[Congressional Record Volume 141, Number 181 (Wednesday, November 15, 1995)]
[Senate]
[Pages S17060-S17061]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           CONCEALING THE TRUE FACTS ABOUT MEXICO AND THE IMF

  Mr. D'AMATO. Mr. President, for months, the Clinton administration 
and the Mexican Government have told Congress and the American people 
that the President's $20 billion bailout of Mexico was a success. But 
the administration and the Mexican Government have been concealing the 
true facts from the Congress and, more importantly, from the American 
people. It is wrong and it is outrageous. Particularly in this time of 
budget austerity when we are having such incredible battles over how to 
balance the budget and deciding what programs will be cut. I think it 
is incredible at this point in our history that we are watching tens of 
billions of dollars go down a sinkhole and do nothing about it.
  For almost a year, I have warned that the Clinton bailout of Mexico 
was doomed to failure. Over the last few weeks, it has become clear 
that the President's Mexican mirage is evaporating. Truth, 
unfortunately, is not pleasant at times, so there are those who seek to 
look the other way. But the truth is finally coming into focus.
  The Clinton administration and the Mexican Government can no longer 
conceal the real facts. We know that record numbers of Mexicans are out 
of work, that Mexican interest rates are soaring and that Mexico is 
reeling under increasing social and political unrest.
  Before the Mexican peso was devalued last December, it traded at 3.44 
against the dollar. On December 22, after the devaluation, the peso was 
trading at 4.8. Then it went up to 6, and then 7. Yesterday, the peso 
closed at 7.81. That is a historic low closing rate. Never before has 
it closed at such a rate--7.81 pesos to the dollar. This morning, it 
opened at 7.9. That is shocking. That is unbelievable. The peso is in 
free fall without Mexican Government intervention.
  Indeed, Mr. President, let me suggest that the only people who are 
making money are the currency speculators. They know that the Mexican 
central bank will intervene, and so as the peso is devalued, as it 
becomes worth less and approaches the 8 mark and 8.1 and 8.2, the money 
speculators begin to buy it up because they know at some point the 
central bank will move in and they can sell for a handsome profit. They 
are making their profit, while the Mexican Government is chewing up 
billions of dollars.
  How much longer will we have to wait before we recognize that this 
program has been a failure? If the Mexican bailout was a success, would 
interest rates have climbed from 20 percent to over 60 percent? That is 
exactly what has taken place during this period of time. No economy can 
survive such crushing interest rates--60 percent. Yet when the Mexican 
President came to the United States, the Secretary of the Treasury, 
indeed, the President of the United States, said that the proof that 
the program was working was Mexico's ``pre-payment'' of some of their 
debt. In reality Mexico flipped the $1.3 billion remainder of their 
loan, rolled it over, and could not pay it in spite of their so-called 
early payment of $700 million.
  Since February, the United States and the IMF have poured over $23 
billion into Mexico. The Mexican Government has used American taxpayer 
dollars to pay off private investors. The administration should not 
continue to throw good money after bad.
  Last week, I offered a Sense-of-the-Senate resolution calling for the 
public release of an important document, a document prepared by the 
International Monetary Fund. This report is known as the Whittome 
Report. The Whittome Report examined the International Monetary Fund's 
monitoring and response to the Mexican peso crisis. According to news 
accounts, the IMF's own report concluded that the International 
Monetary Fund had distorted its reporting on Mexico to placate 
political pressure from the Mexican Government.
  I suggest that the American people have a right to see that report. 
Why is the Treasury Department hiding that report? Secretary Rubin has 
classified it on ``national security'' grounds.
  This report talks about the International Monetary Fund's failure. 
Why should it be classified so that the American people cannot know 
what is taking place with money that we have invested with the IMF, 
with money we have sent down to Mexico. It is American taxpayers' 
dollars. That report should be declassified.
  The Treasury Department's classification on national security grounds 
is hokum. What nonsense. This report has been made available to 178 
other countries that are members of the IMF.
  So here we have a report that has been widely circulated and is being 
held on the arbitrary, obviously sham, excuse that its release would 
jeopardize national security. It is our taxpayers who are providing the 
bulk of the funding for this bailout package, a package which is 
failing. This package is producing record unemployment in Mexico, 
record high interest rates, and has sent the peso to a record low. This 
bailout jeopardizes Americans' financial interests.
  What do we have? We have secrecy from the Treasury Department 
claiming that release of this report would jeopardize the security of 
our country, hiding under the pretext of national security grounds.
  Mr. President, 178 countries, many of which may be allied against the 
interests of the United States, have copies of this report, but the 
American people do not. And this Senator is not permitted to disclose 
the contents of that report? That is just simply wrong. It is obvious 
that this administration is attempting to hide the debacle and the fact 
that we should never have entered into this absolutely shameful 
relationship.
  What we see taking place today is the currency speculators making 
billions of dollars of profit. Last evening, 

[[Page S17061]]
the Mexican central bank moved in to support the peso; otherwise, it 
would have closed over 8. And I have to tell you, as long as they are 
going to continue to do this, the money speculators will ride that 
rollercoaster up and down. They will continue to make their fortunes.
  We are not helping the Mexican people. We are not helping their 
economy. We are not helping to create job stability. As a matter of 
fact, the programs that we have insisted upon are creating economic 
hardship for Mexico. It is just simply wrong, and it is unconscionable.
  I do not believe that we should put one more U.S. dollar into this 
sinkhole. Let us use the money, if we have an opportunity to save that 
$7 billion-plus that has not already been wasted, to reduce the budget 
deficit. Let us use it to fund programs that reasonable people may say, 
yes, we want to fund but we do not have sufficient money. If we are 
talking about providing students with an opportunity to get a better 
education, let us use the money for that program. If we are talking in 
terms of reducing the Medicare burden, then let us see to it that we 
make that money available in that area. If we are talking about not 
having sufficient funds to carry out some of the needs because of 
budget constraints in the Medicaid Program in years to come, let us use 
that $7 billion-plus instead of putting good money after bad and making 
rich people and speculators richer at the expense of the taxpayers.
  But let us not hide the truth. Why should the Secretary of the 
Treasury classify this report and keep it from the American people? I 
ask the Secretary, ``What do you have to hide, Mr. Secretary?'' One 
hundred and seventy-eight foreign countries have this report. Some of 
them put little, if any, money into the IMF, a pittance. The United 
States of America and the taxpayers have poured in billions. And yet 
this report is classified on so-called national security grounds? Mr. 
Secretary, you are telling the people they do not have a right to see 
what has taken place?
  I have not read the report, and I have not read it for good reason, 
because otherwise I would probably want to come down on the floor of 
the Senate and expose the sham that took place. We all know it is a 
sham that took place. The administration does not want people to see 
that the IMF has mishandled and bungled what took place down in Mexico. 
Indeed, the program that we have imposed on the Mexican people not only 
robs the American taxpayers, it will not help the Mexican people.
  We continue blindly along as if the emperor had no clothes and we are 
afraid to say it. Somehow we are afraid, like the fable about the 
emperor having no clothes. It took some little boy to say what was 
wrong. Here they did not want us to have the facts because they do not 
want people to begin to say, ``How could you continue this incredible 
fiasco?"
  Mr. President, let me end on this--the Congress of the United States 
is reluctant to pull the plug in terms of financing for Mexico because 
they are justly afraid that President Clinton will turn around and say, 
``Aha, you are responsible for the failure of the Mexican rescue 
bailout package.'' That is exactly what would take place but that is 
wrong. President Clinton knows it and the American people know it too.
  But there is no reason for this Congress not to insist at least that 
the truth be made public. My colleagues, Senators and Congressmen 
should be demanding the release of this Whittome Report. It should not 
be left to Senator D'Amato. It should not be left to any one person. 
This should be something that we want, that we demand. I urge my 
colleagues to support this resolution.
  So, Mr. President, I am going to continue to call this to the 
attention of my colleagues in the Congress. They have a duty to step 
forward and say, ``Yes, we want this information. The Congress and the 
American people are entitled to it and they should have it.'' For the 
Secretary of the Treasury to say on national security grounds he cannot 
make this information available, is something that is absolutely, 
totally unreasonable, and not sustainable.
  Mr. President, I yield the floor.

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