[Congressional Record Volume 141, Number 138 (Thursday, September 7, 1995)]
[Senate]
[Pages S12831-S12841]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. McCAIN (for himself, Mr. Feingold, Mr. Thompson, Mr. Pell, 
        and Mr. Wellstone):
  S. 1219. A bill to reform the refinancing of Federal elections, and 
for other purposes; to the Committee on Rules and Administration.


                the campaign finance reform act of 1995

  Mr. McCAIN. Mr. President, I am pleased to join with my colleagues, 
Senator Feingold and Senator Thompson, to introduce the Senate Campaign 
Finance Reform Act of 1995. This bill, if enacted, would dramatically 
change American political campaigns.
  This legislation is intended to help restore the public's faith in 
the Congress and the electoral system; to reaffirm that elections are 
won and lost in a competition of ideas and character, not fundraising. 
Toward that end, we hope to level the playing field between challengers 
and incumbents.
  Again, I want to note, this bill is about placing ideas over dollars. 
While my Democrat cosponsors may disagree, I believe that Republicans 
won majorities in Congress last year because the American people 
understood and supported our ideas for changing the American 
Government, not because we excelled at the money chase. We want to make 
sure that decisions about who governs America--decisions that are so 
profound in their consequences for current and future generations of 
Americans--will be made by voters who have a fair understanding of 
those consequences.
  Campaigns, of course, cost money. This bill recognizes that fact. It 
does not end campaign spending, but limits it in a manner that forces 
candidates to rely more on their message than their money.
  Mr. President, poll after poll reveals the public's loss of faith in 
the Congress. One of the reasons this has occurred is that the public 
believes--rightly or wrongly--that special interests control the 
political and electoral system. In order to limit the ability of 
special interests to control the process, and to change the perception 
that money controls politics, we must enact campaign finance reform.
  A recent USA Today-CNN Gallup poll revealed that 83 percent of 
Americans want campaign finance reform enacted. According to the same 
poll, the only two issues that the public feels are more important than 
campaign finance reform are balancing the Federal budget and reforming 
welfare. To the surprise of many, the poll showed that changing 
Medicare and cutting taxes has less support than did campaign finance 
reform.
  Mr. President, I would like to outline what the bill does:
  Spending Limits and Benefits: Senate campaign spending limits would 
be based on each State's voting-age population, ranging from a high of 
over $8 million in a large State like California to a low of $1.5 
million in a smaller State like Wyoming. Candidates that voluntarily 
comply with spending limits would receive:
  Free Broadcast Time--Candidates would be entitled to 30 minutes of 
free broadcast time.
  Broadcast Discounts--Broadcasters would be required to sell 
advertising to a complying candidate at 50 percent of the lowest unit 
rate.
  Reduced Postage Rates--Candidates would be able to send up to two 
pieces of mail to each voting-age resident at the lowest 3d-class 
nonprofit bulk rate.
  New Variable Contribution Limit--If a candidate's opponent does not 
agree to the spending limits or exceeds the limits, the complying 
candidate's individual contribution limit is raised from $1,000 to 
$2,000 and the complying candidate's spending ceiling is raised by 20 
percent.
  On the issue of Personal Funds: Complying candidates cannot spend 
more than $250,000 from their personal funds. Candidates who spend more 
than that amount are considered in violation of this act and therefore 
qualify for none of this Act's benefits.
  Also candidates are required to raise 60 percent of campaign funds 
from individuals residing in the candidate's home State.
  There is a ban on political action committee contributions. In case a 
PAC ban is ruled unconstitutional by the Supreme Court, backup limits 
on PAC contributions are also included. In such an instance, PAC 
contribution limits would be lowered from $5,000 to the individual 
contribution limit. Additionally, candidates could receive no more than 
20 percent of their contributions from PAC's.
  All franked mass mailings banned in year of campaign.

[[Page S 12832]]

  There is a requirement increased disclosure and accountability for 
those who engage in political advertising.
  Bundling is limited.
  It requires Full Disclosure of all Soft Money contributions.
  There is a ban on personal use of campaign funds, which codifies a 
recent FEC ruling that prohibits candidates from using campaign funds 
for personal purposes such as mortgage payments or vacation trips
  This bill will affect both parties equally. It does what other bills 
in the past did not, not benefit just one party. And that is also why 
it has bipartisan support.
  Mr. President, is this a perfect bill? No, it is not. I do not know 
if it is even possible to write a perfect campaign reform bill. But it 
is a good bill, that addresses the partisan and nonpartisan concerns 
that have undermined previous reform attempts. As the Washington Post 
said, ``it would represent a large step forward.'' Also, as many have 
noted, we cannot let the perfect be the enemy of the good.
  We must take this step. The American people expect us to do at least 
that much.
  Mr. President, I want to make a few additional comments. I note the 
presence of my friend and colleague from Wisconsin, who is my partner 
in this effort, Senator Feingold.
  Sometimes, residing here in the Nation's capital, as we have to do a 
great percentage of our time, we have a tendency to not be aware of the 
hopes and aspirations and frustrations of the American people. Last 
week there was a CNN poll that showed what the American people want 
Congress to do and what they expect Congress to do. Mr. President, 88 
percent of the American people want Congress to balance the budget; 31 
percent believe that they will do it. The next highest on that list is 
88 percent want Congress to reform welfare; 47 percent expect them to 
do it. Next in line is 83 percent of the American people want Congress 
to reform campaign financing, while only 30 percent of the American 
people believe that Congress will do it.
  The article goes on to say Congress meanwhile has fallen to a 30-
percent approval, its lowest level since Republicans won control in 
January. Analysts say it is largely due to the slowdown in legislation 
as items have moved to the Senate coupled with an increase in partisan 
bickering over Medicare and GOP squabbles over welfare reform.
  Mr. President, I do not think we should rest easy when the approval 
of the American people of Congress is as low as 30 percent.
  Recently there was a poll done by respected pollsters in this city. I 
would like to quote three very important items from that poll.
  When asked: We need campaign finance reform to make politicians 
accountable to average voters rather than special interests, voters 
stated this was very convincing, 59 percent; somewhat convincing 31 
percent; not very convincing, 5 percent; not at all convincing, 4 
percent; and do not know, 2 percent.
  Mr. President, let me repeat that. When asked: We need campaign 
finance reform to make politicians accountable to average voters rather 
than special interests, a total of 59 percent found that argument very 
convincing, and 31 percent; somewhat convincing, a total of 90 percent 
of those interviewed.
  When asked: We do not need campaign finance reform, the election in 
November helped clean up a lot of problems in Washington, respondents 
said their argument was very convincing, 13 percent; somewhat 
convincing, 19 percent; not very convincing, 22 percent; and not at all 
convincing, 39 percent.
  Reducing the amount special interest groups can contribute to a 
candidate would be very effective, 54 percent; somewhat effective, 34 
percent.
  Mr. President, when the respondents were asked: Those who make large 
campaign contributions get special favors from politicians, respondents 
said this is one of the things that worries you most, 34 percent; 
worries you a great deal, 34 percent. Sixty-eight percent of the 
American people believe that those who make large contributions get 
special favors from politicians bothers them most or bothers them a 
great deal.
  What I am saying is that we need to reform this business. We must 
understand that money will always play a role in political campaigns. 
In an ideal world that would not be the case. We do not live in an 
ideal world. But there should be accountability.
  I am pleased that Senator Feingold and Senator Thompson and others 
are joining in this effort, the first bipartisan effort in over 10 
years. This is not a popular issue, Mr. President. It is not one that 
the Congress would like to address. There are those who are cynical 
about the real prospects of fundamental campaign finance reform since 
it has been a high item on the agenda for a long time.
  Frankly, I do not know if we will reform campaign financing. But I do 
know this: If we do not do something in this area, the very high 
disapproval that the American people have for our activities here in 
Congress will be reflected at the polls in November of 1996 since the 
American people have no other recourse. It is not clear to me what that 
reaction will be, whether it is a search for an independent party or 
candidate.
  About 2 weeks ago was there was a poll taken by the Wall Street 
Journal and NBC that showed that 6 out of 10 Americans now would 
support an independent party for a candidate, or whether they would go 
back to the Democratic Party or they would believe that those on this 
side of the aisle are making a good effort. But I do know this: If we 
continue to experience such high disapproval ratings, the American 
people lose confidence in our ability to carry out their mandates and 
the repercussions cannot be good for our system of government.
  So, Mr. President, I hope we will look at this issue carefully. I 
hope we will continue to try to work on a bipartisan basis. And I hope 
that all of those who are interested in this issue will understand that 
the Senator from Wisconsin and I do not believe that we have come up 
with a perfect document, there are parts of this bill that I have 
reservations about, parts of this bill that the Senator from Wisconsin 
has reservations about. We cannot let perfect be the enemy of the good. 
And always, if there is one lesson here, it
 is that this issue must be addressed on a bipartisan basis and from a 
bipartisan standpoint.

  I reserve the remainder of my time and yield such time as he may use 
to the Senator from Wisconsin.
  The PRESIDING OFFICER. The Senator from Wisconsin is recognized.
  Mr. FEINGOLD. Mr. President, I thank the Chair.
  Mr. President, I especially want to thank the Senator from Arizona. I 
am pleased to be a part of this effort, to be one of two authors in the 
McCain-Feingold bill, and am pleased to hear that Senator Thompson has 
joined us.
  I have worked with the Senator from Arizona already this year on a 
number of issues and on a bipartisan basis about our concern about the 
revolving door. Members of Congress and staff sometimes move rather 
quickly over to lobbying ventures. We are trying to do something about 
that.
  We worked hard together to try to do something about the great public 
frustration about pork items being placed on appropriations bills, and 
are trying to respond in another piece of legislation that is attached 
to the line-item veto, a bill that could do something about putting 
extraneous material on emergency spending bills.
  I, of course, feel particular good about our recent effort and 
success on the gift ban which this body enacted just prior to the 
recess that we just had.
  I have to tell you, back home the response to the gift ban was a lot 
more intense than I expected. People are looking for any sign of hope 
that things can change here in Washington. Even though the gift ban 
itself is not something that changes the world or solves all of our 
problems by any means, there was a feeling I got that people took some 
heart from that.
  Our effort today in introducing this campaign finance reform bill is 
all about building on that initial success and doing it in an area that 
is even far more important; as the Senator from Arizona has said, the 
changing of the way we finance our campaigns. I am very optimistic that 
a number of Members from both sides of the aisle will join us in this 
effort soon. That is the indication I am getting from our 
conversations. 

[[Page S 12833]]

  The Senator from Arizona said this is, will be, and will continue to 
be a bipartisan effort. Senator McCain is speaking to Democrats and I 
am speaking to Republicans about this. We are not dividing up the 
Senate because this has to be a product of the Senate.
  What we are really asking here is for both political parties to, in 
effect, sort of mutually disarm this money race in politics and to have 
a consensus that the Senate and the Congress in this country will all 
be better off if we stop this horrible trend for outrageous spending in 
campaigns.
  I agree with the Senator from Arizona that this is not the perfect 
bill or the ideal bill, if there is one. I believe in complete public 
financing of campaigns. I think it would be better if we did not have 
any campaign contributions, if it was illegal to ask for campaign 
contributions. I think everybody would be better off. I suppose that is 
my ideal world. But I know that cannot pass here.
  I introduced my own bill earlier this year, S. 46. I thought it was a 
good bill but it involved public financing. There are difficulties in 
getting a majority on that issue. But because campaign finance reform 
is such an overwhelming priority, I was not only pleased to see some of 
the ideas of the Senator from Arizona, but I was very surprised to see 
how far he would come to try to reach a consensus, to try to have a 
bipartisan bill to solve this problem. I believe it is one of the 
biggest problems we have in this country. I say the biggest problem we 
have in terms of our day-to-day operations in trying to solve a 
particular problem is balancing the Federal budget. That is No. 1.
  But if we want to talk about the procedure, if we want to talk about 
the way this Government is run and why people feel it does not run 
right, I think the most important issue is changing the way campaigns 
are financed.
  I say this from the point of view of maybe three different groups. 
The first group, the most important group, is the public at large. The 
Senator from Arizona says one of the reasons he thinks the Republicans 
won on November 8 is this issue. I think he is right. I think it is one 
of the reasons Bill Clinton and some of us won in 1992. It does not 
mean we earned that support if we do not do campaign finance reform. 
But I think it is one of the reasons. I think it has been a little bit 
surprising to people that in a reform Congress that this issue of 
campaign finance reform has not really come to the fore.
  So from the point of view of the public, when they see the hundreds 
of thousands of dollars poured into the telecommunications bill or the 
regulatory reform bill, you name it, this is all happening in this 
Congress, the money race, the big contributions continue, and it makes 
people feel that they are disconnected from their elected 
representatives, that something is going on here, that after the 
election somebody comes here and they are distracted or disconnected 
from them, and that the big money in campaigns has a lot to do with it.
  So from the point of view of the public, we need this legislation. We 
also need this legislation from the point of view of people who are 
challengers. We were all new candidates once for the Senate. We all had 
to face the reality that people would come to us and say, ``Well, you 
may be qualified, but where are you going to get the money?'' That 
ended up being the first question I was asked any time I went anywhere 
in Wisconsin or other places trying to figure out if I could run a 
credible race.
 How are you going to get the money?

  Well, that has to change. Some of us were fortunate enough to win, 
maybe even without a great deal of money. But I cannot even imagine the 
thousands and thousands of Americans, good Americans, people who would 
have been wonderful Senators who did not even consider running because 
they believe this has become a game for either the wealthy or the well 
connected.
  Finally, there is a third group that this should have great appeal 
for, and that is the 100 Members of this body. Ask any Senator what 
they do not like about their job. Most are so delighted to be here and 
consider it a great honor. The one thing that is the bane of any 
Senator's existence, if there is one, is this necessity of raising 
money. For many it is a demeaning process, to be told that if you do 
not raise $10,000 a week, you are not going to have a chance and you 
are going to have more opponents. It takes away from time with your 
family; it takes away from time with your constituents; it takes away 
from time to actually do the job here in Washington, to understand the 
issues, to talk to other Senators and to work out solutions. So from 
the point of view of the Senate and those who seek the Senate and those 
who elect us, it is time to come together, compromise if necessary, and 
have a real campaign finance reform bill.
  The Senator from Arizona has outlined already the major provisions. 
Let me just highlight what I consider to be the three core provisions 
that I think make this bill very unique and not only strong but 
balanced from a partisan point of view. And these are the three 
provisions that all have to do with what happens if somebody complies 
with the incentives and with the limits in the bill in order to get 
various incentives.
  First of all, there is a provision that might be called the more 
Democrat-supported provision. It was the one in S. 3 last year, the one 
that passed the Democratic Senate, and that is the voluntary limit. We 
would place a voluntary limit based on the size of the population in a 
State of how much can be spent in total in a U.S. Senate election from 
about $1.5 million in the smaller States to a maximum of about $7 
million to $8 million in California. And we know even though that 
sounds like a lot of money, it does not even compare to the $50 million 
that was spent in a Senate race in California this past year.
  So we provide a voluntary limit, and if you abide by the limit, you 
get benefits such as reduced television time and an opportunity to mail 
on a reduced basis to the constituents in your State.
  The second idea is what I would call a more Republican idea, an idea 
that I have always liked, one idea I campaigned on and I believe in it, 
and that is that you should have to get a majority of your campaign 
contributions from individuals from your own home State--not from 
PAC's, not from out-of-State interests, but a majority of the money has 
to come from the folks for whom you work, the boss--in my case, the 5 
million people who live in Wisconsin. I think that is a very important 
provision to return us to the grassroots politics it has been.
  The third major provision has to do with a rising trend that we have 
all noticed and are all concerned about which makes the public terribly 
cynical, and that is the proliferation of big money being spent by very 
wealthy individuals to finance their own campaigns. This bill produces 
a voluntary limit of approximately $250,000, depending on the size of 
your State, saying that if you spend over that of your own money, your 
opponent gets some advantages in terms of raising funds to make it more 
competitive.
  So this combination, doing something about the overall amount that is 
spent, doing something about obtaining funds from outside of your own 
home State, and doing something about the unfairness of the system that 
allows only the very wealthy to be able to just get right in the middle 
of an election, buy recognition and win an election, these three things 
I think make for the core of a very effective bill. There are other 
provisions that are important, but I think these three are the ones 
that will make this bill work and make the bill pass.
  In addition, if a complying candidate is faced by an opponent that is 
pouring millions of dollars of their own money into their campaign, the 
complying candidate is granted the ability to raise additional campaign 
funds beyond the limits under current law.
  I support that principle--that is, the idea that we should provide 
incentives for candidates to limit their personal funding, and the idea 
that if one candidate is facing someone with such vast resources, the 
candidate without personal wealth should have access to resources of 
equal value.
  I do have concerns about this particular provision that raises the 
individual contribution limits and allows the complying candidate to 
raise hundreds of thousands of extra dollars. I am not sure that 
furthers the goal of bringing down the overall costs of Senate 
campaigns--in fact, it may only 

[[Page S 12834]]
add fuel to the fire. Providing the complying candidate with greater 
benefits may be a better alternative to raising the contribution 
limits. But again I support the principle of finding a way to encourage 
candidates to voluntarily limit their personal spending.
  There are other important provisions in this legislation as well. We 
eliminate a traditional incumbent advantage--franked mass mailings, in 
the calendar year of an election. The bill contains another provision I 
have concerns about, a ban on political action committee contributions 
including the so-called leadership PAC's.
  If such a ban is ruled unlawful, PAC contributions will be limited to 
no more than 20 percent of a candidate's campaign funds collected and 
the contribution levels for PAC's will be lowered from 5,000 dollars to 
whatever the applicable individual contribution limits are.
  Some view a PAC ban as a cure-all to our campaign finance problems. I 
am not so sure of this. First, according to figures released by the 
Federal Election Commission, PAC contributions have remained at fairly 
equal levels over the past few election cycles. Aggregate PAC 
contributions totaled $149 million in 1990, rose to $178 million in 
1992 and remained at $178 million in 1994.
  During the same period, overall campaign spending has risen from $446 
million in 1990 to $724 million in 1994--a 62-percent increase. So even 
though overall campaign costs have skyrocketed in recent years, the 
level of PAC
 contributions has remained relatively constant.

  That is why I have very serious doubts that banning political action 
committees will be very helpful in getting a grip on the rapidly rising 
levels of overall campaign spending. The Senator from Arizona does 
however make a compelling point that incumbents by and large are most 
likely to benefit from PAC's as illustrated by the shift in PAC 
contributions from the Democratic Party to the Republican Party 
following the 1994 elections.
  Though I question the legality and rationale in banning PAC 
contributions, I think it is entirely appropriate to limit the amount 
of PAC contributions a candidate may accept as a percentage of overall 
fundraising. The backup provision in this bill--the 20 percent 
aggregate limit on PAC contributions, as well as lowering PAC 
contribution limits so they are equal to individual contribution 
limits--is a good idea, and I would actually support lowering that 
aggregate threshold, perhaps 10 percent.
  The bill also places new disclosure requirements and limits on the 
tremendous amounts of soft money, that is, the unregulated campaign 
funds that are poured into Federal campaigns including Presidential 
elections.
  Soft money represents a real problem in our political system and this 
is clearly one obstacle that Republicans and Democrats should be 
working together to eliminate. The amount of soft money raised just 
this year--numbering in the tens of millions of dollars--stands to 
undermine the reforms of the Presidential Election System that have 
worked so well for over 20 years now.
  Let me say that I was disappointed in the Democratic National 
Committee's recent fundraising effort that literally sought to sell 
access to the President in exchange for campaign contributions. I am 
very pleased that President Clinton, a longtime supporter of campaign 
finance reform, denounced this effort and distanced himself from it.
  This sort of fundraising has occurred while the White House was in 
control of Democrats and Republicans alike--and let me be clear here--
both parties are guilty of this kind of fundraising tactic that only 
underscores the need for comprehensive
 reform that includes soft money limits and disclosure.

  Finally, the bill will codify a recent ruling by the Federal Election 
Commission that bars candidates from using campaign funds for personal 
purposes, such as mortgage payments, country club memberships and 
vacations.
  Most of these provisions were included in S. 46, the campaign finance 
reform legislation I introduced on the first day of the 104th Congress, 
and I am delighted that Senator McCain and I were able to come 
together, roll up our sleeves and produce a comprehensive reform bill 
that is fair to Democrats and Republicans alike.
  The fact is, I do not support everything in this bill. There are 
provisions I would like to see modified. The legislation I introduced 
in January called for full public financing for candidates that agree 
to limit there overall campaign spending. I continue to believe that 
public financing is the best way to reform a system that has created 
dramatically unfair elections and caused Members of Congress to spend 
increasingly more time hosting fundraisers and less time fulfilling 
their legislative responsibilities.
  However, if campaign finance reform is to pass with bipartisan 
support, a vehicle for such reform must be found that can be supported 
by Members from both parties and from across political ideologies. I 
believe that this bill provides that vehicle.
  Having a fair and competitive election system is not a Democratic or 
Republican issue. How we elect our Representatives is a cornerstone of 
our Democratic political system. As a Nation, we have always put a 
tremendous value on participation in our Democratic process. We have 
repeatedly passed laws, even constitutional amendments, to expand the 
rights of our citizens to vote and express political viewpoints.
  Yet here we are with a campaign system in which the average cost of 
running for a seat in the U.S. Senate is estimated at $4 million. Four 
million dollars. That is just the average. In 1994, nearly $35 million 
was spent between the two general election candidates in California 
alone. Nearly $27
 million was spent by the candidates in the Virginia Senate race.

  So unless you win the Powerball drawing, or strike oil in your 
backyard or are an incumbent Member of Congress, you are an automatic 
longshot to be even considered a credible candidate for the United 
States Senate.
  That is not expanding participation. That is not encouraging 
democracy. That is sending out a clear message that unless you are 
well-financed or well-connected, you should not be running for the 
United States Senate.
  Finally, the time consumed raising contributions for reelection 
efforts is time taken away from legislative responsibilities of 
incumbents. Members of Congress should not have to chose between those 
responsibilities or making phone calls to potential contributors.
  What we need to do is to return to a simple proposition: That is, 
money should not determine the outcome of elections. Elections should 
be decided by issues and ideas, not checkbooks and campaign coffers. 
That does not mean that campaign contributions have no place in our 
election system. It simply means that all candidates should have a 
legitimate and reasonable opportunity to get their message out to the 
electorate in their States.
  I have reached that conclusion, the Senator from Arizona has reached 
that conclusion and the majority of this body has reached that 
conclusion.
  Mr. President, we all know that Congress is not held in very high 
regard by the American people. They are angry, they are cynical and to 
a large extent they have lost faith in their Government. All of these 
feelings have sprung from a common belief that is shared by so many of 
our constituents--a belief that I find deeply troubling--that the 
Congress simply does not represent them anymore.
   They see the television news accounts of Members of Congress 
relaxing on a beach vacation paid for by lobbyists. They find out that 
their Representatives are receiving tens of thousands of dollars from 
this interest group or that interest group, and they have begun to 
wonder if the average American really has any sort of voice in 
Washington DC. They feel alienated, they
 feel disconnected and soon they become distrustful.

  A few weeks ago, thousands of Americans who have been frustrated by 
both parties' inability to produce meaningful political reform met at 
the United We Stand America Convention in Dallas.
  Politician after politician, from both parties, ranging from the 
distinguished Senate majority leader to the general chairman of the 
Democratic National Committee, stood at the lectern in Dallas and 
railed for campaign finance reform. Why? As one attendee at this 
convention framed it:


[[Page S 12835]]

       When I look at a politician, I wonder who really owns him. 
     I do not see them as people with their own ideas. I think the 
     people who are financing them tell them what to think.

  That viewpoint, Mr. President--one that I believe is shared by 
millions and millions of other Americans--is precisely why we are in 
such need of immediate and meaningful campaign finance reform.
  Whether it is showering Members of Congress with free gifts, meals or 
vacation trips, or funneling huge campaign contributions to incumbent 
Members, it has become clear in the minds of the American people--and 
justifiably so--that the key to gaining access and influence on Capitol 
Hill is money.
  And that is what our election system has become all about--money. 
Candidates are judged first and foremost not on their positions on the 
issues, not by their experience or capabilities but by their ability to 
raise the millions of dollars that are needed in today's climate to run 
an effective congressional campaign.
  The bill we are introducing today will return our campaign system to 
the people we represent. If an individual wants to run for the United 
States Senate and can prove that their ideas and viewpoints represent a 
broad base of support, they will have the opportunity to do so.
  I have said many times that we should not have a campaign finance 
system that favors challengers or incumbents, or candidates from either 
party. The bill we are introducing today represents the comprehensive, 
bipartisan reform that the American people have been demanding for 
years.
  This bill represents a compromise that can be supported by Senators 
from across the ideological spectrum. It is not perfect and it includes 
provisions which I and others might not support standing alone. Each of 
us has swallowed hard in some areas to put together a responsible, 
bipartisan proposal. Taken as a whole and on balance, it is a vast 
improvement over our current system which can be described as unfair at 
best and chaotic at worst.
  Finally and very briefly, the question I am getting is: Why do you 
think this is going to succeed? This has been tried time and again.
  Well, I can understand that sentiment. Campaign finance reform is not 
even mentioned in the Republican Contract With America. It is not even 
there. But there is still a strong feeling that this should be done. 
Even though there is a disconnect between what the Senator from Arizona 
has said when he points out people believe this should be done but they 
do not think it can be done, it will not happen, I think there are 
signs it will happen.
  First, this is the first bipartisan effort of its kind for 10 years. 
That is very important.
  Second, I think the gift ban effort showed that there is a 
willingness on reform issues to cross party lines, to sometimes not 
agree with the leadership, and to move on a bipartisan basis to change 
the system.
  Third, you cannot help but notice that at the conference in Dallas 
run by Mr. Perot, even though it may not have been expected, one of the 
leading topics was the need for campaign finance reform. And in the 
first speech given at that conference by our former colleague, Senator 
Boren said that the conference should go on record in favor of the 
McCain-Feingold bill.
  I also noticed that even before we introduced the bill today, we have 
already had editorial endorsements across the country. It is rare to 
receive editorial endorsements on a piece of legislation before you 
even introduce it, but this bill has already merited it. We also 
understand that at least a notice will go out today that a couple of 
our colleagues in the House on a bipartisan basis will introduce this 
same bill in the House. So there is reason to believe that it will not 
just be an effort in the Senate.
  Let me finally say I think the most telling proof that this thing can 
work is the vote we took in July. I came to the floor of the Senate and 
simply brought up a sense-of-the-Senate resolution along with Senator 
McCain that said we ought to consider campaign finance reform during 
the 104th Congress. I expected that this would just be accepted, that 
people would say, ``Fine. Let's deal with that later.'' But the 
majority leader, a person who has enormous respect in this body from 
every Member, came down to the floor and indicated that he was not sure 
there could be a bipartisan effort, and he moved to table my amendment 
to not have campaign finance reform put on the agenda.
  Mr. President, he lost that vote. He almost never loses a vote out 
here. He has a tremendously high success record. But 13 Republicans 
joined with various Democrats to say on a 57-41 vote that, yes, during 
the 104th Congress we have to clean up this money mess that is in 
Washington. We have to stop this race to raise all this money out here 
that takes us away from our constituents.
  I think that is a good sign. It is a sign that both parties want to 
work together. And all I can say in conclusion is the thing I 
especially like about working with the Senator from Arizona is he does 
not just like introducing bills; he likes to win. This is an effort to 
pass a bill--not talk about it, pass a bill--send it to the President, 
and to have by January 1, 1997, a whole different way of electing 
Senators.
  So I thank the Senator from Arizona very much, and I look forward to 
this effort.
  Mr. McCAIN addressed the Chair.
  The PRESIDING OFFICER (Mr. Coverdell). The Chair recognizes the 
Senator from Arizona.
  Mr. McCAIN. Mr. President, I send this legislation to the desk.
  The PRESIDING OFFICER. The bill will be received and appropriately 
referred.
  Mr. McCAIN. Thank you, Mr. President. I just want to congratulate the 
Senator from Wisconsin for a very fine statement. I hope this is the 
beginning of a process that can be completed. I believe we have clearly 
stated that we are interested in a bipartisan effort in this area. We 
are not interested in seeking political advantage or campaign advantage 
for either party. We are interested in leveling the playing field for 
incumbents and challengers, which is clearly not the case today. I 
appreciate the effort of the Senator from Wisconsin and I have grown to 
appreciate not only his dedication but his tenacity.
  Mr. President, I note the presence of the Senator from Maryland in 
the Chamber, so I will yield back the remainder of my time.
  Mr. THOMPSON. Mr. President, I appreciate the opportunity to join my 
colleagues, Senators McCain and Feingold, in the introduction of the 
Senate Campaign Finance Reform Act of 1995.
  It is well known that the American people have very little faith in 
their elected representatives. It is a travesty that the commonly held 
presumption is that Members of Congress are bought and controlled by 
special interests.
  Another problem that affects the reputation and quality of our 
representative government is that once someone gets elected, they have 
a significant advantage in subsequent elections.
  Congress needs to move away from professionalism and more toward a 
citizen legislature. It should be more open, instead of more closed. 
And that's because of the role that money plays. Unless a candidate has 
access to large sums of money he or she is pretty much cut out of the 
process. This leaves the field to the professional politicians.
  This legislation will do several things. First, it will help level 
the playing field and help reduce the advantage that incumbents have. 
And it will bring down the built-in advantage of individual wealth. 
Second, it will reduce the reliance on private donations.
  The new provisions which is the largest step in a new direction is 
the one that requires that most of a candidate's money must be raised 
in his or her own State. For myself, I'd probably be in favor of even 
higher requirements on this.
  The most important element in all this is what passage of this 
legislation would do to improve public confidence. The public is 
extremely cynical and skeptical of the process of our Congress and our 
Government. We need to do everything we can to turn that around. Much 
of the public's concern has to do with the role of money in our 
process. This would be a step in a downplaying the importance of money 
in electing our officials and in what is perceived to be its effect on 
the decisions officials make after their election.
  Much of the public perception of the process is justified. We have 
got to 

[[Page S 12836]]
start doing everything we can to enhance the stature and the confidence 
that people have in the Congress. Otherwise, we are not going to be 
able to exert the leadership we need to in other legislative areas. 
Right now we've got feet of clay, and it makes the rest of the body 
politic weak. Until we do something about these fundamental parts of 
the political process, Congress is not going to have the strength to 
sustain itself when we make the tough decisions on fiscal matters, and 
other important areas such as welfare, tax reform, health care, and 
crime.
  This proposal will help level the playing field, open up the process, 
and do away with some of the advantages of incumbency. It will reduce 
the amount of time a candidate and office holder will have to spend on 
fundraising. It will reduce the role of money and reduce the reliance 
on private political contributions. And most importantly, it will help 
renew public confidence.
  Mr. WELLSTONE. Mr. President, I am delighted to be an original 
cosponsor of the bipartisan legislation introduced today by Senators 
Feingold and McCain, to provide for broad, sweeping reform of the way 
we conduct and finance congressional elections.
  I have been proud to work with my colleagues from Arizona and 
Wisconsin on a number of political reform issues, and was very pleased 
to celebrate a major victory with them as allies on the gift ban, 
passed just before the recess. After several years of struggle and 
controversy in the face of strong and persistent resistance by certain 
of my colleagues, including last year's filibuster by our Republican 
colleagues, it was a major victory for reformers. And in my 
conversations with people back in my State, they recognized its 
importance and said that it gave them renewed hope that we in Congress 
might respond to growing demands for political reform at the 
grassroots.
  But the gift ban, and the passage of lobbying reform, are only two 
key elements of the political reform agenda. The more significant 
reform, in my mind, and the one that will have even more far-reaching 
consequences for stemming the tide of special interest influence in the 
political process, is the effort to profoundly reshape the way we 
finance and conduct political campaigns in this country.
  For many years, I and others have pushed forward here in the Senate a 
number of campaign finance reform bills, only to see them die in the 
face of near-unanimous Republican opposition, including a sustained 
filibuster against last year's bill. I hope that as this bill evolves, 
it will serve as the basis for the grand bipartisan compromise on this 
issue that has so far eluded us. For that to happen, each side will 
have to consider giving up certain advantages that many believe the 
current system now offers. Americans are looking for that kind of 
cooperation and compromise on political reform. They believe it's long 
overdue.
  On the first day of this Congress, I reintroduced S. 116, my 
comprehensive campaign reform legislation, which I believe should serve 
as a model for real, thoroughgoing reform of our campaign finance 
system. I said at the time that I hoped we would move forward quickly 
on real reform, despite the persistent opposition of most of my 
colleagues on the other side of the aisle. That bill has been bottled 
up by the Governmental Affairs Committee, which has thus far refused to 
even hold hearings on campaign reform.
  There have been a number of other campaign reform bills introduced 
this year, including the version of last year's comprehensive bill 
introduced by Minority Leader Daschle. None of them have received 
serious consideration by the committees on jurisdiction either. I hope 
that additional elements of my bill will be incorporated into the final 
version of this bill if it moves forward.
  This bill is not perfect. Some of its provisions I don't support. But 
even with its warts, I have decided to be an original cosponsor in the 
hope that it might provide a vehicle for real, bipartisan reform 
efforts this year. It does provide many of the central elements of any 
significant reform plan. Its enactment would go a long way toward 
restoring integrity to our political process.
  Perhaps most important, it would impose strict limits on the amounts 
that candidates could spend in their campaigns. That is critical if we 
are to address the huge amount of big money that pours into campaigns, 
often from well-heeled special interests. As with my bill, and others, 
the formula would be based on the voting age population in each State. 
Candidates who agree to abide by the limit would receive free broadcast 
time, reduced postage rates, and broadcast discounts as incentives for 
them to participate.
  It also contains tough new provisions to ban special interests from 
bundling contributions, bans contributions from political action 
committees--with backup limits should the ban be found unconstitutional 
by the courts--bans incumbent use of taxpayer-paid mass mailings in an 
election year, imposes tough new limits on so-called soft money 
contributions that can be used to circumvent Federal financing rules, 
and prohibits the personal use of campaign funds.
  Finally, it places a premium on contributions from a Member's own 
home State, in an effort to ensure that Senators are more accountable 
to those who elected them than to big-money special interests. It 
requires that a substantial majority of funds come from one's State, 
and that would be another big step toward reform. While it is true that 
this specific provision has often been seen historically as being 
harder on Democrats than Republicans, I believe this is an important 
principle that should be preserved in some form as this bill moves 
forward.
  As I have said, there are some real problems with this bill, and both 
of its primary sponsors have acknowledged that. I will only identify a 
few. For example, if a noncomplying candidate refuses to abide by 
spending limits, the bill allows an increase in contribution limits for 
the complying candidate, as a deterrent to nonparticipation. I am very 
troubled by this provision, because I think it could, in some 
circumstances, increase individual contribution limits, rather than 
decrease them, as I would prefer. Last year I offered several 
amendments to reduce substantially individual contribution limits. I 
continue to believe that this is the way to go, coupled with other 
incentives. I hope that we will ultimately provide for another way to 
offer carrots, and wield sticks, to encourage candidates to comply with 
spending limits.
  In addition, the bill provides for a limit on personal funds spent in 
a campaign to $250,000. I believe this is much too high, which is why I 
offered an amendment last Congress, approved overwhelmingly by the 
Senate, to cut this limit down to $25,000. I believe that is where the 
limit should be set, and I intend to work with my colleagues to reduce 
that limit.
  In short, while this measure is not as comprehensive as earlier 
versions of campaign legislation which I have authored or supported in 
the past, it would go a very long way toward real reform. I think that 
as the bill moves forward, it can be improved upon, and I intend to 
work to do that. But I commend Senators Feingold and McCain for their 
effort, and I hope the introduction of this bill will help to move us 
as soon as possible toward a major overhaul of the campaign finance 
system, which has eluded us for so many years.
                                 ______

      By Mrs. BOXER:
  S. 1220. A bill to provide that Members of Congress shall not be paid 
during Federal Government shutdowns; to the Committee on Governmental 
Affairs.


                federal government shutdown legislation

 Mrs. BOXER. Mr. President, today I am introducing legislation 
that I believe is fair and necessary.
  This bill says that if the Congress fails to do its work and cannot 
reach agreement on the Federal budget--and the Federal Government 
cannot pay its bills--Members of Congress will not receive pay.
  Americans are being told every day that we may come to a train wreck 
over the budget. Certainly, we have major differences among Members of 
Congress and the President over what our national priorities should be. 
Some in Congress favor a huge tax cut for the rich paid for by 
crippling the Medicare system. I think that is cruel and unfair, and I 
am going to fight it. But even if we cannot agree on priorities, 

[[Page S 12837]]
all Members of Congress should agree that we must pass the budget on 
time and enable the Government to continue operating.
  I believe this legislation is important for two key reasons:
  First, it will help avert the predicted Government shutdown because--
with their personal paychecks on the line--Members will understand the 
fear and uncertainty now being felt by the millions of Americans who 
rely on Government services--from small businesses with Federal 
contracts to farmers to veterans to senior citizens to those who hold 
U.S. Government bonds.
  Second, it codifies a principle that all other workers in America 
live by: If you don't do your job, you shouldn't get paid. One of 
Congress' most important functions is to pass the Nation's budget. If 
we fail in that critically important task, it simply makes sense that 
our pay should be docked.
  This legislation would require that pay for Members of Congress be 
docked if either there is a lapse in appropriations for any Federal 
department or agency or the Federal debt ceiling is reached.
  I am very pleased that a companion measure is being introduced in the 
House of Representatives today by Congressman Dick Durbin.
  I ask unanimous consent that the full text of the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1220

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. PAY OF MEMBERS OF CONGRESS DURING GOVERNMENT 
                   SHUTDOWNS.

       No Member of Congress may receive basic pay for any period 
     in which--
       (1) there is a lapse in appropriations for any Federal 
     agency or department as a result of a failure to enact a 
     regular appropriations bill or continuing resolution; or
       (2) the Federal Government is unable to make payments or 
     meet obligations because the public debt limit under section 
     3101 of title 31, United States Code has been reached.

     SEC. 2. RETROACTIVE PAY PROHIBITED.

       No pay forfeited in accordance with section 1 may be paid 
     retroactively.
                                 ______

      By Mrs. KASSEBAUM (for herself and Mr. Jeffords):
  S. 1221. A bill to authorize appropriations for the Legal Services 
Corporation Act, and for other purposes; to the Committee on Labor and 
Human Resources.


               LEGAL SERVICES REAUTHORIZATION LEGISLATION

 Mrs. KASSEBAUM. Mr. President, I introduce legislation along 
with Senator Jeffords to reauthorize the Legal Services Corporation 
[LSC] Act.
  Through this federally established corporation, thousands of low 
income Americans have access to our legal system. Clients seek 
assistance with landlord-tenant disputes, domestic violence cases, 
writing of wills, and other civil matters. Sometimes the cases need to 
be litigated, but frequently, the clients simply need legal counseling.
  Regrettably, Legal Services has been plagued with controversy over 
the last decade. Critics have charged, with some validity, that Legal 
Services attorneys have acted as advocates for political causes, such 
as welfare reform and state redistricting cases. As a result, LSC has 
not been reauthorized since 1977.
  Today, I am introducing a Senate companion bill to H.R. 1806, 
legislation introduced by Representatives McCollum and Stenholm in the 
House of Representatives. I want to give Representatives McCollum and 
Stenholm credit for their hard work in putting this bill together, and 
for their dedication to assuring that low income Americans retain 
access to our legal system.
  The legislation being introduced today addresses the concerns that 
have been expressed over the past several years by limiting the types 
of activities that Legal Services attorneys can handle. For instance, 
under the bill, Legal Services attorneys cannot represent tenants being 
evicted from public housing projects for drug dealing. In addition, 
attorneys will not be representing incarcerated individuals on prisoner 
rights cases.
  The legislation also has new accountability provisions. Lawyers will 
be required to keep time sheets so federal auditors can monitor the 
types of cases being handled. New litigation safeguards will be 
implemented to protect against the filing of frivolous class action law 
suits. And we will require LSC grantees to bid competitively for their 
LSC contracts.
  Mr. President, Legal Services is an important program. I urge my 
colleagues to support the legislation being introduced today, and ask 
unanimous consent that the full text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                S. 1221

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS; REFERENCE.

       (a) Short Title.--This Act may be cited as the ``Legal 
     Services Reform Act of 1995''.
       (b) Table of Contents.--The table of contents is as 
     follows:

Sec. 1. Short title; table of contents; reference.
Sec. 2. Findings.
Sec. 3. Authorization of appropriations.
Sec. 4. Prohibition on redistricting activity.
Sec. 5. Protection against theft and fraud.
Sec. 6. Solicitation.
Sec. 7. Procedural safeguards for litigation.
Sec. 8. Lobbying and rulemaking.
Sec. 9. Timekeeping.
Sec. 10. Authority of local governing boards.
Sec. 11. Regulation of nonpublic resources.
Sec. 12. Certain eviction proceedings.
Sec. 13. Implementation of competition.
Sec. 14. Research and attorneys' fees.
Sec. 15. Abortion.
Sec. 16. Class actions.
Sec. 17. Aliens.
Sec. 18. Training.
Sec. 19. Copayments.
Sec. 20. Fee-generating cases.
Sec. 21. Welfare reform.
Sec. 22. Prisoner litigation.
Sec. 23. Appointment of Corporation president.
Sec. 24. Evasion.
Sec. 25. Pay for officers and employees of the Corporation.
Sec. 26. Location of principal office.
Sec. 27. Definition.

       (c) Reference.--Whenever in this Act an amendment or repeal 
     is expressed in terms of an amendment to or repeal of a 
     section or other provision, the reference shall be considered 
     to be made to section or other provision of the Legal 
     Services Corporation Act (42 U.S.C. 2996 and following).

     SEC. 2. FINDINGS.

       Section 1001 (42 U.S.C. 2996) is amended to read as 
     follows:


                               ``findings

       ``Sec. 1001. The Congress finds the following:
       ``(1) There is a need to encourage equal access to the 
     system of justice in the United States for individuals 
     seeking redress of grievances.
       ``(2) There is a need to encourage the provision of high 
     quality legal assistance for those who would otherwise be 
     unable to afford legal counsel.
       ``(3) Encouraging the provision of legal assistance to 
     those who face an economic barrier to legal counsel will 
     serve the ends of justice consistent with the purposes of the 
     Legal Services Corporation Act.
       ``(4) It is not the purpose of the Legal Services 
     Corporation Act to meet all the legal needs of all 
     potentially eligible clients, but instead to be a catalyst to 
     encourage the legal profession and others to meet their 
     responsibilities to the poor and to maximize access of the 
     poor to justice.
       ``(5) For many citizens the availability of legal services 
     has reaffirmed faith in our government of laws.
       ``(6) To preserve its strength, the legal services program 
     must be made completely free from the influence of political 
     pressures and completely free of lobbying and political 
     activity.
       ``(7) There are over 2,000 non-profit organizations 
     advocating on behalf of the poor throughout the United States 
     and it is not appropriate for funds regulated under the Legal 
     Services Corporation Act
      to be expended lobbying for or against positions taken by 
     those groups.
       ``(8) Attorneys providing legal assistance must protect the 
     best interests of their clients in keeping with the Code of 
     Professional Responsibility, the Canon of Ethics, and the 
     high standards of the legal profession.

     SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

       Subsection (a) of section 1010 (42 U.S.C. 2996i) is amended 
     to read as follows:
       ``(a) There are authorized to be appropriated for the 
     purposes of carrying out the activities of the Corporation--
       ``(1) $278,000,000 for fiscal year 1996,
       ``(2) $278,000,000 for fiscal year 1997
       ``(3) $278,000,000 for fiscal year 1998,
       ``(4) $278,000,000 for fiscal year 1999, and
       ``(5) $278,000,000 for fiscal year 2000.''.

     SEC. 4. PROHIBITION ON REDISTRICTING ACTIVITY.

       Section 1007(b) (42 U.S.C. 2996f(b)) is amended--
       (1) in paragraph (9), by striking ``or'' after the 
     semicolon;
       (2) in paragraph (10), by striking the period and inserting 
     ``; or''; and
       (3) by adding at the end the following:

[[Page S 12838]]

       ``(11) to--
       ``(A) advocate or oppose, or contribute or make available 
     any funds, personnel, or equipment for use in advocating or 
     opposing, any plan or proposal, or
       ``(B) represent any party or participate in any other way 
     in litigation,

     that is intended to or has the effect of altering, revising, 
     or reapportioning a legislative, judicial, or elective 
     district at any level of government, including influencing 
     the timing or manner of the taking of a census.''.

     SEC. 5. PROTECTION AGAINST THEFT AND FRAUD.

       Section 1005 (42 U.S.C. 2996d) is amended by adding at the 
     end the following:
       ``(h) For purposes of sections 286, 287, 641, 1001, and 
     1002 of title 18, United States Code, the Corporation shall 
     be considered to be a department or agency of the United 
     States Government.
       ``(i) For purposes of sections 3729 through 3733 of title 
     31, United States Code, the term ``United States Government'' 
     shall include the Corporation, except that actions that are 
     authorized by section 3730(b) of such title to be brought by 
     persons may not be brought against the Corporation, any 
     recipient, subrecipient, grantee, or contractor of the 
     Corporation, or any employee thereof.
       ``(j) For purposes of section 1516 of title 18, United 
     States Code--
       ``(1) the term `Federal auditor' shall include any auditor 
     employed or retained on a contractual basis by the 
     Corporation,
       ``(2) the term `contract' shall include any grant or 
     contract made by the Corporation, and
       ``(3) the term `person', as used in subsection (a) of such 
     section, shall include any grantee or contractor receiving 
     financial assistance under section 1006(a)(1).
       ``(k) Funds provided by the Corporation under section 1006 
     shall be deemed to be Federal appropriations when used by a 
     contractor, grantee, subcontractor, or subgrantee of the 
     Corporation.
       ``(1) For purposes of section 666 of title 18, United 
     States Code, funds provided by the Corporation shall be 
     deemed to be benefits under a Federal program involving a 
     grant or contract.''.

     SEC. 6. SOLICITATION.

       Section 1007 (42 U.S.C. 2996f) is amended by adding at the 
     end the following:
       ``(i) Any recipient, and any employee of a recipient, who 
     has given in-person unsolicited advice to a nonattorney that 
     such nonattorney should obtain counsel or take legal action 
     shall not accept employment resulting from that advice, or 
     refer that nonattorney to another recipient or employee of a 
     recipient, except that--
       ``(1) an attorney may accept employment by a close friend, 
     relative, former client (if the advice given is germane to 
     the previous employment by the client), or person whom the 
     attorney reasonably believes to be a client because the 
     attorney is currently handling an active legal matter or case 
     for that specific person;
       ``(2) an attorney may accept employment that results from 
     the attorney's participation in activities designed to 
     educate nonattorneys to recognize legal problems, to make 
     intelligent selection of counsel, or to utilize available 
     legal services if such activities are conducted or sponsored 
     by a qualified legal assistance organization;
       ``(3) without affecting that attorney's right to accept 
     employment, an attorney may speak publicly or write for 
     publication on legal topics so long as such attorney does not 
     emphasize the attorney's own professional experience or 
     reputation and does not undertake to give individual advice 
     in such speech or publication; and
       ``(4) if success in asserting rights or defenses of a 
     client in litigation in the nature of class action is 
     dependent upon the joinder of others, an attorney may accept, 
     but shall not seek, employment from those contacted for the 
     purpose of obtaining that joinder.''.

     SEC. 7. PROCEDURAL SAFEGUARDS FOR LITIGATION.

       Section 1007 (42 U.S.C. 2996f), as amended by section 6 of 
     this Act, is further amended by adding at the end the 
     following:
       ``(j)(1) No recipient or employee of a recipient may file a 
     complaint or otherwise pursue litigation against a defendant 
     unless--
       ``(A) all plaintiffs have been specifically identified, by 
     name, in any complaint filed for purposes of litigation, 
     except to the extent that a court of competent jurisdiction 
     has granted leave to protect the identity of any plaintiff; 
     and
       ``(B) a statement or statements of facts written in English 
     and, if necessary, in a language which the plaintiffs 
     understand, which enumerate the particular facts known to the 
     plaintiffs on which the complaint is based, have been signed 
     by the plaintiffs (including named plaintiffs in a class 
     action), are kept on file by the recipient, and are made 
     available to any Federal department or agency that is 
     auditing the activities of the Corporation or any recipient, 
     and to any auditor receiving Federal funds to conduct such 
     auditing, including any auditor or monitor of the 
     Corporation.

     Other parties shall have access to the statement of facts 
     referred to in subparagraph (B) only through the discovery 
     process after litigation has begun.
       ``(2) No recipient or employee of a recipient may engage in 
     precomplaint settlement negotiations with a prospective 
     defendant unless--
       ``(A) all plaintiffs have been specifically identified, 
     except to the extent that a court of competent jurisdiction 
     has granted leave to protect the identity of any plaintiff; 
     and
       ``(B) a statement or statements of facts written in English 
     and, if necessary, in a language which the plaintiffs 
     understand, which enumerate the particular facts known to the 
     plaintiffs on which the complaint will be based if such 
     negotiations fail, have been signed by all plaintiffs 
     (including named plaintiffs in a class action), are kept on 
     file by the recipient, and are made available to all 
     prospective
      defendants or such defendants' counsel, to any Federal 
     department or agency that is auditing the activities of 
     the Corporation or any such recipient, and to any auditor 
     receiving Federal funds to conduct such auditing, 
     including any auditor or monitor of the Corporation.
       ``(3)(A) Subject to subparagraph (B), any Federal district 
     court of competent jurisdiction, after notice to potential 
     parties to litigation referred to in paragraph (1) or to 
     negotiations described in paragraph (2) and after an 
     opportunity for a hearing, may enjoin the disclosure of the 
     identity of any potential plaintiff pending the outcome of 
     such litigation or negotiations, upon the establishment of 
     reasonable cause to believe that such an injunction is 
     necessary to prevent probable, serious harm to such potential 
     plaintiff.
       ``(B) Notwithstanding subparagraph (A), the court shall, in 
     a case in which subparagraph (A) applies, order the 
     disclosure of the identity of any potential plaintiff to 
     counsel for potential defendants upon the condition that 
     counsel for potential defendants not disclose the identity of 
     such potential plaintiff (other than to investigators or 
     paralegals hired by such counsel), unless authorized in 
     writing by such potential plaintiff's counsel or the court.
       ``(C) In a case in which paragraph (1) applies, counsel for 
     potential defendants and the recipient or employee counsel of 
     the recipient may execute an agreement, in lieu of seeking a 
     court order under subparagraph (A), government disclosure of 
     the identity of any potential plaintiff.
       ``(D) The court may punish as a contempt of court any 
     violation of an order of the court under subparagraph (A) or 
     (B)--or of an agreement under subparagraph (C).
       ``(4) Any funds received from a defendant by a recipient on 
     behalf of a class of eligible clients shall be placed in an 
     escrow account until the funds may be paid to such clients. 
     Any such funds which are not disbursed to clients within one 
     year of the date on which such funds were received shall be 
     returned to the defendant.''.

     SEC. 8. LOBBYING.

       Section 1007(a)(5) (42 U.S.C. 2996f(a)(5)) is amended to 
     read as follows:
       ``(5) ensure that no funds made available to recipients are 
     used at any time, directly or indirectly--
       ``(A) to influence the issuance, amendment, or revocation 
     of any executive order or similar promulgation by any 
     Federal, State or local agency, or to undertake to influence 
     the passage or defeat of any legislation by the Congress of 
     the United States, or by any State or local legislative body, 
     or State proposals made by initiative petition or referendum, 
     except to the extent that a governmental agency, a 
     legislative body, a committee, or a member thereof is 
     considering a measure directly affecting the recipient or the 
     Corporation;
       ``(B) to pay for any publicity or propaganda intended or 
     designed to support or defeat legislation pending before the 
     Congress or State or local legislative bodies or intended or 
     designed to influence any decision by a Federal, State, or 
     local agency;
       ``(C) to pay for any personal service, advertisement, 
     telegram, telephone communications, letter, printed or 
     written matter, or other device, intended or designed to 
     influence any decision by a Federal, State, or local agency, 
     except when legal assistance is provided by an employee of a 
     recipient to an eligible client on a particular application, 
     claim, or case, which directly involves the client's legal 
     rights or responsibilities and which does not involve the 
     issuance, amendment, or revocation of any agency promulgation 
     described in subparagraph (A);
       ``(D) to pay for any personal service, advertisement, 
     telegram, telephone communication, letter, printed or written 
     matter, or any other device intended or designed to influence 
     any Member of Congress or any other Federal, State, or local 
     elected official--
       ``(i) to favor or oppose any referendum, initiative, 
     constitutional amendment, or any similar procedures of the 
     Congress, any State legislature, any local council, or any 
     similar governing body acting in a legislative capacity,
       ``(ii) to favor or oppose an authorization or appropriation 
     directly affecting the authority, function, or funding of the 
     recipient or the Corporation, or
       ``(iii) to influence the conduct of oversight proceedings 
     of a recipient or the Corporation; or
       ``(E) to pay for any personal service, advertisement, 
     telegram, telephone communication, letter, printed or written 
     matter, or any other device intended or designed to influence 
     any Member of Congress or any other Federal, State, or local 
     elected official to favor or oppose any Act, bill, 
     resolution, or similar legislation;

     and ensure that no funds made available to recipients are 
     used to pay for any administrative or related costs 
     associated with an activity prohibited in subparagraph (A), 
     (B), (C), (D), or (E);''.
     
[[Page S 12839]]


     SEC. 9. TIMEKEEPING.

       Section 1008(b) (42 U.S.C. 2996g(b)) is amended--
       (1) by inserting ``(1)'' after ``(b)''; and
       (2) by adding at the end the following:
       ``(2) The Corporation shall require each recipient to 
     maintain records of time spent on the cases or matters with 
     respect to which that recipient is engaged in activities. 
     Pursuant to such requirements, each employee of such 
     recipient who is an attorney or paralegal shall record, by 
     the name of the case or matter, at the time such employee 
     engages in an activity regarding such case or matter, the 
     type (as defined by the Corporation) of case or matter, the 
     time spent on the activity, and the source of funds to be 
     charged for the activity.''.

     SEC. 10. AUTHORITY OF LOCAL GOVERNING BOARDS.

       Section 1007(c) (42 U.S.C. 2996f(c)) is amended--
       (1) by striking ``(1)'' and ``(2)'' and inserting ``(A)'' 
     and ``(B)'', respectively;
       (2) by inserting ``(1)'' after ``(c)''; and
       (3) by adding at the end the following:
       ``(2) The board of directors of any nonprofit organization 
     that is--
       ``(A) chartered under the laws of one of the States, a 
     purpose of which is furnishing legal assistance to eligible 
     clients, and
       ``(B) receiving funds made available by or through the 
     Corporation,

     shall set specific priorities pursuant to section 
     1007(a)(2)(C) for the types of matters and cases to which the 
     staff of the nonprofit organization shall devote its time and 
     resources. The staff of such organization shall not undertake 
     cases or matters other than in accordance with the specific 
     priorities set by its board of directors, except in emergency 
     situations defined by such board. The staff of such 
     organization shall report, to the board of directors of the 
     organization on a quarterly basis and to the Corporation on 
     an annual basis, all cases undertaken other than in 
     accordance with such priorities. The Corporation shall 
     promulgate a suggested list of priorities which boards of 
     directors may use in setting priorities under this 
     paragraph.''.

     SEC. 11. REGULATION OF NONPUBLIC RESOURCES.

       Section 1010(c) (42 U.S.C. 2996i(c)) is amended to read as 
     follows:
       ``(c)(1) Any non-Federal funds received by the Corporation, 
     and any funds received by any recipient from any source other 
     than the Corporation, shall be accounted for and reported as 
     receipts and disbursements separate and distinct from 
     Corporation funds. Any funds so received, including funds 
     derived from Interest on Lawyers Trust Accounts, may not be 
     expended by recipients for any purpose prohibited by this 
     title or the Legal Services Reform Act of 1995. The 
     Corporation shall not accept any non-Federal funds, and any 
     recipient shall not accept funds from any source other than 
     the Corporation, unless the Corporation or the recipient, as 
     the case may be, notifies in writing the source of such funds 
     that the funds may not be expended for any purpose prohibited 
     by this title or the Legal Services Reform Act of 1995.
       ``(2) Paragraph (1) shall not prevent recipients from--
       ``(A) receiving Indian tribal funds (including funds from 
     private nonprofit organizations for the benefit of Indians or 
     Indian tribes) and expending them in accordance with the 
     specific purposes for which they are provided; or
       ``(B) using funds received from a source other than the 
     Corporation to provide legal assistance to a client who is 
     not an eligible client if such funds are used for the 
     specific purposes for which such funds were received, except 
     that such funds may not be expended by recipients for any 
     purpose prohibited by this title or the Legal Services Reform 
     Act of 1995 (other than any requirement regarding the 
     eligibility of clients).''.

     SEC. 12. CERTAIN EVICTION PROCEEDINGS.

       Section 1007 (42. U.S.C. 2996f), as amended by sections 6 
     and 7 of this Act, is further amended by adding at the end 
     the following:
       ``(k)(1) No funds made available by or through the 
     Corporation may be used for defending a person in a 
     proceeding to evict that person from a public housing project 
     if the person has been charged with the illegal sale or 
     distribution of a controlled substance and if the eviction 
     proceeding is brought by a public housing agency because the 
     illegal drug activity of that person threatens the health or 
     safety of other tenants residing in the public housing 
     project or employees of the public housing agency.
       ``(2) As used in this subsection--
       ``(A) the term `controlled substance' has the meaning given 
     that term in section 102 of the Controlled Substances Act (21 
     U.S.C. 802); and
       ``(B) the terms `public housing project' and `public 
     housing agency' have the meanings given those terms in 
     section 3 of the United States Housing Act of 1937 (42 U.S.C. 
     1437a).''.

     SEC. 13. IMPLEMENTATION OF COMPETITION.

       (a) In General.--Section 1007 (42 U.S.C. 2996f), as amended 
     by sections 6, 7, and 12 of this Act, is further amended by 
     adding at the end the following:
       ``(l)(1) All grants and contracts awarded by the 
     Corporation for the provision or support of legal assistance 
     to eligible clients under this title shall be awarded under a 
     competitive bidding system.
       ``(2) Rights under sections 1007(a)(9) and 1011 shall not 
     apply to the termination or denial of financial assistance 
     under this title as a result of the competitive award of any 
     grant or contract under paragraph (1), and the expiration of 
     any grant or contract under this title as a result of such 
     competitive award shall not be treated as a termination or 
     denial of refunding under section 1007(a)(9) or 1011.
       ``(3) For purposes of this subsection, the term 
     `competitive bidding' means a system established by 
     regulations issued by the Corporation which provide for the 
     award of grants and contracts on the basis of merit to 
     persons, organizations, and entities described in section 
     1006(a) who apply for such awards in competition with
      others under promulgated criteria. The Corporation shall 
     ensure that the system incorporates the following:
       ``(A) The competitive bidding system shall commence no 
     later than one year after the date of enactment of this 
     provision and all previously awarded grants and contracts 
     shall be set aside and subjected to this system within one 
     year thereafter.
       ``(B) All awards of grants and contracts made under this 
     system shall be subject to periodic review and renewed with 
     the opportunity for others to compete for the award, and in 
     no event shall any award be granted for a period longer than 
     5 years.
       ``(C) Timely notice for the submission of applications for 
     awards shall be published in periodicals of local and State 
     bar associations and in at least one daily newspaper of 
     general circulation in the area to be served by the award 
     recipient.
       ``(D) The selection criteria shall include but not be 
     limited to the demonstration of a full understanding of the 
     basic legal needs of the eligible clients to be served and a 
     demonstration of the capability of serving those needs; the 
     reputations of the principals of the applicant; the quality, 
     feasibility, and cost effectiveness of plans submitted by the 
     applicant for the delivery of legal assistance to the 
     eligible clients to be served; a demonstration of willingness 
     to abide by the restrictions placed on those awarded grants 
     and contracts by the Corporation; and, if an applicant has 
     previously received an award from the Corporation, the 
     experiences of the Corporation with the applicant.
       ``(E) No previous recipient of an award of a grant or 
     contract may be given any preference.
       ``(m)(1) The Corporation shall define service areas and 
     funds available for each service area shall be on a per 
     capita basis pursuant to the number of poor people determined 
     by the Bureau of the Census to be within that area. Funds for 
     a service area may be distributed by the Corporation to one 
     or more recipients as defined in section 1006(a).
       ``(2) The amount of the grants from the Corporation and of 
     the contracts entered into by the Corporation under section 
     1006(a)(1) shall be an equal figure per poor person for all 
     geographic areas, based on the most recent decennial census 
     of population conducted pursuant to section 141 of title 13, 
     United States Code, regardless of the level of funding for 
     any such geographic area before the enactment of the Legal 
     Services Reform Act of 1995.
       ``(3) Beginning with the fiscal year beginning after the 
     results of the most recent decennial census have been 
     reported to the President under section 141(b) of title 13, 
     United States Code, funding of geographic areas served by 
     recipients shall be redetermined, in accordance with 
     paragraph (2), based on the per capita poverty population in 
     each such geographic area under that decennial census.''.
       (b) Requirements of Recipients.--Section 1007(c) (42 U.S.C. 
     2996f(c)), as amended by section 10 of this Act, is further 
     amended by adding at the end the following:
       ``(3) Funds appropriated for the Corporation may not be 
     used by the Corporation in making grants or entering into 
     contracts for legal assistance unless the Corporation ensures 
     that the recipient is either--
       ``(A) a private attorney or attorneys,
       ``(B) State and local governments or substate regional 
     planning and coordination agencies which are composed of 
     substate areas whose governing board is controlled by locally 
     elected officials, or
       ``(C) a qualified nonprofit organization chartered under 
     the laws of one of the States--
       ``(i) a purpose of which is furnishing legal assistance to 
     eligible clients, and
       ``(ii) the majority of the board of directors or other 
     governing body of which is comprised
      of attorneys who are admitted to practice in one of the 
     States and are approved to serve on such board or body by 
     the governing bodies of State, county, or municipal bar 
     associations the membership of which represents a majority 
     of the attorneys practicing law in the locality in which 
     the organization is to provide legal assistance.

     The approval described in subparagraph (B)(ii) may be given 
     to more than one group of directors.''.

     SEC. 14. POWERS, RESEARCH, AND ATTORNEYS' FEES.

       (a) Powers.--Section 1006(a)(1)(A)(ii) is amended to read 
     as follows:
       ``(ii) State and local governments or substate regional 
     planning and coordination agencies which are composed of 
     substate areas whose governing board is controlled by locally 
     elected officials,''.
       (b) Research.--Section 1006(a) (42 U.S.C. 2996e(a)) is 
     amended by inserting ``and'' at the end of paragraph (1), by 
     striking ``; and'' at the end of paragraph (2) and inserting 
     a period, and by striking paragraph (3).

[[Page S 12840]]

       (c) Attorneys' Fees.--Section 1006 (42 U.S.C. 2996e(f)) is 
     amended by striking subsection (f) and inserting the 
     following:
       ``(f)(1) A recipient, or any client of such recipient, may 
     not claim or collect attorneys' fees from nongovernmental 
     parties to litigation initiated by such client with the 
     assistance of such recipient.
       ``(2) The Corporation shall create a fund to pay defendants 
     or clients under paragraphs (3). In addition to any other 
     amounts appropriated to the Corporation, there is authorized 
     to be appropriated to such fund for each fiscal year such 
     sums as may be necessary.
       ``(3) If a Federal court has found an action commenced by a 
     plaintiff with the assistance of a recipient involves a 
     violation of Rule 11 of the Federal Rules of Civil Procedure, 
     or if the president of the Corporation finds that an action 
     commenced by a plaintiff with the assistance of a recipient 
     in any court involves a violation of the standards of Rule 
     11, or was commenced for the purpose of retaliation or 
     harassment, the president of the Corporation shall, upon 
     application by the defendant, award from the Fund all 
     reasonable costs and attorneys' fees incurred by the 
     defendant in defending the action.
       ``(g)(1) The Board, within 90 days after the date of the 
     enactment of the Legal Services Reform Act of 1995, shall 
     issue regulations to provide for the distribution of 
     attorneys' fees received by a recipient, in accordance with 
     paragraph (2).
       ``(2) Such fees shall be transferred to the Corporation and 
     the Corporation shall distribute such fees among its grantees 
     for the direct delivery of legal assistance, except that, 
     subject to approval by the Corporation--
       ``(A) a recipient shall not be required to transfer fees or 
     other compensation received as a result of a mandated court 
     appointment;
       ``(B) a recipient may retain reasonable costs customarily 
     allowed in litigation against an unsuccessful party; and
       ``(C) a recipient may retain the actual cost of bringing 
     the action, including the proportion of the compensation of 
     each attorney involved in the action which is attributable to 
     that action.''.

     SEC. 15. ABORTION.

       (a) Prohibition.--Section 1007 (42 U.S.C. 2996f), as 
     amended by sections 6, 7, 12, and 13 of this Act, is further 
     amended by adding at the end the following:
       ``(n) No funds made available to any recipient from any 
     source may be used to participate in any litigation with 
     respect to abortion.''.
       (b) Conforming Amendment.--Section 1007(b) (42 U.S.C. 
     2996f(b)), as amended by section 4, is amended by striking 
     paragraph (8) and redesignating paragraphs (9), (10), and 
     (11) as paragraphs (8), (9), and (10), respectively.

     SEC. 16. CLASS ACTIONS.

       Section 1006(d)(5) (42 U.S.C. 2996e(d)(5)) is amended--
       (1) by striking ``No'' and inserting ``(A) Subject to 
     subparagraph (B), no''; and
       (2) by adding at the end the following:
       ``(B) No recipient or employee of a recipient may bring a 
     class action suit against the Federal Government or any State 
     or local government unless--
       ``(i) the governing body of the recipient has expressly 
     approved the filing of such an action;
       ``(ii) the class relief which is the subject of such an 
     action is sought for the primary benefit of individuals who 
     are eligible for legal assistance under this title; and
       ``(iii) before filing such an action, the project director 
     of the recipient determines that the government entity is not 
     likely to change the policy or practice in question, that the 
     policy or practice will continue to adversely affect eligible 
     clients, that the recipient has given notice of its intention 
     to seek class relief, and that responsible efforts to resolve 
     without litigation the adverse effects of the policy or
      practice have not been successful or would be adverse to the 
     interest of the clients.''.

     SEC. 17. RESTRICTIONS ON USE OF FUNDS FOR LEGAL ASSISTANCE TO 
                   ALIENS.

       Section 1007 (42 U.S.C. 2996f), as amended by sections 6, 
     7, 12, 13, and 15 of this Act, is further amended by adding 
     at the end the following:
       ``(o) No funds made available to any recipient from any 
     source may be expended to provide legal assistance for or on 
     behalf of any alien unless the alien is present in the United 
     States and is--
       ``(1) an alien lawfully admitted for permanent residence as 
     defined in section 101(a)(2) of the Immigration and 
     Nationality Act (8 U.S.C. 1101(a)(20));
       ``(2) an alien who is either married to a United States 
     citizen or is a parent or an unmarried child under the age of 
     21 years of such a citizen and who has filed an application 
     for adjustment of status to permanent resident under the 
     Immigration and Nationality Act, and such application has not 
     been rejected;
       ``(3) an alien who is lawfully present in the United States 
     pursuant to an admission under section 207 of the Immigration 
     and Nationality Act (8 U.S.C. 1157, relating to refugee 
     admissions) or who has been granted asylum by the Attorney 
     General under such Act;
       ``(4) an alien who is lawfully present in the United States 
     as a result of the Attorney General's withholding of 
     deportation pursuant to section 243(h) of the Immigration and 
     Nationality Act (8 U.S.C. 1253(h)); or
       ``(5) an alien to whom section 305 of the Immigration 
     Reform and Control Act of 1986 applies, but only to the 
     extent that the legal assistance provided is that described 
     in that section.

     An alien who is lawfully present in the United States as a 
     result of being granted conditional entry pursuant to section 
     203(a)(7) of the Immigration and Nationality Act (8 U.S.C. 
     11553(a)(7)) before April 1, 1980, because of persecution or 
     fear of persecution on account of race, religion, or 
     political opinion or because of being uprooted by 
     catastrophic natural calamity shall be deemed to be an alien 
     described in paragraph (3).''.

     SEC. 18. TRAINING.

       Section 1007(b)(6) (42 U.S.C. 2996f(b)(6)) is amended to 
     read as follows:
       ``(6) to support or conduct training programs for the 
     purpose of advocating particular public policies or 
     encouraging political activities, labor or antilabor 
     activities, boycotts, picketing, strikes, or demonstrations, 
     including the dissemination of information about such 
     policies or activities, except that this paragraph shall not 
     be construed to prohibit the training of attorneys or 
     paralegal personnel necessary to prepare them to provide 
     adequate legal assistance to eligible clients, to advise any 
     eligible client as to the nature of the legislative process, 
     or to inform any eligible client of the client's rights under 
     any statute, order, or regulation;''.

     SEC. 19. COPAYMENTS.

       Section 1007 (42 U.S.C. 2996f), as amended by sections 6, 
     7, 12, 13, 15, and 17 of this Act, is further amended by 
     adding at the end the following:
       ``(p) The Corporation shall undertake one or more 
     demonstration projects in order to study the feasibility of 
     using client copayments to assist in setting the service 
     priorities of its programs. Based on these projects and such 
     other information as it considers appropriate, the 
     Corporation may adopt a permanent system of client copayments 
     for some or all of its programs of legal assistance.''.
     SEC. 20. FEE-GENERATING CASES.

       (a) Representation in Fee-Generating Case.--Paragraph (1) 
     of section 1007(b) (42 U.S.C. 2996f(b)) is amended to read as 
     follows:
       ``(1) to provide legal assistance with respect to any fee-
     generating case, except that this paragraph does not preclude 
     representation of otherwise eligible clients in cases in 
     which the client seeks benefits under titles II or XVI of the 
     Social Security Act;''.
       (b) Definition.--Section 1007(b) is amended by adding at 
     the end the following:

     ``For purposes of paragraph (1), the term `fee-generating 
     case' means any case which if undertaken on behalf of an 
     eligible client by an attorney in private practice may 
     reasonably be expected to result in a fee for legal services 
     from an award to a client from public funds, from the 
     opposing party, or from any other source.''.

     SEC. 21. WELFARE REFORM.

       Section 1007(b) (42 U.S.C. 2996f(b)), as amended by section 
     15(b), is amended--
       (1) by striking ``or'' at the end of paragraph (9),
       (2) by striking the period at the end of paragraph (10) and 
     inserting a semicolon, and
       (3) by adding after paragraph (10) the following:
       ``(11) to provide legal representation for any person or 
     participate in any other way in litigation, lobbying, or 
     rulemaking involving efforts to reform a State or Federal 
     welfare system, except that this paragraph does not preclude 
     a recipient from representing an individual client who 
     seeking specific relief from a welfare agency where such 
     relief does not involve an effort to amend or otherwise 
     challenge existing law; or''.

      SEC. 22. PRISONER LITIGATION.

       Section 1007(b) (42 U.S.C. 2996f(b)), as amended by section 
     21, is amended by adding after paragraph (11) the following:
       ``(12) to provide legal representation in litigation on 
     behalf of a local, State, or Federal prisoner.''.

     SEC. 23. APPOINTMENT OR CORPORATION PRESIDENT.

       Section 1005 (42 U.S.C. 2996d) is amended in subsection 
     (a)--
       (1) by striking ``The Board shall'' and inserting ``The 
     President, by and with the advice and consent of the Senate, 
     shall'';
       (2) by adding ``who shall serve at the pleasure of the 
     President'' after ``the president of the Corporation,'';
       (3) by striking ``as the Board'' and inserting ``as the 
     President''; and
       (4) by striking ``by the Board'' and inserting ``by the 
     President''.

     SEC. 24. EVASION.

       The Legal Services Corporation Act is amended--
       (1) by redesignating sections 1013 and 1014 as sections 
     1014 and 1015, respectively; and
       (2) by inserting after section 1012 the following new 
     section:


                               ``evasion

       ``Sec. 1013. Any attempt, such as the creation or use of 
     `alternative corporations', to avoid or otherwise evade the 
     provisions of this title or the Legal Services Reform Act of 
     1995 is prohibited.''.

     SEC. 25. PAY FOR OFFICERS AND EMPLOYEES OF THE CORPORATION.

       Section 1005(d) (42 U.S.C. 2996d(d)) is amended--
       (1) by striking ``V'' and inserting ``III''; and
       (2) by striking ``5316'' and inserting ``3514''.

     SEC. 26. LOCATION OF PRINCIPAL OFFICE.

       Section 1003(b) (42 U.S.C. 2996b(b)) is amended by striking 
     ``District of Columbia'' 

[[Page S 12841]]
     and inserting ``Washington D.C. metropolitan area''.

     SEC. 27. DEFINITION.

       As used in section 1009(d) of Legal Services Corporation 
     Act, the term ``attorney client privilege'' protects only a 
     communication made in confidence to an attorney by a client 
     for the purpose of seeking legal advice. Claims of such 
     privilege and claims of confidentiality do not, except to the 
     extent provided by court order, protect from disclosure to 
     any Federal department or agency that is auditing the 
     activities of the Legal Services Corporation or any recipient 
     (as defined in section 1002 of the Legal Services Corporation 
     Act), or to any auditor receiving Federal funds to conduct 
     such auditing, including any auditor or monitor of the 
     Corporation, the names of plaintiffs that are a matter of 
     public record or documents which have been seen by third 
     parties, including all financial books and records. The 
     Corporation shall not disclose any such information, except 
     to the Inspector General of the Corporation, to Federal or 
     State law enforcement, judicial, or other officials, or to 
     officials of appropriate bar associations for the purpose of 
     conducting investigations of violations of rules of 
     professional conduct.
                                 ______

      By Mr. FAIRCLOTH:
  S. 1222. A bill to prevent the creation of an international bailout 
fund within the International Monetary Fund, and for other purposes; to 
the Committee on Foreign Relations.


                international monetary fund legislation

 Mr. FAIRCLOTH. Mr. President, I have spoken on a number of 
occasions in opposition to the United States bailout of Mexico. To 
date, the United States has provided $12.5 billion for Mexico to prop 
up the Mexican peso. I remain skeptical that the United States will 
ever have this money repaid.
  The Banking Committee held hearings approximately 2 months ago in 
which a number of Mexican citizens, some of them prominent political 
opposition leaders, said that we would never be repaid.
  What is particularly bothersome about the Mexico debacle is that the 
United States taxpayer is guaranteeing repayment to investors in 
Mexican bonds who at the time were earning extraordinary returns, some 
30 percent to 40 percent on Mexico bonds. These investors were aware of 
the risks.
  As a reponse to this crisis, the administration, along with the 
International Monetary Fund [IMF], is now considering the establishment 
of an international fund to bail out other countries that find 
themselves in the same position as Mexico. The administration calls 
this an Emergency Financing Mechanism--but the truth is that it's 
another bailout on an international scale.
  The most troubling aspect of this is that the new fund will create a 
moral hazard for other countries. What will stop a country from 
pursuing reckless economic policies, from going deeper into debt--
knowing that if they fail, the newly created fund stands ready for a 
bailout. What will prevent investors from investing in the most risky 
Government bonds--with full knowledge that the IMF stands ready for an 
emergency bailout.
  I think this is a bad idea, and I think the United States and the 
International Monetary Fund [IMF] should abandon further discussions 
about its creation.
  Unfortunately, I am not sure this administration will back away from 
this proposal. For this reason, I am introducing legislation today that 
will stop the creation of any new international bailout fund.
  The bill will prevent any funds from being used, directly or 
indirectly, for the creation of this new international fund.
  Mr. President, our own country is going into debt approximately $800 
million a day. We simply cannot afford to be bailing out foreign 
countries that have pursued poor economic policies. It is bad enough 
that we have spent $12.5 billion on Mexico. After this, we should say 
no more to Mexico, and no more to any other country.
  If the United States keeps up this spending pattern, who is going to 
bail out this country? We sent a troubling signal to the world that we 
were not going to get our economic house in order when the Senate 
refused to pass a balanced budget amendment, and the dollar declined as 
a result. I know for certain that we will never balance the budget if 
we continue policies like bailing out Mexico.
  Mr. President, in conclusion, if the United States is serious about 
balancing our budget--and about avoiding other debacles like Mexico, we 
will move quickly to stop the creation of this new fund. I would urge 
the Senate to move forward on this legislation.


                          ____________________