[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.

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