[Congressional Record (Bound Edition), Volume 154 (2008), Part 1]
[House]
[Pages 11-12]
[From the U.S. Government Publishing Office, www.gpo.gov]




 NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2008--VETO MESSAGE 
      FROM THE PRESIDENT OF THE UNITED STATES (H. DOC. NO. 110-88)

  The SPEAKER pro tempore laid before the House the following veto 
message from the President of the United States:

                       MEMORANDUM OF DISAPPROVAL

  I am withholding my approval of H.R. 1585, the ``National Defense 
Authorization Act for Fiscal Year 2008,''

[[Page 12]]

because it would imperil billions of dollars of Iraqi assets at a 
crucial juncture in that nation's reconstruction efforts and because it 
would undermine the foreign policy and commercial interests of the 
United States.
  The economic security and successful reconstruction of Iraq have been 
top priorities of the United States. Section 1083 of H.R. 1585 
threatens those key objectives. Immediately upon enactment, section 
1083 would risk the freezing of substantial Iraqi assets in the United 
States--including those of the Development Fund for Iraq (DFI), the 
Central Bank of Iraq (CBI), and commercial entities in the United 
States in which Iraq has an interest. Section 1083 also would expose 
Iraq to new liability of at least several billion dollars by undoing 
judgments favorable to Iraq, by foreclosing available defenses on which 
Iraq is relying in pending litigation, and by creating a new Federal 
cause of action backed by the prospect of punitive damages to support 
claims that may previously have been foreclosed. This new liability, in 
turn, will only increase the potential for immediate entanglement of 
Iraqi assets in the United States. The aggregate financial impact of 
these provisions on Iraq would be devastating.
  While my Administration objected to an earlier version of this 
provision in previous communications about the bill, its full impact on 
Iraq and on our relationship with Iraq has become apparent only in 
recent days. Members of my Administration are working with Members of 
Congress to fix this flawed provision as soon as possible after the 
Congress returns.
  Section 1083 would establish unprecedented legal burdens on the 
allocation of Iraq's funds to where they are most needed. Since the 
fall of Saddam Hussein, I have issued Executive Orders to shield from 
entanglement in lawsuits the assets of the DFI and the CBI. I have 
taken these steps both to uphold international legal obligations of the 
United States and to remove obstacles to the orderly reconstruction of 
Iraq. Section 1083 potentially would place these crucial protections of 
Iraq's core assets in immediate peril, by including a provision that 
might be misconstrued to supersede the protections I have put in place 
and to permit the judicial attachment of these funds. Iraq must not 
have its crucial reconstruction funds on judicial hold while lawyers 
argue and courts decide such legal assertions.
  Moreover, section 1083 would permit plaintiffs to obtain liens on 
certain Iraqi property simply by filing a notice of pending action. 
Liens under section 1083 would be automatic upon filing a notice of a 
pending claim in a judicial district where Iraq's property is located, 
and they would reach property up to the amount of the judgment 
plaintiffs choose to demand in their complaints. Such pre-judgment 
liens, entered before claims are tested and cases are heard, are 
extraordinary and have never previously been available in suits in U.S. 
courts against foreign sovereigns. If permitted to become law, even for 
a short time, section 1083's attachment and lien provisions would 
impose grave--indeed, intolerable--consequences on Iraq.
  Section 1083 also includes provisions that would expose Iraq to 
increased liability in lawsuits. Contrary to international legal norms 
and for the first time in U.S. history, a foreign sovereign would be 
liable for punitive damages under section 1083. Section 1083 removes 
defenses common for defendants in the United States--including res 
judicata, collateral estoppel, and statutes of limitation--upon which 
the Iraqi government has relied. And section 1083 would attempt to 
revive a $959 million judgment against the new democratic Government of 
Iraq based on the misdeeds of the Saddam Hussein regime.
  Exposing Iraq to such significant financial burdens would weaken the 
close partnership between the United States and Iraq during this 
critical period in Iraq's history. If Iraq's assets are frozen, even 
temporarily, that could reduce confidence in the Iraqi dinar and 
undermine the success of Iraq's monetary policy. By potentially forcing 
a close U.S. ally to withdraw significant funds from the U.S. financial 
system, section 1083 would cast doubt on whether the United States 
remains a safe place to invest and to hold financial assets. Iraqi 
entities would be deterred from engaging in commercial partnerships 
with U.S. businesses for fear of entangling assets in lawsuits. Section 
1083 would be viewed with alarm by the international community and 
would invite reciprocal action against United States assets abroad.
  The adjournment of the Congress has prevented my return of H.R. 1585 
within the meaning of Article I, section 7, clause 2 of the 
Constitution. Accordingly, my withholding of approval from the bill 
precludes its becoming law. The Pocket Veto Case, 279 U.S. 655 (1929). 
In addition to withholding my signature and thereby invoking my 
constitutional power to ``pocket veto'' bills during an adjournment of 
the Congress, I am also sending H.R. 1585 to the Clerk of the House of 
Representatives, along with this memorandum setting forth my 
objections, to avoid unnecessary litigation about the non-enactment of 
the bill that results from my withholding approval and to leave no 
doubt that the bill is being vetoed.
  This legislation contains important authorities for the Department of 
Defense, including authority to provide certain additional pay and 
bonuses to servicemembers. Although I continue to have serious 
objections to other provisions of this bill, including section 1079 
relating to intelligence matters, I urge the Congress to address the 
flaw in section 1083 as quickly as possible so I may sign into law the 
National Defense Authorization Act for Fiscal Year 2008, as modified. I 
also urge the Congress to ensure that any provisions affecting 
servicemember pay and bonuses, as well as provisions extending expiring 
authorities, are retroactive to January 1, 2008.
                                                      George W. Bush.  
                                    The White House, December 28, 2007.

  The SPEAKER pro tempore. The objections of the President will be 
spread at large upon the Journal, and the veto message and the bill 
will be printed as a House document.


                      Motion Offered by Mr. Hoyer

  Mr. HOYER. Madam Speaker, I have a privileged motion at the desk.
  The SPEAKER pro tempore. The Clerk will report the motion.
  The Clerk read as follows:

       Mr. Hoyer moves that the veto message of the President, 
     together with the accompanying bill, H.R. 1585, be referred 
     to the Committee on Armed Services.

  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to refer.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion.
  The motion was agreed to.
  A motion to reconsider was laid on the table.
  The SPEAKER pro tempore. Accordingly, the veto message and the bill 
will be referred to the Committee on Armed Services.

                          ____________________