[Congressional Record (Bound Edition), Volume 147 (2001), Part 1]
[House]
[Pages 989-994]
[From the U.S. Government Publishing Office, www.gpo.gov]



                        THE PARDON OF MARC RICH

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2001, the gentleman from Colorado (Mr. McInnis) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. McINNIS. Mr. Speaker, as has become customary, I have to spend 
the first 5 minutes rebutting some of the previous statements that were 
made here on the House floor.
  First of all, let me say to my colleague that spoke preceding my 
comments here, that as a former police officer I take issue with some 
of the statements that were made in regards to Judge White's decisions. 
If one will take a close look at that case, it will be revealed that 
three police officers were killed by the defendant in that particular 
case, and I think that spending a little time on the facts would be 
helpful for those of us who are interested in looking at the specifics.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, will the gentleman yield?
  Mr. McINNIS. I will not.
  Ms. JACKSON-LEE of Texas. Then the gentleman does not want the truth.
  Mr. McINNIS. The gentlewoman, of course, in her previous comments 
stated one side, and here we are for rebuttal.
  Mr. Speaker, look at facts of the case. Look at the officers that 
were killed in the line of duty. In fact, I remember the gentlewoman 
from Texas (Ms. Jackson-Lee) speaking with seriousness of heart and 
sincerity last year when a law enforcement officer in the State of 
Texas lost his life.
  On this floor, I think we ought to, all of us at least, have an 
obligation to address facts. It is very easy to come down here and give 
one side obviously because we are not in a debate format. It is a 
presentation of one side, but at least both sides ought to present what 
the facts are.
  Second of all, I need to clarify the statement by the preceding 
speaker. Her statement is that President Bush's executive order, and I 
quote, eliminates international family planning. That executive order 
does not eliminate international family planning. What does the 
executive order do? What that executive order does is it simply makes 
it clear that the American taxpayer should not pay for abortions in 
foreign countries.
  Now I know a lot of people, obviously, on the pro-life side. I know a 
lot of people on the so-called pro-choice side, who happen to be pro-
choice but maybe anti-abortion, but I know a lot of people who believe 
in a woman's right to choose but they do not go so far as to say take 
money from taxpayers, from working Americans, and send it to foreign 
countries to pay for abortion. I know a lot of people, myself included, 
that believe that international family planning, excluding abortion, is 
important, but this rule does not say no more international family 
planning, and I think that the accuracy of these statements, we need to 
take some time so that the statements that we make that are portrayed 
are factual in basis.
  Mr. Speaker, I want to speak this evening really about two things 
that I feel very strongly about. One is the death tax. I have taken the 
House floor many times before to speak about the unfairness and the 
inequities that are worked upon hard-working American people by the 
death tax. In my opinion, death should not be a taxable event. In my 
opinion, the death tax in this country is the most unfair, unjustified 
tax that we have. One cannot, in my opinion, legitimize that type of 
tax, taxing a person's death, in a society like ours. So I want to 
spend some time in the latter part of my discussion this evening about 
the death tax, but first of all I want to speak about an event that I 
consider shameful, and all American people ought to have their eyes 
open as to what has gone on here in Washington, D.C. in the last two 
weeks.
  We know that when Clinton left office, Air Force One, they stripped 
the China, whatever, out of Air Force One. There were pranks played at 
the White House. There were lots of gifts made to furnish homes and so 
on and so forth. That is minutia. In my opinion, those issues are 
minutia when held in comparison to the issue of which I wish to discuss 
this evening, and that is the pardon of a fellow named Marc Rich.
  Marc Rich, and I will repeat his name several times during my 
discussion this evening on the floor, Marc Rich was one of the most 
sought-after fugitives in the world. Marc Rich has lived in Switzerland 
or overseas for about 17 years, since he became a fugitive from the 
United States of America, for betraying, in my opinion, betraying this 
country, and that is one of the charges that was brought against him; 
living a life of luxury. This fugitive, Marc Rich, is a billionaire, 
and I intend this evening to step through the process that shows us in 
America even though someone is not in America and they are a fugitive 
overseas, if they are a billionaire they stand a very good chance of 
getting special treatment, to be absolved of any allegations that were 
made against them in regards to white collar crime.
  Fundamentally, what happened for this pardon is unfair. It has never, 
to the best of my study of history, and I have asked for some 
assistance on it, happened before with a previous President who granted 
pardons; never to this level, never to this extent, and never under 
these kind of circumstances.

                              {time}  1930

  But Clinton did it. Marc Rich today, who defrauded the American 
taxpayers, and those are the allegations, who defrauded the American 
taxpayers of tens of millions of dollars, and if we add penalties, we 
are in the hundreds of millions of dollars; and during a time that this 
country had American soldiers and American citizens held hostage by the 
Iranians, Marc Rich, despite the law of this land, was out selling oil 
to our enemy.
  Do we think somebody like that is deserving of a Presidential pardon? 
Take a look at this week's Time Magazine. Very interesting: ``What's 
That Smell?'' Time Magazine, this week. So do not just take it from 
Scott McInnis discussing with my colleagues this evening about this 
pardon. This pardon was wrong. Clinton knew it was wrong; we all know 
it was wrong, Time Magazine knew it was wrong. Take a look at that 
article, ``What's That Smell?''
  Now, just for our interest here, obviously, the former President 
Clinton, the United States Senator, Hillary Clinton, and the ex-wife of 
Marc Rich, and I am going to go into some detail about this woman, her 
lobbying efforts, her contributions to the Democratic Party, and how 
that all played in a pardon being granted to one of the most sought-
after fugitives in American history; but let me quote a little from 
Time Magazine. They have an extensive article. They are talking about 
the pardons, and let me quote directly.
  ``Tucked in among the names was that of Marc Rich, 65, one of the 
world's most wanted white collar fugitives. Marc Rich and Mr. Green 
were charged with an illegal oil pricing scheme that amounts to what 
might be the largest,'' might be the largest, ``tax swindle in U.S. 
history, to the tune of almost $50 million, not to mention trading with 
Iran during the hostage crisis.''
  I skip down a little. ``Marc Rich,'' I add that in, ``has spent the 
last 17 years in Switzerland, living in splendid exile outside Zurich, 
protected by an coterie of private security guards and running a $30 
billion business. Marc Rich's ex-wife, New York City socialite, Denise 
Rich, just happens,'' and I am quoting, ``just happens to be a major 
Clinton donor and fund-raiser

[[Page 990]]

who has raked in millions of dollars for the Democratic Party during 
the last 8 years. Rich's lawyer in the pardoned case, Jack Quinn, was 
once Clinton's general counsel. Quinn personally lobbied Clinton and 
various dignitaries, including, sources tell Time, Israel Prime 
Minister Barak and King Juan Carlos of Spain, who contacted Clinton on 
Mr. Rich's behalf.''
  I will continue, but by the way, let me hold that up. This is the 
second page. This is a photo of Marc Rich, of his second wife and the 
yachts behind him in Switzerland.
  To continue, ``By Thanksgiving 2000, Quinn,'' this is the attorney; 
now, this attorney was general counsel for Bill Clinton, a close friend 
of Bill Clinton's, and he has been retained by Mr. Rich to obtain this 
pardon for him. Mr. Quinn, by the way, makes hundreds of thousands of 
dollars. He is paid, and he admits to this, he is paid hundreds of 
thousands of dollars.
  ``By Thanksgiving of 2000, Quinn had started a new game. During a 
meeting at the Justice Department on November 21, he notified Deputy 
Attorney General Eric Holder of his plan to file a pardon petition with 
the White House. He asked Holder if he wanted a copy. Holder, who 
assumed that the White House would forward the petition to the Justice 
Department's pardon attorney for review, as was customary.'' In other 
words, these pardons have always gone to the Justice Department for 
review, for input by the Justice Department.
  Well, on December 11, Quinn delivered the massive document, about the 
size of a phone book, but for reasons unknown and reasons that have not 
been explained, the White House decided not to send this petition down 
to the Justice Department.
  So remember our steps here. First of all, Marc Rich, the billionaire 
and his partner who, by the way, one of the two at some point tried to 
denounce their citizenship in this country, and they sold oil to the 
Iranians during the Iranian hostage crisis. The ex-wife of Mr. Rich 
begins to make heavy contributions to the Democratic Party. Mr. Rich 
hires Mr. Clinton's former attorney and a good friend of Mr. Clinton to 
begin the legal work and the lobbying effort on his part and, lo and 
behold, what a coincidence, the petition papers, I say to my 
colleagues, that generally and customarily go down to the Justice 
Department, did not make it this time. Quinn, again the attorney, went 
straight to the top, sending a letter to Bill Clinton that read, ``I 
believe in this cause with all of my heart.''
  The pardoned case, this case of Mr. Rich, was strengthened by an 
extraordinary lobbying effort. For starters, there was Denise Rich, 
again, the ex-wife, the grammy-nominated song writer and the Democrat 
diva who throws some of the most happening fund-raisers in New York 
City and Aspen, Colorado, my district, frequented by the likes of 
Marcia Stewart and Michael Jackson.
  Let us go through it on kind of a stick chart on how I think these 
events took place. The pardon. Let us start right here, with Denise 
Rich. Now, remember that the party that we are talking about is Marc 
Rich. He is in business with another gentleman who also got a pardon 
from the President. Now, in the history of pardons, pardons which have 
been customary in the past by previous Presidents is that a pardon is 
issued to someone who has committed an offense, has been found guilty 
of the crime or of the offense, and in the President's assessment of 
the facts, and the President has great latitude in making this 
decision, the President, in the assessment of the facts, feels that the 
debt has been paid to society. Mr. Rich has lived out the debt to 
society for the last 17 years living in luxury in Switzerland.
  Mr. Rich is a fugitive. To the best of my knowledge, in studying the 
history of pardons, and I will grant that it is not the most extensive 
study undertaken on pardons, but I think it is a pretty thorough study 
that we have undertaken, we cannot find where a fugitive, one of the 
most sought-after fugitives in the history of this country, who may 
have undertaken one of the largest tax swindles in the history of this 
country, that a fugitive is granted a pardon by the President.
  Why do not the pardon petition papers make it down to the Justice 
Department? Why not, as was customary, hand those petition papers over 
to the Justice Department? It creates a very confusing and blurry 
picture, and when we have a confusing and blurry picture, we need to 
step back and try to start putting the pieces of the puzzle together. I 
think I can put some of those pieces of the puzzle together for my 
colleagues tonight.
  Again, let us start with the ex-wife, Denise Rich. Denise Rich has 
given $1 million in donations to the Democratic National Committee. 
Now, I am one of those people that believe that one should give 
contributions to one's political party. I am not against contributions. 
But let us look at the coincidence of the timing. Let us look at the 
amount of money. How many people in America do we know that within a 
very short period of time have given $1 million to a political party 
without expecting something in return?
  Now, let me tell my colleagues, she has become very active since 
making those contributions in the party. In fact, I understand that 
Andrew Cuomo, who has just announced for governor of the State of New 
York, was going to have his announcement in her home. But because of 
some of what has come out in the last 24 hours or so, that announcement 
location has changed.
  Let us go on. Mr. Speaker, $190,000, Denise Rich, the ex-wife, 
$190,000 in gifts to the Clintons, $7,800 in furniture to the Clintons 
for their home in New York; $7,000 in furniture for their home in 
Georgetown, and many of us saw the picture on national TV where Ms. 
Rich gave a brand-new saxophone in person to Clinton.
  Now let us come down here. This is puzzle piece number one. The 
puzzle now is starting to take shape. Let us look down here. Jack 
Quinn, he is the attorney who makes hundreds of thousands of dollars. 
Marc Rich, the fugitive, pays the attorney hundreds of thousands of 
dollars to undertake the cause for him. Now, it just happens to be that 
that attorney was the former general counsel for Clinton. So former 
White House counsel and personal confidant to the President, he 
undertakes the case. The current attorney for Marc Rich and Mr. Green, 
the other defendant in this case, which has been paid at least 
$300,000, he begins his efforts and as a part of these efforts, he 
contacts people overseas, he writes the President a letter that says he 
believes in this cause with his whole heart. A lot of things can make 
us believe in things when one gets hundreds of thousands of dollars to 
lobby it.
  So what happens? This begins to funnel to the Clintons. Now the 
puzzle begins to make sense. But we have a little difficulty here. The 
Justice Department is probably going to urge the President not to grant 
the pardon. The Justice Department is going to bring to the President's 
attention how, number one, this is a fugitive. Number two, if this case 
was as weak as Mr. Quinn alleges it is, why did he flee the country? 
Why the fugitive status? Number three, Mr. Rich has not exactly paid 
back society for his alleged wrongdoings. In fact, he has lived a life 
of extreme luxury in Switzerland for all of these years, never 
renounced the tax swindle, although I guess at one point in time, 
somebody he hired offered $100 million for this thing to go away.
  So what happens? The Clintons get it. The Clintons receive fund-
raising support from Denise Rich, and 3 days after the report, going 
back to the Lewinsky affair was released, Denise Rich hosted a $3 
million fund-raiser where President Clinton said it means so much now, 
more than ever, and we will never forget it, and then what happens? 
Here we come out. This is when the puzzle comes together. Marc Rich and 
Green received a Presidential pardon from a 65-count racketeering 
indictment, including the crimes of tax evasion, oil profiteering and 
unlawfully trading with Iran or the enemy during the oil crisis.
  Let me quote from some of the people that have looked at that, 
independent of me. Now some of my colleagues are going to say, look, he 
is a Republican

[[Page 991]]

so he is going to take one last shot at Clinton. I told my colleagues 
at the beginning of my conversation, I thought it was minutia to deal 
with what has been taken out of Air Force One, the tricks that were 
played down at the White House as they left the facility, the phone 
lines that were cut, the gifts and things, although there is some 
question of the President furnishing these homes with the gifts, and 
there is a connection of the gifts with this case. However, what I am 
really focusing on is, whether one is Republican or Democrat, we ought 
to be saying wait a minute, why this pardon? How can we justify it?
  Let me quote from a few sources. From the Wall Street Journal, ``This 
story will go down as an extraordinary feat in the annals of Washington 
lobbying, illustrating in a dramatic fashion how money begets access, 
access begets influence, and influence begets results.'' The Wall 
Street Journal had a superior piece about this very case in yesterday's 
paper. Any of my colleagues that want to look at the facts should take 
a look at how unusual, how rare is what has happened. In fact, to my 
knowledge, I have never found an incident of it in the past of this 
country, for a fugitive being granted a pardon like this. Take a look 
at that Wall Street Journal article.
  I think it is very important, and I think it is incumbent upon a 
President, that when they take a look at issuing a pardon, they truly 
have to see, has that person paid society? Was the person wronged? Is 
it for the good of the country? What does the Justice Department think 
about this case?

                              {time}  1945

  That is how a President ought to be influenced, in my opinion, in 
regards to a pardon. Those are the facts that should be considered by a 
President. What should not be considered by a President in granting a 
pardon is a million dollars in donations to the Democratic National 
Committee, $190,000 in gifts to the Clintons, $7,800 in furniture to 
the Clintons, $7,000 for the home in Georgetown. One of their close 
friends, also their attorney, who has been retained by them in making 
hundreds of thousands of dollars to represent them, it is not right.
  Mr. Speaker, that is why you have an article like Time Magazine that 
comes out, and the title on the article, ``What's That Smell?'' That is 
what they are talking about. They are talking about this pardon; that 
is what justified this article in Time Magazine. Furthermore, at the 
beginning of Time Magazine, there is a cartoon. Here is the cartoon, it 
shows Marc Rich, an image of Marc Rich with lots of money in his hand, 
and it says beg your pardon, billionaire-fugitive Marc Rich, escapes 
jail on 51 charges of fraud, racketeering, and more after Bill Clinton 
pardons him as one of his final acts in office. Rich paid his debt to 
society by living lavishly in Europe for 17 years.
  In all of my years in Washington, D.C., I have dealt with people who 
are discouraged, regular ordinary citizens in this country, and, you 
know, constantly, you find yourself on defense saying, look, we have a 
good government in Washington D.C., and things, for the most part, are 
done right, and then something like this comes along. And as Time says, 
something stinks.
  How can any of us in this room, how can any of us go back to our 
districts and justify the Marc Rich pardon. How can any of us look at 
an ordinary citizen who is not a billionaire, who is not a friend of 
Clinton, who is not paying the attorney hundreds of thousands of 
dollars, how can we explain to the ordinary citizen what their 
treatment would be?
  Let me conclude by saying this in regards to this portion of my 
comments. If any one of your constituents, colleagues, any one of your 
constituents, went to the local WalMart store or the local hardware 
store, let us just say the local WalMart store, and they stole a bag of 
M&Ms and they got caught, their punishment would be worse than Marc 
Rich, who is one of the most sought after fugitives in the world, a 
tax-evasion swindle alleged to be in the hundreds of millions who has 
been living in luxury, and he walks away from this, scot-free. It is 
not right.


                               Death Tax

  Let me move on to my next subject, the death tax. This issue, the 
death tax, is very, very important. It is a tax imposed by our taxing 
system in this country upon one event, your death. Let me say in our 
current Tax Code, there are two taxes that I think fly contrary to what 
this country is about. One of them is the marriage tax, where they 
consider being married, should be taxed. In my opinion, this country 
should encourage marriage, not take actions to discourage marriage.
  This is a country which prides itself on being built upon the family 
foundation, so we should not tax marriage. The other one is, this 
country taxing the event of death. This is a country that, in my 
opinion, and in the opinion, I think, of most Americans, should be in 
the business of encouraging one generation to pass the family farm or 
to pass a small business or to pass some type of wealth on to the next 
generation.
  This is a country where all of us dream, all of us, and colleagues, I 
am not sure there is one exception in this room, where all of us dream 
of being able to do something for our children, hopefully during your 
lifetime, being able to acquire, maybe not a lot, but something that we 
can pass on to our children to make life a little easier for them or to 
pass on a family heritage, like the family ranch or the family farm or 
the family business.
  This tax prevents this. This tax has done more harm to American 
families than any tax I can think of. This tax, the death tax, this is 
a tax on property that has already been taxed. This is not property 
that has somehow evaded taxes. This is not property that has not been 
carrying its fair share of taxation throughout the life of the asset. 
In fact, the taxes many times have been paid two or three times.
  What is interesting about the death tax is you hear the liberal, and 
I say that, because I want you to know, it is not the Democratic, it is 
the liberal. There are a lot of conservative Democrats who agree with 
me that we should eliminate the death tax. The first bill I introduced 
this year is elimination of the death tax in the Committee on Ways and 
Means in the House.
  I think it is almost unified, especially on the Republican side, and 
with some of the conservative Democrats, to eliminate or to 
significantly restructure that so-called death tax.
  Let us talk for a moment about just exactly the arguments on the 
other side. Let us assume what the other side is going to say about 
somehow justifying a death tax.
  First of all, many of my colleagues who have voted for the death tax 
or voted against the abolishment of the death tax, and several of those 
individuals are worth in excess of a million dollars, you can bet your 
bottom dollar that elected people who vote to support the death tax who 
have a net worth of more than a million or $2 million probably have 
already secured the services of legal counsel to make sure that they do 
not pay the death tax, to make sure that their property does not end 
around the tax and can go on to the next generation, because they can 
afford the attorneys to do that. They do not mind having a double 
standard, one standard for their family, i.e., setting up trusts and 
end-runs around the death tax, and one standard for the average working 
American family that might be subject to this that they have to pay the 
tax.
  Make no mistake about it, this tax is very punitive. The next 
argument you will hear from the liberals who support this kind of 
taxation. And, by the way, the history of this taxation, it came in to 
penalize the Robert Barrons. They were going after the Carnegies and 
the Hertz and the people like that. Go penalize them. How dare somebody 
in our society go make a lot of money. Maybe they had some jurisdiction 
to go around these Robert Barrons around the turn of the century, so 
they put in this tax.
  You will hear some liberals say what is the big beef? What are they 
complaining about? It only hits 2 percent of the American people. Let 
me tell you. Let us go through exactly what the death tax does. If you 
have a small

[[Page 992]]

community, take a small community, anywhere America, and this is your 
community. This argument that it only affects 2 percent of the people 
is fallacious on its face.
  Oh, sure, the family that ends up paying the tax directly out of 
their pocket might be the top 2 percent income earners. Although, I am 
not sure that is accurate, the top 2 percent asset holders in this 
country, but the reality of it is look what it does to a community.
  Let us say, for example, we have family A, and family A is subject to 
the death tax. People would have you believe that the only family 
affected in this community is family A. Well, you know what happens to 
the money when they impose a death tax on an estate. It does not stay 
in your community out in Colorado or out in Utah or Texas or Minnesota. 
That money comes out. And in the case of Colorado, it comes out of 
Colorado and makes a sharp turn east. And where does it go? It goes to 
Washington, D.C.
  That is exactly what happens. It sucks that money out of the 
community, takes a 90-degree turn and heads straight for Washington, 
D.C. Then Washington, D.C., the bureaucracy in Washington, D.C. takes 
those family-earned assets, and a lot of times those assets were built 
over the lifetime, over the lifetime of the descendant, takes those 
assets and redistributes them to the Federal Government.
  It is a scheme of redistribution. It creates no capital, but it 
punishes a lot of people.
  I have some letters that I wanted to read. These are letters that I 
have gotten in my office that I think reflect the hardships on hard-
working American people that are imposed by this tax which has no 
justification in our tax system, other than being used as a tool of 
punishment. Remember that the death tax initially came in as a tool of 
punishment against the wealthy.
  Let me read this letter. This actually was a letter to the editor. My 
family has ranched in northern Colorado for 125 years. My sons are the 
sixth generation to work this land. We want to continue, but the 
Internal Revenue Service is forcing almost all ranchers and many 
farmers out of business. The problem is estate taxes. The demand for 
our land is very high and 35-acre ranchettes are selling in this area 
as high as $4,500 per acre. We have 20,000 acres. We want to keep an 
open space, but the U.S. Government is making it impossible, because we 
will have to pay 55 percent of their valuation when my parents pass on.
  Ranchers are barely scraping by these days anyway. If we were willing 
to develop home sites, we could stop the mining. But since we want to 
save the ranch, we are in trouble. The family has been able to scrape 
up the estate taxes as each generation dies up to now.
  So in other words, what the letter is saying, every time we have had 
that death, we have been able to pool some tight resources to pay that 
tax.
  But the time is up. I am afraid we are done for. This time, our only 
option is to give the ranch to a nonprofit organization and they all 
want it, but they will not guarantee they will not develop it. My 
father is 90 years old, so time is short. We are only one of two or 
three ranchers left around here.
  Most ranches have been subdivided. One of the last to go was a family 
that had been here as long as our family. When the old folks died, the 
kids borrowed money to pay the taxes. Soon they had to start selling 
cattle to pay the interest. When they ran out of cattle, their 18,000-
acre ranch was foreclosed on and is now being developed. The family now 
lives in a trailer near town and the father works as a highway flagman.
  If you want to stop sprawl, you better ask U.S. Government to get off 
the backs of family ranches and farms.
  Now, what do they mean by the last comment that this gentleman wrote. 
If you want to stop sprawl? In my district in Colorado, my district's 
the Third Congressional District of Colorado. It is a district 
geographically larger than the State of Florida. It is a district whose 
property values have skyrocketed. It is a district whose beauty, and I 
know I am prejudiced or biased because I represent this district, but 
it is a district that is probably among the top three or four in the 
Nation for beauty, but it is also a district that in the past has a 
strong agricultural base.
  Many, many families, including my own in-laws, who have been on the 
same family ranch since the 1870s or 1880s, my family who were farmers 
who came to Boulder, Colorado in the days of the old Chicago fire, that 
is why they were sent to Colorado after having come to Ellis Island.
  The history of that district is agricultural. There are a lot of 
family farms and ranches. And what happens is if you come in with a 
death tax, because the valuation of the land has got up. Mind you, this 
is not money sitting at the bank account at the Smith ranch or the 
Volbrac ranch, or the Straubaugh ranch. It is not money sitting in the 
bank account. This is money that is on paper. It is called paper money. 
The property has gone up in value, because property around it has gone 
up in value.
  If you have an unexpected death or even an expected death, what 
happens is, and a lot of times the only thing you can do with the 
farmer ranch is subdivide it, you have to break it up.
  A lot of us in Colorado, a lot of us in every State in this country, 
we cherish open space. We become to value open space like we have never 
had in our past, because we understand how much more limited it is 
becoming. And now what is happening once again, instead of encouraging 
a family farm to go from one generation to the next generation, we, in 
fact, are penalizing that family and turning it on ourselves by forcing 
this beautiful open space to be subdivided, so the mere simplification 
of the tax of this estate tax can be paid.
  Some people like to oversimplify the situation and say, oh, come on, 
give me a break, go get life insurance. There are very few ranchers in 
America, very few ranchers in America who make enough money to go out, 
for example, and insure a 90-year-old father against the estate taxes.

                              {time}  2000

  Or even insure a 45-year-old father or a 45-year-old mother against 
the impact of the estate taxes. That insurance costs a lot of money, 
and in agriculture there is some exceptions, but in agriculture, you do 
not make that kind of money. Let us go on.

       I am writing to bring your attention to an issue of the 
     utmost importance to me, my family, my employees and my 
     business, elimination of the death tax. I urge you to support 
     and pass the death tax this year. Family-owned businesses 
     need relief from the death tax now. We are celebrating 66 
     years of business. My grandfather, Vic Edwards, started with 
     a fruit and vegetable stand in 1943 at our current location 
     in Colorado. The business grew into a grocery store, a lawn 
     and a garden center. My father is now 80 years old and is in 
     poor health. No business can remain competitive in a tax 
     regime that imposes rates as high as 55 percent upon the 
     death of the owner. Our tax laws should encourage rather than 
     discourage the perpetuation of these businesses. While being 
     a member of the House Ways and Means Committee, I am sure you 
     already know the urgency for the death tax repeal. Family-
     owned businesses and their employees will continue to suffer 
     until this unfair, unproductive, uneconomic tax is abolished. 
     My wife and I are active and look forward to working with you 
     and your staff to enact common-sense legislation to preserve 
     and promote our Nation's family-owned enterprises.

  Now, take a look at what it involves to get you subject to the estate 
or the death tax bracket. If you are a contractor, for example, let us 
say in Vail, Colorado, let us say that you own your pickup free and 
clear, you own a dump truck free and clear, and a bulldozer free and 
clear, and let us say you have a single-car garage to store things in, 
or maybe do some mechanical work on those four pieces of machinery, you 
are subject to the death tax in this country. If you live in areas like 
the Third Congressional District in these communities where you have 
seen quick valuations and rapidly escalating valuations on these 
properties like in California or Colorado, take a look, you better look 
at your assets because as long as that death tax is in place, you could 
subject your family to an economic punishment the likes of which they 
have never experienced before.

[[Page 993]]

  Your plans, colleagues, and the plans of your constituents of working 
their entire life paying their taxes, being hard-working citizens, 
being law-abiding citizens and trying to accumulate something for their 
lifetime to pass on to the next generation, and in the case of ranches 
and businesses in the hope that that generation passes it to the next 
generation, these dreams can be trashed upon your death. These dreams 
can be demolished.
  And for what purpose? Is there any purpose that any of my colleagues 
today, any purpose other than punishment that you can think of as 
justification for the death tax in this Nation? Of course there is not.
  Let me talk about another example which happened about a year and a 
half ago. This comes right out of our newspaper, Grand Junction, 
Colorado, the Daily Sentinel, Brookhart's Building Centers, a small, 
family-owned lumber company. They had to sell it in order to avoid 
paying the death tax. The owner said it was one of the hardest 
decisions that his father and his family have made in their 52 years of 
doing business. So for 52 years, they have been in western Colorado 
doing business as a small lumber company. This by the way is not Home 
Depot, it is not some massive operation, it was a small lumber building 
center for 52 years. But the current Federal death taxes as they now 
exist forced this gentleman and his family to sell the business in 
hopes of being able to redistribute some of the wealth within their 
family and within their own community before the death took place.
  I quote: ``In order to protect our family and our current employees 
from a forced liquidation upon the death of himself and his wife, 
Betty, the best thing now is to sell the company.'' This family cared 
about, and this is a valid point to observe, this family did not just 
care about their own family and the generation behind them, they cared 
about the employees of the lumber company.
  They said, if this death were to occur, we would have to liquidate 
the business, which means these employees lose their jobs.
  Let us go back to community A. Remember what I said in community A. I 
will draw a little bigger circle. This is community A. I will give my 
colleagues a true example of which I am aware of out in Colorado. 
Businessman A comes into town. Many, many years ago, maybe 50, 60 years 
ago, he comes into this small community in western Colorado. He becomes 
a janitor at a construction company.
  Because of his hard work, his dedicated efforts, over a period of 
several years, he has an opportunity to buy into the company. After a 
while, he is able to become the primary owner of the company. After 
many years, he owns the whole company.
  What happens, it becomes a very successful construction company in 
that area, in that community. They are the primary employer in the 
community. They are the primary holder of real estate in that 
community. They are the primary contributor to the charities in that 
community. They are the primary contributor to the local church that 
they went to in that community.
  What happened? I knew the person personally. My friend got cancer. My 
friend had sold the construction company about 2 months before he found 
out that he had cancer. So he got hit with what is called a capital 
gains taxation. Then he got the cancer. He died. They hit him with 55 
percent, 55 percent of what he had spent his entire life, his entire 
life working for. Fifty-five percent.
  Now, when you combine it with the capital gains taxation that our 
government imposed upon A's estate, the effective rate was around 72 
cents on the dollar, 72 percent taxation rate because he died. Seventy-
two percent, 72 cents on the dollar.
  Now, I asked the family, I said, You mean you only walked away with 
28 cents out of every dollar that your father spent his entire life 
working on property that you had already paid the taxes on? You only 
walked away with 28 cents on the dollar?
  No, no, no. You have got it wrong. You have got it wrong, Scott. We 
did not get 28 cents on the dollar. In order to pay the 72 cents on the 
dollar, we had to go to a fire sale. We had to sell our property for 
less than what it was worth because we had to sell it quickly to meet 
the estate taxes we had to pay. So we figured we walked away with about 
18 cents on the dollar, maybe 15 cents on the dollar.
  That is pathetic. That is unbelievable. What happened in the 
community? Remember, I said they were the largest employer? Forget 
that. Remember the money that stayed in the community? Citizen A, he 
did not bank his money in Washington, D.C. He did not employ people in 
Washington, D.C. He did not help the church in Washington, D.C. He did 
not send his money to charities in Washington, D.C. He used them in 
that community. His bank deposits were in his little community in 
western Colorado. His employees were in that community in western 
Colorado. His charitable contributions were in that community. His 
landholdings were in that community. His investments were in that 
community.
  But what happened after the death tax took place? All of that was put 
into one big bundle, one big bundle. Out of the State it went and on to 
Washington, D.C. where the bureaucracy back here figures they have a 
better idea of how to redistribute that money.
  Did it have any impact on that community? Let us say one does not 
sympathize with my friend A, the wealthier individual who owned this 
construction company. Let us say one has no sympathy for him. But look 
beyond him. What did it do to that community?
  Can one justify sitting here in Washington, D.C., imposing a tax, in 
effect which is on that entire community, just because a person has 
worked hard all his life and paid those taxes? This is not the first 
time this property was taxed.
  I will tell my colleagues what happens a lot of times or could 
happen, does happen. Let us say this is mom and dad B, and they own the 
ranch. Let us say that A and B are in an accident and all of a sudden 
the ranch has to pay estate taxes. So now the ranch becomes a little 
smaller because one has got to trim a part of it off to pay the taxes. 
One can sell the cattle; but after a while, one has got to get to the 
land.
  Well, the good Lord forbid, that the family that is left, let us say 
they have a daughter C, the good Lord forbid that C would die 
prematurely. Because if C died, even if C died within a few months of A 
and B, guess what happens? Uncle Sam is back again and takes another 
chunk out of that until, finally, the chunk is so small that they do 
not tax it anymore.
  Where is the fairness of this? I can tell my colleagues with a great 
deal of pleasure, we have got a President now, President Bush, who has 
committed as one of his top agenda items in this tax cut that he is 
going to send to the Hill, one of his top priorities is to do something 
about that death tax. We are going after the marriage tax, too.
  But, in my opinion, it is about time we had someone with enough 
gumption to stand up to that liberal segment of our society that 
believes in punitive and believes in punishment instead of fairness, 
somebody who is standing up, as President Bush is doing, and saying, 
wait, instead of deciding whether we should punish somebody because 
they have worked hard or they have built up a ranch or a farm or a 
business, why do we not kind of figure out what we are looking for.
  Number one, are we looking for punishment? No, we are not looking for 
punishment, or we should not be. Now, sure, there are some of my 
colleagues in here that like class warfare that want to do everything 
they can to beat down the rich because it is good political rhetoric. 
But the fact is we are not looking for punishment.
  Are we looking for redistribution of wealth through Washington, D.C.? 
Well, we should not be. That is not fair. Look what it does to the 
community in my previous example.
  Well, are we looking for some kind of justification that a death tax 
is a legitimate reason for a government to tax a family? Nobody, nobody 
in their right mind can stand up and argue the legitimacy of a death 
tax.
  So what is it that allows this to continue to stand? Well, what 
allowed it to

[[Page 994]]

continue to stand has now left office. Now, granted, there are a few 
House Members and a few of my colleagues that will still support the 
continuation of a death tax. But count my words, Mr. Speaker, any one 
of my colleagues that votes for this death tax, to keep a death tax in 
place, that believes that death is a taxable event in our society, any 
one of them who on their financial disclosure sheet shows that the have 
a net worth of, say, more than $2 million, as an example, I will bet 
them to the person in here that they have arranged for their legal 
counsel to build up trust funds and to figure an end to run around it. 
I will bet that has happened.
  So I am urging all of my colleagues, come on. It is time for us to 
join the President and stand up and say enough is enough on this death 
tax. No longer can we justify a death tax on our society.
  In fact, as his previous letter said, let me repeat it here: Our tax 
laws should encourage rather than discourage the perpetuation of that 
business.
  Finally, let me conclude my remarks on the death tax with a very 
moving letter about a ranch that was established in 1888. This article 
actually, in part, came from the Aspen Times. I live close to Aspen. I 
live in a town called Glenwood Springs. I can tell my colleagues today 
Aspen, as one well knows from my previous comments, some people party 
up there, but it used to be a mining community. When I grew up there, 
we were farmers, agriculture. It was a strong base. We grew 
strawberries, potatoes, et cetera, et cetera. Some of those family 
farms and ranches are still left, and some of them still left are run 
by the families that started them.
  In this case, this ranch was established, again, in 1888. ``There are 
a lot of tales to be told about the conversion of former ranches into 
luxury homes and golf courses throughout the valley.
  ``Sometimes it was a simple financial decision, a choice to take 
advantage of soaring development values in the face of plummeting 
cattle prices. But for other families, the passing of a parent meant 
the passing of a way of life.''
  The passing of a parent meant the passing of a way of life.

       ``We've been around a long time,'' said Maurin Ranch's 
     current proprietor, Dwight.

  The family ``roots are dug deep along Capitol Creek Road in Old 
Snowmass and, for nearly a century, heritage and hard work were enough 
to sustain those that lived on that 1,300-acre stretch of land. But all 
that changed in 1976.''

                              {time}  2015

  But all of that changed. Until Dwight's father's death, each 
generation presided over a working cattle ranch that was both the 
lifeblood and the livelihood of the clan. The father's later years were 
lean times, but the fate was not at risk until the Internal Revenue 
Service came around to collect upon the father's death. The tax bill 
came to $750,000. And what it took to pay the bill was this: Half of 
the ranch, the ability of the cattle to migrate in the winter months, 
and 10 years till the last installment was paid.
  What those taxes took was also something very vital: The ability of 
the family to support themselves by working the land that had so long 
been theirs. This land had been theirs for over 100 years. They no 
longer had the ability to work that land because they had to reduce the 
size of the land to pay the estate tax.
  Now the son works full time as a mechanic for the Roaring Fork School 
District and then helps at the ranch when he gets home at night. He 
does not mind the long hours he has to put in. What does get under his 
skin is the memory of how the Internal Revenue Service, overseeing the 
father's taxes, either did not recognize the devastation that was about 
to occur or did not care. It was just, ``Pay us or we will seize 
everything. If anything is left over, you can keep it or, if you can't 
make ends meet on what's left, you will have to figure out something 
else.''
  They are trying not to sell what remains, which is about 640 acres, 
but the father wonders if his daughters would be willing to go through 
what he has just endured with the death of his father and mother. With 
only half the land to graze and falling beef prices, the ranch itself 
is only making enough to cover its operating costs and annual property 
taxes. It is the wife's day job at the school district and the 
husband's job as a mechanic that pays the doctor bills, the car 
insurance, the grocery bills and everything else. There is always hope 
that things will change before his daughters need to make any decisions 
about what is left on the ranch.
  And, frankly, colleagues, that is up to us. Here is a family right 
here. I heard some liberal writer say there is no ranch in America that 
has been lost. How sadly mistaken that individual was. We have an 
example right here. We can do something about saving this family's 
generation and their way of life. It is not just the loss of the 
family, the ripple spreads much wider in our area. Once this land is 
sold to developers, the land is gone forever.
  We here have the power. This session, this congressional session, 
with a new president, President Bush, who wants to significantly 
eliminate it or restructure it, we have an opportunity to do something 
about it, and I hope we do not squelch that opportunity. There are a 
lot of American families who really think that working a lifetime for 
the next generation is a worthwhile cause. And we, the government, the 
government of the people and by the people, should not be the 
government that destroys the people's dreams for their next generation.
  Every one of us in this room has an obligation to stand up and step 
forward and do our duty, and that is to protect the dreams of the 
American working people so that they know the generation behind them 
has just a little start on their life.

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