[Congressional Record Volume 140, Number 4 (Friday, January 28, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: January 28, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                   FARMERS HOME ADMINISTRATION LOANS

  Mr. CONRAD. Mr. President, I awoke this morning and got my copy of 
the Washington Post and found, on page 1, a story that was very 
disturbing. Headline: ``Agency Fails To Collect Millions in Loans to 
Wealthy Farm Owners.''
  The story talks about FmHA, Farmers Home Administration, and their 
failure to pursue people who have borrowed money from it, in some cases 
millions of dollars, and have failed to repay those loans.
  First, I want to commend the Washington Post for this article. They 
were able to get the specific names and some specific examples of 
people that, because of privacy provisions, we have not been able to 
get. I think it is very useful that they have focused a light on very 
wealthy farmers who have gotten loans under programs that used to 
exist--that no longer do, in most cases--but who have failed to pay 
those loans back and whom FmHA has failed to make pay back these 
delinquent loans.
  I have spoken this morning to the new administrator of FmHA, Mr. Mike 
Dunn. I have asked him if he would be prepared to come to the hill next 
week to have a hearing on this question so we can hear directly from 
the new administrator what he intends to do to go after these 
deadbeats. I have spoken to my counterpart on the Subcommittee on Farm 
Credit, Senator Grassley of Iowa, who has agreed to be ready for those 
hearings. I have also spoken to both the chairman of the Agriculture 
Committee, Senator Leahy, and to the ranking member, Senator Lugar, and 
all of them are supportive of our going forward next week with a series 
of hearings on the questions raised by this article.
  One thing I think my colleagues should know is most of these loans 
were done under programs that have been killed or sharply curtailed by 
Congress in years past. The economic emergency loans, the disaster 
emergency loans that are the focus of most of these examples were badly 
abused and Congress recognized that and took action years ago.
  Nonetheless, we are still left with the problem of collecting on 
these loans. In one case, a man owes $3.5 million in backpayments, has 
a $900,000 beach house, and has a $1.7 million office building. 
Clearly, he is not someone without assets, and he ought to be pursued. 
He ought to be made to pay what he owes.
  In my discussion with the FmHA Director this morning, I pointed out 
to him two provisions in law that allow that agency to take action. 
First, people are not supposed to receive any writedown or change in 
their loan status if the delinquency was not beyond the power of the 
borrower. In other words, if the delinquent had an ability to pay that 
loan or reduce the loan amount or to pay the interest on that loan, 
they should be compelled to do it. That is in the law.
  Second, we have provided in the law that if somebody operated in bad 
faith, they would not be eligible for any of the loan servicing 
provisions of the law. They would not be eligible for writedown, they 
would not be eligible for restructuring, they would not be eligible for 
any favorable treatment from the agency.
  Mr. President, I wanted to alert my colleagues that action is going 
to be taken with respect to these wealthy farmers who are not paying 
what they owe. It is intolerable, it is unacceptable and action is 
going to be taken and it is going to start immediately.
  (The remarks of Mr. Conrad pertaining to the introduction of S. 1808 
are located in today's Record under ``Statements on Introduced Bills 
and Joint Resolutions.'')
  Mr. CONRAD. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. HELMS. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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