[Congressional Record Volume 140, Number 2 (Wednesday, January 26, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: January 26, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
PRESIDENTIAL SUCCESSION
Mr. LEAHY. Mr. President, I will take only a moment or two, but I
hope the schoolchildren and others who watched the State of the Union
Message yesterday and listened to some of the commentaries afterward do
not make a mistake that can get them to flunk an exam on the U.S.
Constitution or U.S. Government. I heard many commentators go on to
talk about the fact that the President, the Vice President, Speaker of
the House, and everybody is there in the Chamber and that they always
hold back one member of the Cabinet so there would be somebody to take
over as President if some terrible event happened.
Well, I advise them to go and read the Constitution and the statutes
governing Presidential succession, title 3, United States Code, section
19. All they had to do was look down front and notice that the
distinguished President pro tempore of the U.S. Senate was obviously at
home watching the State of the Union Message. So I say to my friends in
the national media, the Constitution says that if the President is
disabled or can no longer serve, then the Vice President takes over.
According to statute, in the absence of the Vice President, it is the
Speaker of the House. In the absence of the Speaker of the House, it is
the President pro tempore of the Senate. Only then does the Presidency
succeed to a Cabinet member, the Secretary of State, followed by other
Cabinet members in order as set out by the statute. It does not jump
from the Speaker of the House to whichever member of the Cabinet
happened to be asked to stay at home or in a pizza parlor the night of
the State of the Union Message. I do not think most of the press corps
that covers us would make that mistake. But every year we hear this. I
hope they will check to see whether the President pro tempore of the
Senate was there.
I spoke to my very good friend, the President pro tempore of the
Senate, the senior Senator from West Virginia, Senator Byrd, this
morning. I told him I was going to mention this. He chuckled. So just
for the record, it is a nice thing to talk about, which member of the
Cabinet was not there, but the succession does not go from the Speaker
of the House to the Cabinet; it goes to the President pro tempore of
the Senate.
I yield the floor.
Mr. KERRY. Mr. President, we are about to proceed on another
amendment, which will take a few moments. I ask unanimous consent that
the pending amendments be temporarily laid aside.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 1255
(Purpose: To control the export of items to terrorist countries)
Mr. PRESSLER. Mr. President, I send an amendment to the desk on
behalf of myself, Senator Helms, and Senator D'Amato and ask for its
immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The bill clerk read as follows:
The Senator from South Dakota [Mr. Pressler], for himself,
Mr. Helms and Mr. D'Amato, proposes an amendment numbered
1255.
Mr. PRESSLER. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
On page 179, after line 6, add the following:
SEC. 714. CONTROL OF REEXPORTS TO TERRORIST COUNTRIES.
Section 6(j) of the Export Administration Act of 1979 (50
U.S.C. App. 2405(j)) is amended by adding at the end the
following new paragraphs:
``(5) Upon the request of the chairman or ranking minority
member of the Committee on Foreign Relations or the Committee
on Banking, Housing and Urban Affairs of the Senate or the
Committee on Foreign Affairs or the Committee on Banking,
Finance and Urban Affairs of the House of Representatives,
the President shall include in the notification required by
paragraph (2)--
``(A) a detailed description of the goods or services to be
offered, including a brief description of the capabilities of
any article for which a license to export is sought;
``(B) an evaluation, prepared by the Director of the Arms
Control and Disarmament Agency, in consultation with the
Secretary of State and the Secretary of Defense, of the
manner, if any, in which the proposed export would--
``(i) contribute to an arms race;
``(ii) support international terrorism;
``(iii) increase the possibility of an outbreak or
escalation of conflict;
``(iv) prejudice the negotiation of any arms controls; or
``(v) adversely affect the arms control policy of the
United States;
``(C) the reasons why the foreign country or international
organization to which the export or transfer is proposed to
be made needs the goods or services which are the subject of
such export or transfer and a description of the manner in
which such country or organization intends to use such
articles, services, or design and construction services;
``(D) the reasons why the proposed export or transfer is in
the national interest of the United States;
``(E) an analysis by the President of the impact of the
proposed export or transfer on the military capabilities of
the foreign country or international organization to which
such export or transfer would be made;
``(F) an analysis by the President of the manner in which
the proposed export would affect the relative military
strengths of countries in the region to which the goods or
services which are the subject of such export would be
delivered and whether other countries in the region have
comparable kinds and amounts of articles, services, or design
and construction services;
``(G) an analysis of the impact of the proposed export or
transfer on the United States relations with the countries in
the region to which the goods or services which are the
subject of such export would be delivered;
``(H) the projected delivery dates of the goods or services
to be offered; and
``(I) a detailed description of weapons and levels of
munitions that may be required as support for the proposed
export.
``(6) If the Congress within 30 calendar days after
receiving a notification under paragraph (2) enacts a joint
resolution prohibiting the proposed export, then no license
may be issued, unless the President states in his
notification that an emergency exists which requires such
export in the national security interest of the United
States. If the President so states that an emergency exists,
he shall set forth in the notification a detailed
justification for his determination, including a description
of the emergency circumstances which necessitate the
immediate issuance of the license and a discussion of the
national security interest involved.
``(7)(A) Any joint resolution under this subsection shall
be considered in the Senate in accordance with the provisions
of section 601(b) of the International Security Assistance
and Arms Export Control Act of 1976.
``(B) For the purpose of expediting the consideration and
enactment of joint resolutions under this subsection, a
motion to proceed to the consideration of any such joint
resolution after it has been reported by the appropriate
committee shall be treated as highly privileged in the House
of Representatives.
``(8) For purposes of this section, the terms `export' and
`transfer' shall include any reexport, third party transfer
or other consignment of United States-origin goods or
services.''.
Mr. PRESSLER. Mr. President, this amendment amends section 6j of the
Export Administration Act to require, upon the request of the
committee, a more detailed notification to Congress of potentially
dangerous U.S. exports to terrorist states. It is supported by Senators
Helms and D'Amato. The notification requirement parallels section 36B
of the Arms Export Control Act almost exactly. It also gives Congress
the right to disapprove the licensing of such sales by joint resolution
within 30 days of notification and explicitly defines export and
transfer to include the reexport of controlled items.
Mr. President, I could go into some detail here about the Boeing 727
jets transferred from Kuwait to Syria. Syria is a terrorist state, and
the jets contain dual use items generally considered militarily useful.
The State Department did not wish to notify Congress of this transfer
of U.S. origin goods, but the Department of Commerce insisted. After
consulting with congressional staff and meeting with almost universal
disapproval of the transfer, State went ahead and, within hours,
recommended to Commerce that they license the transfer.
I believe this amendment has been agreed to on both sides. I urge its
adoption.
Mr. KERRY. Mr. President, this is a good amendment. I ask unanimous
consent that I be added as a cosponsor.
The PRESIDING OFFICER (Mr. Metzenbaum). Without objection, it is so
ordered.
Mr. KERRY. This amendment would significantly strengthen our arms
control regime, and for the reasons the Senator described, we are
supportive of it.
Mr. HELMS. Mr. President, my amendment is a simple solution to a
complicated problem. Basically, the law now says that every time U.S.
origin goods are exported to a terrorist country, the Secretary of
State should decide if those goods could help the terrorist state
militarily. If he determines that is the case, Commerce must decide
whether to issue a license and in the case of a positive decision, must
inform Congress 30 days in advance.
The laws seem clear on this matter, but not clear enough for State
and Commerce. They disagree on what constitutes assistance to a
terrorist state's military potential; they disagree on what the law
means; they also disagree on what consultation and notification of
Congress requires.
Most recently, the State Department came up to consult with
congressional staff on the proposed licensing of a transfer of three
Kuwaiti 727's to Syria, a terrorist state. Republicans and Democrats
alike were uncomfortable with the transfer as presented. Despite
universal expressions of concern from the Hill, State went ahead on the
same day of its briefing to Congress and recommended the license be
issued.
My amendment won't teach Commerce and State better manners toward
Congress. What it will do is give Congress the option of a better
explication of the proposed export, give Congress the option of an
expedited resolution of disapproval, and I hope, bring some gravitas to
future congressional expressions of concern about such exports to
terrorist states.
The PRESIDING OFFICER (Mr. Kerrey). The question is on agreeing to
the amendment.
The amendment (No. 1255) was agreed to.
Mr. KERRY. Mr. President, I move to reconsider the vote.
Mr. PRESSLER. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. FEINGOLD addressed the Chair.
The PRESIDING OFFICER. The Senator from Wisconsin.
Mr. FEINGOLD. I ask unanimous consent that the pending amendment be
set aside.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 1256
(Purpose: To prohibit third-party incentive payments and requiring
reporting on offset agreements)
Mr. FEINGOLD. Mr. President, I send an amendment to the desk and ask
for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The bill clerk read as follows:
The Senator from Wisconsin [Mr. Feingold] proposes an
amendment numbered 1256.
Mr. FEINGOLD. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
At the appropriate place in the bill, insert the following
new sections:
SEC. . REPORTS UNDER THE ARMS EXPORT CONTROL ACT.
(a) Quarterly Reports.--Section 36(a) of the Arms Export
Control Act (22 U.S.C. 2776(a)) is amended--
(1) by striking ``and'' at the end of paragraph (10);
(2) by striking the period at the end of paragraph (11) and
inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(12) a listing of all offset agreements proposed to be
entered into in connection with the sale of any defense
article or defense service.''.
(b) Numbered Certifications With Respect to Government-to-
Government Sales.--Section 36(b)(1) of the Arms Export
Control Act (22 U.S.C. 2776(b)(1)) is amended after the
second sentence by inserting the following new sentence:
``Each such numbered certification shall contain a
description of any offset agreement proposed to be entered
into in connection with such letter of offer to sell.''.
(c) Numbered Certifications With Respect to Commercial
Exports.--Section 36(c)(1) of the Arms Export Control Act (22
U.S.C. 2776(c)(1)) is amended after the first sentence by
inserting the following new sentence: ``Each such numbered
certification shall also contain a description of any offset
agreement proposed to be entered into in connection with such
export.''.
(d) Definitions.--Section 36 of the Arms Export Control Act
(22 U.S.C. 2776) is amended by adding at the end the
following:
``(e) For purposes of this section--
``(1) the term `offset agreement' means an agreement,
arrangement, or understanding between a United States
supplier of defense articles or defense services and a
foreign country under which the supplier agrees to purchase
or acquire, or to promote the purchase or acquisition by
other United States persons of, goods or services produced,
manufactured, grown, or extracted, in whole or in part, in
that foreign country in consideration for the purchase by the
foreign country of defense articles or defense service from
the supplier; and
``(2) the term `United States person' means--
``(A) an individual who is a national or permanent resident
alien of the United States;
``(B) any corporation, business association, partnership,
trust, or other juridical entity--
``(i) organized under the laws of the United States or any
State, district, territory, or possession thereof; or
``(ii) owned or controlled in fact by individuals described
in subparagraph (A); and
``(C) the United States Government or any agency or
instrumentality thereof.''.
SEC. . PROHIBITION ON THIRD PARTY INCENTIVE PAYMENTS
UNDER THE ARMS EXPORT CONTROL ACT.
Section 39 of the Arms Export Control Act (22 U.S.C. 2779)
is amended by adding at the end the following new subsection:
``(e)(1) No sale may be made, no credits may be extended,
no guarantees may be issued, and no licenses may be approved
under this Act with respect to the sale of any defense
article or defense service to a foreign country unless the
United States supplier of such articles or services first
certifies that neither the supplier nor any employee, agent,
or subcontractor thereof will make any third-party incentive
payments for the purpose of satisfying, in whole or in part,
any offset agreement with that country.
``(2) For purposes of this subsection--
``(A) the term `offset agreement' means any agreement,
arrangement, or understanding between a United States
supplier of defense articles or defense services and a
foreign country under which the supplier agrees to purchase
or acquire, or to promote the purchase or acquisition by
other United States persons of, goods or services produced,
manufactured, grown, or extracted, in whole or in part, in
that foreign country in consideration for the purchase by the
foreign country of defense articles or defense services from
the supplier;
``(B) the term `third-party incentive payments' means cash
incentives, fees, or compensation of any kind made by a
United States supplier of defense articles or defense
services or by any employee, agent, or subcontractor thereof
to any other United States person to include that United
States person to purchase or acquire goods or services
produced, manufactured, grown, or extracted, in whole or in
part, in the foreign country which is purchasing those
defense articles or services; and
``(C) the term `United States person' means--
``(i) an individual who is a national or permanent resident
alien of the United States;
``(ii) any corporation, business association, partnership,
trust, or other judicial entity--
``(I) organized under the laws of the United States or any
State, district, territory, or possession thereof; or
``(II) owned or controlled in fact by individuals described
in subparagraph (A); and
``(iii) the United States Government or any agency or
instrumentality thereof.''.
Mr. FEINGOLD. Mr. President, I understand that this amendment will be
accepted will be accepted by the managers. This amendment was approved
last year by the Foreign Relations Committee. It deals with reporting
requirements and third party payments relating to offset agreements in
connection with foreign military sales subject to the Arms Export
Control Act.
This is an issue that I became interested in because of an experience
earlier this year by a Wisconsin company that makes papermaking
machinery and which could affect many jobs in the State of Wisconsin if
this practice continues.
I have consulted closely with the General Accounting Office in
developing this amendment.
The amendment would require additional information be included in the
reports received by the Senate Foreign Relations Committee and close a
loophole that the GAO has identified regarding third-party payments to
induce American companies to purchase foreign goods.
As I indicated, I became involved in this issue last year because of
something that happened to a papermaking machine company in the State
of Wisconsin, Beloit Corp. This Wisconsin company was in the process of
making a bid on a rather large papermaking machine being purchased by a
paper company. They were told by their potential customer that a
defense contractor had approached them and had offered to pay $1.5
million if the paper company would award the contract to a Finnish
company over the American company. The Wisconsin company came to me
asking whether this was legal.
That inquiry led me into a fascinating, but rather obscure area of
international arms sales--offset agreements whereby our defense
contractors make commitments to secure sometimes dollar-for-dollar
sales of foreign goods and services in the United States in exchange
for foreign military sales.
I asked the General Accounting Office and several Federal agencies to
look into this area. GAO has been expressing concerns about these
agreements that began a few years ago, and have been steadily growing.
Our United States trade representative told me that the situation I
had encountered demonstrated the potentially distortive effects of
offsets and that while we had a memorandum of understanding with the
Government of Finland that discouraged offsets, it does not
significantly restrict them.
The Department of Commerce indicated that it had long been concerned
with the potential impact of military offsets on the U.S. industrial
base, and pledged to look further into the specific case I had raised.
The Department of Defense indicated that since 1990, U.S. Government
agencies were prohibited from entering into or committing any U.S.
firms to offset agreements and U.S. funds were prohibited from
financing offsets, but defense contractors were free to enter into
these commitments as part of their ongoing business activities.
I also found out that information about these types of arrangements
is not provided to the Foreign Relations Committee when it is notified
under the Arms Export Control Act about a proposed sale, although this
information can be requested if the offset commitment has been directly
made by the United States.
The amendment would require that the Senate Foreign Relations
Committee, and the House of Representatives, be notified of the
existence of an offset agreement at the time of notification of a
pending sale under the Arms Export Control Act.
The amendment would also prohibited the use of third party incentive
payments to secure offset agreements in any sale subject to the Arms
Export Control Act.
I don't have any problems with the concept of defense contractors
entering offset agreements for coproduction, or subcontracting, or many
marketing assistance types of agreements. But I am deeply troubled by a
defense company going into my State and offering to pay a third party
$1.5 million if they will award a contract to a foreign company over an
American competitor in a field like paper-making which is totally
remote from the defense industry.
The General Accounting Office advised me that this activity appears
to fall between the cracks of various statutes. Neither the Anti-
Kickback Act nor the Foreign Corrupt Practices Act seems to clearly
reach this kind of activity. The Anti-Kickback Act would prohibit these
kinds of payments if it were a Government contract involved; the
Foreign Corrupt Practices Act covers payments to foreign officials to
secure contracts, not payments by U.S. companies to U.S. companies to
direct business to foreign entities.
Mr. amendment is directed only at the practice of offering third
party incentive payments--that is cash payments--to induce American
companies to purchase foreign goods and services. It doesn't prohibit
offset agreements or other means of satisfying offset commitments--just
the practice of paying U.S. companies to award contracts to foreign
competitors.
Mr. President, since the time the Foreign Relations Committee adopted
these amendments, the defense company that was involved in the problem
with the Wisconsin paper machinery company announced that it would no
longer be making these types of third party incentive payments in the
area of paper machinery. I applauded that decision. However, I believe
that it is important to enact these amendments into law so that other
companies are not subject to these kinds of tactics. I also believe
that it is important that Congress receive information from the
administration which discloses the nature of these agreements so that
their impact upon other U.S. business interests can be taken into
consideration when decisions are made about arms sales.
I yield the floor.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KERRY. Mr. President, this is a good amendment and, indeed, we
are prepared to accept it. We hope it will have a positive impact on
the procurement process, and the Senator is to be congratulated for
bringing it. I think it will improve the current status.
Does the Senator from South Dakota wish to speak?
Mr. PRESSLER. We are prepared to accept this amendment.
The PRESIDING OFFICER. Is there further debate on the amendment?
Without objection, the amendment is agreed to.
So the amendment (No. 1256) was agreed to.
Mr. KERRY. Mr. President, I move to reconsider the vote.
Mr. PRESSLER. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from Ohio is recognized.
Mr. METZENBAUM. Mr. President, I ask unanimous consent that the
Senate go into morning business for a period not to exceed 10 minutes.
The PRESIDING OFFICER. Is there objection?
Mr. KERRY. Mr. President, reserving the right to object, and I will
not object, I simply would like to ask my colleague if I could propound
a quick unanimous-consent request.
Unanimous-Consent Agreement
Mr. KERRY. Mr. President, I ask unanimous consent that the vote on my
motion to table amendment No. 1254 occur at 2 p.m.; that immediately
following the disposition of that amendment the Senate vote on
amendment No. 1253, with no amendments in order to either amendment or
to the language proposed to be stricken.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. KERRY. Mr. President, I ask for the yeas and nays on the
amendment No. 1254.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
Mr. KERRY. Mr. President, I move to table the amendment No. 1254, and
I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
Mr. KERRY. I thank the Senator.
The PRESIDING OFFICER. Under the order that vote will occur at 2 p.m.
____________________