[Congressional Record Volume 141, Number 49 (Thursday, March 16, 1995)]
[Senate]
[Pages S4046-S4049]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


       EMERGENCY SUPPLEMENTAL APPROPRIATIONS AND RESCISSIONS ACT

  The Senate continued with the consideration of the bill.


                           Amendment No. 340

   (Purpose: To require monthly reports on United States support for 
         Mexico during its debt crisis, and for other purposes)

  The PRESIDING OFFICER. The Senator from Colorado.
  Mr. BROWN. Mr. President, I rise to send an amendment to the desk and 
ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows.

       The Senator from Colorado [Mr. Brown] proposes an amendment 
     numbered 340.

  Mr. BROWN. 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 end of the bill, add the following new title:
            TITLE ____--MEXICAN DEBT DISCLOSURE ACT OF 1995

     SEC. ____01. SHORT TITLE.

       This title may be cited as the ``Mexican Debt Disclosure 
     Act of 1995''.

     SEC. ____02. FINDINGS.

       The Congress finds that--
       (1) Mexico is an important neighbor and trading partner of 
     the United States;
       (2) on January 31, 1995, the President approved a program 
     of assistance to Mexico, in the form of swap facilities and 
     securities guarantees in the amount of $20,000,000,000, using 
     the Exchange Stabilization Fund;
       (3) the program of assistance involves the participation of 
     the Federal Reserve System, the International Monetary Fund, 
     the Bank of International Settlements, the World Bank, the 
     Inter-American Development Bank, the Bank of Canada, and 
     several Latin American countries;
       (4) the involvement of the Exchange Stabilization Fund and 
     the Federal Reserve System means that United States taxpayer 
     funds will be used in the assistance effort to Mexico;
       (5) assistance provided by the International Monetary Fund, 
     the World Bank, and the Inter-American Development Bank may 
     require additional United States contributions of taxpayer 
     funds to those entities;
       (6) the immediate use of taxpayer funds and the potential 
     requirement for additional 
     [[Page S4047]] future United States contributions of taxpayer 
     funds necessitates Congressional oversight of the 
     disbursement of funds; and
       (7) the efficacy of the assistance to Mexico is contingent 
     on the pursuit of sound economic policy by the Government of 
     Mexico.

     SEC. ____03. REPORTS REQUIRED.

       (a) Reports.--Not later than April 1, 1995, and every month 
     thereafter, the President shall transmit a report to the 
     appropriate congressional committees concerning all United 
     States Government loans, credits, and guarantees to, and 
     short-term and long-term currency swaps with, Mexico.
       (b) Contents of Reports.--The report described in 
     subsection (a) shall include the following:
       (1) A description of the current condition of the Mexican 
     economy.
       (2) Information regarding the implementation and the extent 
     of wage, price, and credit controls in the Mexican economy.
       (3) A complete documentation of Mexican taxation policy and 
     any proposed changes to such policy.
       (4) A description of specific actions taken by the 
     Government of Mexico during the preceding month to further 
     privatize the economy of Mexico.
       (5) A list of planned or pending Mexican Government 
     regulations affecting the Mexican private sector.
       (6) A summary of consultations held between the Government 
     of Mexico and the Department of the Treasury, the 
     International Monetary Fund, or the Bank of International 
     Settlements.
       (7) A full description of the activities of the Mexican 
     Central Bank, including the reserve positions of the Mexican 
     Central Bank and data relating to the functioning of Mexican 
     monetary policy.
       (8) The amount of any funds disbursed from the Exchange 
     Stabilization Fund pursuant to the approval of the President 
     issued on January 31, 1995.
       (9) A full disclosure of all financial transactions, both 
     inside and outside of Mexico, made during the preceding month 
     involving funds disbursed from the Exchange Stabilization 
     Fund and the International Monetary Fund, including 
     transactions between--
       (A) individuals;
       (B) partnerships;
       (C) joint ventures; and
       (D) corporations.
       (10) An accounting of all outstanding United States 
     Government loans, credits, and guarantees provided to the 
     Government of Mexico, set forth by category of financing.
       (11) A detailed list of all Federal Reserve currency swaps 
     designed to support indebtedness of the Government of Mexico, 
     and the cost or benefit to the United States Treasury from 
     each such transaction.
       (12) A description of any payments made during the 
     preceding month by creditors of Mexican petroleum companies 
     into the petroleum finance facility established to ensure 
     repayment of United States loans or guarantees.
       (13) A description of any disbursement during the preceding 
     month by the United States Government from the petroleum 
     finance facility.
       (14) Once payments have been diverted from PEMEX to the 
     United States Treasury through the petroleum finance 
     facility, a description of the status of petroleum deliveries 
     to those customers whose payments were diverted.
       (15) A description of the current risk factors used in 
     calculations concerning Mexican repayment of indebtedness.
       (16) A statement of the progress the Government of Mexico 
     has made in reforming its currency and establishing an 
     independent central bank or currency board.

     SEC. ____04. PRESIDENTIAL CERTIFICATION.

       Notwithstanding any other provision of law, before 
     extending any loan, credit, guarantee, or arrangement for a 
     swap of currencies to Mexico through any United States 
     Government monetary facility, the President shall certify to 
     the appropriate congressional committees that--
       (1) there is no projected cost to the United States from 
     the proposed loan, credit, guarantee, or currency swap;
       (2) all loans, credits, guarantees, and currency swaps are 
     adequately collateralized to ensure that United States funds 
     will be repaid;
       (3) the Government of Mexico has undertaken effective 
     efforts to establish an independent central bank or an 
     independent currency control mechanism; and
       (4) Mexico has in effect a significant economic reform 
     effort.

     SEC. ____05. DEFINITION.

       As used in this title, the term ``appropriate congressional 
     committees'' means the Committees on Banking and Financial 
     Services and International Relations of the House of 
     Representatives and the Committees on Foreign Relations, and 
     Banking, Housing and Urban Affairs of the Senate.

  Mr. BROWN. Mr. President, I rise to offer this amendment because of 
the urgency of time and the need to ensure that a full report of the 
activity of the Mexican bailout be available to the Congress.
  The facts are these. The first article of our Constitution deals with 
Congress and the preeminent power it conveys on Congress, and I might 
say responsibility, of appropriating money.
  It was the abiding belief of the Founding Fathers, and I believe the 
abiding belief of this country's citizens, that expenditures of money 
be made by elected officials. Taxation without representation is 
tyranny. The reality is this country and our Constitution and our 
system demand that someone be accountable for funds that are expended 
and that those people be elected by the voters of this country. The 
Constitution could not be clearer on the subject.
  Years ago, in the 1930's, a small Exchange Stabilization Fund was 
started with a modest amount of money at the time. I think it is fair 
to say, and most Members would agree, that has grown to a horrendous 
amount. The reports are that the amount in that fund is somewhere 
between $25 and $30 billion, probably a little closer to the higher 
number.
  Most Americans were astounded earlier this year when on January 31 
the President of the United States announced that he would take $20 
billion of that money without the benefit of appropriation, without 
deliberation of Congress--as a matter of fact, bypassing Congress--and 
use that in a program of assistance to Mexico, and specifically the $20 
billion would be put at risk through swaps and security guarantees 
involving $20 billion from the Exchange Stabilization Fund.
  Mr. President, it is very clear the kind of impact that has on this 
Nation. One need only look at what has happened to the value of the 
dollar versus the yen and the mark since that announcement was made.
  Now, Mr. President, the Exchange Stabilization Fund is American 
taxpayers' money that is meant to stabilize the currency of the United 
States. When our currency falls out of bed and our money has been 
diverted to bailing out the Mexican currency, who is it that is going 
to defend the United States dollar? Where will the money come from to 
stabilize the United States dollar?
  If there is a purpose for the Exchange Stabilization Fund, it surely 
must be to defend the United States dollar.
  Now, what this amendment calls for is a simple, straightforward 
report to Congress on a monthly basis. It involves things like changes 
in policy of Mexico, disbursements from the Exchange Stabilization 
Fund, accounting for United States credits, guarantees and loans to 
Mexico.
  What it asks for, Mr. President, are the simple facts. There is some 
indication that the administration may be reluctant to disclose these 
facts to the Congress, but I believe this is the minimum that we ought 
to do. If we are going to take our responsibilities as appropriators 
seriously, we ought to at least demand the information on how the 
money, this huge amount of money, is being used. That is what this 
amendment does.
  Mr. President, there are two other aspects of this measure that I 
would like to call to the Members' attention. One is the very sincere 
interest Americans had in helping the Mexicans and the Mexican economy. 
I sincerely believe the President wanted to help the Mexicans when he 
diverted this huge amount of money to the support of the peso. But it 
is also my belief that far from building stronger, better, closer 
relationships with Mexicans, this has done the opposite. I wish to draw 
the Members' attention to an article that appeared in the El Norte 
newspaper on January 30 of this year.

       Seventy-four percent of the population of Mexico City wants 
     the Mexican Government to turn down the $40 billion worth of 
     guarantees the United States is offering.

  Obviously, the reference is there not only to the Exchange 
Stabilization Fund money but the other funds that have been involved.

       In Mexico City, 78 percent of the respondents and in 
     Monterrey 64 percent distrust President Zedillo's pledge not 
     to accept any conditions that would undermine national 
     sovereignty.

  Mr. President, the reality is this. While the Mexican President had 
taken a strong oath not to accept any conditions that jeopardize their 
sovereignty--and it implied that much of the money could come condition 
free--the administration in the United States was saying none of this 
money would go to Mexico unless there were strong changes in policy, 
and they did accede to that.
  Now, that is part of why this report is so important. What we have is 
one 
[[Page S4048]] side saying there is going to be real guarantees and 
real changes in policy so the guarantee would get repaid, and the 
people who are getting the money are saying loudly and clearly, no, we 
have not accepted conditions; we are not going to accept conditions.
  Now, the reality is there apparently have been some conditions set 
and some conditions accepted on the part of the Mexicans.
  The question for this body is do we insist on knowing what they are. 
I believe we should. That is what this amendment is all about. It is a 
simple, straightforward request for a monthly report on exactly what is 
happening, on exactly what U.S. taxpayers' money is being used and how 
it is being used, and what changes of policy are.
  We have been in touch with the Treasury Department over this 
amendment for more than a week, almost a week and a half. In that time, 
they have expressed concerns about having to detail this information. 
One of the concerns they have mentioned that I think is a legitimate 
concern is a concern that any sensitive information they would convey 
to Congress would be kept confidential.
  Mr. President, they have not sent me language on that, but I wish to 
assure the body that I am sensitive to that, that if, indeed, there is 
information that should be kept confidential, I believe strongly that 
that request by the administration ought to be honored. And I wish to 
commit publicly in the Chamber that we will work with them to urge the 
conferees to include in the measure that may come back from conference 
such information as appropriate to ensure confidentiality.
  Mr. MACK. Mr. President, I thank my colleague from Colorado for 
offering this amendment, and I am pleased to be a cosponsor.
  This amendment is essentially the same as legislation I introduced 
earlier this year to require monthly reports by the United States 
Treasury on the Mexican economy. It is critical that this information 
be conveyed to Congress on a timely basis so that we, who are 
responsible for the protection of United States tax dollars, are fully 
informed as to the risk of Mexico's failure to repay those dollars.
  The reason for this risk is that while we stand here, the Mexican 
economy is deteriorating. Inflation has reached 40 or 50 percent, 
production is falling rapidly and the Mexican peso continues to drop 
like a rock. Mexican citizens are suffering from the massive reduction 
in the purchasing power of their pesos.
  Many economists suggest that Mexico's economic problems could have 
been avoided if the right economic policies were followed. However, 
they were not. Now that United States taxpayer money is at risk, it is 
more important than ever that the Congress be informed about economic 
developments in Mexico.
  In order for Congress to gauge this risk, information is key. This 
amendment will guarantee that the Congress is kept fully informed about 
developments in Mexico so that taxpayer dollars can be protected.
  Mr. BROWN. Mr. President, at this point I ask unanimous consent to 
add the names of Senators D'Amato, Mack, and Nickles as cosponsors of 
this amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. D'AMATO addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. D'AMATO. Mr. President, I commend my colleague, Senator Brown, 
for his legislation. Indeed, he has warned the Congress, the American 
people, and the administration the danger of having a situation whereby 
we become the banker and where the people of Mexico as a result of the 
harsh conditions imposed look to the United States as the culprits as 
opposed to being the saviors, as opposed to being the helpers.
  Here we are, extending we do not know how much. That gets to the 
heart of the amendment of the Senator. I have had legislation in 
hearings in the Banking Committee where we considered whether we should 
put a cessation of dollars after a certain amount is expended in 1 
year. We were thinking that after $5 billion was expended to any one 
country, that there should be a requirement to come to Congress to get 
the appropriate authority, authorization, and appropriations. After 
all, that is what the Constitution says. We are the body charged with 
the responsibility of appropriating these funds.
  Whether or not legally the administration could maintain the position 
that by use of the stabilization funds this is not an appropriation or 
would not require an appropriation of this Congress is something that 
reasonable people might debate. Indeed, in the Treasury report by the 
general counsel of the Treasury to the Secretary of the Treasury on 
page 6, that report indicates that the use of the stabilization funds 
is appropriate provided that--and I am paraphrasing--it does not become 
a loan.
  I suggest if this is not a loan, we are stretching the legal language 
to the point that it becomes pretty difficult to differentiate. It 
really did not say loan, it said ``foreign aid.'' If this $20-billion-
plus package is not foreign aid, I do not know what we would call it. 
Some of these dollars, it has been testified before the Banking 
Committee, will be used by the Mexican Government to repurchase or to 
meet its, the Government's, obligations; not as it relates to currency, 
the Government's obligations, Government debt.
  I suggest that crosses the line, notwithstanding what the legislation 
of the Senator does, and I am proud to support it and cosponsor it. It 
says: Tell us what you are doing with the money. Tell us what you are 
doing. We have a right to know. The American people have a right to 
know and Congress should not abdicate this most basic responsibility.
  Let me tell you how shrouded this whole situation becomes. We do not 
know whether or not we have committed--the administration has committed 
us--to loaning $20, $30, $40 billion, and some people have suggested it 
may be, indeed, even closer to $50 billion that the United States of 
America, the people, the taxpayers of this country will be responsible 
for.
  We know we have heard $20 billion from the exchange fund. Is it true? 
Do we not have a right to know whether or not the United States has 
pledged $10 billion through IMF funds, which we know our allies were 
not happy with, some of our European allies? But on a promise, a 
supposed promise that we, the United States of America, would make 
available $10 billion to this fund? That is $20 billion plus $10 
billion over and above. That puts us in for $30 billion.
  Question: World Bank? How much money is going to come from the World 
Bank and how much money have we put into the World Bank? So now we are 
over $30 billion and growing, as it relates to our commitments. 
Certainly, we have a right to know. That is what this legislation does.


                 Amendment No. 341 to Amendment No. 340

  Mr. D'AMATO. Mr. President, I send an amendment to the pending 
amendment to the desk and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from New York [Mr. D'Amato] proposes an 
     amendment numbered 341 to amendment No. 340.

  Mr. D'AMATO. 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:

       Add at the end of the proposed amendment the following new 
     section:

     SEC.   . REPORT ON ILLEGAL DRUG TRAFFICKING IN MEXICO.

       The President shall transmit to the appropriate 
     congressional committees no later than June 1, 1995 detailing 
     the illegal drug trafficking to the United States from 
     Mexico:
       (1) A description of drug trafficking activities directed 
     toward the United States;
       (2) A description of allegations of corruption involving 
     current or former officials of the Mexican government or 
     ruling party, including the relatives and close associates of 
     such officials; and
       (3) The participation of United States financial 
     institutions on foreign financial institutions operating in 
     the United States in the movement of narcotics-related funds 
     from Mexico.

  Mr. D'AMATO. Mr. President, I understand my amendment may not be in 
order. Therefore, I ask unanimous consent that I be permitted to 
withdraw the amendment, because I understand there was an agreement I 
was not aware of. I certainly would not look to violate that agreement.
   [[Page S4049]] The PRESIDING OFFICER. Without objection, it is so 
ordered.
  The amendment (No. 341) was withdrawn.
  Mr. PELL addressed the Chair.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. D'AMATO. Mr. President, I do not believe I have yielded the 
floor.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. D'AMATO. Mr. President, it is my intent, if not on this 
amendment--and I thought it would be appropriate to attempt to further 
enhance the amendment, let me tell you, by way of a reporting 
requirement. I have become aware--it has become painfully obvious to 
this Senator, and during the hearings we had a number of witnesses who 
testified to the absolute corruption of many of the officials in the 
Mexican Government at many levels--Governors, military police, whole 
sections of the Government that are dedicated to one thing--their own 
enrichment. It should become painfully obvious to the administration, 
and they know--they know, proof positive--that Mexico has become the 
leading transshipment country as it relates to illegal drugs and 
narcotics, particularly cocaine, into the United States of America.
  It has become so widespread, it has become so commonplace, that we 
can, indeed, even identify the planes that come in regularly from 
Colombia to the United States, carrying drugs and bringing back money. 
If you have a drug cartel operating from Colombia into Mexico with 
regular transshipment of drugs for money and then the drugs coming into 
the United States, it is rather obvious that we are choosing to look 
the other way. It is obvious the Mexican Government at most levels is 
looking the other way. If we are serious in terms of our fight against 
crime, let me suggest that close to 60 percent of violent crime comes 
directly as a result of drugs--60 percent.
  Take a look at your inner core cities. You see the problem there. You 
talk about all the social problems, but just keep pouring the drugs in 
and look the other way as our neighbors to the south, to whom we are 
making available up to $40 billion, do little, if anything. Indeed, 
many of their highest officials and people at various important levels 
in Government are involved in drug trafficking.
  This Senator will be seeking a report by June 1, 1995, by this 
administration, by the President, detailing and calling for him to make 
available to the people of the United States that information which our 
Government has as it relates to that drug dealing. Here we are sending 
$40-plus billion to Mexico. I think it is about time that we said, ``If 
we are going to help you with your currency, we want to know exactly 
what is taking place.'' And this administration and every 
administration has an obligation to do something about it.
  Let me be very clear and precise. I do not think the previous 
administration did much, if anything, except do everything they could 
to push through our agreements--such a wonderful thing, our trade, we 
have Salinas, he is a wonderful guy, the people on top are wonderful, 
great business opportunity, et cetera. The corruption, the deprivation 
of human rights, the sham of the democracy, all of that put to the 
side. The fact is that people in high places and high officials in high 
places are making billions of dollars, dealing in billions of dollars 
in illegal narcotics. We look the other way. ``Don't rock the boat. 
This is so important. They have made great strides. They have 
privatized.'' Who has made the money? The oligarchy. A handful of 
billionaires have become richer. When those dollars plunged, who do you 
think sold out at the high and who got stuck at the low when the peso 
fell? Do you think the billionaires who controlled the profits in 
Mexico were down here on this chart? I will tell you where they were. 
They were up here, up here--billions.
  We have American taxpayer dollars going down there. I have to tell 
you that at the least we should know what is taking place with that 
money. At least we should have the reports on a monthly basis so that 
we can report to the citizens so that they know how their tax dollars 
are being spent. I have never heard of a bailout program or a program 
designed to help one's country when the people do not have a right to 
know. People have a right to know how we spend their money here. Why 
should they not have the right to know how their money is being spent 
south of the border? I would like to know why they should not have a 
right to know. Do you mean to tell me that the Mexican track record in 
government is one that is so magnificent that we would be insulting 
them, we would be insulting their national sovereignty to ascertain 
exactly what this money is being used for? If that is the case, then we 
should suspend sending money down. I am tired of hearing that they are 
a sovereign nation.
  By the way, I think we are going to be mighty shocked when we get 
into just how we are backing up collateral for this loan. How much oil 
does the Mexican Government really have that they can make available to 
back up these loans? We have been told that the loan is going to be 
fully collateralized. On the other hand, I have gotten information that 
indicates to me that indeed there may be a significant shortfall 
between the amount of moneys the Mexican Government is drawing down and 
the collateral value of the oil and the oil reserves that they have. 
The two may not come close to matching.
  So, Mr. President, for all of these reasons I want to commend the 
Senator from Colorado for proposing this amendment. At the appropriate 
time I intend to ask that additional legislation be required or be 
considered which would require the reporting on the illegal drug 
activities as it relates to Mexico and this country.
  Mr. President, I yield the floor.
  Mr. BROWN addressed the Chair.
  The PRESIDING OFFICER (Mrs. Hutchison). The Chair recognizes the 
Senator from Colorado.
  Mr. BROWN. Madam President, I know that in our course of discussion 
we would go to the distinguished Senator from Rhode Island next. I do 
not mean to delay that process. But I understand it has been cleared on 
both sides.

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