[Congressional Record Volume 149, Number 34 (Tuesday, March 4, 2003)]
[Senate]
[Pages S3077-S3079]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      A KOREAN GOVERNMENT BAILOUT

  Mr. HATCH. Madam President, I rise today as a longstanding proponent 
of free international trade. I am confident that if given the chance, 
U.S. companies that operate in the global market-place will set the 
standard by which all international business will be conducted. This 
fact has been proven over-and-over again. Many great American owned 
companies are conducting business all over the world. I am a strong 
believer that these U.S. companies that operate in the global 
marketplace have a direct and positive impact world wide on consumers 
by allowing them competitive pricing and variety of choices in an 
increasingly discerning global market.
  This benefit to society, however, is only as good as the business 
practices employed by foreign-owned companies. U.S. companies must 
operate in a competitive market that requires them to continue to 
innovate, cut costs, and effectively market their products. This is not 
always the case in certain industries in some foreign markets. In 
particular, I'd like to point out an important problem facing one of 
the largest employers in my State of Utah. Micron Technologies, the 
largest U.S. producer of D-RAM semiconductors, long has been plagued 
with unfair competition from its principal Korean competitor, Hynix, a 
company that has time and time again employed illegal government 
financed bail-out schemes to keep them in business.
  This is not the first time that Micron has faced difficulties due to 
unfair trade practices. In the mid-1980s, Micron almost went out of 
business because of dumping by Japanese companies. Several of us in the 
Senate worked successfully to help put a stop to the illegal dumping. 
Ultimately, the Department of Commerce imposed duties that offset this 
dumping and Micron was not only able to survive, but eventually to 
become the second largest producer of semiconductors in the world 
today.
  Micron has a very large facility in Lehi, Utah, that has employed 
over 500 of Utah's skilled laborers. This facility has the capacity of 
employing well over 5,000 people--a feat that will never be realized if 
the Korean Government is allowed to continue to subsidize Hynix.
  It is important to point out that, just last December, Hynix received 
yet another direct financial bailout from the government of Korea. This 
practice must simply not be allowed to continue. Companies that operate 
in the global marketplace must be assured that they will be able to 
compete on a level playing field--and not against government-subsidized 
companies that may produce a substandard product, but are allowed to 
continue their operations because of an artificial infusion of 
operating capital. These illegal subsidies are costing the U.S. jobs 
and are weakening our technology base.
  Let's examine the underlying facts about the trade distorting 
practices that Micron faces when competing in the world market.
  Since October 2000, the government of Korea, acting through the banks 
that it owns and controls, has provided an astounding $16 billion in 
subsidies to Hynix, a Korean producer of D-RAM semiconductors and the 
principal global competitor to Micron Technologies.
  Hynix is a company with massive debts resulting from the easy lending 
practices of Korean banks during the late 1990s. With these 
preferential loans, Hynix built substantial new capacity and became the 
third largest D-RAM producer in the world.
  Starting in late 2000, Hynix became unable to repay the principal and 
interest on these loans and bonds. Rather than letting Hynix undergo 
formal bankruptcy, which would have resulted in substantial asset sales 
and restructuring, the Government of Korea orchestrated no less than 
five separate bailouts.
  These subsidies have permitted Hynix to stay in business and that

[[Page S3078]]

company continues to run all its D-RAM labs full out, flooding the 
market with subsidized products. Despite all these subsidies, Hynix 
continues to lose money--by all accounts, roughly $8 billion over the 
past three years.
  And yet, the Korean government continues to pour money into this 
company. Just two month ago, there was another bailout amounting to 
$4.1 billion. This is almost twice Hynix's revenues in all of 2002, 
which only amounted to $2.4 billion.
  The Korean government must not be allowed to continue to underwrite 
the horrendous operating losses of this company as it has done for the 
past three years.
  In the highly competitive D-RAM market, subsidies of this sort act as 
a trade distorting measure. Every other D-RAM company in the world is 
being crippled by the subsidized D-RAM that Hynix floods the market 
with. This has resulted in the worst and longest downturn the D-RAM 
sector has ever experienced.
  Just last week, Micron announced that it was laying off ten percent 
of its worldwide workforce. This translates into 1,800 lost jobs in the 
United States. Hynix subsidies have had a real impact on Micron's 
bottom line as well--the subsidies have impacted pricing to such an 
extent that even Micron, one of the most efficient D-RAM producers in 
the world, has lost two billion dollars over the past two years. We 
cannot afford to see an important technology like D-RAMs lost in the 
United States, because of foreign government subsidies.
  These sorts of subsidies have absolutely no place in today's global 
economy, particularly as we are engaged in a new round of trade talks 
aimed at further liberalizing trade regimes around the world.
  All indications are that Hynix will use the debt forgiveness to 
continue to expand capacity. Just last week, Hynix announced that it 
would begin work on a new fabrication line to produce D-RAMs on state-
of-the-art 300 mm wafers, which will result in even more subsidized D-
RAM from Hynix. Now, we read in the papers that Hynix and other Hyundai 
companies are being investigated for illegally transferring about $500 
million to North Korea in 2000, in return for lucrative contracts, and 
it did so with the help of South Korean banks and with the approval of 
the President of South Korea. This is the country that plans to 
reactivate its nuclear arms program.
  In closing, I feel it incumbent upon me to point out that many 
Members of the United States Senate are paying close attention to the 
Korean Government's business practices as they relate to Hynix. Korea 
is one of the most developed economies in Asia and is a good friend to 
the United States in a wide variety of ways. But the government of 
Korea must realize that this type of illegal subsidy runs contrary to 
all the rules in the WTO and is not permitted under U.S. trade law. I 
call upon the Secretary of Commerce and the U.S. Trade Representative 
to help put an end to these illegal acts.
  Mr. FEINGOLD. Madam President, I want to speak briefly on the clear 
violation of Judiciary Committee rules that occurred last week in our 
executive business meeting. It was a sad moment for our committee and 
does not bode well for the harmonious functioning of the committee this 
year. I believe that a discussion of this issue is also relevant to our 
debate of Miguel Estrada. In both cases we are talking about rules that 
protect the rights of the minority in this body from being run over by 
the majority. And in both cases we are talking about the use of those 
protections by the minority not to stonewall or block action by the 
majority indefinitely but to seek information about nominees that has 
not been forthcoming.
  Let me quickly review the background of what happened last Thursday. 
All of this goes back, of course, to our duty under Article II, Section 
2 of the Constitution, which specifically provides that the President 
shall appoint judges to our courts ``by and with the Advice and Consent 
of the Senate.'' The Senate's role is not just a matter of historical 
tradition, or comity with the Executive Branch, it is constitutionally 
mandated. All of us on the Judiciary Committee, and in the full Senate 
take this responsibility very seriously.
  One of the ways that we exercise our constitutional responsibilities 
in this area, on behalf of the Senate and our colleagues who are not on 
the committee, is to closely examine the records of judicial nominees. 
We do that in part by holding hearings so that nominees can be 
questioned about their records, their judicial philosophy, their 
previous writings, their judicial opinions if they are currently or 
have been judges on other courts, and their views on legal issues. 
These hearings are not a mere formality, they are crucial to the role 
of the Judiciary Committee in carrying out the Senate's 
constitutionally mandated responsibilities.
  This year, it appears that there is an effort underway to push 
through nominations in the shortest possible time. Prior to the 
President's Day recess, the committee held three nominations hearings 
in three weeks. By February 12, the committee had held hearings on five 
circuit court nominees. This is an extraordinary pace, particularly 
when you consider that the earliest that the committee had held 
hearings on five circuit court court nominees during President 
Clinton's term was April 29. In some years, that milestone wasn't 
passed until June, July, or even September, and in 1996, the committee 
never held a hearing on a 5th nominee to the circuit courts.
  So this effort really gives the impression of a forced march. Our 
constitutional responsibilities are being subjugated to a schedule that 
seems to be aimed at forcing nominations through as quickly as 
possible, without regard to the Senate's prerogatives.
  The Democrats on the committee have not tried to block all of the 
nominees. We voted on Miguel Estrada, and Jeffrey Sutton, and Jay Bybee 
in the ordinary course of business on the committee. But when it came 
to two other nominees, Justice Deborah Cook, a nominee for the Sixth 
Circuit and John Roberts, nominated to the D.C. Circuit, we tried to 
draw a line.
  The reason we made that effort was that Justice Cook and Mr. Roberts 
were both considered in a single hearing on January 29th, along with 
Jeffrey Sutton, who was reported to the floor just prior to the recess. 
Actually, it is misleading to say they were considered in that hearing. 
They were all sitting at the witness table, but the vast majority of 
the questioning was directed to Mr. Sutton. There simply was not 
sufficient time for members of this committee to examine the other 
nominees.
  A number of Senators asked repeatedly that further hearings be 
scheduled so that Senators could examine Justice Cook and Mr. Roberts. 
We even made the offer to have a single additional hearing for these 
two important nominees, even though we would prefer to examine a single 
controversial nominee at a time. We were rebuffed at every turn, even 
when it became abundantly clear that the single hearing would not 
suffice to let members of this committee examine the records of all of 
these nominees.
  The single hearing that was held on January 29, 2003, on these three 
nominees was unprecedented. Never before has the committee held one 
hearing on three circuit court nominations over the objections of the 
minority. Indeed, it is highly unusual for the committee to hold a 
single hearing on even two controversial nominees, as a 1985 agreement 
among Senators Dole, Byrd, Thurmond, and Biden demonstrates. That 
agreement was that only one controversial nomination would be 
considered at a time. It gave the minority some control over the pace 
of nominations, without of course giving it any kind of veto.
  A number of Democrats on the committee raised the need for an 
additional hearing on Justice Cook and Mr. Roberts publicly during the 
hearing and privately during the breaks. We have repeated that request 
to the chairman of the committee on many occasions subsequently.
  Early last week, when it become clear that the chairman would not 
schedule a second hearing so that Justice Cook and Mr. Roberts could 
receive proper consideration by the committee, we tried another 
approach. The nominees had said they are available to meet with us to 
answer any questions we have. So we sent a letter to the White House 
and requested that the two nominees make themselves available for a 
meeting to answer further

[[Page S3079]]

questions. In order to be able to proceed quickly in the committee 
following such a meeting, we suggested a joint meeting that Senators 
could attend at different times based on their individual schedules. We 
stated that we would have a transcript of the meeting prepared so that 
we could refer back to the nominees' answers, and that the meeting 
would be open to the public.

  The response from the White House, which has repeatedly offered to 
have nominees meet with us privately was an immediate ``No.'' The 
immediate and unqualified refusal to our reasonable request seem to be 
part of the forced march. The Administration seems to be saying, ``We 
are to going to jam these nominees through, our way, regardless of how 
reasonable your request is.''
  So that left us with only one option: To delay the vote on these two 
nominees until agreement could be reached on a further hearing, or some 
substitute for it. Some Senators on the Democratic side were simply not 
prepared to vote on Justice Cook or Mr. Roberts. We did not believe the 
committee has been given adequate opportunity to assess the 
qualifications and examine the record of Justice Cook and Mr. Roberts.
  So when the chairman of the committee asked for a vote on Justice 
Cook, we objected. The proper course under our committee's longstanding 
Rule IV was for the chairman to hold a vote on a motion to end debate 
on the matter. The Rule provides that debate will be ended if that 
motion carries by a majority vote, including one member of the 
minority. In this case, our side was united in opposing ending the 
debate, so the motion would have failed. It is, in effect, as the 
chairman of the committee himself recognized in 1997 when the Rule was 
invoked in connection with the Bill Lann Lee nomination, a kind of 
filibuster rule in the committee. The vote to end debate is like a 
cloture vote, and it cannot succeed unless at least one member of the 
minority votes for it.
  Now I have heard the argument, made by the chairman of the committee 
in a letter to the Democratic leader, that this rule was designed to 
allow a majority of the committee to force a so-called ``rogue 
chairman'' to hold a vote on a matter when he doesn't want to, but not 
to limit the chairman's ability to call for a vote over the objections 
of the minority. That is clearly an erroneous interpretation. It 
conflicts with text of the rule, the practice of the committee for 24 
years under five separate chairmen, including the current chairman, and 
with the history of the rule itself.
  The rule was adopted in 1979 when Senator Kennedy chaired the 
committee. The committee at that time had 10 Democrats and 7 
Republicans. Until that time there was no way to end debate in the 
committee. Recent years had seen controversial matters such as the 
Equal Rights Amendment stalled in committee. The Civil Rights era had 
seen the committee headed by a segregationist chairman block civil 
rights legislation by allowing it to be filibustered and never voted 
on. Chairman Kennedy sought a new committee rule to allow him to bring 
a matter to a vote. His original proposal was simply to let a majority 
vote of the committee end debate. On January 24, 1979, he proposed such 
a committee rule.

  Republicans on the committee, including Senator Thurmond who was the 
ranking member, and Senators Simpson, Dole, Cochran, and Hatch, spoke 
up to protest that the minority should retain the right to debate a 
matter for as long as it felt it needed to. The next week, the 
committee reached agreement and adopted Rule IV, which has been in 
effect ever since. The compromise ended the ability of one or a few 
Senators to tie up the committee indefinitely. But it gave the majority 
the power to end debate if it could convince one member of the minority 
to agree. That was the compromise reached, and that is the rule we have 
had for over two decades.
  The chairman's argument that the rule places no limit on his ability 
to end debate is clearly answered by this history. It is clearly wrong. 
The committee rule was violated when Justice Cook and Mr. Roberts were 
reported over the objection of some members without a ``cloture vote'' 
in the committee. There is simply no question about this.
  It is very disappointing to have to discuss and debate committee 
rules on the floor of this body. This might seem like a petty matter. 
But it isn't. Honoring the rules of the Senate and the rules of the 
committees gives credibility and legitimacy to the work we do here. 
Rules are the hallmark of a democracy. In many ways our rules are 
analogous to the rule of law in our society. We have to respect those 
rules or we have nothing left.
  In situations like these, I often think of the words of the great 
philosopher Sir Thomas More as portrayed in the play ``A Man for All 
Seasons.'' More questions a man named Roper whether he would level the 
forest of English laws to punish the Devil. ``What would you do?'' More 
asks, ``Cut a great road through the law to get after the Devil?'' 
Roper affirms, ``I'd cut down every law in England to do that.'' To 
which More replies:

       And when the last law was down, and the Devil turned round 
     on you--where would you hide, Roper, the laws all being flat? 
     This country's planted thick with laws from coast to coast . 
     . . and if you cut them down . . . d'you really think you 
     could stand upright in the winds that would blow then? Yes, 
     I'd give the Devil benefit of law, for my own safety's sake.

  It is clear from the history of Rule IV that it was insisted on by 
Republican Senators then in the minority to preserve their rights in 
committee. They should not cut down that forest just to have their way 
now that they are in the majority. We cannot permit that kind of 
results-oriented approach to the rules of the committee or of this 
body. The rules of this body, like the laws of this country, protect 
all of us. We must stand up to efforts to ignore them. What happened in 
the committee last week did not reflect well on this body. I sincerely 
hope that the chairman will reconsider his rulings and return some 
comity to our proceedings.
  Let me just finally say that I voted Present on both Justice Cook and 
Mr. Roberts. I have not made a final decision on their nominations. I 
could very well support one or both of them here on the floor. But I 
think the committee must hold a proper hearing on them, giving all 
Senators a better opportunity to be well informed on these nominees 
before exercising their constitutional responsibilities.

                          ____________________