[Congressional Record Volume 148, Number 52 (Wednesday, May 1, 2002)]
[House]
[Pages H1792-H1795]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
Amendment No. 3 Offered by Mr. Kucinich
Mr. KUCINICH. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 3 offered by Mr. Kucinich:
At the end of the bill, add the following:
SEC. ____. REQUIREMENT THAT APPLICANTS FOR ASSISTANCE
DISCLOSE WHETHER THEY HAVE VIOLATED THE FOREIGN
CORRUPT PRACTICES ACT; MAINTENANCE OF LIST OF
VIOLATORS.
Section 2(b)(1) of the Export-Import Bank Act of 1945 (12
U.S.C. 635(b)(1)) is further amended by adding at the end the
following:
``(M) The Bank shall require an applicant for assistance
from the Bank to disclose whether the applicant has been
found by a court of the United States to have violated the
Foreign Corrupt Practices Act, and shall maintain a list of
persons so found to have violated such Act.''.
Amend the table of contents accordingly.
The CHAIRMAN. Pursuant to House Resolution 402, the gentleman from
Ohio (Mr. Kucinich) and a Member opposed each will control 15 minutes.
The Chair recognizes the gentleman from Ohio (Mr. Kucinich).
Mr. KUCINICH. Mr. Chairman, I yield myself such time as I may
consume.
Mr. Chairman, my amendment will require the Ex-Im Bank to gather
information relating to compliance by applicants with the Foreign
Corrupt Practices Act, as amended.
The Foreign Corrupt Practices Act of 1977 makes it unlawful for any
domestic corporation to corruptly bribe a foreign official in order to
obtain or retain business. It also requires those companies that are
required to register with the Securities and Exchange Commission to
keep detailed and accurate books, records, and accounts of corporate
payments and transactions.
Under my amendment, Ex-Im would request that applicants report
whether or not they had been found guilty by a U.S. court to be in
violation of the Foreign Corrupt Practices Act, and importantly, the
Ex-Im Bank would also independently keep a list of companies that had
violated the Act.
Mr. Chairman, this amendment is based upon the following premise:
That taxpayers should not subsidize the venture of companies that use
corrupt methods to obtain business or deceive taxpayers with false
financial reports.
Recently, a large multinational energy corporation based in the
United States was revealed to have intentionally misled the public
about its finances and its profits, leading to drastic consequences for
shareholders and its employees. In part, Enron accomplished this
deception by concealing the complex corporate transactions that allowed
it to inflate its profits.
{time} 1200
Now, what if a company like this one used similar practices in order
to cover up its bribery of a foreign official? How would this affect
its application for financing from the Ex-Im Bank?
Under current practice, applicants for Ex-Im financing are required
to certify they have not violated and will not violate the Foreign
Corrupt Practices Act. That is good, and this amendment is not meant to
stop the Ex-Im Bank from doing this. But the Ex-Im Bank is not required
on its own to compile a list of FCPA violators. So a company that lied
about its Foreign Corrupt
[[Page H1793]]
Practices Act history on its application would not be in danger of
discovery by the Ex-Im Bank.
Is such a scenario out of the realm of possibility? Our experience
with Enron should make it clear that it is not. A recent Enron loan
application to the Ex-Im Bank for a natural gas plant in Venezuela
included the company's 1998 annual report, which Enron admitted was
falsified. Did Ex-Im discover this? No. Has the Ex-Im taken any action
against Enron for submitting falsified materials? Not that I know of.
In a recent column by Bob Novak this matter is detailed.
In fact, Ex-Im loaned Enron nearly $200 million for this project,
according to this report by the Institute for Policy Studies. Overall,
Ex-Im has financed Enron projects to the tune of $826 million.
Now, ideally, this amendment should be passed in conjunction with
another amendment I submitted to the Committee on Rules. The second
amendment would have barred Ex-Im from providing financing to any
company that violated the Foreign Corrupt Practices Act. Unfortunately,
the rule for this bill did not make the second amendment in order.
Nevertheless, the current amendment makes an important contribution by
codifying Ex-Im's current practice of requiring applicants to certify
their compliance with the Foreign Corrupt Practices Act and, further,
by requiring the Ex-Im Bank to independently compile a list of
companies that are in violation of this act. I encourage my colleagues
to support this amendment.
Mr. Chairman, I reserve the balance of my time.
Mr. BEREUTER. Mr. Chairman, I rise to claim the time in opposition.
The CHAIRMAN pro tempore (Mr. Simpson). The gentleman from Nebraska
(Mr. Bereuter) is recognized for 15 minutes.
Mr. BEREUTER. Mr. Chairman, I yield myself such time as I may
consume, and I do not intend to oppose the gentleman's amendment.
Actually, I think it is quite appropriate.
The Foreign Corrupt Practices Act does regulate the practices of
American businesses doing business abroad. It requires them to keep
accurate books, records and accounts. It requires issuers to register
with the Securities and Exchange Commission to maintain a responsible
and internal accounting control system, and it prohibits bribery by
American corporations of foreign officials.
In the way of background, the Foreign Corrupt Practices Act was a
U.S. initiative and we have tried very hard, through the Organization
for Economic Cooperation and Development in Europe, OECD, to have other
countries adopt similar kinds of national legislation. Until recently,
many of our west European export competitors have actually permitted
their corporations to have their bribes as tax deductible, incredible
as that may seem. We have recently had positive action by many of these
countries in that respect, but now the proof is in the pudding. That is
to say, will they, in fact, have enforcement to make sure that no such
bribery is not encouraged or permitted under their tax codes.
In any case, the gentleman's amendment, I think, is highly
appropriate. This kind of information should be made available and, in
fact, generated, if necessary, within the Export-Import Bank. And it is
my expectation that as a result of having that information and being
encouraged to give it careful consideration the Ex-Im Bank will be able
to avoid providing any kind of transaction assistance to an American
firm that would be in violation of the Foreign Corrupt Practices Act.
Mr Chairman, my hope is that in fact something like the Foreign
Corrupt Practices Act can be applied internationally by actions of
national legislative bodies. So I do speak in support of the
gentleman's amendment, and I thank him for his initiative in offering
it.
Mr. KUCINICH. Mr. Chairman, I yield myself such time as I may consume
to thank the gentleman for his expression of support for transparency
and integrity in international transactions.
Mr. Chairman, I submit for the Record the article by Bob Novak I
referred to earlier:
[From the Chicago Sun-Times, Apr. 29, 2002]
Enron's Corporate Welfare
(By Robert Novak)
A bipartisan Senate Finance Committee investigation has
found that Enron Corp., no paragon of free-market
deregulation, gorged itself on corporate welfare. The Clinton
administration gave more than $650 million in Export-Import
Bank loans to Enron-related companies. While the Senate now
probes whether the bankrupt energy company falsified loan
requests, the bigger question is why Enron was subsidized at
all.
Export-Import officials early this year, expressing
confidence in the accuracy of information provided by Enron
in its loan applications, were not interested in an
investigation. However, Ex-Im Vice Chairman Eduardo Aguirre
sang a different tune in his April 23 letter to Sen. Chuck
Grassley of Iowa, the Finance Committee's senior Republican.
``Please let me assure you that Ex-Im Bank takes very
seriously potential violations of law . . . and works very
closely with the Department of Justice,'' Aguirre wrote.
Finance staffers have found that Ex-Im, as well as the
Overseas Private Investment Corp., in a Democratic
administration routinely approved loan requests from a
supposedly Republican company. Lavish bipartisan political
contributions may have helped, as well as a top Enron
executive sitting on Ex-Im's Advisory Committee.
Actually, one official of the agency informed a Senate
investigator that all Ex-Im really monitors is loan
repayment. Ironically, it is unclear whether Enron loans will
be defaulted at American taxpayer expense. While the
rationale for the Export-Import Bank's existence is to give
U.S. businesses a level playing field against government-
subsidized foreign competition, the Enron loans merely
buttressed questionable projects where the company often was
both producer and exporter.
The classic case is a September 1994 Ex-Im direct loan of
$302 million ($175 million of which remains unpaid) to Dabhol
Power Co. in India, then 80 percent owned by Enron. In this
deal, Enron was the ``foreign'' company, and its allies,
Bechtel Group and General Electric, were the exporters. With
an Indian utility that could not pay its bills (and was
pressured by the Bush administration to do so) as its only
customer, Dabhol went bankrupt even before Enron.
A less-publicized loan scrutinized by Senate investigators
provided $135 million (only $4 million of which has repaid)
to the Accroven partnership for a natural gas plant in
Venezuela. Nearly half the company's stock was owned by Enron
while Enron also was the exporter. Thus, the U.S. taxpayer
was paying Enron money so that Enron could buy gas from
Enron.
Enron's loan application for the Accroven project included
the company's 1998 annual report, which the company has
admitted was falsified. ``I'm troubled by the Ex-Im's seeming
lack of interest in this matter,'' Grassley wrote Aguirre on
April 2.
Ex-Im lent $250 million to Trakya Elektrik of Turkey, owned
50 percent by Enron, which was buying goods and services from
Enron. Ex-Im insured a $3.6 million Citibank loan to Promigas
in Colombia, owned 42.3 percent by Enron. Whether or not
these loans were based on misleading information, it is
difficult to see how any of these deals fulfills the Export-
Import Bank's avowed purpose of promoting American
competition against the world.
While Democratic Sen. Ernest F. Hollings delivered his
memorable judgment that Enron benefitted from the Bush
presidency on a cash-and-carry basis, the symbiosis between
big business and the purveyors of corporate welfare is
bipartisan. Just as Enron gave to both parties, Bechtel has
contributed $820,000 to Republicans and $730,000 to Democrats
since the 1992 elections. Rebecca A. McDonald, CEO of Enron
Global Assets, was on Ex-Im's Advisory Committee under
President Clinton in 2000 and remained there under President
Bush in 2001. How can it be that a major recipient of
government largess is advising the agency handing it out?
Except for a fitful effort to trim it down in the early
months of the Reagan administration in 1981 and some by the
current Bush administration, the Export-Import Bank has
sailed through governments of both parties--hardly noticed
and never critically examined. A broader scrutiny of the
agency's global pursuits is still wanting.
Mr. KUCINICH. Mr. Chairman, I yield back the balance of my time.
Mr. BEREUTER. Mr. Chairman, I yield back the balance of my time.
The CHAIRMAN pro tempore. The question is on the amendment offered by
the gentleman from Ohio (Mr. Kucinich).
The amendment was agreed to.
The CHAIRMAN pro tempore. It is now in order to consider amendment
No. 4 printed in House Report 107-423.
Amendment No. 4 Offered by Mr. Sanders
Mr. SANDERS. Mr. Chairman, I offer an amendment.
The CHAIRMAN pro tempore. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 4 offered by Mr. Sanders:
At the end of the bill, add the following:
[[Page H1794]]
SEC. ____. INFORMATION AND CERTIFICATIONS REQUIRED FROM
COMPANIES SEEKING OR RECEIVING NEW ASSISTANCE.
Section 2 of the Export-Import Bank Act of 1945 (12
U.S.C. 635) is further amended by adding at the end the
following:
``(g)(1) As a condition of providing assistance to a
company in connection with a transaction entered into on or
after the date of the enactment of this subsection, the Bank
shall require the company to submit to the Bank the following
information on an annual basis:
``(A) The number of individuals employed by the company
in the United States and its territories.
``(B) The number of individuals employed by the company
outside the United States and its territories.
``(C) A description of the wages and benefits being
provided to the employees of the company in the United States
and its territories.
``(2)(A) Beginning 1 year after the Bank provides
assistance to a company in connection with a transaction
entered into on or after the date of the enactment of this
subsection, the company shall, on an annual basis, provide
the Bank with a written certification of--
``(i) the percentage of the workforce of the company
employed in the United States or its territories that has
been laid off or induced to resign from the company during
the preceding year; and
``(ii) the percentage of the total workforce of the
company that has been laid off or induced to resign from the
company during the preceding year.
``(B)(i) If, in the certification provided by the
company, the percentage described in subparagraph (A)(i) is
greater than the percentage described in subparagraph
(A)(ii), then the company shall be ineligible for further
assistance from the Bank until the company provides to the
Bank a new written certification in which, for the year
covered by the new certification, the percentage described in
subparagraph (A)(i) is not greater than the percentage
described in subparagraph (A)(ii).
``(ii) If the company does not provide a certification
required by subparagraph (A), or provides a false
certification under this paragraph, then 60 days thereafter
the Bank shall withdraw all assistance from the company, and
the company shall thereafter be ineligible for assistance
from the Bank.''.
The CHAIRMAN pro tempore. Pursuant to House Resolution 402, the
gentleman from Vermont (Mr. Sanders) and a Member opposed each will
control 15 minutes.
The Chair recognizes the gentleman from Vermont (Mr. Sanders).
Mr. SANDERS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I hereby submit for the Record a letter sent to the
Speaker of the House, the gentleman from Illinois (Mr. Hastert), by
every large multinational corporate trade organization in the country,
people who contribute hundreds of millions of dollars into the
political process, because they are opposed to the amendment.
Aerospace Industries Association, American Business
Council of the Gulf Countries, AMT--The Association for
Manufacturing Technology, Bankers Association for
Finance and Trade, Coalition for Employment Through
Exports, Emergency Committee for American Trade,
International Energy Development Council, National
Association of Manufacturers, National Foreign Trade
Council, Small Business Exporters Association, U.S.
Chamber of Commerce, U.S.-China Business Council, U.S
Council for International Business,
April 16, 2002.
Hon. Dennis Hastert,
Speaker of the House,
House of Representatives, Washington, DC.
Dear Mr. Speaker: As the House Republican leadership
considers scheduling floor action on H.R. 2871, to
reauthorize the Export-Import Bank, we write to reiterate our
strong support for the Bank. Our collective members include
many of the U.S. exporters and financial institutions that
rely on the Bank as the lender of last resort in meeting the
fierce competition for export opportunities in world markets.
In FY 2001 alone, the Bank financed some 2,300 export
transactions, 90 percent of which were for small and medium-
sized firms.
Ex-Im Bank plays a crucial role in supporting the export of
American-made goods and American-provided services in markets
where commercial financing is difficult to obtain and when
foreign competitors have the active support of their
governments' export credit agencies. In 2000 alone, the most-
active export credit agencies worldwide financed more than
$500 billion in exports. Ex-Im Bank financed $15.5 billion in
U.S. exports that year.
To deal with this increasingly aggressive foreign
competition, H.R. 2871 would authorize the Bank to respond to
new export financing programs offered by foreign governments,
including so-called ``market windows''. The bill also
provides the Bank with clear authority to use the tied-aid
war chest to respond aggressively to foreign governments' use
of foreign assistance to supplement their export credit
activities (so-called ``tied-aid'').
It is important to note that Ex-Im charges risk-based
interest, premiums and other fees for its loans, loan
guarantees and insurance. These fees are paid by exporters,
banks and overseas customers. Last year, the Bank's revenues
generated a $1 billion net income for the U.S. government.
Moreover, the Bank maintains some $10 billion in reserves to
protect against the risk of loss. The Bank's conservative
lending policies and aggressively loss-recovery efforts have
resulted in a very low 1.9 percent historical loss rate.
Amendments of Concern
Two amendments may be offered which, in our judgment, would
impede the ability of U.S. exporters to effectively utilize
the Bank, thus weakening the Bank's programs and causing a
loss of U.S. exports and the jobs of American workers. We
urge you to oppose these amendments if offered during House
floor action:
(1) Rep. Sanders may offer an amendment to deny Ex-Im Bank
financing for U.S. companies that are growing
internationally. It would make the Bank completely unusable
for any U.S. exporter that is succeeding in world markets.
The proposal runs contrary to U.S. trade policy and market-
based economic growth. It would make no sense for the
Congress to seek open world markets, but then deny U.S. firms
access to one of the key tools to take advantage of these new
opportunities. Since Ex-Im Bank only finances U.S.-origin
goods and services, shutting off the Bank would only result
in making the Bank less effective in creating and keeping
U.S. jobs here at home.
Rep. Schakowsky may offer an amendment to require a human
rights assessment of about 600 export transactions supported
by the Bank annually. This proposal is unnecessary because
the Export-Import Bank Act already includes a procedure under
which the Bank relies on the U.S. State Department for human
rights analysis. The amendment would require the Bank to
establish an unnecessary new bureaucracy that would duplicate
the long-established State Department human rights office.
The amendment would require U.S. exporters to submit any
proposed transaction over $10 million to a costly and time-
consuming notice and comment period, which inevitably would
lead to the loss of export sales to our foreign competitors.
The current, long-established, process works well to ensure
that human rights issues are analyzed by the State
Department's experts and included in the Bank's consideration
of export transactions.
We urge the House to approve H.R. 2871 and to oppose
amendments that would weaken the Bank and impede U.S.
exports.
Sincerely,
Don Carlson, President, AMT-The Association For
Manufacturing Technology; Calman J. Cohen, President,
Emergency Committee For American Trade; Timothy E.
Deal, Senior Vice President, U.S. Council for
International Business; John W. Douglass, President,
and CEO, Aerospace Industries Association; John Hardy,
Chairman, Standing Committee, International Energy
Development Council; Robert Kapp, President, U.S.-China
Business Council; James Morrison, President, Small
Business Exporters Association; John Pratt, Chairman,
American Business Council of the Gulf Countries;
William Reinsch, President, National Foreign Trade
Council; Edmund B. Rice, President, Coalition For
Employment Through Exports; Consider W. Ross, Executive
Director, Bankers Association for Finance and Trade;
Franklin J. Vargo, Vice President, National Association
of Manufacturers; Willard A. Workman, Senior Vice
President, U.S. Chamber of Commerce.
Mr. Chairman, these gentlemen, representing the largest multinational
corporations in this country, are opposed to this amendment. And why
not? They are receiving huge amounts of corporate welfare. They think
it is a good deal. So, yes, they will be opposed to the amendment. And
I would hope that gives Members a good reason why they should think
about voting for this amendment.
I am very proud that this amendment is cosponsored by the gentleman
from Texas (Mr. Paul) and the gentleman from Oregon (Mr. DeFazio), and
we are united, along with many other Members here, to protect American
workers and to fight corporate welfare.
Mr. Chairman, some of my colleagues will say that the Ex-Im Bank has
helped businesses and workers throughout the United States. They are
right. But that should not be a great surprise for an agency that has a
budget of some $1 billion and has the capability
[[Page H1795]]
of guaranteeing some $15 billion in loans a year. If we stood outside
on street corners all over America and gave out money, we would do some
good. We would help people. We would create jobs.
The question that we want to ask is: Given the amount of money that
we are spending, are American taxpayers and are American workers
getting good value for their dollars? And I think any objective
analysis of Ex-Im would suggest that we are not.
At the present moment, Ex-Im is wasteful, it is inefficient, and it
is a major example of corporate welfare. If we cannot make fundamental
changes in the way that program is run, it should be killed.
Mr. Chairman, let us be clear about who the major beneficiaries of
Ex-Im are. My colleagues have heard a lot about how small businesses
are benefiting. The reality, however, is that 80 percent of the real
dollars goes to the Fortune 500, some of the largest corporations in
America. Now, let us hear who those tiny small businesses are who
receive this corporate welfare from the American people.
Well, they are Boeing, General Electric, Caterpillar, and Mobile Oil.
They are a struggling small company. Westinghouse and AT&T. Another
little tiny mom and pop company. Motorola, Lucent Technologies, Enron,
IBM, FedEx, General Motors, Haliburton, Siemens, Raytheon, and United
Technologies. The list goes on and on.
Workers in this country, working 50, 60 hours a week to keep their
heads above water, veterans not getting the benefits they are entitled
to, but, hey, all these little tiny companies they are on the welfare
line. Name the largest multinational corporation in America, many of
whom make substantial campaign contributions, and there they are
getting their money from Ex-Im.
Further, many of these companies pay exorbitant salaries and benefits
to their CEOs. One example, which I have experience with, IBM, on the
welfare line, gave their former CEO Lou Gerstner, over $260 million in
stock options, while they cut back on pensions and retirement health
benefits of their workers and retirees and they are opening plants in
China. No doubt, no doubt that the American taxpayers should be giving
them their welfare check.
Now, even more importantly, what else do these companies have in
common? What they have in common is that company after company that
receive Ex-Im money are some of the largest job cutters in America. In
the name of job creation, we are giving huge amounts of money to large
corporations who are laying off hundreds of thousands of American
workers, and they are moving their plants to China, where they are
paying desperate people there 20 cents an hour; moving to Mexico,
moving to Vietnam, moving anyplace in the world where they can get
cheap labor. Well, that is a smart public-policy move on our part.
Let me give a couple of examples. General Electric has received over
$2.5 billion in direct loans and loan guarantees from Ex-Im Bank. And
what was the result? From 1985 to 1995, GE reduced its workforce from
243,000 to 150,000. A real success story for the Ex-Im Bank.
General Motors. They received $500 million in direct loans and loan
guarantees from Ex-Im. The result, GM has shrunk its U.S. workforce
from 559,000 to 314,000. Congratulations Ex-Im.
Motorola. They have reduced their workforce; only 56 percent of their
workers are from the United States.
Now, if a company wants to receive taxpayer support, fine. But what
that company has got to do is say we pledge to protect American jobs.
And the amendment that I am offering is very, very simple. What it says
is that if a company is going to lay off workers, then they cannot lay
off more American workers than they lay off people abroad. Now, I do
not think that is too much to ask for companies that receive subsidies
from the American taxpayer.
Mr. Chairman, I reserve the balance of my time.
Mr. BEREUTER. Mr. Chairman, I claim the time in opposition, and would
be glad to allow the gentleman from Vermont to continue to yield.
The CHAIRMAN pro tempore. The gentleman from Nebraska (Mr. Bereuter)
is recognized for 15 minutes.
Mr. SANDERS. Mr. Chairman, I yield 2 minutes to the gentlewoman from
Ohio (Ms. Kaptur), who has been one of the strongest fighters in the
U.S. Congress for American workers.
Ms. KAPTUR. Mr. Chairman, I rise in strong support of this Sanders
amendment. It is eminently reasonable and aims to protect the jobs of
American workers and strike a blow against the corporate welfare state.
This amendment is beautifully simple. It says no more Export-Import
Bank help for corporations that lay off a greater percentage of workers
in America than in other countries where they employ workers, including
Mexico or China and other low-wage platforms. No more Export-Import
Bank help for General Electric when it cans workers in Bloomington,
Indiana, and exports all their jobs to Mexico.
Why cut workers' throats in our country with their own taxpayer
dollars? Eighty percent of Ex-Im subsidies go to the biggest boys on
the block, the Fortune 500 countries with global reach. And how do they
return the favor to the American taxpayer? Well, General Motors gets
more than $.5 billion from Ex-Im and then shrinks its U.S. workforce
from 559,000 to 314,000 workers. That is almost a quarter million lost
jobs in America. Motorola took $.5 billion from the taxpayers in the
form of Export-Import Bank help and then slashed the American
percentage of its workforce down to 56 percent.
Here is how I see it: if we cannot have the Ex-Im Bank for American
workers, then at least we should stop cutting our own throats with this
giveaway to the runaway multinational companies that export jobs and
leave American workers, American families, and American communities
holding the bag.
Say ``no'' to this abuse of taxpayer dollars and this betrayal of
American communities. Stand up for the Sanders amendment. Vote ``yes''
on the Sanders amendment, which actually says, ``Do not hurt America
first.'' If we have to take cuts, at least make those cuts equal
globally to other countries. It does not say only serve America, it
only says be fair to all concerned.
Support the Sanders amendment.
Mr. BEREUTER. Mr. Chairman, I move that the Committee do now rise.
The motion was agreed to.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
Bereuter) having assumed the chair, Mr. Simpson, Chairman pro tempore
of the Committee of the Whole House on the State of the Union, reported
that that Committee, having had under consideration the bill (H.R.
2871) to reauthorize the Export-Import Bank of the United States, and
for other purposes, had come to no resolution thereon.
____________________