[Congressional Record Volume 147, Number 112 (Friday, August 3, 2001)]
[Extensions of Remarks]
[Page E1554]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      H.R. 2273--THE NATIONAL BANK OFFSHORE ACTIVITIES ACT OF 2001

                                 ______
                                 

                          HON. MAJOR R. OWENS

                              of new york

                    in the house of representatives

                        Thursday, August 2, 2001

  Mr. OWENS. Mr. Speaker, I requested of the author of H.R. 2273, the 
National Bank Offshore Activities Act of 2001, to permit me to lend my 
support for this legislation. Let me tell you why H.R. 2273 is so 
important.
  As one member who is interested in relations between Asian nations 
and the United States, I would whole-heartedly endorse the purpose of 
H.R. 2273 in closing a major loophole in the United States' supervision 
of the national banks it charters.
  My office has been in receipt of numerous press accounts about the 
treatment of a vitally important corporation in Thailand, Thailand 
Petrochemical Industries, Inc. (TPI); the second largest business in 
the country, by a ``workout specialist'' assigned to act as what we in 
the United States would call a ``trustee in bankruptcy'' This ``workout 
specialist'', Effective Planner, an agent of the accounting firm 
Ferrier Hodgsen, from Australia, has, with a Thai bankruptcy court 
approval, become the agent of the United States chartered banks to whom 
the debt is owed. What should concern us here in the United States is 
the activities of the Effective Planner. These questionable actions 
include the diminution of the value of the company (TPI), by the use of 
questionable accounting procedures and poor business practices, the 
expenditure of millions of dollars to a bodyguard company which is 
either not in existence or is not appropriately registered as a 
legitimate corporation, and the initiation and ultimate culmination of 
a ``debt for equity swap'' which was done in an offshore Caribbean Bank 
in the British Virgin Island. This ''swap'' has permitted the U.S. 
chartered banks to own approximately three-fourths of the entire TPI 
stock. The manager of Effective Planner and several of his associates 
were arrested in Thailand for violation of the labor laws of that 
country, and have reportedly even removed themselves to Singapore to 
manage this Thailand company.
  It is the stated goal of our foreign policy to assist our allies and 
friends around the world during difficult times. The Asia Debt Crisis, 
like the Mexican Debt Crisis several years ago, has presented a number 
of nations with difficult choices. Thailand is no different. It is for 
this reason that our private sector financial institutions should not 
be permitted to work against the interests of our country with respect 
to our relations with other nations. Certainly, no bank in the United 
States could be placed in control of a trustee in bankruptcy with the 
trustee being left to their own devices in acquiring control of a U.S. 
business without at least some supervisory or consultative authority, 
such as the Office of the Comptroller of the Currency (OCC) or a court, 
being capable of reviewing their activities. If alleged criminal and 
actionable civil activities were reported, surely the OCC would at a 
bare minimum, conduct some oversight of such actions. It should be no 
different for U.S. chartered banks doing business in friendly foreign 
country.
  Our principal banking regulator, the Office of the Comptroller of the 
Treasury (OCC), continues to believe that it has little or no power to 
act against U.S. chartered banks implicated in illegal activities 
abroad, even when such activities may involve crimes such as 
embezzlement, money laundering, and establishment of secret accounts in 
offshore tax havens. This position makes H.R. 2273 even more important.
  In this global economy, banks chartered and regulated by our 
government must maintain the highest legal and ethical standards 
wherever they operate. Simply put, our vital system of banking 
regulation and our confidence in our financial system is compromised 
when a U.S. chartered bank or its agents are implicated in criminal 
activities anywhere in the world. In fact, allowing our banks to enjoy 
a double standard harms our good relations with our trading partners 
and allies everywhere in the world.
  This major loophole in our banking regulation is dramatically evident 
in Thailand, a staunch ally of our country and victim of the recent 
Asian economic crisis. Thailand actually stands to lose its domestic 
ownership and control of a key public company to foreign interests, 
including a group of banks chartered by us, through the Office of the 
Comptroller of the Currency.
  As I stand here today, ownership and control of Thai Petrochemical 
Industries, or TPI has been transferred to a group of U.S. chartered 
and foreign banks by an equivalent of a bankruptcy trustee hired, 
supervised and controlled by those same banks. That trustee, Effective 
Planner, a foreign company that purportedly specializes in bankruptcy 
reorganizations, stands accused by TPI's shareholders of embezzlement, 
money laundering, and other crimes. Incredibly, that same trustee, 
supported by those same banks, stands accused of sending payments from 
TPI's own bank account to two of its business associates who have been 
indicted, convicted, and imprisoned in Laos for embezzlement, 
destruction of records, and tax evasion.
  Unfortunately, instead of stopping such practices and terminating 
their relationship with the accused trustee, U.S. banks chartered and 
foreign banks licensed by our government have allowed the trustee to 
use countless sums of TPI funds to mount a public relations effort to 
defame TPI's founder and former CEO, who built TPI into one of 
Thailand's largest employers. The family who built the company has 
mounted a lonely crusade to prevent the trustee from disassembling TPI 
and feeding it to the banks for which the trustee works. Clearly, if 
those banks had no concern about the legality and fairness of their 
activities, why would they want their stock owned through a secret, 
offshore trust account?
  Mr. Speaker, the involved banks and their trustee may have an 
explanation for all these troubling facts. If they do, they should 
report to the OCC the activities of the trustee for whose actions they 
must account. That is precisely what H.R. 2273 would require. I would 
ask my colleagues to join me in seeking passage of the bill.

                          ____________________