[Congressional Record Volume 140, Number 11 (Tuesday, February 8, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: February 8, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
WHITEWATER
Mr. D'AMATO. Mr. President, today is February 8. We can mark off one
more day in the Whitewater/Madison County. There are only 20 days
remaining until February 28.
While we say we have 20 days remaining, in essence, as it relates to
business days that we may be in session, it is a lot less. It is, at
the most, 7 days: February 9, 10, and if we are in session, the 11th,
because we go out and do not come back until the 22d. So that would
then be 5, 6, 7--8 business days. And we have not gotten a response yet
as it relates to the status of the statute of limitations which will
run out on February 28.
Again, the Senator says the statute of limitations, people do not
really understand. What that means is once that date is reached, the
28th, anyone who might have liability as it relates to the failure of
this institution, which cost the taxpayers $47 million, will no longer
have liability unless two things are achieved: First, a tolling
agreement is obtained. That is something that is done regularly in
these cases. That is not extraordinary. So what we are asking of the
RTC is: Are you undertaking the tolling agreement that you do
regularly? And, second, if not: Will you be undertaking, then, a suit
against those people who have potential liability, to protect the
taxpayers and thereby find additional opportunity to refine the lawsuit
and, in essence, toll the statute?
I have to say, the RTC's response to date is one of obfuscation. In
the two letters we have sent to them, they have really failed to answer
the question directly: Is this the last day? We believe it is, February
28. Second, are you seeking these tolling agreements? If you are not,
why are you not and will you be commencing action against those people
who might have liability before the statute of limitations runs out?
That is why I and a number of my colleagues, 40 Senators at this time
have joined with me in sending a letter today to the interim RTC Chief,
and that is Mr. Altman. Thirty-nine of my colleagues have joined me. We
have requested a prompt and comprehensive response from the RTC.
Under ordinary circumstances, one might believe that a prompt
response would be forthcoming. I am somewhat doubtful. I believe we are
getting the old ``four-corner stall''. This is being viewed as a game.
I think we call it stonewalling. That is what is taking place. Indeed,
Mr. Altman has an obligation, notwithstanding his tremendous
responsibilities as Deputy Secretary of the Treasury, to respond to us
because he is the interim Chief, by the way, of the RTC. We do not have
a head of the RTC. He is the acting Chief. And that raises some other
very interesting and difficult questions.
Can a man who is appointed by another person allow the kind of review
necessary and make a recommendation that may impact upon the appointing
official? I think it is very, very doubtful if that can be done without
there being a tremendous burden placed on that person. One that
ethically and morally should not be placed on Mr. Altman. It is wrong.
But that is exactly and precisely what we have today.
Mr. MURKOWSKI. I wonder, Mr. President, if the Senator from New York
will yield for a question?
Mr. D'AMATO. Certainly.
Mr. MURKOWSKI. First, let me compliment him for his efforts in
generating the signatures of 40 Senators on the letter to Mr. Altman.
But I wonder if I could inquire of the distinguished ranking member
of the Banking Committee specifically whether or not there is an
oversight board at the RTC that determines strategies and suggests
policies to the Chief Executive Officer; in this case, the acting
Chief, Mr. Altman?
Mr. D'AMATO. There is such a board. It is known as the Thrift
Depositor Protection Oversight Board.
Mr. MURKOWSKI. Can the Senator give us an idea of who the members of
the board are and what the status and authority of the board might be?
Mr. D'AMATO. I can. By statute there are seven members of the board.
They consist of the Secretary of the Treasury, Lloyd Bentsen; the
Federal Reserve Chairman, Alan Greenspan; the Director of the Office of
Thrift Supervision--we now have an acting Director; the Chairman of the
FDIC--we have an acting Chairman there; and Chief Executive Officer of
the RTC--in this case, that is Mr. Altman, who is the interim CEO.
In addition to those five members, there are two independent members.
Neither of these posts are filled. They are presently vacant, the post
of the two independent members.
Mr. MURKOWSKI. The Senator from New York has indicated there are two
members, the Director of the Office of Thrift Supervision and the CEO
of RTC, who have not been confirmed in their posts. And the independent
members as well. Two of those have not been appointed.
I wonder if the Senator from New York has any idea as to why these
posts have not been filled by permanent appointees?
Mr. D'AMATO. I cannot answer that question. There are four vacancies.
I know there have been difficulties with one of them, the filling of
one of those posts and nomination for another of these is pending. But
why the other two independents have not been filled, I have no reason.
I think for the board to be fully functional, to have the kind of
review necessary and encompassed by the statute, certainly those posts
should be filled.
Mr. MURKOWSKI. I wonder, it is my understanding that this board has
broad authority relating to the overall direction the RTC takes. For
instance, the board is authorized to review the RTC's overall
strategies, policies, and goals for resolution of various cases, and
cases that may require the modification of such strategies. This board
obviously has some authority in policymaking, to communicate to the
Chief Executive Officer of RTC.
Mr. D'AMATO. That is correct. It does have the ability to set that.
Indeed, that is its goal, not only to review but set policy.
I note the RTC itself is authorized to take whatever actions it deems
appropriate with respect to individual cases and their resolution,
without the approval or disapproval of the board.
Mr. MURKOWSKI. So, in other words, the RTC could determine in this
case to seek a tolling of the statute of limitations in the Madison
case without having to gain the approval of the oversight board? That
is within the authority of the Chief Executive Officer, Mr. Altman? Or
it appears to be?
Mr. D'AMATO. That is correct. The oversight board sets a general
strategy for the RTC, but the RTC operates on a case-by-case basis,
without having to seek approval of the board.
Mr. MURKOWSKI. Further, it is my understanding that the oversight
board may issue rules and regulations and standards consistent with its
responsibilities in setting policies and goals for case resolution.
In Mr. Altman's February 1 letter to the Senator, he indicated that
the RTC would pursue all appropriate remedies, using ``standard
procedures.'' That would suggest to me it is a standard procedure to
seek tolling agreement in civil proceedings seeking a recovery of
taxpayer funds. I think in this instance we are talking about something
in the area of $47 million, or thereabouts. So would it not be fair to
assume that the oversight board has rules that would require seeking
tolling agreements in a case such as Madison?
Mr. D'AMATO. I know of no reason why the board could not establish
standards pertaining to the RTC's use of tolling agreements, as well as
other general litigation policies. But I think what we have here is a
policy and a practice which has been followed in all of the matters; in
all of these cases where the statute is running, tolling agreements are
regularly sought.
Mr. MURKOWSKI. So this would not be an exception? This would be a
conventional policy of RTC, to simply extend the tolling agreement or,
in the event the RTC cannot obtain the tolling agreements, then the RTC
could file appropriate civil claims against all individuals whom the
RTC has reasonable cause to believe may be liable to the United States,
prior to the date of February 28, thereby tolling the statute and
allowing time for refinements to the original complaint?
Mr. D'AMATO. The Senator from Alaska is absolutely correct. That is
the frustrating part. Here we are--at one point a half-dozen Senators;
at another point a number of Senators and Congressmen--attempting to
get from the RTC the answer and the facts.
What, if anything, are you doing to protect the interest of the
taxpayers in this case? Are we looking to extend----
The PRESIDING OFFICER. The Senator's time has expired.
Mr. D'AMATO. Mr. President, I ask unanimous consent that I might be
permitted to proceed as in morning business for another 10 minutes.
The PRESIDING OFFICER. Is there objection? Without objection, it is
so ordered.
Mr. D'AMATO. I thank my colleagues and I thank the Chair.
What, if anything, are we doing to see to it, can we have an
assurance that the tolling agreements are being sought or that in lieu
of that, if they are not able to get them from the various parties that
might have liability, this being the case, if it is done regularly,
then in that case that litigation would be commenced in order to
protect the rights of the taxpayers.
The clock keeps ticking. It took us almost a month to get our second
response. It is only because Chairman Riegle intervened, and we still
have not gotten a satisfactory response. This Senator has now been
forced to turn to colleagues, 39 of my colleagues have joined me--40
Senators--and we sent a letter today, which I will ask to be entered
into the Record and read--although I know my colleague has another
question.
Mr. MURKOWSKI. Prior to reading it, because I do not want to
interrupt the continuity, the Senator from Alaska believes we should
take a closer look at the operations of the oversight board and
consider the appropriateness of contacting its members with regard to
this case and the potential for tolling the statute of limitations.
Obviously, we do not have the assurance of Mr. Altman that he intends
to do it. He, in effect, said he might do it. But it would appear that
the board, which has a responsibility of setting policy, could make a
recommendation or perhaps direct him to do it.
I am wondering if the Senator from New York is prepared to pursue
this as an alternative avenue if, indeed, a positive response is not
forthcoming from Mr. Altman relative to his intention to extend tolling
on the statute of the limitations in the Madison case?
Mr. D'AMATO. It is my hope that the Banking Committee will have an
oversight hearing prior to the February 28 deadline. Chairman Riegle
has indicated he will hold hearings. I believe they have become almost
academic. If we do not toll them prior to the 28th, that will put us
into the week of the 22d.
I intend to raise this issue because, indeed, if we have not been
satisfied that this case will be handled in the normal course, then I
believe that it would be proper and correct for us to see if we could
not get a determination from them instructing the RTC and setting down
guidelines for them to see to it that they take the appropriate action
to keep the statute from running out.
Mr. MURKOWSKI. As the Senator from New York has indicated, we are
really up against some time realities here as you pointed out, to try
and obtain the Senate Banking Committee's oversight hearings prior to
February 28, knowing we have a recess that is going to be starting
Friday of this week, which takes all of next week, and that leaves us
just roughly 5 to 6 days in the last week of the month remaining.
Of course, the statute continues to go on and we continue to
communicate with the chairman of the RTC. I encourage my colleague to
consider the merits of directing a communique to the oversight board
and perhaps copying the letters, the correspondence that has already
been sent to Mr. Altman pleading for an extension of the tolling so
that no one can say they were not notified who is in a position of
responsibility.
Finally, let me commend my colleague, the Senator from New York and
ranking member of the Banking Committee for his commitment to pursue
this matter. I think it is his intention today to deliver or have
delivered to the RTC the signature of 40 Senators that urge an
extension of that tolling. I am sure it is the Senator's intention to
put that in the Record and perhaps read that letter as well.
So just let me wind this up by indicating that I think what is being
initiated here to try and generate action within the timeframe prior to
February 28 is in the best interest, certainly of the taxpayers of this
country, already seeing some $47 million--no small amount by any
means--jeopardized by the action of Madison and the realization that
Madison should be treated like any other S&L that has failed and the
appropriate action by the RTC oversight board, as well as the chief
executive officer, should be followed simply as a matter of standard
procedure.
So I commend the Senator and thank him for his diligence in this
matter.
Mr. D'AMATO. Let me thank my colleague and, indeed, I believe I will
take that suggestion and see to it that a copy of our prior
communication to Mr. Altman, as well as today's letter, be sent to the
five members who are on the oversight board so that they understand
that we will be seeking answers from them and maybe getting a decision
from them and maybe they can contact Mr. Altman in regard to this.
Mr. President, I ask unanimous consent that a copy of the letter--I
am not going to read it--we sent dated February 8, signed by 40
Senators, to Mr. Altman be printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
U.S. Senate,committee on banking, housing and urban
affairs,
Washington, DC, February 8, 1994.
Mr. Roger Altman,
President Interim and Chief Executive Officer, Resolution
Trust Corporation, Washington, DC.
Dear Mr. Altman: The RTC has acknowledged that the statute
of limitations for any civil action arising from the failure
of Madison Guaranty will run out on February 28. After
February 28, the RTC will not be able to recover any more of
the $47 million the taxpayers were forced to pay to close
Madison.
The RTC took over Madison in 1989. Presumably, the RTC has
thorough knowledge of the institution, the reasons for its
failures and the individuals and activities that contributed
to its demise. The RTC made a criminal referral to the
Justice Department perhaps as early as October, 1992 based on
its extensive information and investigation.
The RTC's inaction on the civil side is therefore even more
disturbing. With the civil statute of limitations about to
run out, the RTC must take action immediately. Unless the RTC
takes actions, the rights of the American people to justice
and financial recovery will be forfeited to a legal
technicality.
Your February 1 letter offered assurances ``that the
Resolution Trust Corporation is conducting a thorough review
of the potential civil claims it possesses as a result of the
failure of Madison.'' Moreover, you stated that the RTC
``will vigorously pursue all appropriate remedies using
standard procedures in such cases, which could include
seeking agreements to all the statute of limitations.''
Beyond this general response, we are seeking specific
answers to the following questions:
What is the RTC doing to obtain voluntary agreements to
extend the statute of limitations from all potential
defendants in the Madison/Whitewater matter beyond February
28, 1994?
In the event the RTC cannot obtain tolling agreements, will
the RTC file appropriate civil claims against all individuals
whom the RTC has reasonable cause to believe may be liable to
the United States prior to February 28, thereby tolling the
statute and allowing time for refinements to the original
complaint?
Will the RTC provide us with a complete report on the
status and scope of its ``thorough review'' as soon as
possible?
Time is of the essence. The RTC has had years to
investigate Madison Guaranty; it should have complete
knowledge of the situation and adequate legal foundation for
any civil suits. It has only week left to act and it should
do so without further delay.
We must respectfully request that you respond fully and
promptly to this letter.
Sincerely,
Lauch Faircloth; Alfonse D'Amato; Frank H. Murkowski;
Robert F. Bennett; Don Nickles; Trent Lott; Thad
Cochran; Strom Thurmond; Hank Brown; Bill Roth; Paul
Coverdell; Arlen Specter; ------ ------ Connie Mack; Al
Simpson; Nancy Landon Kassebaum; Richard G. Lugar; Judd
Gregg; Conrad Burns; Dan Coats; Larry E. Craig; Chuck
Grassley; Dirk Kempthorne; Bob Smith; Slade Gorton;
John McCain; Jesse Helms; Larry Pressler; Kit Bond; Jim
Jeffords; Dave Durenberger; Ted Stevens; Mitch
McConnell; Malcolm Wallop; Peter V. Domenici; Orrin
Hatch; John Danforth; John Warner; Bob Packwood; Bill
Cohen; John H. Chafee.
Mr. D'AMATO. Mr. President, this letter will put several urgent
questions to Mr. Altman and the RTC. Let me review them.
One. What is the RTC doing to obtain voluntary agreements to extend
the statute of limitations beyond February 28 as it relates to all
potential defendants or people who have possible liability in the
Madison/Whitewater matter?
Two. If the RTC cannot obtain tolling agreements, will the RTC file
an appropriate civil action against those who the RTC has reasonable
cause to believe may be liable to the taxpayers prior to the expiration
of the statute of limitations?
Three. Will the RTC provide a complete report on the status and the
scope of the thorough review described in the February 1 RTC letter to
us as soon as possible?
Again, Mr. President, this is the third letter from Members of this
body. It seeks answers to some basic questions. These basic questions
must and should be answered.
The bottom line will be: Will American taxpayers see that all
institutions are treated the same way, irrespective of where they are
or who they are? That is the bottom line. As Sgt. Joe Friday said,
``All we want are the facts.''
I yield the floor.
Mr. METZENBAUM addressed the Chair.
The PRESIDING OFFICER. The Senator from Ohio is recognized.
Mr. METZENBAUM. Does the Senator need to ask for a specific amount of
time?
The PRESIDING OFFICER. Under a previous order, the Senator is
authorized to speak for up to 10 minutes.
Mr. METZENBAUM. I ask unanimous consent that the time be extended to
15 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________