[Congressional Record Volume 141, Number 170 (Tuesday, October 31, 1995)]
[Senate]
[Pages S16372-S16373]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                EXTENSION FOR REPAYMENT OF MEXICO'S LOAN

  Mr. D'AMATO. Mr. President, without any fanfare, late this past 
Friday afternoon, the Clinton administration quietly gave the 
Government of Mexico an extension on their loan payments owed to the 
United States taxpayers. This delay contrasts sharply with the much 
publicized partial prepayment Mexico made on the same loan just a few 
weeks ago.
  Yesterday, the Mexican Government was supposed to pay the remaining 
$1.3 billion of their $2 billion payment to the United States. This 
money is only a part of the $12.5 billion in loans given to Mexico by 
the Clinton administration this year.
  On October 6, as part of the public relations campaign for Mexican 
President Zedillo's visit, Mexico paid back $700 million. At that time 
the Clinton administration hailed this partial prepayment saying, ``The 
American taxpayer is being repaid ahead of schedule.''
  But what that amounted to, Mr. President, was nothing more than a 
publicity stunt. This so-called prepayment turned out to be a sham.
  What about the $1.3 billion still owed to the American taxpayers that 
was due yesterday? On Friday, the real story came out. Without the 
fanfare, the photo opportunities, and the state dinner at the White 
House, the Clinton administration quietly announced that it was their 
plan all along to allow Mexico to postpone paying back its loan.
  Mr. President, I am outraged. It appears to this Senator that the 
loans to Mexico may never be repaid, and the Clinton administration 
knows it. I have serious doubts that the American taxpayer will ever be 
repaid all of the $12.5 billion that this administration sent to 
Mexico.
  It is time to stop playing politics and tell the truth to the 
American public. Make no mistake about what and who is bankrolling the 
Clinton administration loans to the Mexican Government. It is the U.S. 
taxpayer, the American citizen. And the reality stands in sharp 
contrast to what the administration said just weeks ago. The American 
taxpayers are not being paid back on time.
  The Clinton administration's claims that the Mexican bailout is a 
success rings hollow. The Mexican bailout is a failure for the American 
taxpayers and the Mexican economy. The history of the Clinton 
administration's bailout is a failed one.
  On December 9, 1994, President Clinton lauded Mexico as an economic 
success story. And just 10 days later the Mexican Government ineptly 
devalued their peso by 20 percent. The peso's value subsequently went 
into a free fall and capital fled Mexico.
  Ironically, we have recently learned that Mexican investors have been 
pulling their money out of Mexico before the peso's crash. They were 
tipped off, Mr. President. They got their money out long before the 
rest of the world found out what was happening. The question again 
emerges, why are American taxpayers forced by the Clinton 
administration to bail out a foreign economy that was first abandoned 
by its own wealthy citizens?
  I have said all along that American tax dollars are being sent to 
Mexico to bail out wealthy global speculators. That is wrong. So where 
are we now? The Mexican Government, with the approval and consent of 
the Clinton administration, has used American taxpayer dollars to pay 
off investors, but the Mexican economy remains in shambles. Global 
speculators have reaped huge profits while U.S. taxpayers are left 
holding the bag.
  Last Thursday, the Mexican peso dropped to a 7-month low, trading at 

[[Page S16373]]

7.23 pesos to the dollar, almost matching its low point of 7.5 pesos to 
the dollar in early March. The Mexican Central Bank frantically 
intervened to support the peso but despite these efforts, the peso 
closed at 6.925 to the dollar yesterday. Banks in Mexico may have to 
raise short-term interest rates even higher to help the peso recover 
its value.
  These high interest rates are already crippling Mexican families and 
small businesses. And, Mr. President, do you know who they hold 
responsible for this? The United States of America. The Clinton and 
Zedillo administrations' assertions that the Mexican economy is 
recovering simply does not hold water. It is not true. The American 
people and the United States Congress deserve all the facts on the 
Mexican economic situation.
  This summer, I released a report on the Mexican economic crisis that 
detailed a disturbing pattern of deception and misrepresentation of the 
true state of the Mexican economy. News reports indicate an internal 
study commissioned by the International Monetary Fund [IMF], sheds new 
light on the subject and confirms this disturbing pattern. Now the 
Clinton administration has classified the report--the Whittome report--
and is resisting efforts to make it available to the public. The public 
has a right to know the whole truth. Why is the Treasury Department 
hiding this information from the American public?
  I have written to the Director of the IMF and copied the Secretary of 
the Treasury to request that this report be made public. We have sent 
$12.5 billion worth of taxpayer money directly from the United States 
and $9.8 billion from the IMF. Another $1.6 billion will be sent from 
the IMF to Mexico next month. And do you know who is the single largest 
contributor to the IMF--the United States. According to news reports, 
the Whittome report provides valuable insight into the handling of the 
Mexican economic crisis by the administration and the IMF. Yet neither 
of them wants to share this report with the American public.
  On October 18, I wrote to the Director of the IMF asking him to make 
it available. The public has a right to know the whole truth but so far 
the Treasury Department and the IMF have not responded to my request.
  We were told several weeks ago that Mexico was recovering 
wonderfully, that it was repaying its debt of $700 million earlier than 
required, but the administration knew 2 weeks ago that Mexico would be 
unable to pay the full debt, which was $2 billion. So they put up $700 
million, when they still owe us $1.3 billion and call it a success. It 
is disingenuous to say the least.
  Mr. President, let me make a prediction before I close. I predict 
that there will be a time in the not-too-distant future when we will 
see Mexico come quietly to the Treasury, the United States Treasury, 
and make a deal for more money, and this administration will once again 
go along with it. The American people will be the losers. We should be 
prepared the next time they come to say no.
  There is an old saying, ``You don't put good money after bad.'' But I 
guess we have an administration that figures if it is not their money, 
that it only belongs to the American taxpayers, that wise old saying is 
not valid.
  I believe this Congress has a responsibility to demand that report, 
and I intend to submit a resolution expressing the sense of the Senate 
that report be made available so that the American people can see that 
we have a Government that operates in accordance with the rules and 
they can judge the situation for themselves. They can decide whether or 
not they are ever going to get that $12.5 billion back. The American 
public can decide whether or not the administration has dealt with them 
fairly and candidly.
  Mr. President, I thank you for your courtesies and I yield the floor.
  Mr. INHOFE addressed the Chair.
  The PRESIDING OFFICER (Mr. Thomas). The Senator from Oklahoma is 
recognized for 5 minutes in morning business.
  Mr. INHOFE. Thank you.

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