[Congressional Record Volume 140, Number 85 (Wednesday, June 29, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 29, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                           UNCOLLECTED FINES

  Mr. DORGAN. Madam President, I wanted to share with the Senate today 
some chartboards that I used at a hearing yesterday, and talk a bit 
about the conclusions of the hearing. Most Americans will well remember 
the 1980's as a time of intense speculation, junk bonds, leveraged 
buyouts, the country was awash in debt, and most especially a country 
in which we had massive S&L failures where two-thirds of the failures 
involved fraud. We had folks who used to run S&L's, who committed 
fraud, on their way to prison for 2 years at hard tennis in some 
minimum security camp, and the American people were furious about it. 
Billions of dollars, literally, were stolen by people who ran some of 
these institutions into the ground. The American people wanted, first 
of all, for these folks to be convicted of fraud when they committed 
fraud; and second, to have their assets seized as they went to jail.
  I held a hearing yesterday before the Governmental Affairs Committee 
on the question of what has happened with respect to those who have 
been fined, or against whom restitution orders have been made. What has 
happened? Have we gotten the money from these folks? I am not just 
talking about those who committed fraud in S&L's. I am talking about 
those who were convicted of fraud in financial institutions and others 
convicted of Federal crimes and who have been ordered to pay fines and 
restitution.
  You will see a blowup of a story in a newspaper the other day that 
says, ``Little S&L Payback; swindlers' fines go uncollected.''
  The headline is probably an accurate reflection, from the information 
that I received at the hearing yesterday.
  Here is another newspaper article from the Miami Herald. ``Fine-
collection center: `Still just a good idea. Haven't gotten all the bugs 
out yet?'''
  The article is talking about the National Fine Center, something that 
was decided to be created 7 or 8 years ago; $5 million has been spent 
and there still is no National Fine Center to collect the fines that 
are levied against those who have been fined in the Federal courts.
  Let me describe where we are. ``Major Financial Institution Fraud 
Fines and Restitution Ordered and Collected.'' These are the biggest 
crooks in the country. These are the criminals who fleeced the American 
people of billions of dollars, not with a gun but a pencil, stole from 
S&L's, defrauded the S&L's, defrauded the banks. They were sent to 
jail, most of them, and ordered to pay fines and restitution.
  Now let us see how well we have done: $1.96 billion in fines and 
restitutions ordered against these criminals; $1.96 billion. How much 
has been collected? Two and a half percent; 98 cents on the dollar goes 
uncollected; 2 cents or 2\1/2\ cents on the dollar is collected. What 
on Earth is going on?
  Let me show another chart. The 50 largest criminal debts owed to the 
United States. These are in Federal courts, fines and restitutions 
ordered by the Federal courts. The 50 largest. Just take the 50 largest 
that are on file. These are the biggest crooks. They owe $822 million 
in Federal fines and restitution.
  How much have they paid? $4.1 million, one-half of 1 percent; 99.5 
percent of the fines uncollected, one-half of 1 percent is collected.
  Another chart. The 36 largest financial-institution-fraud debts. Now, 
recall, the last chart was the 50 largest criminal debts. This is the 
36 largest financial institutions; that is S&L's and banks. These are 
the people who committed the fraud against those institutions. They 
went to court, most went to jail, ordered to pay fines and restitution; 
$608 million in fines and restitutions. They paid $4 million, six-
tenths of 1 percent. Nearly 99.5 percent of the Federal fines levied 
against these folks, some of the biggest crooks in this country, goes 
uncollected.
  They will say, ``Yes, but these are the big crooks and they are in 
prison. How can the biggest crooks who are in prison pay?'' Well, of 
the 14 largest financial-institution-fraud debts owed to the United 
States where the perpetrator is not in prison, these are folks who are 
out of prison, of $224 million in Federal fines assessed in 
restitution, $2.9 million was paid. These are people who are not in 
prison. That is 1.3 percent of the Federal fines that have been levied 
in restitutions ordered paid, 98.7 percent remains uncollected.
  Another chart. Restitution orders of $1 million or more, payable to 
the Resolution Trust Corporation. These are restitution orders; $384 
million ordered, $5.9 million paid; 1.5 percent collected.
  I do not need to show a lot of other fancy colored charts to give you 
the same message. The message is that when the Federal Government, 
through its Federal court system, levies a fine on a criminal, it is 
not very likely we are going to collect much. We are collecting about a 
penny on the dollar. Under the best of circumstances, we are collecting 
4 cents on the dollar. And the rest of the story is, 96 cents on the 
dollar is not being collected from some of the biggest criminals in 
this country.
  Why? Because we do not have a national fine center. We have a 
disparate, fractured, disassembled system all around this country that 
does not work to collect fines. It is an afterthought in most of the 
districts.
  You ask people how much is owed, how old is it, who owes it, what is 
their address, and they cannot tell you. They spent $5 million to 
create a national fine center, at the end of which we have no national 
fine center. The money for the national fine center comes out of the 
funds that would otherwise go to victims. So $19 million is available 
to be spent, they have spent $5 million, and we have no national fine 
center.
  In fact, they say now we will have a national fine center, the first 
stage of which will be operational about 2\1/4\ years from now, and 
that will largely be manual. There is something seriously wrong.
  The hearing I held in the Governmental Affairs Committee yesterday 
asks the question: Why on Earth do we see a situation which, when we 
levy fines in the Federal Government or restitution orders against some 
of the biggest criminals in the history of this country, people who 
fleeced the American public of millions, yes, billions of dollars 
through fraud, why are we finding 99 percent of that fine and 
restitution ordered is not being collected? It is because at least, in 
large part we have a system that would persuade those out around the 
country, if you are going to owe money to somebody, better you owe it 
in the judicial system because it is unlikely they are going to be able 
to collect it. Owe it on a credit card and see what happens, see if you 
do not have a pen pal for life, see if you do not have pressure every 
day. But owe it here, we collect 1 percent. We collect only 1 percent; 
99 percent goes uncollected.
  We deserve better than that. The American people expect a whole lot 
better than that. I indicated yesterday to the Justice Department and 
the Administrative Office of the U.S. Courts that we are going to come 
back again with another hearing and another hearing to find out why do 
we not see better statistics on collecting fines against some of the 
biggest criminals in this country. The American people expect it and 
deserve it. Frankly, this system is not working, and we need to change 
it.
  Madam President, I yield the floor.
  Mr. BOREN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oklahoma.

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