aid the American war effort and American military
personnel left on the island.
In recognition of the suffering of these United States nationals,
the first war claims act passed by the Congress was for Guam. It was
called the Guam Meritorious Claims Act of November 11, 1945. It
authorized the formation of a claims commission to make payments not to
exceed $5,000 for damage, loss or destruction of public or private
property resulting from hostilities or hostile occupation or non-combat
activities of United States armed forces or civilian personnel. If a
claim exceeded $5,000 or was for death or personal injury, it was to be
forwarded to the Congress for payment out of appropriations.
In early 1947, a delegation headed by Ernest M. Hopkins was sent by
Secretary of the Navy James V. Forrestal to assess the war claims
payment situation on Guam, which was administered at the time by the
Navy. The March 25, 1947 Hopkins delegation report stated:
The Guamanian people rendered heroic service to the Nation in
the recent war and displayed great courage, fortitude and
loyalty. Such services, equivalent to service on the field of
battle, should be recognized both collectively and in specific
cases, individually.
The Hopkins delegation called for legislation to pay all claims
``on the spot'' in Guam, including death and personal injury, and
raising the limit to $10,000. The Hopkins authors also recommended
further relief for any person who had voluntarily reduced his claim to
$5,000. No action was taken on the Hopkins report.
A year later, the Congress passed the War Claims Act of 1948. Among
other provisions was one to compensate ``civilian American citizens''
who were captured at Midway, Guam, Wake Island, the Philippine Islands,
or any territory or possession of the United States attacked or invaded
by the Imperial Japanese Government. Payments were made to persons who
were interned by the Japanese and to widows and children of persons who
died in internment. Virtually all the residents of Guam were
``nationals'' of the United States at that time, but not ``citizens.''
Thus, the 1948 Act did not apply to most World War II residents of
Guam.
The 1962 amendment to the War Claims Act of 1948 provided for
payments to ``nationals of the United States'' for loss, destruction,
or damage to property ``except the island of Guam.'' The 1962
amendments did not compensate for death or personal injury, except on
the high seas.
What we have here is a patchwork of war claims laws focusing on
differing groups of persons at differing times with relief for
differing categories of suffering.
Administration Position
The Administration supports H.R. 308, with a change that I will
address shortly.
We believe that the central reason for this legislation is
reflected in item (4) of section 5 of the bill. Item (4) calls for a
commission to determine whether or not there was parity of war claims
paid to residents of Guam as compared with awards paid to other
similarly affected United States citizens or nationals in territory
occupied by the Imperial Japanese military forces during World War II.
Examination of the history of war claims payments is warranted given
questions involving the administration of the Guam Meritorious Claims
Act and subsequent claims acts. By examining the payments under the
various acts, the commission will be able to determine how claimants on
Guam fared vis-a-vis United States citizens and other nationals with
regard to different categories of suffering and deprivation for which
awards were made.
I would now like to turn to item (5) of section 5, the one key area
of concern we have with the bill. The term ``people of Guam'' and the
listing of categories in item (5) would introduce new language not
included in existing World War II war claims acts. Moreover, item (5)
is redundant of item (6), which directs the commission to issue a
report, ``including any comments and recommendations for action.'' If
the commission believes that ``additional compensation'' should be
paid, based on analysis of the World War II war claims laws and
information from Guam, it can include such a recommendation in its
report. The Administration, therefore, suggests that item (5) of
section 5 of H.R. 308 be removed from the bill.
H.R. 309--GUAM FOREIGN INVESTMENT EQUITY ACT
I would now like to turn to H.R. 309, the Guam Foreign Investment
Equity Act.
Background
Foreign investors, who do not reside in Guam, contribute
significantly to the economy of Guam. Under current United States law,
such investors pay tax to Guam at a rate of thirty percent on the gross
amount of interest, dividend, rent, royalty and other periodic income
derived from their investments. With respect to investment within the
fifty states, foreign non-resident investors pay United States taxes,
but the rate of such tax is often reduced significantly under one of
the over sixty income tax treaties to which the United States is a
party. This disparity in tax rates has proven to be a disincentive for
investment in Guam by foreign investors.
There are three ways to lessen the taxation of foreign investors
who do not reside in Guam. The first would be the re-negotiation of
current United States treaties to cover Guam. Such an undertaking would
be a time-consuming and expensive governmental task. Second, under the
1986 tax act, Guam could reduce its tax rates if it chose to de-link
its tax system from the Federal system. Guam has chosen not to de-link.
Third, the Congress, by law, can assign the benefit of the tax treaties
to foreign investors on Guam.
This last alternative is embodied in H.R. 309. Under the bill,
foreign investor income would be subject to tax at the rate that would
apply were Guam covered by United States tax treaties. H.R. 309 would
level the playing field for Guam, and bolster its economy.
Administration Position
The Administration supports the enactment of H.R. 309.
Senator Akaka. Thank you very much for your statement. I
have a few questions for you. The issue of Guam war claims is
not a new issue. Despite a new administration, I hope that I
can count on the Interior Department to continue the progress
made on this issue over the years, given the fact that many of
Guam's World War II generation have already passed on.
The Department of the Interior is the lead agency on
insular areas. Given Guam's economic state, the Guam Foreign
Investment Equity Act will greatly assist Guam's economy. Apart
from support for this bill, what else can the Interior
Department do to work with the Government of Guam and other
Federal agencies to assist Guam in this economic recovery?
Mr. Kearney. Well, you mentioned something in the part of
your question which goes to the heart of my answer. We are now
just getting our team in place. Secretary Norton has now--as
she has said, is now no loner home alone. We now have a number
of political appointees in place, including the Assistant
Secretary for Policy Management and Budget, who is now in her
third day, who has responsibility for insular areas.
We are looking at a range of policy issues, including
matters related to Guam and the other areas, and we are going
to look very closely to see what other areas there are that we
can be helpful, and we are going to try to be as exhaustive in
that review and advocacy as we can. I do not have a specific
proposal for you at the moment, but I can commit to you that we
are interested and desiring of pursuing as many opportunities
for Guam and the other islands as we can, and we continue to
look for every opportunity, and we will work with you in the
future too, as we come across those opportunities.
Senator Akaka. Thank you for that response. When will the
administration make a decision on whether or not to continue
the Interagency Group on Insular Areas?
Mr. Kearney. That is something under review at the moment.
That is something that I am taking a look at. I would hope that
would be in the next several weeks. I would be less than candid
if I gave you a specific date.
Senator Akaka. Well, I have no further questions for you,
Mr. Kearney. I want to thank you very much for appearing here
before the committee with your testimony, and I look forward to
working with you. Thank you very much for your response.
Mr. Kearney. As do I. Thank you, Mr. Chairman, for holding
this hearing.
Senator Akaka. Thank you. Our next panel is Mr. Tom Michels
from Guam, and Hon. Ben Blaz, former delegate from Guam, and I
want to welcome both of you. Hafa adai. I am glad to have you
here. Before I ask my friend Senator Murkowski for any
statement he has, I want to welcome you, Ben Blaz in
particular, because I served with you in the House, and I hope
your family is well. It is so good to see you again.
Senator Murkowski.
STATEMENT OF HON. FRANK H. MURKOWSKI, U.S. SENATOR
FROM ALASKA
Senator Murkowski. Thank you very much, Mr. Chairman. I
appreciate you holding this hearing. As you know, you recall,
you and I have had an opportunity to hear first-hand the
circumstances surrounding the reason for this hearing, and I
want to also comment on the qualifications of the nominee for
the Department of Energy.
We have several distinguished witnesses. You have already
had the introduction of Congressman Underwood. I reviewed the
information submitted by the nominee, who has met with our
staff. I think she is extremely well-qualified.
On the two measures, I have a series of questions which I
will submit to the administration, but I look forward to
working with you, the delegate, the Governor and others as we
consider these measures. I am certainly grateful for the
courtesies the Governor extended to both of us when we did
visit Guam a few years ago. I hope that we can visit again.
I think it is fair to say that too often we take for
granted the relationship we have with our territories, and as a
consequence I think it is very appropriate that from time to
time, particularly your proximity from Hawaii, that we give
them an opportunity to be heard from, and I had a conversation
with the Governor yesterday with regard to testimony that has
already occurred.
Unfortunately, I had a physician's appointment of
longstanding, and when you go to the physician, you know, you
never get out on time, and you do not start on time. I do not
know whether the Senate schedule is patterned after the
physician's office or if it is the other way around, but in any
event, the Governor's daughter had--her grandmother, as you
have noted, died as U.S. forces were liberating Guam. Her
mother was a child.
She is now in law school, and we wish you well, and I
understand you are named after your grandmother, so I did want
to make that acknowledgement, Mr. Chairman, and tell you how
important I think it is that we try and be more responsive to
the concerns and needs of our territories.
You and I have both shared the experience of being
territories, Alaska and Hawaii, so we know first-hand that
oftentimes it is a distant government that is unresponsive to
the needs, and really does not understand, if you will, that
the people really have no other relief than to look to the
Federal Government and those that have the responsibility in
the Federal Government, both the House and Senate, to provide
representation and the voice of the territories.
I look forward again to assisting you as you proceed, and
wish you and the nominees and the witnesses well. Thank you.
Senator Akaka. Thank you very much, Senator Murkowski. As
you know, Senator Murkowski and I are close friends. We have
traveled somewhat together, and we have gone to Guam together,
so we have been able to identify some of the problems and some
of the issues that are out there in the Pacific, and I will
tell you that he is a champion in helping the Pacific area out
as well as other parts of our country, but I want to wish him
well, and I hope the doctor had something good to say about
you.
Senator Murkowski. Thank you. He said we should go back to
Guam.
[Laughter.]
Senator Akaka. I would agree with you. I think we ought to
work on that.
Senator Murkowski. All right.
Senator Akaka. Thank you very much.
I would like to ask our Senator from Delaware who is
present with us for any statement he may have.
Senator Carper.
STATEMENT OF HON. THOMAS R. CARPER, U.S. SENATOR
FROM DELAWARE
Senator Carper. Thanks very much, Mr. Chairman. I have
never had a chance to go to Guam with you and Senator
Murkowski, but I have been to Guam many times. I went there as
a naval flight officer oftentimes in the 1970's, and as
recently as the 1990's leading a congressional delegation back
to Southeast Asia, and we used to have a saying--we were
stationed in Okinawa for part of that period of time, and I go
to Okinawa about 8 months into an 11-month drought, and they
turned the water on about 1 hour out of every 48 hours in
Okinawa, from midnight to 1 a.m., and turned it back off for
another 2 days, and we used to go off to Guam for about a 5-day
detachment and fly operation. There were surveillance flights
out of Guam.
And boy, in Guam it rains about every other hour and then
the sun shines, it is beautiful, but we used to say, Guam is
good. We loved to go to Guam, and I am here this morning as a
father who just appreciates very much Guam. I am pleased to see
Ben again and to welcome him, and was a colleague of Governor
Gutierrez, and I am sorry I missed Hannah but I wanted to be
here for at least this last panel. I have just gotten here from
Delaware, just got off the train, so I apologize for missing
the earlier panels, but I wish you well, welcome, and it is
nice to see you.
Thank you.
Senator Akaka. Thank you very much for your comments,
Senator Carper.
At this time we would like to proceed with the testimony. I
will call on Hon. Ben Blaz first for your statement, and before
you do that, again I want to say, we have had many good times
talking, and I have heard so much directly from you about what
you experienced, and you are, I can say specifically, one of
the few that experienced the occupation of the Japanese on
Guam, and can certainly testify for the people of Guam, so will
you begin?
STATEMENT OF HON. BEN GARRIDO BLAZ,
FORMER DELEGATE FROM GUAM
Mr. Blaz. You wish for me to begin, Mr. Chairman?
Senator Akaka. Yes.
Mr. Blaz. Thank you very much, Mr. Chairman, and I must say
that I cannot resist the temptation to make a few personal
comments at this juncture. Despite the fact that I am not
unfamiliar with the halls of Congress, the fact that you are
sitting under that seal with the gentleman from Alaska and the
gentlemen from Delaware that embraces the story of our entire
Nation speaks so well for the country that we all served for so
long.
I dare say that there is not a single person in this room,
however, who can give an account of Pearl Harbor, and in my
case Apra Harbor on a first-hand basis, besides you and me, and
for that reason I think we may well add a little sidebar to the
long story, and to the long effort, for I remember so well, Mr.
Chairman, when you and I used to knock on doors that had knobs
but did not open, and here we are, sitting mano-a-mano in the
House of Lords, with all due respect.
This is a trip that I have made several times. The effort
before us here has been called by many names, meritorious
claim, war restitution, war reparation, war claim. Like the
rose, despite the name, it is still the same, but unlike the
rose, those efforts have not been so rosy, and I must say to
you that one of the things that occurred to me as I walked in
this morning was that the past 60 years or so, every once in a
while when I get a chance my comrades from the labor battalion,
18 of us in the beginning, would meet from time to time to tell
jokes until the belly aches, to garnish and regarnish stories
so that I no longer recognize whether we really did them or
not.
But nevertheless, we take pride in the fact that we survive
a test that our country has not faced since the revolution, in
many respects, people fighting on their own soil, and then
ending up by being neither fish nor fowl, and caught in a whole
series of activities and legislation that I do not believe was
ever intended to deny. It is just that in the process somehow
the devil in the detail strikes back and we suffer.
This year, I will have that reunion again. Believe it or
not, in the ensuing years 16 have gone to heaven, and only two
of us will have that reunion, and such is the long journey that
we have taken.
Ironically, the people of Guam--and I am not going into the
details, because I took a laborious effort to reduce them to
writing, but I wanted to add the flavor of a person who was
there. Ironically, despite the enormous frustration of not
having remedy to this malady in the system, there remains an
enormous amount of pride on the people of Guam that we are one
of the few segments of our American society who, as a family
together, have weathered a storm that proves beyond any doubt,
today or tomorrow, our loyalty to the United States.
I could go on and on, Mr. Chairman, but you know darned
well if you let me do that we would have to have sandwiches
brought in here, so let me just say to you that I very much
appreciate the opportunity to be here. I was a part of this
institution. I left my heart not in San Francisco, but in Guam
and in the U.S. Congress, and I am very proud to be here to
thank you personally for the fact that although we do not have
the privilege of electing two Senators from Guam, we continue,
and Mr. Akaka, we have always been well-represented here. I
also want to thank my successor for his tenacious effort to
right what we think was a wrong.
[The prepared statement of Mr. Blaz follows:]
Prepared Statement of Ben Garrido Blaz, Former Delegate From Guam
I should like to thank you, Mr. Chairman, and members of the
Committee for inviting me to this hearing on H.R. 308, a bill to
establish the Guam War Claims Review Commission. I am particularly
grateful to Congressman Robert Underwood for his perseverance in
seeking a resolution to a heart-wrenching issue that has been gnawing
at the cockles of the hearts of the native Chamorro population of Guam
for many, many years.
In an earlier hearing on this subject, the Disclosure Requirement
form that came with the invitation had a question that caught my
attention and, admittedly, brought a mild chuckle. It inquired whether
I had any training or educational experience which add to my
qualifications to testify on the subject matter of the hearing. I
responded that my training for forced labor was in the category of
``on-the-job training'' under heavily guarded conditions. We refer to
it as ``unhappy labor'' in my language. I indicated that my educational
experience was ``hands-on'' or, perhaps, ``hands-up,'' considering the
circumstances of my indentured service. Although I was only thirteen
years when the occupation started, I had the good fortune of being
healthy, but the misfortune of being taller than those in my age group
and the Japanese guards. I was drafted in the first round for the labor
battalion--right out of 7th grade!
The six decades since ``Pearl Harbor'' and the beginning of World
War II have dimmed the sight, shortened the steps, and mellowed the
temperament; however, they have not muddled the memory of those
painfully difficult years of the occupation. It was a defining period
in the history of Guam and the Chamorros.
Because so many years have elapsed since the great war, a brief
background may be helpful to the reader's understanding of the events
that transpired and the attitude and sentiment toward America that
prevailed on Guam at the start of the war.
A few months before the invasion in December 1941, the families of
Americans stationed on Guam were sent home. That was the first
perceptible signal to us that the war that was raging in Europe may
extend to the Pacific; we felt, however, that our little island would
not be involved. But the departure of the American families was a very
emotional occasion and it revealed a strong attachment to the departing
families. At that time, there were elders in our village who remembered
a similar event involving the Spanish garrison at the turn of the
century. According to them, no tears flowed on that occasion.
After the island was captured, the remaining Americans were sent to
prisoner-of-war camps in Japan. Except for the occupation force and a
lone U.S. sailor, hidden in the jungle by patriots, the remaining
population, about 25,000 strong, consisted of native Chamorros,
intensely loyal to the United States. Their devotion and loyalty to
America was not lost on the Japanese who exacted revenge at every
opportunity. The harsh treatment, however, resulted in bonding, rather
than breaking, the resolve of the natives to remain steadfast in their
loyalty to America.
This sentiment hardened during the occupation and had a very
positive effect on the morale of the people. It became even more
pronounced after liberation. It was manifested in the cooperative
manner in which the Chamorros reacted to the taking of their ancestral
land parcels for the war effort against Japan. It was also to play a
role in the initial reluctance to submit claims for property damage and
personal injury on the notion that to do so would be seemingly
ungrateful to the mother country that had just liberated our people.
This demonstrably deep affection for the United States was somewhat
surprising to many, given the relatively low standing that the
Chamorros of Guam found themselves on the American totem pole. Official
records, in all three branches of the U.S. government are replete with
references to Guam's status, or, more accurately, non-status, during
the first fifty years of the last century. Quite frequently, the
natives of Guam were referred to as wards of the United States, with
the U.S. Navy serving as their wardens. Sons of Guam were only
permitted to join the Navy as men servants. Ironically, many served
their entire careers in officers' wardrooms.
This dubious category of being neither citizens of the U.S. nor
foreigners on U.S. soil, also played a major role in discouraging the
citizens of Guam from aggressively seeking remedial action for property
damage and personal injury even after they realized that doing so was
not inappropriate.
In previous efforts to address this issue through Congressional
action, agencies of the Federal government cite the Guam Meritorious
Claims Act of 1945 (Public Law 79-224) as evidence that the U.S. had
resolved it. That effort, however well intentioned, did not serve its
purpose satisfactorily. A sizable chunk of the population of Guam was
not even aware that such a program existed. They were stunned later
when they discovered that the period for submission of claims lasted
only one year. This opportunity took place relatively shortly after the
occupation when the island was in a feverish struggle to rebuild and
was inundated with thousands of soldiers, sailors, Marines, and airmen
and their equipment. At the time, most in the civilian population did
not have access to a reliable newspaper; had limited use of radios; had
no phones; and no mail service. The Navy's effort was woefully short of
one of the most essential requirements of pending government action:
due notice.
Meantime, America's benevolence and generosity toward vanquished
foes was flowing world-wide. The Marshall Plan in Europe was lifting
both friends and former enemies off their backs to make them
economically self-sufficient. In Asia, General Douglas McArthur was
saving Japan's face and fate through his leadership and magnanimity
toward Japanese customs and traditions. In time, former Japanese
mandated islands around Guam received reparations and assistance toward
nationhood; other islands in the Marianas chain with Guam became a
Commonwealth of the United States; and reparations for the Micronesians
became a reality (Public Law 92-39).
Against this backdrop came the realization that Guam was deserving
of recognition for its own ``hand-to-hand'' engagement during the war.
There was a time when the focus was to seek remedy from Japan. This
avenue, however, was permanently closed when the United States and
Japan signed the Japanese Peace Treaty. None other than John Foster
Dulles recognized that there were unresolved issues when he stated that
United States nationals whose claims are not covered by the provisions
or by legislation of other allied powers must look for relief to the
Congress of the United States. In 1962, Congress extended the time for
American nationals to submit their claims (Public Law 87-846) but
specifically excluded the people of Guam who, by that time, were no
longer American nationals, having attained U.S. citizenship.
In recent years, the Congress of the United States has resolved
similar problems with the compensation to individuals of Japanese
ancestry evacuated, relocated, and interned during World War II and the
Aleutian and Probilof Island Restitution Act. Guam, on the hand,
continues on its arduous quest for some measure of acknowledgement for
its own sacrifices.
Despite the number of years that have elapsed since the occupation,
the issue of restitution continues to simmer and has had an influence
in current thinking and sentiment on Guam toward the U.S. Coupled with
the quest for political self-determination, it has virtually attained
the status of a rallying slogan, ``Remember the Occupation.''
Grandchildren of those who suffered personal injury have now assumed
the role of champions for the cause.
Some have characterized this episode as unrequited love; others
simply describe it as lack of appreciation. A few years ago, I
accompanied the Secretary of Defense on a trip that stopped on Guam.
There was a lot of discussion on what the Secretary should or should
not say while he was on island. To break the impasse, I wrote down
three words on an index card and passed it to a member of the staff. I
suggested, as a starter, to try those words. They were: Thank You,
Guam.
There is a battalion of lawyers at Justice, a company of them in
this Department, and a platoon of them in that Department. They are
capable of finding more citations to justify a rejection of H.R. 308
than I have time to read them during the remaining years of my life.
If, on the other hand, they would take into account the special
circumstance of Guam and its people, they could just as readily find
citations in support of the bill. If the question last century was why,
the answer this century could be--because it is the right thing to do.
From time to time, a group of us who were in the same labor
battalion during the occupation would meet for beer, beans, and another
look at a box full of mementos. Among them is a torn and tattered
clipping from a U.S. newspaper which appeared following liberation:
There Were No Quislings on Guam. Of the original 18 in our group, only
two of us are left to view that clipping this year.
As a member of the generation of Chamorros most directly affected
by the events that prompted the piece of legislation now before us, I
ask your support of H.R. 308. I dare say, Mr. Chairman, that among
those present here today, you and I are the only ones who truly
remember what happened at Pearl Harbor and, in my case, at Apra Harbor
on Guam, sixty years ago which triggered the chain of tragic events
which prompted the continuing search for resolution by the people of
Guam. Ironically, those of us who remember the enemy occupation, now
all septuagenarians and older, still manage to walk with prideful
swagger that we survived a loyalty test very few Americans have had to
endure.
Senator Akaka. Thank you very, very much for your personal
statement, Congressman Blaz.
Mr. Michels, we will receive your statement.
STATEMENT OF THOMAS P. MICHELS, CHAIRMAN,
BOARD OF DIRECTORS, GUAM CHAMBER OF COMMERCE
Mr. Michels. I am Tom Michels, and I am the chairman of the
board of the Guam Chamber of Commerce. I am representing the
Guam chamber today. We represent our membership represents
approximately 70 percent of the gross island product. I think
Congressman Underwood articulated the merits of the bill very
good, so let me just briefly say, I think H.R. 309 is all about
leveling the playing field.
Guam has an unincorporated--unincorporated territory that
was created by the Organic Act Reform. Under the Organic Act,
Guam's income tax mirrors the Internal Revenue Code, and quite
frankly, this is a distinct advantage that Guam offers to
foreign investors, because under the Internal Revenue Code, it
is a well-known tax code, it offers a lot of stability to the
territory, so it is a real advantage to us.
However, there is the inequity addressed in H.R. 309 that
Guam is not entitled to participate in the tax treaties of the
United States, and as a result of that, foreign investors are
subject to the 30-percent withholding tax.
I think Congressman Underwood gave the example of the tax
treaty with Japan. The withholding tax is 10 percent rather
than 30, and with the United Kingdom it is zero.
Our largest industry is tourism. Over 90 percent of our
tourists are from Asia, the majority of that being from Japan,
and our tourism infrastructure was primarily built by foreign
investors in the form of hotels, golf courses, and other
tourist attractions. In order for us to be competitive it is
essential that this infrastructure be kept modern and up-to-
date, and that obviously requires investors.
Because our visitors are primarily from Asia, the source of
investment is from Asia, so H.R. 309 is all about bringing
parity to Guam so that foreign investors are treated equally,
as they would in the United States.
Our second largest industry is Department of Defense
spending, and we at the Guam chamber are very active in
attracting additional Department of Defense activities. The
economy has suffered with the Asian economy meltdown, and we
are looking to further diversify our economic base.
I would be happy to answer any questions that the committee
may have.
[The prepared statement of Mr. Michels follows:]
Prepared Statement of Thomas P. Michels, Chairman, Board of Directors,
Guam Chamber of Commerce
Introduction
My name is Thomas P. Michels. I am a Vice President & Guam Country
Manager of the Bank of Hawaii, the principal subsidiary of Pacific
Century Financial Corporation, a regional financial services holding
company based in Hawaii, with operations throughout the West and South
Pacific, Asia, and selected markets on the U.S. mainland.
I am here, however, in my capacity as Chairman of the Guam Chamber
of Commerce Board of Directors. Our chamber membership is comprised of
over 300 individual businesses representing all sectors of the business
community. About 52% of our members come from small businesses, but our
combined membership generates $2 billion annually in economic activity
or approximately 70% of Guam's Gross Island Product.
I feel privileged to be here today to provide supporting testimony
for the Guam Foreign Investment Equity Act, H.R. 309. This legislative
measure is long in coming and will correct a very serious inequity in
the tax treatment of foreign investors in Guam.
Background
In the Organic Act of 1950, Congress mandated that the Guam tax
system would be identical to the U.S. Internal Revenue Code, using
basically the same rates, exemptions, credits, and deductions. The
Government of Guam was to be responsible for the collection of taxes
and the administration of tax laws under a ``mirror system.'' In
effect, Guam's tax code is the U.S. Internal Revenue Code, with all
laws in effect at that time applying to individual and corporate tax
payers, as would all future tax regulations and amendments made
thereto.
Corporations organized in Guam, as well as Guam residents, are
subject to tax on their worldwide income. Non-resident aliens and
foreign corporations engaged in trade or business within Guam are
subject to full U.S. taxation on income effectively connected to such
trade or business. Non-resident aliens and foreign corporations are
also subject to a 30% tax on certain other forms of passive income,
from sources within Guam, that is remitted to them from their
investment projects on Guam.
Current Situation
Guam is not included in any of the U.S. Tax Treaties negotiated
with our major trading partners around the world. And since Guam is
required to impose the ``IRC Mirror Image'' 30% withholding tax, absent
relief or abatement from negotiated tax treaties, we find ourselves to
be the most expensive taxing jurisdiction that foreign investors
encounter under the American flag, including offshore U.S. Territories.
The Problem
The main barrier to foreign investment in Guam is the 30%
withholding tax on dividends, interest, and other forms of passive
income that are remitted to foreign investors from their investment
projects in Guam. This additional 30% cost on investment returns makes
Guam an extremely unattractive place for foreign investors who now
comprise about 80% of the island's source of outside capital. From an
historic perspective, Asian banks that lend Capital to Guam projects do
so at interest rates of about 100-125 basis points above the Libor
Index. This cost of funds for large projects is about 50 Basis Points
or Libor less 0.5%. Under these arrangements, the extra 30% cost to
lenders on total interest income derived from a spread of only 100-125
basis points make the profit potential for outside capital on Guam nil
or marginal at best.
A $25 million loan from a Japanese bank in today's interest
environment, for example, will provide an effective return yield of
about 12.5 basis points or 0.0125% before operating costs. According to
a major financial institution in Guam, the 30% withholding tax impact
to a lender is equal to about 90% of the profit potential from a simple
lending transaction.
The Law
The 30% rate is statutory. It is a rate established in the U.S.
Internal Revenue Code and ``mirrored'' on Guam as the island's income
tax law as I have described earlier. The U.S., in agreement with its
trading partners around the world, has lowered the withholding tax
rates on a country-by-country basis through the execution of double tax
treaties. The intent of these treaties, as I understand it, is to
prevent double taxation of citizens of the contracting states and to
remove tax impediments on foreign trade between the contracting states.
I also understand that it is a standard feature of all tax treaties to
provide for significantly lower tax rates on investment returns. The
withholding tax rates vary with each country. For example, the
withholding rate on interest income from the U.S. to Japan is 10% and
0% to the United Kingdom. The same interest income is subjected to a
30% rate from Guam. Asian investors, who comprise the majority of
foreign investors to the island, can find more cost effective returns
on the U.S. mainland than on Guam because tax treaties limit the
definition of the ``United States'' to the 50 states for tax treaty
purposes. As it stands now, Guam has one of the highest withholding tax
rates in the industrialized world.
The Solution
If Guam were to be included in the definition of the United States
for all future tax treaty negotiations, then foreign investors in Guam
could enjoy competitive withholding tax rates. This remedy, however, is
of little practical value because the U.S. Treasury Department
negotiates new and revised tax treaties on an infrequent basis. In the
interim, the U.S. Treasury should be encouraged to give Guam permission
to ``mirror'' the provisions of any U.S. tax treaty currently enforced
on a basis consistent with the ``mirror'' application of the U.S.
Internal Revenue Code as provided in the 1950 Organic Act of Guam.
Guam Foreign Investment Equity Act, H.R. 309
The enactment into law of H.R. 309 will provide Guam with the most
expedient remedy to our problem, and it is the preferred solution of
the Guam Chamber of Commerce. It is our preferred solution because it
provides the statutory basis for relief to a very specific problem. It
is also our choice of remedy because it is the most immediate way to
eliminate a discriminatory tax burden that has been the most serious
impediment to foreign investment on Guam.
Making Guam a part of renegotiated tax treaties is an option. But
it entails a very long, difficult process that could span many years,
and involve different players at different stages of negotiations.
Having the state department enter into an exchange of protocols with
each jurisdiction is also another option. But this too can be just as
difficult a path to take as in actual treaty negotiations because it
involves basically the same procedures for state department heads to
get together and agree on even a change in sentence to a treaty.
H.R. 309 should be passed with a sense of urgency at a time when
Guam continues to struggle from the aftermath of the Asian economic
meltdown. Our economy is heavily dependent upon tourism and foreign
investments associated with this economic activity. And of major
concern to us today, is the island's high employment rate at 15%, and
the 30% shortfall in government revenues, heightening the difficulty
for the Government of Guam to meet its public obligations.
Conclusion
Mr. Chairman, and members of the committee, the Guam Chamber of
Commerce urges the expedient adoption of H.R. 309 at the earliest date
possible. It will remedy a long-standing discriminatory problem that we
have endured far too long. It will enhance the inflow of capital at a
time when it is most needed and it is the right thing to do for all
Americans, especially for those who live on Guam. Thank you.
Senator Akaka. Thank you very much, Mr. Michels. I do have
questions. My first questions will be to Congressman Blaz. I
know you have been through this, and you have worked with the
Department, too. My question to you is, do you believe that the
Department of the Interior--do you believe that their
recommendations are necessary for H.R. 308?
Mr. Blaz. You are going to put me right on the spot, right?
I have a long history of not agreeing with the Department of
the Interior, Mr. Chairman, on a number of issues, and in fact
in this issue before us today I have a little bit of concern
over the lack of linking in the funding so that we are really
at the discretion of whoever is in charge there. There is no
line. The line of responsibility for appropriation is really
almost a subjective thing for whoever decides, oh yeah, we can
do that.
But the specific question, someone just handed me,
additionally compensate the people of Guam for death. I believe
the value, the true significance of the review commission, Mr.
Chairman, really is to resolve this, because we have been in a
number of hearings over the years, and in each time of the
hearing we would have it bogged down by having to do this thing
in this manner, and as a result, but one of the reasons that I
was so heartened by the fact that we are now establishing a war
claims review commission was to permit people then to go to the
scene, and to interview witnesses, and to determine for
themselves, and then come back with a recommendation.
So on that particular issue, I am a little leery about
additional compensation simply because the political reality,
and the reality of this body here is really against something,
additive to something that has already been agreed upon, and so
on that basis I would just say that I think I would yield to
the Guam review commission.
I support that it be established, and let them come up with
the recommendations, and if they say this is what we are going
to go for, then I think we should go for it. That is the best I
can do, Mr. Chairman.
Senator Akaka. One of the questions in this is who--and
this was alluded to in testimony, and the question would be,
who should be eligible claimants?
Mr. Blaz. Who should be--I am sorry, Mr. Chairman.
Senator Akaka. Who should be eligible claimants?
Mr. Blaz. You know, this is a very, very serious question,
because it is precedent-setting, as you know, Mr. Chairman.
There is in the air, as you know, a big effort, or some people
think, about reparations for something that happened a long,
long time ago, and when you stop to think about people and the
descendants, this thing can go on and on forever.
For me personally, my initial reaction would be that the
person who was involved in this thing here should be the
primary claimant, and I will tell you, there is a provision
here that if you do not want it, you can give it back, I think
I will give mine back, because that is not the issue so much
for people as is the issue of having the thing addressed, even
if we have to turn it back and give it to a scholarship or
something else.
So to me the principal recipients should be--I am a little
bit uneasy, quite frankly, about any methodology that would
grant unto survivors ad infinitum something that really is
beyond even our great Treasury to manage, so I am not going to
be very popular on Guam because of this position, but the truth
of the matter is that it may be the most difficult thing to put
across, is the whole idea that, hey, listen, I am related to
him, and particularly in the case of places where the
relationships are almost loco parentis, I guess is the closest
you can get, and if you start including those things it becomes
quite muddled.
Once again, I think that the review idea may be the thing,
to iron all these things out, but for me personally, the people
who were involved in this long odyssey, primarily, and they are
just a handful, are the primary recipients, and if they
establishing later on that maybe the son of this for whatever
reason, I would not stand up and do any side-straddle hop
opposing it, but I would not be as--let me put it this way, as
encouraged that the Congress would respond so generously to a
long line of recipients beyond the survivors, quite frankly.
Senator Akaka. I would like to ask other members for
questions that they might have for you, Congressman Blaz, so
let me ask Senator Murkowski whether he has any questions.
Senator Murkowski. Thank you very much. I think, Senator
Akaka, you have covered much of the concern at hand on the
repatriation issue.
I would like to just make a statement and see if there is a
comment from either of the witnesses relative to something that
you and I had extended discussion on over the years, and it
emanated to some extent from the ground snake issue, and then
the question of, I think it is pronounced Ritidian Point, which
is the area that the military retained, and then the U.S. Fish
& Wildlife Service currently has.
I think it is somewhere in the area of 300 acres, or
something of that nature, which brings home the point that
would seem to me that excess land that the military no longer
has a use for, and lands that have been taken from basically,
historically, the people of Guam, should be returned as opposed
to transferred to other Federal agencies, and I would encourage
the Governor and the chamber, former officials and others to
come up with some recommendations relative to what their
attitude might be towards returning some of this land.
Speaking from the point of view of one Senator, it would
seem to me that once the Government has finished with the
general purpose of the land that was necessary for military
installations and other defensive or offensive capabilities,
that when that need no longer exists, it should be returned to
the territory of Guam so that the people in the territory can
directly benefit by it, as opposed to it being in the status of
some other agency, and I believe it is the U.S. Fish & Wildlife
Service particularly on Ritidian Point that still retains that.
It is questionable in my own mind the justification for
that continuance, and my question to you is, would it not be
better off back under the control of the Government and the
territory of Guam, and if so I would be very happy to discuss
this matter with Senator Akaka further and see if there is
something that we cannot do.
I would welcome the comments of either of you.
Mr. Blaz. On the issue of excess land and returning it, is
that the question, sir?
Senator Murkowski. The question specifically is, Federal
lands that are no longer utilized for the purpose that they
were withdrawn and taken from the territory and the people, the
question is, in your opinion, is there any reason why we cannot
work to return those, and Ritidian Point as well, to the
territory?
Mr. Blaz. All right, sir. My sentiment on this thing here
is that when you return excess land from the Government and say
you are returning it to Gov Guam, or Guam, there is one school
of thought that you will be returning it to the original land
owners.
My sentiment on this thing here differs a little bit from
that notion, because since this thing happened six decades ago
Guam has grown almost unbelievably, and there are common needs.
There are common needs for all sorts of things for common
usage, and I would favor, quite frankly, a formulation which
would permit the Government to take a look and see what it is
that the Government needs for further expansion, perhaps, of
its port, for further expansion of its air facilities, for a
school, for recreation, whatever it is for the common good, and
having done that, then if there remains any land that might be
suitable for return to the original landowners, they would have
the first shot at getting those.
With respect to the land, whether or not the Federal
Government or the Government of Guam takes it, I think there is
probably a series of laws that have to be hurdled in a way
regarding this issue, but here again we have a possible
problem, and that is that in the one hand, for the Government
of Guam really to encourage, to continue to encourage the
return of the military, which in the past has been a tremendous
source of a stable economy for the people of Guam being so
reliable, there is now currently a mood on Guam that the
military should return.
If that were to happen, the only way that it could happen
would be to permit those military units that are planning to
return to Guam to have a place to stay, so one has to work with
the other.
If, on the other hand, you say, well, all excess land go
back, then it is almost useless to then turn the land back and
argue to return, because there is no place at the end for them,
and that would be my sentiment.
Senator Murkowski. Thank you.
Mr. Michels.
Mr. Michels. Yes, I think the Ritidian Point area you refer
to, a portion of it was retained by Fish & Wildlife, and there
is a portion on the perimeters that did go back to family
members, and frankly, this area is beautiful. It is quite
pristine, and it has probably been an advantage that it was
under Federal control for a number of years, in that it is very
natural and a very pretty area.
Those areas on the perimeter of the Fish & Wildlife, there
has been some tourism development there, mainly day-type trips
for tourists. It is a beach fiesta type situation, and it is an
attraction to our tourism industry, so it does supplement it.
Senator Murkowski. Well, I am not here to interfere in the
realm of what is preferential to Guam, but it would seem to me
that the Government of Guam could be more responsive to the
needs of the people in determining, a) if the--and I am
talking, Hon. Ben Blaz, of excess land that is not being
utilized. I am not talking about the active military
installations there, but the excess land that has been
identified as no longer necessary, but still occupied by
various Federal agencies.
It would seem to me it would be beneficial to Guam to have
those lands transferred back, and then Guam would determine how
to utilize those lands, either through trying to find
legitimate heirs, or for the public benefit, and as far as
Ritidian Point, is it better that a government 5,000, 6,000
miles away dictates utilization of Ritidian Point, or the
Government of Guam retain, but that is for the people of Guam
to decide, but I am simply suggesting to you, and I do not mean
to imply that--you might find a more favorable attitude in the
Department of the Interior currently to transferring excess
Government land than we have had in the past.
Thank you.
Mr. Witt. Mr. Chairman, with your indulgence, could we
respond?
Senator Akaka. Could you state your name and your title?
Mr. Witt. John Witt, the Washington legislative director
for Governor Gutierrez.
With your indulgence, could we respond to the points that
Mr. Murkowski raised?
Senator, Mr. Murkowski and Mr. Akaka have been very
supportive of the Guam Land Return Act which passed in the last
Congress, which gives Guam the right of first refusal for
excess military lands, and we very much appreciate all the work
on excess lands that you guys have done with us.
The Land Return Act includes a provision for negotiations
with the Secretary of the Interior for disputed lands which are
in the wildlife refuge overlay. We tried that process in the
closing months of last year. We tried to negotiate with the
Department of the Interior regarding Ritidian. Governor
Gutierrez put on the table a proposal to remove the most
contentious issues in Ritidian, to at least carve out a small
sliver of 90 acres and trade that with better Gov Guam land.
And we take your point, Mr. Murkowski, that perhaps that
might be more receptive ears at the Secretary of the Interior's
office now, which is why Governor Gutierrez supported the
nomination of Secretary Norton, that we do believe that there
ought to be more local input and local controls, and local
cooperation on conservation issues. So long as Ritidian is an
issue that divides us, it is difficult for the Governor of Guam
to cooperate on conservation issues.
With regard to the general issue of the return of excess
lands, and the possible return of military forces from Okinawa
to Guam, we feel very strongly that if you are talking about
the permanent stationing of military on Guam and the increasing
of military presence, that is a good that all of the community
can agree on.
But if you are talking about still leaving excess lands
idle, and on occasion using them for training, well, there are
valid concerns that have to be balanced with Chamorro land
claims, so that is a very difficult question, but if you are
talking about moving 2,500 or 5,000 marines to Guam, we do not
argue with the increase of the military permanent presence on
Guam.
We do not like the idea that there are 40,000 marines on
Okinawa, and they come on occasion to Guam to use our island
for training, but the economic benefit remains in Okinawa. As
Mr. Guzman pointed out, we are a two-horse town, tourism and
the military, and we have to try to find the correct balance
between the military presence and training.
Senator Akaka. Thank you very much.
Senator Murkowski. I would certainly look forward to
working with members of the committee on what Guam may want to
bring back on the table.
Senator Akaka. Thank you very much, Senator Murkowski, for
your questions.
May I call on Senator Carper?
Senator Carper. Thank you, Mr. Chairman. I was not familiar
with either H.R. 308 or H.R. 309 prior to today's hearing, and
I just want to make sure I understand what is proposed in each
of these.
As I understand it, in H.R. 308, the legislation would
create a commission. The job of that commission would be to
gather information from a variety of sources, and to then
provide a report to the Secretary of the Interior and to the
Congress on its findings in a period of time, I think something
less than a year, and then it would be up to the Congress and
the administration as to what to do. Is that the sum and
substance of it? Can either of you tell me what is the status
of H.R. 308 in the House of Representatives? Has it been
enacted?
Ms. Finkler. It has passed.
Senator Carper. It has passed, H.R. 308 has passed, okay.
Thank you.
With respect to--and now we are holding the hearing on it
here today, and we will determine whether or not the Senate,
this committee and the Senate are to act.
H.R. 309, the Guam Foreign Investment Equity Act, I
understand that that legislation has passed the House of
Representatives?
Mr. Michels. That is correct, in May of this year.
Senator Carper. Introduced this January, passed in May, and
it now is getting its hearing before this committee. As I look
at it, my thought was, this seems to be a bill that might fall
within the purview of the Finance Committee, at least as much
or more than this committee. Is there shared jurisdiction on--
no? We have soul jurisdiction, okay.
Ms. Finkler. This committee has jurisdiction over
territorial affairs.
Senator Carper. This committee has jurisdiction over
territorial affairs, fair enough.
Let me just ask, what are the objections--if I may, of our
witnesses, what are the objections that have been raised to
H.R. 309?
Mr. Michels. I believe there was some objection from
Treasury last year, but it was primarily related to, there was
a trust legislation--well, the tax ability of trusts is
administered by the Internal Revenue Code, but there was
legislation passed locally in Guam that would rebate taxes
administered to trusts based on Guam. There would be 100
percent rebate, and I believe their objections were related to
those trusts, foreign trusts being on Guam, that there be a
100-percent rebate of their taxes.
Senator Carper. Has the current administration shared with
us or with you their own views of this legislation, H.R. 309?
Mr. Michels. Yes. They are in support.
Voice. Yes, sir. The witness today tacitly endorsed----
Senator Carper. And when we say the witness today, it was
the administration's witness. Okay, good. All right. Well,
those are my questions. Again, thank you. It is good to see
you, and for those in the audience who are affiliated with
Governor Gutierrez, please convey to him my very best. Thank
you.
Senator Akaka. Thank you very much, Senator Carper.
I have no further questions for our witnesses. I just want
to thank you again, but before I do, is there any other comment
that you would like to make, either one of you?
Mr. Michels. I would just like to comment, you have asked
some of the other witnesses about what the Federal Government
could do for the economy of Guam. I would like to respond to
that. Our infrastructure in Guam, namely the roads, the sewers,
and water distribution systems, are quite dated. Most of that
was built post World War II. That was nearly 60 years ago, so
some infrastructure redevelopment and improvement is necessary,
and if there are any Federal programs that we could look to to
assist in that area.
Also, I have mentioned the chamber of commerce is very
active in soliciting additional military activities in Guam. We
feel our location is very strategic, and as the military
reassesses their strategic direction, and may redistribute
force structure with that strategy, that Guam is a very welcome
and I think well-located location for that.
Senator Akaka. I want to be sure that we understand that,
based on Congressman Underwood's testimony and the testimony of
Mr. Kearney, it is my understanding that the administration's
concerns have been addressed. I think there was a question on
H.R. 309. The administration's position and, I underline,
supports its enactment, so we are moving along here, and for
our former members such as Congressman Won Pat and Congressman
Blaz, and now Congressman Underwood, you folks have worked long
and hard for this moment, and I believe this moment is coming,
and we want to move as quickly as we can to get it done.
Mr. Blaz. Mr. Chairman, may I add a footnote here, because
I did not get an opportunity to respond to Mr. Murkowski's
comment, and quite frankly I did not hear requests or comment
about the natural habitat, the thing that Mr. Witt had
commented on.
It is, indeed, very, very puzzling to the people of Guam
for an area so beautiful and so pristine to be preserved for
that day when the bird returns, that day that is sure never to
come until they correct the malady of the invasion of the brown
tree snake, which is not indigenous to Guam, which will destroy
the first effort into that pristine area.
Of all the things that we have in Guam that probably annoys
the people more, is this whole idea of the birds and the bees
are endangered, but the Chamorros of Guam are not. We are in
many respects endangered from not having a place for our own
habitat.
So the question of which comes first, the chicken or the
egg, is really the question before the House, and yet to this
day the whole idea of the brown tree snake, which you know, Mr.
Senator, Mr. Akaka, if we ever lose sight of the effort to keep
it from Hawaii would be so devastating to Hawaii across the
State, and should we not take care of Hawaii, and it gets to
Balboa Park in San Diego, then the whole Congress would be
looking at the eradication or the control or somehow try to do
something about a snake that came into Guam not because we
imported it, because someone else, and yet to this day, the
Department of Defense is going to throw us a few dollars to the
Department of the Interior, and a few people get together and
they go through the motion.
Had it not been for you and Senator Inouye, who tried to
keep this out of Hawaii, we probably would not be getting any
money, so to me, the whole question of pristine land and set-
aside, and all this by the Department of the Interior, is
absolute nonsense, when you are saving it for a day that is
likely never to come.
So it is really a question of priority, and to me the
formulation that was on line by Mr. Witt about possibly
exchanging sites, it might well be a first step solution, but
the area that we are talking about right now the Department of
the Interior wants to reserve for itself is really one of the
most choice areas in the entire Marianas chain.
I am sorry for this passionate plea at the end here, Mr.
Chairman, but--well, you know I would have made that plea after
I heard that.
Senator Akaka. Well, thank you very much, Congressman Blaz,
and thank you, Mr. Michels, for your testimony.
I would like to announce that the hearing record will
remain open for 1 week if anyone wants to submit additional
comments on any of these bills.
It has been a good hearing, good to hear from the folks of
Guam. It looks as though we will be completing our work here
and will be moving this on to the floor of the Senate, so I
would like to thank all of the witnesses, especially those who
have come all the way from Guam, and those who have their heart
in Guam concerns. I want to tell you again that this has been a
great hearing, and without any further comments or statements,
this hearing is adjourned.
[Whereupon, at 11:30 a.m., the hearing was adjourned.]
APPENDIX
Additional Material Submitted for the Record
----------
Territory of Guam,
Hagatna, Guam, July 25, 2001.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources, U.S. Senate,
Washington, DC.
Dear Mr. Chairman: I am herewith submitting my official testimony
in support of the passage of House Resolution 308, the Guam War Claims
Commission Act. As much as I want to present this in person, pressing
matters here on Guam renders it impossible far me to get away.
Congressman Robert A. Underwood's District Office will be sending via
Congressional pouch, original copies of this testimony for submission
to your office.
However, if there are any questions as to any of the contents of
this testimony, please do not hesitate to call me at (671) 472-3456/
3457.
Sincerely yours,
Antonio R. Unpingco,
Speaker.
Statement of Antonio Reyes Unpingco, Speaker, 26th Guam Legislature
Committee Chair, Mr. Bingaman, Subcommittee Chair, Mr. Akaka,
Members of the Committee on Energy and Natural Resources and the
Subcommittee on Natural Resources:
I am Antonio Reyes Unpingco, Speaker of the Twenty-Sixth Guam
Legislature. I am submitting this testimony in support of the most
expeditious passage of House Resolution No. 308, the Guam War Claims
Review Commission Act.
Mr. Chairman, for many years now, the people of Guam have pursued
the reactivation or renewal of war claims for atrocities suffered at
the hands of enemy occupiers from December 8, 1941 to July 21, 1944.
The mechanism developed by H.R. 308 has been reviewed and evaluated as
the most efficient and expeditious for its stated purposes. The
timelines provided in the legislation will permit a most thorough
review of existing records, the interview of those survivors who are
still living, and an expeditious conclusion as to what must be done to
accomplish the goals and intent of the original Guam Meritorious War
Claims, which, unfortunately did not accomplish its intent because of
circumstances at the time. The people were just too busy trying to get
their lives and families back together again. Likewise, the
administrators of the original Guam Meritorious War Claims considered
the program as limited to providing compensation for property loss, and
in this sense, to property loss after the invasion of the island by the
liberating forces rather than the devastation and destruction, of
property, loss of human life and horrific atrocities, perpetrated by
Japanese occupiers. The provisions of H.R. 308 will rectify this.
It is heartening to note the inclusion of a provision through which
the Commission may ``. . . advise on any additional compensation that
may be necessary to compensate the people of Guam for death, personal
injury, forced labor, forced march, and internment; . . .'' There can
be no doubt that the Chamorros on Guam on December 8, 1941, suffered
over 1,000 days of atrocities and horror. Immediately upon enemy
occupation, individuals were needlessly murdered or brutalized. Simply
upon suspicion of sheltering and assisting American Naval radioman
George Tweed, many were tortured using horrific methods, some were
murdered, executed without trial.
Born on April 21, 1942, I was a child of the war. I survived only
because my family made many sacrifices. My father, Jose Aguon Unpingco,
a U.S. Navy chief petty officer, was on Guam on December 8, 1941. His
leave was abruptly interrupted. Not able to escape, he was caught by
the Japanese, and beaten. Later during the occupation, he, and my older
sister Gloria, who is now 75 years old, were placed, with other
Chamorros, in slave labor building airstrips at Tiyan. My father, my
mother, Gloria and my two older brothers and three sisters were all
obedient, knowing that disobedience would most certainly bring
suffering on themselves, and perhaps their mother and baby brother. My
father and mother have passed away. However, I pray for closure for my
brothers and sisters and the thousands of Chamorros who are still alive
and still have vivid memories of the war. Every year, I sponsor the
ceremonies to memorialize the Chamorros who were ruthlessly massacred
in caves along Guam's only fresh water lake hoping that for the
brothers and sisters of those butchered, closure would be coming soon.
H.R. 308 will be the first step in making that closure possible.
Knowing that survival would come only with strength of character
and a belief in freedom and liberty, the Chamorros of Guam remained
fiercely patriotic and loyal to America. Throughout the Japanese
occupation, the people's allegiance to American democracy and freedom
remained unwavering. The song ``Uncle Sam Won't You Please Come Home.''
was written by a Chamorro and hummed or sang throughout the island. In
so many ways, this allegiance and faith in their adoptive nation,
provided the spirit and motivation to be strong and stay alive.
Towards the end of the war, when Japanese leaders began realizing
their inevitable doom, and anticipated the arrival of American forces,
the occupiers stepped up their program to buttress their defenses on
the beaches of Agat and Asan, the most obvious points for landing an
invasion force. Likewise, work on airstrips at Tiyan and Jalaguac, at
Orote Peninsula and Harmon Field were intensified in preparation for a
futile attempt to use the few Zeros on hand to fend off liberation
forces. All of this work was accomplished by Chamorro men, women and
children. Forced to work under penalty of death or torture, the
Chamorros became slaves.
Many were forced to march to work camps along the invasion beaches
in Agat to prepare Japanese defensive positions. On July 19th, two days
before the first American soldier set foot on the shores of Agat, these
young Chamorros were marched into caves in the Fena Lake area where
they were brutally murdered with grenades, machine gun fire and
bayonets. In the southern village of Malesso, the angry enemy decided
to simply slaughter Chamorro men and women in caves in the Tinta and
Faha areas. There were plans to annihilate the entire village. A few
days later, the liberation invasion began and the useless slaughter
stopped.
As the days of liberation were coming closer and closer, the enemy
occupiers decided to move all of their prisoners of war to
concentration camps in Mannengon and Talofofo. Forced to march from as
far away as the northern villages of Chiguian, Janom and Jinapsan, the
surviving Chamorros were concentrated in camps along the Manenngon
River in Yona and the Talofofo River in Talofofo. Some, too sickly to
walk, were brutalized and died on the way, their bodies simply
disgracefully thrown on the wayside to decompose and rot. Without
sanitary and health care facilities, without adequate food, and without
shelter from the elements, many, particularly infants and the elderly,
died and were buried in mass graves next to the concentration camps.
All of these incidents are documented and these documents and
eyewitness testimony have been presented in previous testimony before
the House Committee on Natural Resources and Insular Affairs and will
be made available to the Commission for their review. I am confident
that upon that review the members of the Commission, no matter where
they are from, will come to the conclusion that justice has not been
achieved in terms of the human suffering and injustices.
Mr. Chairman, in this sense, and in an effort to resolve this issue
once and for all and, most of all, in an effort to bring closure to the
many who lived through those 1,000 days of horror, I ask this
Committee, in the most humblest of terms, to favorably consider H.R.
308, to report the measure out with its recommendation to do pass, and
to encourage your colleagues in the Senate to approve the measure as
expeditiously as possible.
I understand that there are many important and crucial issues
before this body. And I know that many times, measures such as H.R. 308
can get lost in the shuffle of paperwork. However, I am confident that
every member of Congress can understand the human side of this
particular issue and will support its passage and enactment.
With great sincerity, I extend a most heartfelt Si Yu'os Ma'ase, in
our vernacular, Thank You and God Bless You All. God Bless America. God
Bless Freedom.
______
Territory of Guam,
Hagatna, Guam, July 25, 2001.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources, U.S. Senate,
Washington, DC.
Dear Mr. Chairman: I am transmitting, via facsimile, my unsolicited
testimony on House Resolution 308, the Guam War Claims Commission Act,
to your Committee for its consideration. As one who has lived on Guam
for 52 years, I had the privilege to be here during the reconstruction
and rebuilding of a community devastated by war. I also had the
privilege and honor of attending high school classes with the many
young Chamorros whose lives were abruptly and brutally interrupted I
can only imagine the contributions that could have been made by the
young Chamorros who were killed during the Japanese occupation as I
found that those young Chamorros who survived the war were intense and
passionate in their desire to learn and to improve their lives.
Mr. Chairman, House Resolution 308 will bring closure to a horrific
period in the lives of many Chamorros. It will also bring justice to a
people who were forgotten or who were simply treated as nationals and
property, rather than humans.
I ask that this testimony be included in the official retard and
that my office be placed on your mailing list for any information
relative to this matter.
Sincerely yours,
Madeleine Z. Bordallo,
Lieutenant Governor.
Statement of Madeleine Zeien Bordallo, Lieutenant Governor of Guam
Mr. Bingaman, Honorable Chairman of the Senate Committee on Energy
and Natural Resources, Mr. Akaka, Chairman of the Subcommittee on
Natural Resources, Honorable members of this Committee, Senators:
By way of introduction, I am Madeleine Z. Bordallo, Lt. Governor of
Guam and I am submitting this testimony in support of the most
expeditious passage and enactment of H.R. 308, the Guam War Claims
Commission Act.
Mr. Chairman, I am not a native of Guam and I am not a Chamorro by
birth. I was born in Graceville, a small town on the outskirts of St.
Paul, Minnesota, to a family of German descent. When I first arrived on
Guam, the children looked strangely at the young girl with white skin
and blonde hair.
However, I have lived on Guam since 1948 when I was a fourteen-
year-old high school student. My father was appointed to re-establish
and rebuild the educational system on Guam and other islands, and he
took his family with him. Since then I have been a Guamanian. I married
into a prominent Chamorro family and my daughter and granddaughter
consider themselves native Chamorros. In spirit and in my heart, I
consider myself a Chamorro.
I speak of this tie with the native Chamorros as a means to express
the love that developed within me for the island, its people, its ways
and its culture. Since my arrival on Guam, except for two short years
for college studies, I have never left Guam except for short vacations
or business trips. The island is my home, the people are my people.
I did not experience World War II. Sometimes I wonder if I were
there on December 8, 1941, would I have survived? I know, from accounts
related to me by close friends who were there, of many things that
happened during those hostilities. However, I am an eyewitness to the
aftermath and destruction war brings down on property and the
devastation it causes on human lives. Because I was there, as a young
girl, to see the results of war, I think that I am qualified to testify
on the matter before the Committee and its importance to the Americans
on Guam.
The native Chamorros of Guam, those who lived on Guam between
December 8, 1941 to July 21, 1944, and are still living today, have
been pursuing the re-institution of the Guam Meritorious Claims Act for
many years. Unfortunately, Guam Meritorious Claims Act, implemented
during the rebuilding period on Guam, was a victim of circumstances.
The people were too busy trying to find their families, rebuild their
homes and lives. Those who were displaced in order to build U.S.
military installations were busy trying to build new communities and
settled into their new homes. Communications was non-existent. There
were no phones, no newspapers, and no electronic media. The roads were
devastated and travel from village to village was discouraged because
of the continuing fear of Japanese stragglers (Japanese soldiers not
aware that the war had ended and who remained in hiding in the
jungles).
Mr. Chairman, I do not express this to the Committee because I
heard it from people. Up to 1948 and into the early 50's communications
and transportation on Guam was virtually non-existent; the majority of
the island did not even have electricity. Roads were bombed out and
impassable. Living in Tamuning, it took my family nearly four hours to
travel to Agat, a distance of 21 miles, and we have a car.
The circumstances at the time made it difficult for those
attempting to administer the Guam Meritorious Claims Act to do their
work thoroughly and effectively. The plight of the people and the
condition of living that they found themselves in, made it impossible
for them to prioritize the filing of claims as much as they should
have. As a young American thrown into that arena, I understood then, as
I do now, why and how these things can happen.
I am very pleased that H.R. 308 contains a provision to include a
consideration of the human suffering during the period of Japanese
occupation. The provision to consider death, personal injury, forced
labor, forced march and internment as reasons for just compensation
will be welcomed by the Chamorro people. Many were needlessly murdered
and just as many were brutalized with scars still showing. Airstrips,
used by Japanese and American air forces, and Japanese emplacements, in
preparation for the American invasion, were built with Chamorro slave
labor. And every Chamorro man, woman, and child was forced to march to
concentration camps in Mannengon and Talofofo. In the process many were
murdered. Today, the families memorialize those who were massacred,
simply because the impending invasion angered the Japanese occupiers,
in the Malesso caves at Tinta and Faha and the Fena Lake cave at Mepo.
Guam, as U.S. property, is the only American soil that has ever
been occupied by hostile enemy troops. Japan did not invade Hawaii
after the bombing of Pearl Harbor. Though there were plans to bomb the
U.S. West Coast, it never materialized. After bombing Guam on December
8, 1944 and on December 10, 1944 the Japanese Imperial Army captured
Agana, Guam's capital.
Mr. Chairman, the Chamorro people are ready for this legislation.
They have been waiting for it for 57 years. And, as an American who has
turned Chamorro, I think I can state that they look forward to it, not
because of any promise of compensation, but primarily so that it can
bring closure to a horrific period in their lives.
In this vein, I ask this Committee and the Congress to pass H.R.
308 as soon as possible so that what should have been done then can be
revisited now with the purpose of accomplishing the intent of the Guam
Meritorious Claims Act and with the intent and spirit to bring closure
for those who survived World War II.
______
Office of the People,
Hagatna, GU, July 26, 2001.
Hon. Frank Murkowski,
U.S. Senate, Committee on Energy and Natural Resources, Washington, DC.
Re: H.R. 308
Hafa adai Mr. Chairman: It is indeed fitting that we are present
here today to hear testimony on this item of legislation that will
provide the path necessary to close a chapter in the lives of the
people of Guam who suffered the atrocities of war and the neglect of a
nation.
Guam celebrated the 56th anniversary of its liberation from
Japanese Occupation just five days ago, on July 21, 2001. The
generation who were the direct beneficiaries of the ultimate measure--
given by the American liberating forces--shed tears of gratitude at
remembrance ceremonies throughout the island. But behind the tears, one
can see a longing for a return of the loyalty they gave to these
soldiers, to the nation that has yet to fulfill its responsibility to
them for their own sacrifices and suffers endured--and the ultimate
measure our people gave because they remained loyal to a country that
left them behind--when it evacuated all Americans on Guam when the
threat of a Japanese invasion was imminent.
Throughout the years of Japanese Occupation of Guam in World War
II, the people of Guam endured unimaginable day-to-day experiences.
They did not know what the day would bring, or worst, if they would
survive the following day.
The Japanese military orchestrated numerous massacres, killing
hundreds of island people. In addition to these mass murders, women
were raped and killed. Numerous killings occurred simply because the
Japanese armed forces assumed that they held the supreme power to abuse
the people of Guam.
For those whey were not killed, they were forced to march and were
placed in an internment camp. Many were also forced to work long hours
under the sun, sometimes going without food or water.
Others were physically tortured, and the rest were mentally
tortured.
Such descriptions are simplified. What went on for almost three
years on Guam could never he described the same way it actually
happened. The emotional and physical sufferings the people of Guam had
to go through could never be accurately imagined or felt by those who
did not experience the Occupation.
The island that once lived in paradise was suddenly turned into an
island of hell. Houses, ranches, buildings and many other structures
were destroyed. People lost their homes, loved ones, and basically, the
lives they once had before the Japanese occupied Guam. For three years,
the people of Guam were exposed to vicious horrors and terrors of
military occupation.
Certainly, no one can travel back in time to repair the damages
done. Attempts to somehow compensate the survivors of this period can
be traced back in history. Unfortunately, each attempt was
unsuccessful. Guam was left out in numerous legislations and foreign
treaties that sought to justly compensate the victims of the War.
Due to a peace treaty with Japan in September of 1951 in San
Francisco, California, claims of reparations against Japan by United
States citizens were waived. Therefore, the people of Guam cannot bring
such claims to the Japanese Government.
The only other means is to bring such issue to the United States
Congress. Since 1972, each Guam Delegate to Congress tried to introduce
a bill for restitution from the United States Government. But each time
the bill failed. Until now, Guam has not been fairly recognized for the
sacrifices it has made as the only American soil occupied by enemy
forces during World War II.
Decades have quickly passed by since the Occupation. This also
means that thousands of original victims and survivors of the
atrocities have passed away and only a few remain today.
Therefore, I strongly urge the Senate to take H.R. 308 into
consideration since we can no longer waste anymore time. The U.S.
government must realize this objective and to compensate them before
they are all gone.
The Japanese stripped off the natural rights of the people of Guam.
These human rights violations include death, personal injury, forced
labor, forced march, and internment. We cannot undo what was done.
Nevertheless, we can restore a little bit of what the Japanese took
away from the people of Guam by continuing to keep our forefathers'
principles that men are ``endowed with certain unalienable rights''
through the approval of the Guam War Claims Review Commission Act.
I humbly beseech this good and august body to act. They say that
we--all humans--inherently know what is right; the hard part is to do
what is right.
In my heart, I am certain that this body knows that passing this
bill is the right thing to do; it must now do the hard part and do what
is right.
On behalf of Chamorro-Americans long gone from this good earth, and
those soon to leave us, I thank you. Un Dangkulu Na Si Yu'us Maase.
Respectfully,
Vicente C. Pangelinan,
Minority Leader.
______
Office of the People,
Hagatna, GU, July 26, 2001.
Hon. Frank Murkowski,
U.S. Senate, Committee on Energy and Natural Resources, Washington, DC.
Re: H.R. 309
Hafa adai Mr. Chairman: It is my distinct honor and pleasure to
appear before this Committee to support the passage of H.R. 309, to
provide the determination of withholding taxes under the Guam income
tax.
While Guam struggles with a depressed economy, we have doubled our
efforts to help ourselves with aggressive efforts in seeking investment
resources from without Guam to provide the economic revitalization for
the benefit of our people. Despite our efforts, the legal structure and
application of the internal revenue code to these foreign investors
places Guam at a disadvantage with other jurisdictions. Specifically, I
am referring to the application of the rate of withholding tax on the
income of these investors.
This disparage treatment has hindered our efforts and aggravated
our conditions to the point of economic depression. Unemployment on
Guam has risen to over fifteen percent, bankruptcy filings are
occurring at a record pace and government revenues will fall to the
lowest levels in ten years.
Guam does not generate the necessary investment capital internally
to lift us out of these depressed economic conditions and thus we must
rely on investment from outside sources.
Passage of this act will not give us equality, but at least we will
realize equity in the treatment of outside investors, so vital and
essential to our economic growth. This change in treatment of the rate
of withholding taxes will place Guam as close to level as we can get,
without full integration into the tax structure. That discussion I will
leave for another day.
I want to thank our Delegate, Congressman Underwood, for his
valiant efforts in presenting this issue before the Congress. I hope
and pray for your favorable action.
On behalf of the people of Guam, I thank you for this opportunity
to plead their case and remain confident that your action will benefit
them all.
Respectfully,
Vicente C. Pangelinan,
Minority Leader.