February 24, 1992 CONGRESSIONAL RECORD-HOUSE 8159 HOUSE OF REPRESENTATIVES-Monday, February 24, 1992 The House met at 12 noon. But I think it also goes back to some PROGRAM The Chaplain, Rev. James David of the legislation passed in this body Opening: Arnold Goldstein, Superintend­ Ford, D.D., offered the following pray­ and the other body on title IX and ent, National Capital Parks-Central, Na­ er: some of the efforts that we have made tional Park Service. Presentation of the Colors: Joint Armed Teach us in all our ways, 0 God, to to make sure that Federal money is Services Color Guard, Military District of look upon others with the respect and spent equally on men and women ath­ Washington. honor that is due every person. We letes in the various programs that are "The National Anthem" : U.S. Air Force admit our disagreements and conflicts, sanctioned at the college level. Band, Chief Master Sgt. Alan Sine, Director. our disputes and quarrels, and yet we Mr. Speaker, certainly we want to Welcome by the Master of Ceremonies: Ar­ acknowledge You as the Creator and give tribute to our Olympic women and nold Goldstein, Superintendent, National Judge of the whole human family, a to all of the young Bonnie Blairs and Capital Parks-Central, National Park Serv­ ice. family bound together by Your gift of Kristi Yamaguchis who watched these Remarks: Honorable Russell E. Train, life and Your sustaining spirit. May Olympics and will be our Olympians in First Vice President, Washington National the spirit of tolerance mark our voices future years. Monument Society. and the spirit of understanding touch I think it is also important for us to Robert G. Stanton, Regional Director, Na­ our actions so we will see others as note that this Congress and this Nation tional Capital Region, National Park Serv­ companions on the road of life. May played a role in these achievements. ice. Your blessing, gracious God, be with us Honorable Herbert H. Bateman, U.S. House of Representatives, 1st District, Virginia. all this day and every day. Amen. Honorable James P. Moran, U.S. House of PERMISSION TO PRINT PROGRAM Representatives, 8th District, Virginia. AND REMARKS OF MEMBERS AT Musical Selection: Stevens Elementary THE JOURNAL WREATH-LAYING CEREMONY FOR School Glee Club and Bell Ringers. The SPEAKER. The Chair has exam­ OBSERVANCE OF GEORGE WASH­ Presentation of Wreaths: ined the Journal of the last day's pro­ Wreath of the U.S. House of Representa­ INGTON'S BIRTHDAY tives: Honorable Herbert H. Bateman, Honor­ ceedings and announces to the House Mr. MONTGOMERY. Mr. Speaker, I able James P. Moran. his approval thereof. ask unanimous consent that the pro­ Wreath of the Washington National Monu­ Pursuant to clause 1, rule I, the Jour­ gram and the remarks of the two Mem­ ment Society: Honorable Russell E. Train. nal stands approved. Wreath of the National Park Service: Re­ bers representing the House of Rep­ gional Director Robert G. Stanton. resentatives, the gentleman from Vir­ Taps and Retiring of the Colors: Military PLEDGE OF ALLEGIANCE ginia [Mr. MORAN] and the gentleman District of Washington. from Virginia [Mr. BATEMAN]. at the The National Park Service and the Wash­ The SPEAKER. The Chair will recog­ wreath-laying ceremony at the Wash­ ington National Monument Society would nize the gentleman from Mississippi ington Monument for the observance of like to acknowledge special thanks to the [Mr. MONTGOMERY] to lead us in the George Washington's birthday on Fri­ Military District of Washington, the United Pledge of Allegiance. day, February 21, 1992, be inserted in States Air Force Band, and to the students Mr. MONTGOMERY led the Pledge of and faculty of Stevens Elementary School today's CONGRESSIONAL RECORD. for contributing to the success of this pro­ Allegiance as follows: The SPEAKER pro tempo re (Mr. gram. I pledge allegiance to the Flag of the Unit­ VENTO). Is there objection to the re­ ed States of America, and to the Republic for quest of the gentleman from Mis­ SPEECH OF REPRESENTATIVE JAMES P. MORAN, which it stands, one nation under God, indi­ sissippi? CELEBRATING THE BIRTHDAY OF GEORGE visible, with liberty and justice for all. There was no objection. WASHINGTON , FEBRUARY 21, 1992 The text of the program and speeches Today we are gathered to celebrate the are as follows: birthday of George Washington, the founder HAIL TO AMERICA'S FEMALE of our Country. We celebrate this occasion at OLYMPIANS PRESIDENT GEORGE WASHINGTON, 260TH one of many monuments throughout our Na­ BIRTHDAY OBSERVANCE, FEBRUARY 21, 1992, (Mr. MAZZOLI asked and was given tion memorializing the spirit and courage of 11 A.M., WASHINGTON MONUMENT, WASHING­ the first President of the United States. We 1 permission to address the House for TON , DC stand here today at this memorial-the tall­ minute and to revise and extend his re­ "The name of American* * *must always est monument in our city that serves daily marks.) exalt the just pride of Patriotism, more than as a quidepost and reference point to how Mr. MAZZOLI. Mr. Speaker, 2 weeks any appellation derived from local discrimi­ important Washington was to our country of Olympic competition ended yester­ nations. With slight shades of difference, you and to all Americans. day. While the United States perform­ have the same Religeon, Manners, Habits I am especially proud to be able to speak ance was not what we would have loved and Political Principles. You have in a com­ at this gathering as the Congressman rep­ it to be-we did not win all the med­ mon cause fought and triumphed together. resenting the 8th.district of Virginia, where, The indep&ndence and liberty you possess are just southeast of here, George Washington's als-we certainly won a representative the work of joint councils, and joint efforts; home, Mount Vernon, is located. And, like share. I think all of us should take of common dangers, sufferings and suc­ all Virginians, I am proud that Washington note of the fact that 9 of the 11 medals cesses.' '-FAREWELL ADDRESS. served in Virginia's House of Burgesses and the United States won, and all 5 of the " * * *the Propitious smiles of Heaven, can lived here all of his life. gold medals which the United States never be expected on a nation that dis­ When I think of George Washington, I won, were won by our American regards the eternal rules of order and right, think of a man with exceptional principles, women. which Heaven itself has ordained."-FIRST backbone, and vision. A man so well loved by INAUGURAL ADDRESS. his countrymen that some thought of I think that goes back to a lot of " Knowledge is in every country the surest anointing him King, but who steadfastly re­ things, including the wonderful train­ basis of public happiness, contributing ines­ fused to accept any such title in the best in­ ing techniques that coaches have devel­ timably to the security of a free constitu­ terests of democracy. oped today, the great nutritional tech­ tion.* * *"-FIRST ANNUAL ADDRESS TO CON­ One need not wonder what our Nation niques, and new equipment. GRESS. might be like today if George Washington

DThis symbol represents the time of day during the House proceedings, e.g., 0 1407 is 2:07 p.m. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. 3160 CONGRESSIONAL RECORD-HOUSE February 24, 1992 had been a different kind of man. What if he In 1753, at the age of just 21, George Wash­ Our nation today remains symbol of the had not had the courage to serve as com­ ington was sent as an emissary to the Ohio spirit of George Washington. It is fitting mander of the Continental armies in our River Valley to deliver an ultimatum to the today that we pay tribute to him at this be­ Revolutionary War and lead the fight French warning them not to encroach upon loved site and rededicate ourselves to the vi­ against the British from the first stirrings of English territory. During this mission, sion of our nation that is our great inherit­ rebellion in 1776 to the victorious meeting at Washington was shot at by Indians, nearly ance from the father of our country. Yorktown in 1781. He steadfastly maintained drowned, and exposed to extreme cold and We must maintain George Washington's his conviction that fighting for your beliefs hunger. This experience demonstrates his faith and pride in our nation. We must follow does sometimes necessitate waging battles perseverance, which was to serve him well in his example and remain committed to free­ against those who want to limit your free­ the years to come. dom and democracy. As John Adams said, dom. In the fall of 1755, Washington was air " his example will teach wisdom and virtue Knowing that he had done his part to se­ pointed by Governor Robert Dinwiddie as to magistrates, citizens, and men, not only cure independence from British rule, Wash­ commander in chief of the Virginia militia. in the present age, but in future generations, ington should have been content with this The respansi bility of defending some 300 as long as our history shall be read." The service and retire to his home at Mount Ver­ miles of rugged frontier taught him the im­ memory of George Washington will be kept non, but he could not turn his back on the portance of strong leadership and statesman­ as long as humankind treasures liberty needs of his countrymen. They called upon ship. The primitive conditions of the then under law: him next to help craft the most important frontier and the conduct of warfare against document in our nation, the Constitution. the Indians gave him the opportunity to con­ Washington came to the meetings with the duct difficult military operations over large LUXURY TAX firm belief that, "* * * the mass of citizens and rugged terrain, a lesson well used during in these United States mean well, and I firm­ (Mr. NICHOLS asked and was given the Revolution. His resolve and dedication to permission to address the House for 1 ly believe they will always act well whenever duty made him successful in defending the they can obtain a right understanding of inhabitants of the frontier of Virginia that minute and to revise and extend his re­ matters.'' reached to the Ohio River. marks.) After the final votes had been taken at the By the 1770s, relations between the colo­ Mr. NICHOLS. Mr. Speaker, more fig­ Second Constitutional Convention, it was ures have been released this morning the unanimous opinion that Washington was nies and Great Britain had become ex­ the only man capable of filling the role of tremely strained. British abuses of the colo­ which again underscore what a tremen­ President. Though at first he was opposed to nists affronted George Washington's sense of dous failure the so-called luxury tax this suggestion he quickly saw the impor­ dignity and strengthened his belief in self­ has been. Let me share a couple of tance of his ascension to the Presidency and determination. He came to envision a land those statistics with you. resigned himself to the will of his colleagues united in self-governance. He saw moral This study reveals the luxury tax ac­ and assumed the office of President. · righteousness in the American struggle for liberty and dedicated himself to helping his tually costs the Federal Government Washington carefully molded the role of millions of dollars in revenue; $7.6 mil­ the Presidency during his two terms-setting fellow countrymen realize their dream. the precedent for the functions of the Chief Although cautious in his approach, Wash­ lion to be exact. Worse yet, the tax Executive and interpreting the balance of ington was firm in his support of the colo­ also costs thousands of working Ameri­ i:owers shared with the judicial and legisla­ nists' resistance to British political and eco­ cans their jobs. In fact more than 9,000 tive branches of government. nomic repression. He represented Virginia in middle-class American workers lost After two terms, Washington stepped down the First and Second Continental Con­ their jobs because of this so-called tax as President and left the office open for a gresses, and Washington was so well re­ on the rich. democratically elected successor. In Wash­ spected that he was unanimously elected as ington's farewell address he said, " * * * the commander of the Continental Army. One economist calls the tax a very happiness of the people of these states, under In the long struggle of the Revolution, shortsighted kind of tax because it ig­ the auspices of liberty, may be made com­ George Washington's successful command of nores the second round effect of tax­ plete by so careful a preservation, and so a poorly equipped and often demoralized ation-increased unemployment. prudent a use of this blessing, as will acquire army was fueled by the inspiration and hope Congress aimed its tax gun at the to them the glory of recommending it to the he was able to instill in his men. Washing­ rich, and shot itself in the foot and applause, the affection and adoption of every ton's commanding presence and personal sta­ working men and women in the back. nation which is yet a stranger to it." We bility fortified the courage of the nation. He Any economic growth package that have come to thank George Washington was able to manage seemingly impossible does not include a full repeal of this today for his selfless service for the better­ situations with a poise that seemed lil~ e ment of our country which set an example ease. His genuine concern for his men won tax is a failure. A failure to do what is for all Americans to follow. Thanks to their steadfast devotion. Indeed, the respect economically sound for this country George Washington all Americans can truly he was accorded both as a person and as a and a failure to protect the jobs of recommend the adoption of such democratic leader was critical to the success of the Rev­ thousands of Americans. principles by all Nations-and hope that olution. they are privileged to find such selfless, vi­ George Washington briefly retired after sionary leaders to make that democracy the Revolution to Mount Vernon where he THE SOCIAL SECURITY EARNINGS work. was the country's pre-eminent farmer, but TEST was drawn back into national service when it GEORGE WASHINGTON WREATH-LAYING CERE­ became apparent that in the interest of the (Mr. HUTTO asked and was given MONY REMARKS, REPRESENTATIVE HERBERT nation, he must assume a leading role in permission to address the House for 1 H. BATEMAN, FIRST DISTRICT OF VIRGINIA, transforming the Articles of Confederation. minute and to revise and extend his re­ FEBRUARY 21, 1992 Washington had great hopes for the new na­ marks.) I am privileged to have this opportunity to tion. He felt that it should be pre-eminent in Mr. HUTTO. Mr. Speaker, why does speak here today in honor of a fellow Vir­ the world and a model for other nations. He the Government encourage people not ginian and our first President. For more believed this could only be attained through to work? Why does the Government pe­ than two centuries, his dedication to the a union stronger than the Confederation. nalize people for working? Why does principles upon which our country was George Washington said that the purpase the Government tell experienced and founded has served as an inspiration to all of of the new Constitution was to " establish us. George Washington's character and dedi­ good order and government and to render the productive citizens not to use their cation America validates his being referred nation happy at home and respected skills and abilities? to as the " father of our country." No one abroad." He strongly felt that the people These are just a sample of the many was more important to our winning our inde­ should govern themselves. He said he was questions I hear from my constituents pendence from Great Britain or to the cre­ sure the "citizens of the United States mean regarding the Social Security earnings ation of America. well, and * * * I firmly believe they will al­ test. George Washington's early experiences ways act well." Mr. Speaker, the Social Security taught him many lessons that he would later Washington felt that the people must be draw upon as commander of our Revolution­ inspired by a sacred regard for public justice. earnings test is a policy that defies ary War army, and as our post war leader. And most importantly, he felt that Ameri­ common sense. Our country suffers His experience as a young surveyor taught cans must be united in a common national from the worst recession in recent his­ him the significance of patience and exac­ interest and maintain their dedication to the tory which is having a severe impact titude and reinforced his love of the land. preservation of liberty. on our Nation's older citizens. In light February 24, 1992 CONGRESSIONAL RECORD-HOUSE 3161 of our Nation's economic condition, the leadership to apologize to Presidents Later she let the Voice examine a small set earnings limit is grossly unfair and il­ Reagan and Bush for this political of phone records and credit card receipts logical. The income restriction not hatchet job. that debunked Brenneke's claim that he'd Mr. Speaker, I include for the participated in October Surprise negotia­ only denies some of our most produc­ tions in Paris. After the Voice published a tive citizens the opportunity to help RECORD the entire article. story based on this material last September, support themselves, but also prevents [From the Village Voice, Feb. 25, 1992] Robohm contacted Representative Lee Ham­ them from contributing to our econ­ OCTOBER SURMISE ilton, chair of the House's October Surprise omy and recovery. For example, sen­ (By Frank Snepp) staff, and began preparing to help with an of­ iors are finding it increasingly difficult Former Carter aide Gary Sick says, in his ficial investigation of Brenneke's files. When to pay their personal health care costs. recent book October Surprise, that the many Hamilton brushed her off with a form letter, Consequently, the Government is re­ sources he relied on for his searing indict­ she again contacted the Voice, this time of­ quired to increase spending at a time ment of Reagan campaign tactics in 198~an fering the entire Brenneke archive. indictment that accuses the GOP campaign To verify the substance of Brenneke's files, when budgetary restraint must be a staff of sabotaging Jimmy Carter's Iran hos­ the VoicP, checked with Kilian and others priority. Clearly, the ability of seniors tage negotiatons-all spoke independently quoted in the files to see if they had said to earn an income after retirement is with no common script. That's why he be­ what Brenneke reported. (The taped con­ vital to their well-being and to our Na­ lieved them, he maintains. versations spoke for themselves.) In every tion. "As time went on and the number and di­ instance, these principals recalled the state­ People are living longer and leading versity of sources increased," he writes, " the ments or conduct attributed to them. likelihood of a concerted, organized The picture that finally emerged from the very active lives far beyond retire­ disinformation campaign dwindled." But in investigation was one of a self-perpetuating ment. For older Americans the oppor­ an exhaustive examination of the origins of fraud. Reporters with preconceptions about tunity to remain active participants in the Surprise story, the Voice has discovered October Surprise had often suspended skep­ society is much greater today than it that Sick's assumption is wrong. ticism in deference to helpful sources. Sick has ever been. Older Americans must All his principal sources harken back to a himself ignored or overlooked inconvenient be permitted to enjoy the lives they de­ group of Israeli and European arms mer­ details. As early as 1989, he also became in­ sire and to which they are capable. chants who dealt regularly with one another volved in the first of two movie deals that throughout the 1980s and early '90s, first in committed him prematurely to an unverified Mr. Speaker, the issue may be dif­ shipping arms to Iran, then in shipping the ficult to understand, but the answer to conspiracy theory. October Surprise story to reporters. Several ROOTS OF OCTOBER SURPRISE the questions I mentioned earlier is members of this group got caught in a U.S. simple-let us eliminate the earnings Customs sting in 1986, which left them with For all the many permutations of the Oc­ test. an incentive to pay back the Republicans tober Surprise story, Congress told it first, and George Bush. and most convincingly, eight years ago. A Based on a review of exclusive documenta­ subcommittee under Democrat Representa­ OVERWHELMING EVIDENCE DE- tion it appears that none of Sick's key in­ tive Don Albosta was charged in 1983 with BUNKS OCTOBER SURPRISE formants had any original knowledge of the unraveling "Briefing-gate," the theft of MYTH October Surprise counterplot, an alleged President Carter's briefing book during the Reagan campaign attempt in 1980 to head off 1980 campaign. A yearlong investigation con­ (Mr. LIVINGSTON asked and was a preelection release of the 52 American hos­ firmed the larceny and also produced evi­ given permission to address the House tages then being held in Tehran. Only by dence of a more sinister kind of campaign es­ for 1 minute and to revise and extend swapping rumors and tacking with the latest pionage. ones-a process that the Voice has traced in According to the Albosta report, 120 "for­ his remarks and include extraneous eign policy consultants" working for Reagan material.) detail-were they able to create an impres­ sion that they knew of this event firsthand. in 1980 had monitored military bases, heisted Mr. LIVINGSTON. Mr. Speaker, an­ By 1988 Martin Kilian, a journalist for the secrets, and leaked disinformation, all in an other hand grenade has been dropped German magazine Der Spiegel, was keeping effort to anticipate and head off a on the Democrats' October Surprise de­ many of these sources supplied with informa­ preelection hostage release. Even if nothing bacle. The counterculture Village tion they needed for this charade. He devoted more had been uncovered, that should have Voice has published an extensive re­ countless hours to trading tips with them, been enough to scorch the reputations of view of the conspiracy theory and its though his journal has published only two ranking Reaganites, for it was clear from Al­ sources. October Surprise stories in three years. At bosta's findings that the effort had been de­ Proponents of the October Surprise times Kilian seems to have been unaware liberately disruptive and directed from the that he was contributing to distortions. But top, by campaign boss William Casey and theory might have been overjoyed that records of his phone conversations with one several aides, including Richard Allen and the liberal Village Voice would add to source, Richard Brenneke, indicate that he Robert Gray. the allegations against the 1980 Reagan also knew that some of his contacts couldn't It was Gray, the committee discovered, campaign. Unfortunately for the con­ toe a straight line. who had brainstormed a PR strategy aimed spiracy minded, the Village Voice has Even the most doubtful of these sources he at screwing up Carter's last-minute bargain­ joined Newsweek and the New Repub­ passed on to Sick, who credits Kilian for ing. " If we leak to news sources our knowl­ lican thoroughly refuting Gary Sick's having encouraged him to pursue the Octo­ edge of the Carter planned events," ran one ber Surprise story. In late 1988, writes Sick, Gray memo, " we can get the press [to] say provocative claims. "Kilian began calling me at my home in Carter is politicizing the issue." In fact, the The Voice article states, Manhattan after each new interview or leak campaign did much more, prompting Based on a review of exclusive documenta­ whenever he picked up some nugget of infor­ misleading press reports of concessions and tion it appears that none of Sick's key in­ mation from the small network of individ­ breakthroughs that doubtless confused the formants had any original knowledge of the uals who continued to delve into the elusive Iranians- at the very moment Carter was October Surprise counterplot. st ory." It was a pattern Kilian would follow edging toward a deal. The reverberations in Only by swapping rumors and tack­ with others. Tehran may not have been the ultimate ing with the latest ones, a process that So pervasive was his influence and so cause of the breakdown of Carter's initiative. tightly knit the group of sources and jour­ But there is no doubt that this was the Re­ the Voice has traced in detail, were nalists who fed off him and one another that publicans' objective. " If there is a moral they able to create an impression that the truth about the scandal may be lost to truth to the October Surprise scandal," de­ they knew of this event firsthand. the confusion they generated. clared one ex-Carterite, " the most important The article also states, The Voice investigation was based in part revelations reside in the Albosta report it­ The picture that finally emerged from the on nearly 8000 pages of phone records and self.'' investigation was one of a self-perpetuating diary notes compiled by Brenneke to support But like many other scandals, this one fraud. his own October Surprise claims. Brenneke's quickly lapped over the boundaries of fact onetime researcher, Peggy Adler Robohm, and even righteous supposition. The earliest Mr. Speaker, due to the overwhelm­ initially thought that he'd picked up his proponents of a Republicans-did-it conspir­ ing evidence debunking the October knowledge firsthand. But last June, after ex­ acy theory were in fact searching for some­ Surprise myth, you owe it to the Amer­ amining his files, she wrote a warning letter thing else. As the election neared, Lyndon ican people to call off this partisan to his literacy agent. " Much of this material Larouche's right-wing journals launched an witch hunt. I call on the Democratic seems to come from Martin Kilian," she said. attack on Carter, claiming that he'd gone 3162 CONGRESSIONAL RECORD-HOUSE February 24, 1992 soft on pro-Khomeini "terrorists" in the Citing Jamshid as his source, Sick also ar­ other things, that a Republican was capable United States. gues that the Hashemis did similar duty for of conspiring in the Israel-Iran arms shuttle. The focus of their pamphleteering was Ira­ William Casey and other Reagan campaign­ Granted, the deals exposed long postdated nian exile Cyrus Hashemi, who they said was ers in 1980, providing them hostage informa­ 1980. But one aroused suspicion often begets running terrorist money through a bank he tion and a "backchannel" to Iran that en­ another, and even before Congress had com­ owned. They also concocted a supporting abled them to outflank Carter. Noting in the pleted its Iran-contra probe, a network of cabal, incongruously made up of Zbigniew censored FBI surveillance files bears out this conspiracy fetishists was beginning to take Brzezinski and Henry Kissinger, which they charge, and Jamshid clearly missed an op­ shape. said was out to pit Khomeini against com­ portunity to tell the story himself in his ear­ Initially, the most ardent accusers were munism in the gulf. All this might have been liest known public statement on the hostage Iranian exiles. In April 1987, the former chief laughable except that, in fingering Hashemi, issue. That itself raises a question about his of the shah's secret police, Manzur they'd inadvertently found a key to Carter's credibility. For if he wouldn't clearly impli­ Rafizadeh, took the first swipe, accusing the hostage strategy. According to FBI surveil­ cate Casey, then why believe him when he CIA of having persuaded Iran's foreign min­ lance reports recently released under the does so now? ister in November 1980 to hold off a hostage Freedom of Information Act, Hashemi was By 1985 the integrity of both Cyrus and release until Reagan took office. even then conducting overtures to Iran for Jamshid Hashemi was in tatters. Cyrus had Rafizadeh had been in exile at the time, so Carter. turned Customs informant to avoid prosecu­ his charge, leveled in a memoir, was second­ The delicacy of Hashemi's position natu­ tion on gun-smuggling charges, Jamshid was guessing. But later that year exiled Iranian rally made him publicity-shy, so he sued hiding out abroad for the same reason, and president Abol Hassan Bani-Sadr pumped life LaRouche and his aides for libel in Septem­ William Casey's CIA, evaluating their poten­ into the story. In a New York Times inter­ ber 1980. That didn'c; quiet them, though, and tial as middlemen in a new hostage venture, view, he said that two ex-rivals of his, the after the election they zapped Kissinger turned them down flat. According to one ayatollahs Beheshti and Rafsanjani, had bro­ again, arguing that he'd secretly bargained contemporaneous CIA assessment, obtained ken off negotiations with Carter in October with the Iranian parliament to head off a through FOIA, Cyrus was deemed "only 1980 because of an overture by unnamed Re­ hostage release. In December, one of their slightly less sleazy than his notorious broth­ publicans in Paris. He also linked subsequent publications surfaced what is surely the first er Jamshid who is con artist par excellence Israeli arms deliveries to this event. It was articulation of the October Surprise counter­ and is a candidate for the scam of the month the first time anyone had pulled all these plot. "It appears, they wrote, "that a pattern championship." Another CIA report, dated threads together. of cooperation between the Khomeini people June 14, 1985, indicates that Director Casey The Miami Herald, meanwhile, put faces to and circles nominally in Reagan's camp himself vetoed any cooperation with Cyrus. the conspirators, reporting that a mysteri­ began six to eight weeks ago, at the height "The point was," ran the report, "he [Casey] ous Iranian had approached Richard Allen did not want the agency involved in the and Robert McFarlane in Washington a of President Carter's efforts to secure an Hashemi brothers' problems with the Depart­ arms-for-hostages deal with Teheran." ment of Justice." month before the 1980 election and offered to Over the next three years, the Larouchies Ten months later, Cyrus redeemed himself broker a hostage deal beneficial to Reagan. dogged the scandal and bayed at each new in­ slightly by helping to nab an Israeli arms Allen acknowledged the overture and said dication that Israel, a favorite bugbear of ring that included, coincidentally, many who he'd rebuffed it, but admitted that he'd theirs, was slipping arms to Iran. Meanwhile, later preached the October Surprise. His own failed to tell the Carter White House about Cyrus' brother, Jamshid, approached glory, however, was short-lived. In July 1986, it. Senate majority leader Robert Byrd cried LaRouche's organization in a bid to settle he died under mysterious circumstances in foul, and the House Judiciary Committee the libel suit quietly (the court finally dis­ London and Jamshid hunkered down to nour­ started digging. missed it). In early 1983 he told LaRouche re­ ish his own vision of the Surprise, the one he The initiative soon fizzled, however, along searcher Ed Spannaus that it wasn't Carter eventually fobbed off on Sick and ABC's with the Iran-contra investigation itself, and who'd nuzzled up to him and his brother in Nightline. by late 1987 the October Surprise "lobby" 1980, but the Republicans. "Jamshid told The Larouchies, meanwhile, shared their had shriveled to a claque of political me," recalls Spannaus, "that Cyrus was in own research with others, and some of it Ishmaels best personified by an ex-Reagan fact much closer to the Reagan-Bush admin­ turned up as footnotes in the first October staffer Barbara Honegger. istration than to the Carter people." Surprise book, by Barbara Honegger. The Honegger, a trenchworker for the GOP Later, in mid July, Time magazine pub­ scandal had taken its first captives. campaign in 1980, had bailed out of a Justice lished an investigative piece linking Another initial fillip to the story came Department job three years later to protest Jamshid to Iran arms smuggling. Again from news of early Irsaeli-Iran arms deals. the administration's handling of women's is­ Spannaus was summoned. This time, he says, Beginning in mid 1981, when the London Sun­ sues. Denounced as a "munchkin" by the Jamshid leveled about his Carter connection, day Times reported the downing of a mys­ White House for taking her gripes public, she acknowledging "that he had personally spent terious "Argentine" cargo plane en route promptly retaliated by handing the Albosta about six months flying back and forth be­ from Tehran, the prospect of an Israeli arms committee some real dirt. In October 1980, tween the USA, London and Madrid as a cou­ pipeline to Iran prompted only evasiveness she testified, she had overheard a Reagan rier for messages between the U.S. and in Washington. But Israeli leaders them­ aide boasting that "Dick [Allen] cut a deal" Iran." Jamshid also got cagey about the Re­ selves were more candid, hinting that they to ward off Carter's much-feared October publicans. Though Spannaus' recollections had Washington's sanction despite the U.S. Surprise. The committee skirted her recol­ are hazy on this point, he clearly recalls embargo. lections in its final report, and Honegger was Jamshid telling him that Cyrus was being Then came the Time report in 1983 that set left to disclose them on a Larry King radio protected by "the highest levels" of the Jamshid so much on edge. In a concurrent show in December 1986. Reagan administration. Time memo, which the Voice has obtained, What cinched her suspicions about the According to one published version of this the anonymous sources quoted in the article scandal, she later told Bani-Sadr, was his conversation, Jamshid also mentioned the are named. "Prime source on this is Admiral New York Times interview. In talking with GOP's October Surprise plot, though without Inman," the memo states, referring to Bobby him about it by phone in August 1988, she did claiming to have been a part of it. In another Inman," who'd just resigned as the CIA's not mention his own shortcomings as a wit­ account, which has likewise appeared in a deputy director. ness-though based on a transcript of their LaRouche publication, Jamshid refused to be The weighing in of such an authority inevi­ conversation, which the Voice has reviewed, explicit. In both stories, Spannaus claims to tably strengthened speculation that Israel she recognized them. She is heard in the ex­ have asked: "Was Casey involved in the hos­ was feeding the Ayatollah's war machine. change discussing scandal-related gossip tage negotiations?" To which Jamshid re­ But it was not until Gary Sick published All that she'd fed Bani-Sadr to jog his memory, plied, "I wouldn't tell you ifl knew." Fall Down in 1985, a book about Carter's Iran and he is heard debating the truth of his own Even given Spannaus' impression, it seems policies, that the Israeli shenanigans were previous statements. When she reminds him that as early as 1983 Jamshid was beginning tied back to the hostage crisis of 1980. Sick of his claim that Reagan campaign aides met to confide in LaRouche's propagandists. wrote that Carter had discovered, in the with Iranian counterparts in Paris in Octo­ Some of his remarks have checked out. Ac­ midst of his secret bargaining, that Israel ber 1980 to discuss the hostage crisis, he re­ cording to the recently released FBI surveil­ was treating Khomeini to military spare plies: "I am not sure. I have said it is pos­ lance reports, Cyrus Hashemi did help the parts. Sick did not, in this initial foray, sug­ sible." When she asks if he knows the names White House with its hostage negotiations in gest any Republican complicity, but the very of the Reagan participants, he says simply, 1980, even as he was arranging illegal arms hint of such an Israeli end run was enough to "No," and then proceeds to emphasize that sales to Iran, and Gary Sick acknowledges in set wheels turning. it's all secondhand-"information from Iran his recent book that Cyrus brokered a secret FIRST GLIMPSES OF THE DAISY CHAIN sent to me." meeting between a Carter representative and The loop was closed during the Iran-contra Honegger would later tout Bani-Sadr as a Iranian officials in Madrid in early July 1980. investigations of 1987, which proved, among source for her own October Surprise theories, February 24, 1992 CONGRESSIONAL RECORD-HOUSE 3163 demonstrating a remarkable ability to filter increasingly moving in conspiratorial cir­ If Brenneke initially knew little of October out what she didn't want to hear. (Honegger cles. Surprise, however, he did possess informa­ refused to return calls about this story.) Based on Brenneke's diaries, Ben-Menashe tion that would ultimately be woven into Not that she was the only offender. In fall and Davies were much on his mind when he that tapestry like an integral thread, and in 1988, Playboy magazine published an October met Delarocque in St. Tropez the following July 1988 he unspooled it. Two former Cus­ Surprise story that skirted the reliability of September to discuss an Iran arms deal toms informants, Gary Howard and Ron another source, Iranian American arms mer­ known as the "Demavand Project." His Tucker, had sued the government to recover chant Hushang Lavi. By Playboy's account, notes of their conversation are speckled with expenses they'd racked up in an abortive Lavi had courted the John Anderson cam­ references to "Nick" and "Arie" (initially sting operation in the early 1980s. Part of paign, offering to open contacts with Iran in misspelled with an E). their argument was that the government it­ order to deny the president a hostage break­ Brenneke comes across in these pages as a self had crippled the project to protect an through. The implication was that Lavi had novice at the arms game. But soon afterward early Iran arms deal never reported to Con­ played into the hands of Republicans out to he experienced an instant greening. On Sep­ gress. Brenneke, ever determined to legiti­ delay a release. tember 24, during a stopover in Seattle, he mize Demavand, decided to offer testimony. But in fact Lavi had said something quite was rousted by U.S. Customs agents and re­ His sworn statement marked his first at­ different. According to a transcript of the lieved of his notebooks. Thereafter, accord­ tempt to write himself into the October Sur­ interview that the Voice has examined, Lavi, ing to other documentation, he became a prise scenario. when asked "about a deal between the low-grade Customs informant, and also He told Howard and Tucker's lawyers that, Reagan campaign and Khomeini," had re­ began sending notes to the Pentagon and as a contact CIA employee and sometimes plied: "I am not aware of that. I do not even the White House designed to distance Mossad agent, he'd flown 12 cargo flights to know." Jonathan Silvers, the interviewer, himself from Demavand. Iran between 1980 and 1982 as part of a joint had then asked: "Do you personally believe In early 1986, in one such note, Brenneke U.S.-French operation. Included, he said, that Reagan officials negotiated to delay the mentioned a secret White House decision were spare parts for the Iranian air force release of the hostages?" Lavi replied: "I permitting covert arms sales to Iran. How he drawn from NATO stores. For corroboration, don't believe so, sir." got this tip-off to the Iran-contra scandal Brenneke cited Delarocque, and despite hav­ None of this crept into the Playboy story isn't known. But over the next few weeks, ing privately pegged him as an "independ­ itself, which was written by Silvers and ex­ even as he continued playing up to his arms­ ent," described him here as an agent of the Yippie Abbie Hoffman, or into Honegger's ap­ dealing friends, U.S. Customs set up a sting French, U.S., Israeli, and Iranian govern­ proving statements about the article. Lavi against them. It was sprung in mid April. ments. would survive to become a primary source Delarocque eluded arrest, Brenneke later The testimony, so clearly a hodgepodge of for accusations against the Reagan cam­ claimed, only because of a warning call from half-truths, might have dropped into obscu­ paign, including Gary Sick's. him, and Ben-Menashe recalled a similar rity except for Howard and Tucker them­ HONEGGER, BRENNEKE, AND MARTIN KILIAN alert from Delarocque. Nine others, however, selves, who in pressing their suit soon be­ On August 25, 1988, the October Surprise were arrested, including three Israelis. came October Surprise devotees. What made story got its first big airing at a Washington Spearheading the sting was a bona fide in­ the testimony all the more noteworthy, news conference sponsored by an anti-CIA side informant, Cyrus Hashemi, the very moreover, was the way it seemed to dovetail watchdog group. The feature attraction was man whom brother Jamshid and other Octo­ with earlier reports of Israeli arms deliveries Honegger. Unfurling a copy of the Playboy ber Surprise buffs would place in the van­ to Iran. Brenneke himself was never involved article, she quoted Bani-Sadr as placing guard of Reagan's 1980 schemes. in any of these flights (his credit card re­ Bush at an October 1980 plotter's meeting in Over the next year, Brenneke stayed in ceipts show that he was in Portland, Oregon, Paris and Manzur Rafizadeh, the ex-Savak touch with Delarocque and, according to per­ on many of the dates when he said he'd made chief, as including Donald Gregg in Bush's sonal notes, shared his own phone records deliveries). But his "confirmation" of such a Paris entourage. (It was the first time any­ with the FBI. He also cultivated the press, fi­ pipeline-first mentioned by Bani-Sadr-was body had so clearly linked Gregg, who in 1980 nally leaking a story on Demavand to a New enough to set conspiracy theorists buzzing. had been a Carter official, to Reagan's sup­ York Times reporter in early 1987. The re­ After all, how could you have a secret 1980 posed machinations.) sulting notoriety enabled him to strike a deal between Iran and the Reagan campaign Again citing Bani-Sadr, she fixed the nego­ book deal with the reporter, and by August without a payoff? From now on, Brenneke tiations at Paris's Hotel Raphael and listed he'd lined up another collaborator, Will Nor­ was to be a player in the daisy chain. the Iranians present as "representatives of throp, an American-born Israeli rolled up in It wasn't an easy fit, though. By the sum­ Rafsanjani and Behesti." She then dropped a the Demavand sting, who was now living in mer of 1988, he was on the outs with the lib­ bombshell, announcing that arms dealer Oklahoma City awaiting trial. eral establishment in Washington, a sound­ Cyrus Hashemi and the CIA 's Casey had been Looking to make money fast, Brenneke ing board for October Surprise rumors. Ear­ involved. Her source, she said, was someone drew up a plan to insure a bestseller. "The lier in the year, he had won a $4000-a-month she would only refer to as "Mr. X." primary method of doing this," he wrote, "is job at Washington's Center for Development As events would prove, this new secret to bring new information to the press. The Policy by publicly accusing Vice-President sharer was Portland businessman Richard information must create interest and con­ Bush of running an Israeli-backed drugs-for­ Brenneke. troversy." Under "People," he listed himself, arms operation in Central America. Most re­ A word about his background: Documents Northrop, Delarocque, and-"Ari Ben­ cently, though, a Senate investigator named from his files show that throughout the mid Menashe." Jack Blum had soured on him because of his '80s Brenneke courted a bunch of would-be It is apparent from Brenneke's diaries that inability to document his charges, and on weapons dealers, including Ari Ben-Menashe, he and Northrop were never sure of Ben­ July 31, soon after his statement in the How­ who has emerged as an equally omniscient Menashe's or Delarocque's bona fides. After ard-Tucker case, Brenneke's boss at the lib­ October Surprise expert. According to busi­ speculating that the two might be Mossad eral think tank suspended him for failing to ness and other records, Brenneke's contact agents, they settled on a less flattering con­ put Bush in the hot seat, as he'd promised. with this group traced back to late 1984, clusion. "John [has] no connection with Brenneke was desperate, and might now when he began traveling ';o Europe as an ap­ Mossad," Brenneke wrote after a phone con­ have hauled himself back to Portland, had prentice arms broker for the Farnham­ versation with Northrop in late 1987. "John not Barbara Honegger fortuitously material­ Ottokar Trust, a baroque outfit registered in is known only as an independent with no ized from the wings. She was preparing for the Channel Islands. In early summer 1985, sponsorship. He is not trusted by Israel . . . her news conference, and needed a bit more during one such junket, he was introduced to Ari is not known at all. They believe he is than Bani-Sadr had given her. On August 22, an American arms merchant in France, John only an arms dealer." she approached Brenneke and asked his help. Delarocque, and, through him, became aware Nowhere in his diary notes from this pe­ As she later admitted in her own book, she of Ari Ben-Menashe. riod does Brenneke quote Ben-Menashe or virtually scripted the discussion. She handed Soon afterward, on July 29, Brenneke Delarocque on the October Surprise. The Brenneke a list of possible Paris conspira­ wrote to one Nick Davies in London, propos­ only relevant marginalia he immediately tors, including Bush and Gregg, and asked ing a weapons deal. Later he received an MCI picked up from his Demavand buddies was a him to confirm it. After striking one name telex from the same man. Since such docu­ miscue-from Northrop. On May 26, 1988, (Honegger herself had put a question mark ments are difficult to fabricate, the telex Brenneke jotted a Northrop phone message: beside it) and promising to ask around about seems to link Brenneke definitively to Da­ "Oct. 80 Bush in Paris meeting with Bani­ Bush's presence, Brenneke numbly suggested vies, who is described in Seymour Hersh's re­ Sadr." If either had been acquainted with that there might have been two meetings in cent book, The Sampson Option, as an Israeli the evolving October Surprise story, they Paris, not one. His own record of the con­ intelligence agent and Ben-Menashe's part­ would have realized how absurd this was. No versation reveals how bewildered he was: ner in a London-based arms company. Thus, one had ever suggested that Bani-Sadr him­ "Honegger meeting notes: Thesis: Reagan­ by mid 1985, Brenneke appears to have been self was in on the Paris meetings. Bush campaign conspired to delay the hos- 3164 CONGRESSIONAL RECORD-HOUSE February 24, 1992 tage release until after the November 1979 ex-CIA agent who'd been jailed for outfitting Paris meetings. In a taped memo recorded election . . . Howard Hughes was somehow terrorists, yet none of this apparently put soon afterward, Brenneke paraphrased Kilian involved . . . " anybody off. Kilian assured Brenneke that he as saying: "[Razine] knows me [Brenneke] Honegger would later claim that during knew a journalist who would vouch for and ... knew that the Paris meeting that I this first interview Brenneke wrote Casey Razine. Brenneke, for his part, remained dis­ was at was the [Hotel] Florida ... " and Cyrus Hashemi into the Surprise sce­ inclined to look a gift horse in the mouth. So astonishing was this fillip to nario, as well as Frenchmen Robert Benes. The story Razine told (through Kilian to Brenneke's story-and so sensational, if Brenneke's own notes, however, tell a dif­ Brenneke and by phone to Honegger) put true-Kilian might have been forgiven if he'd ferent story. " Was Cyrus Hashemi present?" Casey, Bush, and Gregg in Paris in October tried to cop it as an exclusive for his own he asked himself. "If so, which Iranians and 1980, and expanded the attendance list to in­ magazine. But he didn't. Instead, he handed Americans was he representing?" clude Hashemi Rafsanjani on the Iranian it off to a competitor, Robert Parry, then of Notwithstanding Brenneke's ignorance, side, and Robert Benes, the very Frenchman Newsweek. Honegger hailed him at her news conference Brenneke had named. Because of Kilian's im­ According to court documents, Kilian also as a breakthrough source and offered to pulse to share everything he knew, it is im­ assisted Brenneke a few days later in gaining broker introductions to " Mr. X. " Among possible to tell from the available docu­ an even loftier soapbox. The opening came those who jumped at the invitation was the mentation whether Benes sprang spontane­ when the brother of Colorado representative man who would become Gary Sick's closest ously from Razine's memory. But from now Patricia Schroeder-a Denver lawyer named collaborator-Martin Kilian, Washington on, Benes would be an October Surprise sta­ Mike Scott-began looking for help with a correspondent for the Germany newsweekly ple (to be cited indirectly in Sick's book). tough case. His client Heinrich Rupp, a self­ Der Spiegel. To judge from Brenneke's files, Razine described ex-CIA pilot, was facing sentencing Born in Germany and trained as a histo­ wasted no time proving his worth. He embel­ for bank fraud and had begun mumbling rian at the University of Georgia, the 41- lished Brenneke's dual-meeting theory by about a Reagan frame-up aimed at discredit­ year-old Kilian had been at his present post positing three Paris conspirators' meetings, ing him and others who'd allegedly witnessed for little over a year. But his discovery of all at the Hotel Raphael. He also said that some mysterious events in 1980. All Scott the October Surprise story immediately Bush and Casey had shown up with a $40 mil­ needed for a leniency plea was some support­ hyped it, focusing the resources of a major lion wire transfer to tide the Iranians over ive information. As he later explained to the international magazine on what had been a until Reagan's inauguration. As Brenneke judge Kilian and Parry helped him "get in quirky sidebar. recalled, he and Razine agreed, after fencing contact with Mr. Brenneke and aided us in Why Kilian became interested in the scan­ politely- through Kilian-that Bank Lam­ bringing this information to the court." dal is easily understood, since many of its bert had handled the transfer, not Bank Leu In fact, Brenneke needed no introduction principals operated in Der Spiegel's back­ as Razine had first reported. to Rupp. His own phone records show that yard. But how he covered it would add to its How Razine had come to know all this he'd called Rupp's Denver number a year be­ complexity, for he was always ready to swap never rang clear, since he kept changing his fore, and Rupp conceded, in a private inter­ rumors and sources with anyone. He told the story. He initially told Honegger and Kilian view with Scott (a record of which the Voice Voice that he favored this "non-competi­ that he'd read of the Casey-Gregg machina­ has obtained), that he knew of the offshore tive" approach because the October Surprise tions in a report by Benes filed at CIA head­ trust that had employed Brenneke as an was too complicated for any journalist to quarters in November 1980 by the chief of arms dealer. The odor of collusion thus cover alone. Perhaps so. But for Brenneke French intelligence. Later, by Honegger's hangs over this sudden and mutually bene­ and the other charlatans who were now or­ own account, he said he'd picked up the re­ ficial Brenneke-Rupp reunion, whoever bro­ biting the story, the ever-generous Kilian port from a " friendly foreign intelligence kered it. was a dream come true. service." It was a minor correction. Still The story that Rupp later told reporters Asked if it was okay to trade information somebody should have wondered. put both him and Brenneke in the midst of with such sources, Kilian told the Voice last Nor was this the only time Razine's mem­ the action in October 1980. He would claim Friday, "On a subject like this one, abso­ ory shifted. Besides changing Leu to Lam­ that he'd flown Casey to Paris on October 18 lutely, because it makes it possible to see bert, he altered the Iranian lineup at the and that he'd seen Bush at the airport there. contradictions.•• Paris meetings, initially including an arms He'd also include Brenneke among the Paris The afternoon of Honegger's press con­ procurement officer named Jalal el-Din conspirators. ference, Kilian drew up a confidentiality Farsi-only to replace him later with two These "recollections," however, did not agreement for "Mr. X," promising not to re­ others. Honegger and Kilian relayed these spring forth full-blown. On September 22, the veal his identity. A week later, after Der "adjustments" to Brenneke. But nowhere in day before Brenneke showed up in Denver to Spiegel published a story parroting his notes does he reflect concern on their testify on Rupp's behalf, Scott interviewed Honegger's theories, she encouraged a new part about the source's fickleness. Instead, his client and-based on notes from the law­ source, a mysterious fellow named Oswald Kilian and Honegger continued to peddle yer's files-discovered that Rupp knew little LeWinter who preferred to be called Razine like a miracle health cure. about the October Surprise. When asked how "Razine," to contact the reporter. On Sep­ Brenneke, too, found uses for Razine, im­ he knew of Bush's flight to Paris, Rupp re­ tember 7, Kilian took Razine's revelations to mediately parlaying him into added job secu­ plied, " Sloganism"-hearsay to the effect Brenneke, and soon afterward identified rity for himself. Shortly after first learning that "we've got the whole government on Brenneke to Razine. Suddenly. thanks to about Razine, he alerted his still touchy boss board." When asked if he'd recognized any­ Kilian, there wasn't a virgin in the house. at the Center for Development Policy that body on his own flight, he said, " Might rec­ For Honegger and Brenneke, what Razine Kilian wanted him to help exploit this new ognize faces. No names." And when pressed provided was mortar with which to bind up source. " [Der Spiegel] has asked me to uti­ to tell his story in court, he begged off, in­ their stories. What Razine got was a chance lize my contacts to help obtain further infor­ sisting that he'd have to defer to Brenneke to play Scaramouche, for never in his initial mation and corroboration," he told his supe­ since he, Rupp, was sworn to official secrecy. contacts with them or Kilian did he show his rior by memo. The following morning, in a It was the perfect prelude to a setup. Yet face, preferring instead to communicate by " Revised Proposal," he asked to be allowed Scott encouraged his client to tell his story, phone. Gary Sick, who later embraced to assist Kilian with a story about 1980 arms saying that if he didn't , Brenneke would. Razine/LeWinter as a primary source, de­ sales. In closing he offered a more provoca­ Brenneke did much more than that. In a scribes him in his book as a "genius. [an] er­ tive thought: " Help Der Spiegel develop closed hearing the following day, he not only ratic man" who knew novelist Saul Bellow proof of Bush-Iranian meetings in 1980 aimed seconded Rupp's allegations but embroidered and played the intelligence field, working for at delaying the release of the Embassy hos­ his own. He said that he'd attended at least both U.S. and Israeli spy services. Based on tages." one Paris meeting at the behest of a CIA offi­ Brenneke's files, Kilian suspected that That cinched it. As Brenneke recorded in cer named " Bob Kerritt" and had helped to Razine had also once been arrested for im­ another note, he was immediately assured purchase arms to pay off the Iranians for de­ personating a U.S. serviceman. Nowhere does that he could keep his job through October. laying a hostage release. Insisting that this point appear in Sick's book, though THE EYEWITNESS STEPS FORWARD French intermediaries had brokered these there is reference to a drug bust against Having gained this reprieve, Brenneke transactions, he identified Robert Benes as Razine. acted quickly to build insurance into it, seiz­ one involved. Initially Kilian seemed dubious of his new ing on an idea that boosted his value as an He also tried to turn Razine and Kilian source, and informed Brenneke (according to "October Surprise expert." How it came to into character witnesses for himself. Claim­ the latter's notes) that Razine sounded like him remains obscure. What can be docu­ ing to have been recently contacted by the a LaRouchie. Razine himself told Honegger mented is that on September 10, three days CIA, Brenneke testified that he'd been ad­ paradoxically that he was out to " protect" after first interviewing Razine, Kilian t old vised that a "retired" CIA officer would ap­ Israel, and both she and Kilian discovered Brenneke that the new source had identified proach a foreign journalist to verify what he that he sympathized with Edwin Wilson, the him as a participant in the October 1980 was saying. He then mentioned Kilian and February 24, 1992 CONGRESSIONAL RECORD-HOUSE 3165 Parry and said that both had recently been spoiled an earlier sale. Is this the same immediately rallied the troops. Kilian told contacted by a CIA retiree (Razine). "Kerritt" Brenneke served up as his October Honegger that Brenneke had identified Once Brenneke's statement was released Surprise case officer? Gregg as a "notetaker" in Paris and had several days later, Kilian must have experi­ Had Sick known of all the linkages, he "talked constantly" with Hushang Lavi. enced a twinge. Obviously, this wasn't how might have realized that an obscure tank Honegger threw the weight of her scholar­ things had happened at all. Asked about his deal told a lot about the genesis of the Octo­ ship behind Brenneke's case by finally pub­ reaction, Kilian said last Friday, "I was flab­ ber Surprise story. Ignatiew, Brenneke, lishing her book, and Will Northrop, bergasted. I still don't know today what he Benes, Razine, Naqashan, Heidari, even Will Brenneke's Demavand buddy, provided a meant-I thought there would be somebody Northrop-all had been part of the T-72 bid­ sworn statement that bolstered his friend's else who would contact reporters. I asked ding, and all would emerge as October Sur­ claims of Israeli shipments to Iran in the [Brenneke], 'What did you mean by that?' He prise gurus. A coincidence? Not likely. The wake of the October Surprise meetings. didn't want to talk about it." tank deal-plus Demavand-seems to have As it turned out, the statement was merely Later, in a TV interview, Rupp squared his forged a number of links in the daisy chain. a distillation of news clips, and even the left­ own "recollections" with Brenneke's, explic­ Significantly, though, Brenneke and Kilian ist Nation magazine trashed Honegger's itly adding Casey to his passenger list. He came away from Paris largely empty-hand­ book. But nothing seemed to discourage also said that five other unnamed VIPs had ed. Ignatiew and Benes had proved especially Kilian. Over the next few months, he grasped been aboard the BAC-111 he'd supposedly uninformative. If these men were October the torch and ran with it, pulling together a flown to Paris on October 18, 1980. All this Surprise experts, they didn't reveal it first plethora of sources and demisources that jarred with what he'd told Scott just before time out. kept Brenneke and the October Surprise the hearing. Yet Scott continued to vouch Nor even the second time. After returning story alive. Once Brenneke tried to graph for Rupp's and Brenneke's credibilities in home, Brenneke stayed in touch with the Kilian's network, jotting a primitive wiring public. two Frenchmen, and tapes of his phone con­ chart that connected the journalist to He had help. Shortly after the hearing, versations with them (which have been re­ sources stretching from South Africa to Razine informed Honegger that Rupp had viewed by the Voice) confirm how ill-in­ Texas. It was an exaggeration perhaps. But been Casey's "favorite pilot" and that formed they were. On October 13, for in­ the fact is, Kilian did have his contacts. Brenneke's CIA handler, Bob Kerritt, was stance, Brenneke called Ignatiew to say that Start, for instance, with the ever-adapt­ "close to Gregg." Kilian in turn did some­ Kilian might be willing to offer Benes money able Hushang Lavi and Swiss journalist thing that would bolster Brenneke's own to sharpen his memory about the October Frank Garbeley, and follow the dancing line ability to script the facts. On September 26, Surprise (in fact it was an exaggeration). to Israeli ex-agent Ahran Moshell and Roy he dipped into Der Spiegel's coffers and Ignatiew was incredulous. "If I had been a Furmark and Richard Allen, and you have hauled Brenneke off to Paris to help inter­ journalist that evening [in Paris]," he ex­ just the beginnings of Kilian's daisy chain. view other sources. Gone forever was any claimed, "I would, I think, have understood Loop into it a German TV freelancer named hope of keeping the waters pure. that Robert knows more or less nothing." He Jurgen Roth and G&.ry Sick, plus Razine and Brenneke's diary of the three-day junket then betrayed his own ignorance by asking if Northrop, and you begin to spy the entire records meetings with Robert Benes and an­ Benes had been present at meetings with Modigliani. Not a pretty picture. other Frenchman, Nicholas Ignatiew, as well Casey in October 1980. "Oh, yeah, yeah, Others crept into it over time. Gary How­ as a phone call to Razine. Later Gary Sick yeah," Brenneke replied, "but not for the ard, the ex-Customs informant who was would claim that sources like these had no whole time." He also reminded Ignatiew that suing the government, provided back-ground connection with one another. But judging Bene's command of English was not suffi­ on Gunther Russbacher, and acquaintance of from Brenneke's files and other evidence, the cient for complicated discussions. Honegger's who claimed (falsely) to know of three individuals whom he and Kilian con­ Ignatiew asked Brenneke if he wanted Brenneke's adventures. tacted in Paris not only knew one another Benes to tell the truth. "I haven't decided," Anybody else with such credentials might but shared ties to other October Surprise Brenneke responded. have prompted some caution. But so taken "regulars." In effect Brenneke had ushered A few minutes later Brenneke called Benes was Kilian with this source that all other Kilian into his own circle of rogues. himself and, using pidgin English, explained considerations, including detachment, The ringleader, it appears, was Ignatiew, a that certain "people" were saying that he dropped away. When Stoffberg was extra­ Frenchman of supposedly noble Russian an­ knew .of Bush's role in the 1980 Paris meet­ dited to New York for arms trafficking last cestry. Four Brenneke memos show that he ings and would pay him to confirm it. "For year, Kilian helped find him a lawyer (the and Ignatiew had been discussing weapons what?" Benes replied, surprised. "I don't same one who represented Ben-Menashe). deals since mid 1986 and bandying about such know Mr. Bush." And when Congress began nosing around the names as John Delarocque of Demavand "They think you understand," said Surprise scandal, Kilian's research helped project and Benes. According to one of Brenneke. Benes shot back: "I don't under­ convince House investigator R. Spencer Oli­ Brenneke's notes, Benes had met Ignatiew stand." ver that Stoffberg was too valuable a witness "in service" and had good "access" to "east No sooner had Brenneke hung up than he to be left in jail. On the strength of Oliver's bloc" weaponry. called a Boston Globe reporter to keep the testimonial, a judge later reduced What Brenneke had long sought from pot boiling. "Robert is willing to talk," he Stoffberg's prison sentence. Needless to say, Ignatiew was a piece of his action. For years said disingenuously, adding that Ignatiew Stoffberg emerged from his cell ready to the Frenchman had been trying to purchase was likewise aware of Benes's role in October champion Kilian's views. a captured Soviet T-72 tank from Iran and Surprise. "Nicholas still works for the Kilian's firmest ally, however, was free­ other brokers, and Brenneke had wanted to French government,'' he assured the re­ lance journalist Jurgen Roth, who, according be cut in. Nor was he the only one. In his porter. "And he just flatly admitted that he to Brenneke's files, routinely swapped ru­ book, Sick describes the same deal and says was well aware of these things." mors and sources with him. In mid 1989, Roth that Razine once worked on it with an Ira­ It was all pure baloney, a smarmy effort by helped produce a German TV documentary nian expatriate named Ahmed Heidari, who Brenneke to pump up two sources who obvi­ that resuscitated the October Surprise scan­ likewise became an October Surprise source ously knew nothing. This time, it didn't dal and several of its more dubious promot­ for him. Sick says nothing of Brenneke's in­ work. On October 23, the Boston Globe re­ ers. Bani-Sadr came across in the program as volvement or Ignatiew's (which he didn't ported that Benes was ignorant of any Paris an authority on the very events that had know about), but his description of Razine's meetings. eluded him earlier, and Hushang Lavi pursuit of the T-72 leaves little doubt that On top of this, once Brenneke's testimony emerged for the first time as a self-described they were all on the same raft. at the Rupp hearing became public, Senate "participant" in the final Paris negotia­ Another name in the Surprise lineup that staffer Jack Blum promptly caught him out tions-a far cry from the know-nothing role traces back to the tank venture is Hamid in a lie. Brenneke had testified that he'd he'd assigned himself in his earlier Playboy Naqashan. Sick describes Naqashan as an once told Blum's subcommittee under oath interview. Iranian procurement officer who knew of about October Surprise. That, Blum advised By far, Roth's most provocative on-camera Casey's efforts to delay a hostage release. the Justice Department, was simply not source was an Israeli named Ahran Moshell, Sick doesn't mention-again he apparently true. Though Brenneke corrected his claim, who claimed to be an ex-Mossad agent. doesn't know-that Naqashan was also tied a grand jury began investigating, and in May Shortly after Roth interviewed him, Kilian up with Brenneke and Ignatiew. A July 1986 1989 he would up facing a perjury indictment sent Brenneke, a transcript and declared document in Brenneke's files indicates that for falsely portraying himself as a CIA con­ that here, finally, was firsthand proof of he and Ignatiew were then in contact with tractor and for having lied about the Bush Bush's complicity in October Surprise. His Naqashan about the tank deal. More pro­ trip to Paris. enthusiasm seemed justified, Moshell had vocatively, another Brenneke memo from Did the indictment cost him any friends? placed himself at a conspirators' meeting the same period mentions "Bob Keret," a On the contrary, Kilian and Rupp's lawyer, with Bush in October 1980 and seemed to suspected CIA agent, who was said to have Mike Scott, who later represented Brenneke, know secrets no one else did. At one point, 3166 CONGRESSIONAL RECORD-HOUSE February 24, 1992 for instance, he remarked cryptically that project anyway. When asked what he'd been to another weak reed, the mysterious the same deal offered to Reagan had been of­ paid, he declared, "It's nobody's business." Razine. "We all know why we need him," fered to Carter. "Even Gary Sick didn't If Kilian helped turn Sick into a believer, Breimeke wrote to his lawyers at one point, know this," Brenneke noted excitedly in a he turned himself into something more, an and indeed they did know. For by now Razine computer memo. ex officio member of Brenneke's defense had gone the way of most other October Sur­ "Kilian is having Sick check a biography team. He once wrote a letter to chief attor­ prise sources, writing himself directly in to Razine gave Jurgen Roth," Brenneke noted ney Rich Muller, counseling him on how to the 1980 Paris meetings. This gratuitous in a December memo. Later, Kilian told him question Richard Allen should he become a shift in status from secondhand source to that Sick had talked to former Casey aide witness. And Brenneke's records indicate eyewitness should have given somebody George Cave, "who would not deny knowl­ that Kilian provided tips on other potenial pause, for the guest list for the final October edge of the hostage deal," and to Iran-contra witnesses, a chronology of Casey's where­ Surprise bash was fast reaching Biblical pro­ figure Richard Secord, "who claims he abouts in October 1980, and a suggestion of portions. But even Kilian, Razine's closest knows nothing." He also briefed Brenneke on how to undercut Donald Gregg's claim that monitor, seemed incapable of counting him Sick's conversations with Hushang Lavi and he was at a beach in Delaware on the very out. "Martin is convinced that R's knowl­ with another of Jurgen Roth's sources, weap­ day others would have him in Paris with edge of 1980 is real time knowledge," ons dealer William Herrmann. Bush. Brenneke wrote in late November, "not As Sick later noted in his book, Herrmann In a computer note keyed to his point, something he learned after the fact." claimed to have learned of the GOP hostage Brenneke reminds himself to check Gregg's Having invested his trust so completely, deal from Iranian procurement officer 1980 vacation schedule and then quotes Kilian soon took the next logical step, ask­ Ahmed Naqashan. What Sick didn't know Kilian as saying that weather reports for Oc­ ing Razine to testify for Brenneke-"as [a) was that this was the same Naqashan who tober 19 and 20, 1980, were "overcast, approxi­ moral obligation." Razine, however, was not had worked with Ignatiew and Brenneke on mately 55 degrees." It was this issue-the about to get trapped. In late November the Soviet tank deal in the mid 1980's. No beach weather in Delaware-that would fi­ Kilian told Brenneke that their last best link in the daisy chain was thus untainted. nally trip Gregg up. hope was wavering, that Razine was worried Nor did Sick seem to realize that the Kilian's willingness to play lawyer may about Israeli reprisals and the loss of a "CIA Herrmann-Naqashan story had undergone re­ have been quickened by an affinity for chief pension." Even worse, said Kilian, questions vision by the time he heard it. Earlier, ac­ attorney Rich Muller, who was as much an were beginning to crop up about Razine's cording to Honegger, Herrmann had told her October Surprise enthusiast as he. A long­ past-about his whereabouts from 1969 to that Naqashan had actually placed himself time friend of Brenneke's, Muller once joked 1980, about the fact that his intelligence in Pairs with Bush and Casey in October 1980. to an acquaintance that he'd taken the background was nowhere mentioned in court With Sick, however, Herrmann glossed over Brenneke case so he couldn't be called as a records of a 1984 drug bust against him. Sud­ this point. He also apparently neglected to witness. That quip told a lot. denly Razine didn't look like a sure thing at mention-for Sick omits these details in his Back in the mid '80s, as a reserve Marine all. book-that he, Herrmann, had been jailed in colonel, Muller (by his own account) had As they say in the pulps, however, help was helped Brenneke negotiate the shoals of Britain as a counterfeiter in 1986 and had Demavand and had kept Pentagon counter­ on the way. Within the next few days, Kilian tried to win extradition to the U.S. by cast­ told Brenneke that Nicholas Ignatiew was ing himself to Congress as an Iran-contra ex­ intelligence specialists informed. In late ready to pinch-hit for Razine. According to a pert, very much like Brenneke. 1985, as Brenneke's overseas contacts ex­ Brenneke memo, Kilian explained that Sick would later deny debt to Brenneke, panded, Muller used information from them to pinpoint a pro-Israeli leaker inside the "Nicholas on camera places Bush in Paris 9/ claiming that he'd listened but remained White House itself. Later, when Honegger ap­ 20 [sic] and probably later in Zurich." It is skeptical. But Brenneke's own files suggest proached "Mr. X" for help with the October not known whether Brenneke snickered otherwise. They show that in 1989, through when he heard this. This was the same Nich­ Kilian and Brenneke's other allies, Sick's Surprise, Muller again played Brenneke's si­ lent partner, briefing him on the drawdown olas Ignatiew whom he had coached by phone own perceptions began to harden. Two years months before, and who'd then known zero before, Barbara Honegger had found Sick to of NATO weapons stocks-supposedly a symptom of illicit shipments to Iran. For about the October Surprise. be unwilling to go much beyond what he'd anyone nursing paranoia, Muller was a prize Suddenly in a flush again, Kilian and written in his earlier book "All Fall Down." in himself. Brenneke conferred on January 3 to sort out There, he'd complained circumspectly of Is­ Less appealing, though, was his co-counsel, the bidding. Everything seemed upbeat. raeli interference, including illicit arms Mike Scott. "Mike the puppet master," "Very important discussion today with Mar­ shipments to Iran, at the height of Carter's Brenneke jotted after a conversation with tin Kilian," Brenneke tapped into his com­ hostage negotiations. But by mid 1989, Sick Kilian, and from Brenneke's own standpoint, puter. "Write Rich Muller and Mike Scott re was prepared to jump hard in the direction there was something to worry about here. this." What Brenneke outlined was the Octo­ Kilian and Brenneke pointed. For one thing, he wondered, "To what exent ber Surprise gospel according to Kilian, a That is apparent from an interview he gave is Mike Scott using his trial for political mo­ goulash of suspended doubts that put Casey, to Jurgen Roth at the time, laying out the tives?"-after which, in the same computer McFarlane, Pentagon official Fred Ikle, and "circumstantial evidence" of a Republican note, he added the name of Scott's sister, Bush at one conspirators' meeting in Paris end run in 1980. "There were meetings late in Colorado representative Patricia Schroeder. and Casey at several others with provision October in Paris," Sick declared. "We knew According to other memos, Renneke also (thanks to Moshell) for a Bush side trip to that arms deliveries went from Israel to Iran considered Scott a leaky faucet and feared Luxembourg. Sadegh Tabatabai and Ahmed at the same time ... We know that the Ira­ that he was slipping trial information to Khomeini had supposedly represented the nians were changing their negotiating strat­ Parry and other journalists, particularly Iranians, with an unidentified Swiss and a egies." Expect for a hard cover, this was es­ after Kilian told him of a tip he'd picked up Jordanian also attending. "Every one of sentially the book Sick would write two from Scott. Martin's sources agreed independently on years later. There was something else about the lawyer [this scenario)," Brenneke wrote. In late 1989, Sick became involved in a that also prompted worry, a little-boy qual­ He then listed those sources: Bill more ambitious film project. A friend of ity that mocked the solemn business he was Herrmann ("second hand because he got his Kilian's, a researcher named David Marks, about. Visitors to his office were startled to information from Naqashan"); "unidentified persuaded producer Oliver Stone and Orion discover that he kept a rabbit in an adjoin­ source ("probably from London"); Dirk Pictures to option Sick's All Fall Down as ing room, and even more troubling was his Stoffberg ("second hand, through Iranian well as Brenneke's own story and consulting fascination for James Bondish antics, par­ government officials ... and South African services. The commissioned script focused on ticularly the use of childish and absurdly intelligence"); Ignatiew ("unknown how their October Surprise allegations and fea­ misleading code names for potential wit­ Nicholas got his information"); Rozine ("un­ tured them as "characters." Though the film nesses. In a computer list attached to Scott's known whether first or second hand has yet to be made, Sick reportedly reviewed letterhead, for instance, Gregg was identified sources"); Moshell ("first-hand source. one version of the script and offered sugges­ as "Q in WH," translated elsewhere in the States he was there and was an eyewitness"). tions-a contribution that, like the Roth document as "Queer in White House." As a footnote, Brenneke credited Sick's interview, belies his current claim (first ex­ The thing that turned nuisance to liabil­ contributions and noted (the single caveat) pressed in a New York Times op-ed piece last ity, however, was Scott's inability to deliver that Moshell was suddenly unsure of his April) that he arrived at his conspiracy theo­ on Rupp. As Brenneke noted in a memo just dates. He also jotted a suggestion from ries only recently. According to Marks, before his own trial, Scott has "no idea Kilian that neatly accommodated all the Kilian also provided "substantive" advice, whether Harry will talk or tell the truth if new dates and locales being tossed around. though without a consultant's fee. he does." "We need to show that the October 19/20 Sick told the Voice that he didn't like the With Rupp such a question mark, the meeting I was at was part of a series of meet­ script, but admitted that he stayed with the weight of Brenneke's defense briefly shifted ings," he wrote. "As an isolated incident it February 24, 1992 CONGRESSIONAL RECORD-HOUSE 3167 makes no sense. It only makes sense in [the] worked, had never retracted any Brenneke organization, which had been sniffing around context of [the] structure of an ongoing story. Since Brenneke and I had never dis­ the Inslaw case and advising its principals, deal." cussed October Surprise at all, my testimony Riconosciuto said that he'd helped transfer Superficially, this suggestion seemed a was irrelevant to whether or not the scandal $42 million to Iran as part of the October reasonable attempt to adjust to fresh data. had happened. Surprise deal. He also claimed that Brian, But there was also something mischievous Taking that stand himself, Brenneke swore who has repeatedly denied wrongdoing, had about it, for deliberately or not, Kilian had that he'd not only attended a Paris session gotten the pirated software as a bonus for just handed Brenneke's supporters new li­ with Don Gregg on October 19, 1980, but had his work on the project. cense to improvise. been told of Bush's presence. The govern­ Within the next week both Honegger and They wasted no time. A few days later, ac­ ment countered with testimony from Gregg Kilian called Brenneke to say that here was cording to a Brenneke note, the hitherto and two Secret Service agents who allegedly new proof for his story, and over the next cautious Northrop advised Kilian that he had been with Bush throughout the disputed several months Brenneke continued to talk knew of "two series of meetings" prior to period. Inexplicably, however, the agents for­ with Hamilton, and with freelance reporter the Paris sessions-one round in Frankfurt got to bring supporting records, and a retired Danny Casolaro, who was researching the in September and another in Geneva and TV weatherman from Portland obliterated Inslaw case. By fall 1990, according to Frankfurt in mid October. A week later Gregg's alibi by insisting that a photograph Brenneke's files, Riconosciuto's "role" in Razine picked up the thread, placing Bush in supposedly taken of him at a Delaware beach October Surprise had greatly expanded. Paris on September 5 through 8. on the pivotal weekend showed inapplicable Hamilton informed Brenneke on October 19 This sudden embellishment of Razine's weather conditions. It was the very tack that Riconosciuto "has told him Earl Bryant story again prompted hopes that he might Kilian had discussed with Brenneke weeks [sic] went to Iran in 1980 with Mike to de­ testify. But according to Brenneke's notes, before. liver hostage delay payoff." Soon afterward he protested to Kilian and Jurgen Roth that Not once did prosecutor Thomas O'Rourke Kilian advised Brenneke that "Riconosciuto he was now cornered by American agents in ask Brenneke for credit card receipts that says he saw me [Brenneke] in Paris October Europe and unable to depart and that their might have established his whereabouts that 1980." own phones-and Brenneke's-were tapped. weekend. Nor did he manage to discredit The daisy chain went bonkers, hailing the It was such a blatant resort to stall tactics Brenneke's weatherman (in fact conditions Inslaw case as a new wedge into October Sur­ that it's something anyone took him seri­ along the Delaware shore were variable on prise, particularly after Ari Ben-Menashe ously. In fact, he'd said too much, inadvert­ Sunday, October 19). Brenneke's own law­ and another burgeoning source, Richard ently giving Brenneke's lawyers something yers, by contrast, never missed a beat. On Babayan, provided supporting affidavits to to go on. May 4 the jury handed down a not-guilty ver­ Hamilton. Their statements dealt only with In March they acted, calling on the court dict on all counts, thus enabling Brenneke to Brian's alleged role in the software theft, not to dismiss the case against Brenneke because walk away claiming that the October Sur­ October Surprise. But no one seemed to no­ of the "intimidation" of Razine. Kilian, prise story had survived the government's tice. And after reporter Casolaro died mys­ Roth, and Rico Carisch all provided support­ best shot. teriously in August 1991, the word went out ing statements, and Brenneke swore he'd The verdict immediately kicked the daisy all along the daisy chain that a deadly cover­ known Razine for "more than 10" years­ chain into overdrive. Reporter Bob Parry, up was in the works. Ben-Menashe's notori­ which must have surprised Kilian, since he who by his own account had been lukewarm ety increased, and Gary Sick embraced had reason to believe the two had been intro­ about the October Surprise story, spent the Babayan, who'd been convicted of fraud in duced nearly two years before. next 10 months investigating it for PBS. Florida, as an authority on part of the Octo­ As it happened, it was't Brenneke but Sick, assisted by Parry and Kilian, finished ber Surprise. The fact that Babayan and Razine himself who got caught out. On researching a book on it, and Brenneke Ben-Menashe shared a business connection in March 23 an FBI agent in Bonn called began a new one of his own. His earlier book Chile-a fact made clear in their affidavits­ Razine, then filed a report to Washington. deal had collapsed after coauthor Stuart Dia­ raised no apparent concern about collusion. According to the document, Razine-identi­ mond had complained of his inability to And once again, Brenneke's version of the fied as "Oswald LaWinter"-had admitted produce documentation. (Brenneke had truth gained new luster. "that he does not personally know subject promptly declared bankruptcy and pocketed KILIAN SEALS THE DEAL Brenneke" and "would do him more harm his share of the $137,000 advance). But short­ Throughout all this Martin Kilian, the than good" if he testified. As for the alleged ly after, the trial researcher Peggy Adler journalist who'd done so much to make intimidation, the report continued, "he at­ Robohm offered Brenneke her services, and Brenneke what he was, continued to midwife tributes the origin of that information to a he began his work anew. everybody else's baby. Not until August 1991 'couple of hot shot journalists' for whom he All along the daisy chain, meanwhile, oth­ did Der Spiegel publish a story based on his decided to make life difficult. As LaWinter ers whose credibility had become linked to October Surprise reporting-the first in explained, he gave them numerous false his urged him to keep laying in insurance. three years. But Brenneke, Sick, and Bob leads. "You have the way to create media inves­ Parry all continued to draw on his handouts. OCTOBER SURPRISE IN COURT tigations," Northrop told him, "by simply Sick would credit Kilian with having briefed The witness list for Brenneke's nine-day telling a journalist or two something that him regularly on a variety of October Sur­ perjury trial did not include Razine or any happened, i.e., The Surprise." Brenneke com­ prise sources, and, based on Brenneke's own other October Surprise "expert" except Nor­ plied. notes, Kilian did the same for him. throp, who testified that he had seen One of the most useful insurance policies Shortly before Brenneke's trial, for in­ Brenneke in Europe sometime in September he copped for himself involved a strange case stance, Kilian uncovered evidence that 1980. According to lawyer Muller, Hushang of purloined computer software. Shortly be­ seemed to place a businessman, the late Lavi was rejected because of his inconsist­ fore his trial, Brenneke scrawled a cryptic John Shaheen, in the middle of the 1980 deal­ encies. Rafizadeh declined to testify unless note to himself-"Iran Contra Mike ings as an intermediary between Cyrus reimbursed. Brenneke had long ago dis­ Rechonashudo [sic]." A few weeks later, on Hashemi and Casey, who'd worked with missed Honegger as a "ding-a-ling" and Sick May 17, he got a related call from Bill Ham­ Shaheen during World War II. On September stayed away for reasons of political hygiene. ilton, owner of a small computer company 7, according to Brenneke's files, Kilian He explained to Northrop that for the sake of named Inslaw. Hamilton told him that back shared the Shaheen tip with him, and ac­ his own credibility, he had to remain "purer in the mid 1980s, the Justice Department had cording to Sick's book, the same information than Caesar's wife," eschewing any overt extorted some sophisticated software from was passed to him. That of course was typi­ contact with "spook tapes." Inslaw and then let it slip to Earl Brian, a cal of Kilian. While keeping his own byline As for the defendant's own credibility, at confidante of both Reagan and Edwin Meese. off controversial information, he always least one of his lawyers seemed doubtful. The source for this story, said Hamilton, was seemed willing to let others try to make it Just before the trial, as Brenneke noted in Michael Riconosciuto, a technical wizard fly. his files, Mike Scott complained to him that who is now doing time on drug charges. Typically, too, Kilian remained true to "everything checked out except my Riconosciuto had allegedly worked with even the worst of the bad apples. Despite the [Brenneke's] personal data." Brian on a contra project. " Formerly helped questions surrounding Razine, he continued With so little to go on, the defense's case contras with Reagan group," Breimeke to tout his virtues to Brenneke, telling him boiled down to innocence by inference. The jotted in a memo of the conversation. in August that "Razine was part of clean-up two ex-Customs informants, Howard and Whether Brenneke discussed October Sur­ crew" that had · covered the conspirators' Tucker, for whom Brenneke had testified, re­ prise with Hamilton is not apparent from the tracks in Paris. ciprocated by offering speculative testimony memo. But the following day Riconosciuto Equally generous was Kilian's attitude to­ about his alleged CIA connections, and one wrote himself prominently into the scandal. ward Harry Rupp, whose credibility had like­ other witness-myself-was subpoenaed to In a three-way phone conversation with wise nose-dived. "Harry's dates still messed certify that ABC News, for whom T then Hamilton and Jeff Steinberg of Larouche's up," Kilian warned just before Brenneke's 3168 CONGRESSIONAL RECORD-HOUSE February 24, 1992 trial. Yet, come the following November, LaRouche interviewers only a few years be­ think Herrman or Ben-Menashe were linked Kilian was still pushing Rupp as a source. fore that Casey was involved. to Brenneke. I didn't think that those "Harry now says he did National [airport] to Nor did the particulars of the Madrid deal sources that I used had any ties." When ap­ Paris non stop with Bush, Gregg, and one or square with what was known of the praised that Jamshid knew Will Northrop, he two others," Kilian told Brenneke. Later Hashemis' opportunism. In 1984 a grand jury said, "I didn't think they knew each other." Bob Parry sat Rupp down for a PBS inter­ indicted Cyrus for petty arms smuggling to SICK'S RECYCLING MACHINE view and discovered that the pilot had sud­ Iran, including transactions during the very Kilian's ability to censor out what he denly remembered an even earlier Surprise period when he was supposedly brokering the didn't want to hear clearly influenced Sick, episode-a series of meetings supposedly held $150 million October Surprise shipment. whose recent book is a study in selective re­ in Madrid as a prelude to the Paris negotia­ Would Cyrus have bothered with such penny­ porting. Time and again the author shaves tions. That should have sounded alarms all ante stuff if he'd really been involved in such facts that prejudice his sources or pet theo­ along the daisy chain. It didn't. Gary Sick a bonanza? Simple logic says no. ries. He only barely touches on Cyrus would later cite the Rupp interview as a Adding to the skeptic's brief are the FBI Hashemi's complicating role as a Carter hos­ prime reason for believing the Madrid meet­ surveillance reports mentioned previously. tage negotiator, and overlooks Carter's ings had happened. Based on wiretaps of Cyrus Hashemi's busi­ hands-off treatment of Hashemi's illicit As noted above, it was Kilian who had first ness phones in late 1980, they indicate that arms deals with Iran. (Sick would have us glimpsed the "need" for earlier negotiating this key "conspirator" was in New York on believe that it was solely the Reagan cam­ sessions. But only after Ben-Menashe and October 20, a date frequently associated with paign, in collusion with the Israelis, that Jamshid Hashemi, Cyrus's brother, picked up the Paris meetings. They also show that nurtured these deals and thus undercut on the Madrid theme in mid 1990 did this Cyrus took orders from Iranian, not Repub­ Carter.) multimeeting theory of the conspiracy catch lican, agents in arranging subsequent weap­ Similarly, it is only from Honegger's book fire. Afterward, Sick and Parry became be­ ons deliveries to Iran. Even more provoca­ that we learn of gunrunner William lievers, and Brenneke began rewriting his tive is the newly revealed role of the Carter Herrmann's conviction as a counterfeiter. book outline to place himself in every meet­ administration in his activities. Whereas Sick likewise ignores Razine's boast to the ing anyone could think of. conspiracy buffs like Jamshid and Sick FBI about peddling false leads, the inability "My major contribution to the story from argue that Cyrus helped the Republicans of Jamshid Hashemi and Hushang Lavi to a research point of view," Sick told the stave off a hostage release by smuggling ·stick to a consistent story about whether Voice, "was the Madrid meetings." As Sick arms to Iran, the wiretaps show that admin­ they took part in the Paris and Madrid ses­ recalls in his book, Jamshid boasted to him istration officials acquiesced in his weapons sions, and Ben-Menashe's failure to pass a of having firsthand knowledge of these meet­ deals because of his importance to their own polygraph test administered by ABC News ings. Jamshid claimed that in mid 1980 he hostage bargaining. If the Republicans en­ shortly before Sick's publication date. and Cyrus had twice arranged for Casey to couraged Cyrus in these ventures, weren't In interviews Sick has argued that a meet secretly in Madrid with the Ayatollah they then only mimicking the administra­ source's propensity for lying shouldn't dis­ Mehdi Karrubi. During the first session in tion? credit everything he says. But he fails to ac­ late July, he said, Casey had suggested that . In late 1990 Kilian began to have his own knowledge that some of his sources stood to arms might be sent to Iran through a "third doubts about the Hashemi story, and, ac­ gain, even to the point of easing a prison country" if the hostages were released as a cording to Brenneke's files, complained that sentence, by lying about the Surprise. "gift" to a fledgling Reagan administration. Jamshid might be an agent for Customs or Though Sick may not have appreciated Two weeks later, by Jamshid's account, even the CIA. Other sources also began to how interconnected his sources were, he Casey had returned to Madrid to firm up the wear badly. In April 1991, In These Times surely knew that Kilian-the man he credits arrangement, and the Israelis had then se­ published comments from Ben-Menashe that in his postscript as a "kindred spirit"-had cretly dispatched $150 million in arms and diverged from what he'd told Sick and oth­ flitted among many of them like a pollen spare parts to Iran, with Cyrus brokering the ers. The discrepancy involved that Washing­ bee. His book bristles with borrowings from deal for a commission. The October sessions ton get-together (reported so long ago) be­ Kilian's interviews, and where Kilian proves in Paris were icing on the cake. tween Reagan campaigner Richard Allen and wanting, Sick substitutes gleanings from other reporters. When Ben-Menashe was asked about all an Iranian emissary in early October 1980. "Let's get it clear here," Sick said last this, he "confirmed" it, saying that he'd Ben-Menashe said he'd accompanied Friday. "There was no conspiracy here. I was read about the Madrid sessions in Israeli in­ Hushang Lavi to the meeting. But for Sick talking to Martin Kilian, I was talking to telligence reports. Later, reporters for ABC's he spun a different tale, claiming that his Bob Parry, I was talking to Craig Unger, Nightline discovered a hotel ledger that companion was not Lavi at all, but a profes­ anybody who worked on the story. And as we seemingly established Cyrus and Jamshid's sor from Tehran University (an inconsist­ made a breakthrough in one place * * * [and] presence in Madrid at the appropriate mo­ ency that Sick noted). Lavi himself clouded when we asked where Casey is, some people ment. They also found that Casey had been things further by insisting that he'd handled went out to interview Meese. Nobody was abroad at the time and that someone named the meeting alone-this from a man who telling anyone what to do. This was a vol­ "Robert Gray" had been registered in the nearly four years before had denied knowing untary group of people working on the story Hashemis' hotel. Since that was the name of anything about the plot. which I regard as almost the best of inves­ Casey's campaign deputy in 1980--the same By mid 1991, the Surprise story was begin­ tigative journalism." Robert Gray who had written some of the ning to fray, partly because of mounting evi­ Indeed, the most remarkable thing about most aggressive GOP strategy papers on the dence that Bush couldn't have been in Par.is Sick's book is its derivative character. Only hostage issue-the glove seemed to fit per­ during the crucial period of October 19 and five of the 14 primary sources he cites for the fectly. 20, 1980. Kilian has told the Voice that he Paris and Madrid meetings did he interview And yet, there were holes in it. For one broke with Ben-Menashe over this issue. In himself, thus casting doubt on his ability to thing, as Jamshid had long ago intimated to May he also wrote Brenneke off after discov­ judge the credibility of the lot. With few ex­ LaRouche researchers, Madrid had been a ering that a letter "certifying" Brenneke's ceptions, moreover, his source list duplicates way station in Carter's hostage negotiations CIA recruitment had been forged. the one that Honegger used for her book two in 1980. So there was ample room for confu­ If Kilian was beginning to have doubts, years before and that Kilian expanded with sion. In addition, as Nightline reported, however, he was slow to tumble to the impli­ Brenneke's help. To be fair, Sick might well much of Casey's three-day European junket cations. Almost better than anyone else, he consider sharing with them the half-million in late July had been given over to a London knew that the daisy chain was not divisible, dollars he's reportedly been promised in a conference. Though he could have darted off that the bursting of one link affected the second movie deal, for they provided the to Madrid and back, conference records ad­ whole. He knew that Ben-Menashe had indi­ needed research. mitted only a silverlike window of oppor­ rect links to Brenneke and that Ignatiew and The proof is in his page notes. Consider, for tunity. Razine's credibility hinged on Brenneke's. example, the sources he says vouched for the More troubling still were problems with He also knew that Lavi, Jamshid Hashemi, Madrid meetings. Besides J amshid Hashemi the sources themselves, particularly and Ben-Menashe were part of a skein that and Ben-Menashe, he cites Brenneke's dubi­ Jamshid, whose memory seemed infinitely could not hold if any one of them proved un­ ous friend Harry Rupp and Richard Babayan, elastic. At one point, for instance, he told true. Yet, Der Spiegel's August 1990 story on the convicted defrauder whom the Inslaw Sick that he'd been present for the Madrid the scandal merely recycled much of what documents link to Ben-Menashe. He also in­ negotiations but not the Paris ones, while in Kilian had gotten from these sources, par­ cludes an Iranian exile who learned of the an interview with Kilian he glossed over Ma­ ticularly Jamshid. meetings only secondhand from the drid and refused to specify whether he'd been "If I had known that Jamshid was linked Hashemis, and a convicted weapons dealer, in Paris. Anyone bothering to research, to Brenneke it would have raised a couple of Arif Durrani, who has told the Voice that he moreover, would have discovered that questions," Kilian said. "I didn't think knows nothing about any October Surprise Jamshid had been unwilling to affirm to Jamshid was linked to Brenneke. I didn't meeting. February 24, 1992 CONGRESSIONAL RECORD-HOUSE 3169 The same paucity of firsthand information meetings and often relied on hearsay from mation with them and other journalists. His is evident in Sick's account of the Paris ses­ journalist Martin Kilian and others. While own magazine has devoted only two stories sions. Again, Ben-Menashe and the oblivious acknowledging the unreliability of some of to the scandal in three and a half years. Durrani are identified as primary sources, his sources, Sick nonetheless built them into David Marks-Kilian's close friend, helping but here Sick also relies upon Brenneke, the scaffolding of his conspiracy theory, thus bring Sick and Brenneke together for an Oli­ Razine, Lavi, and Brenneke's newly tutored erecting an edifice of compounded error. In ver Stone movie project in 1989 that was to friend, Ignatiew. Two unnamed sources are 1989 Sick became involved in a movie deal dramatize both men's conspiracy allegations mentioned; quite possibly they are the self­ with Brenneke and producer Oliver Stone by turning both into "characters," much styled Israeli agent Abran Moshell and that gave the former NSC aide a financial like ex-New Orleans district attorney Jim Brennecke's pal Benes. stake in a theory he had only begun to re­ Garrison in Stone's current film, JFK, In addition, Sick cites Kilian as the source search. Sick said the fact that he made Marks, who was rejected as a prospective in­ for speculation about the role played by movie deals and how much money they vestigator for Congress's October Surprise Casey's friend Shaheen. He also slips weap­ earned him were "totally irrelevant to the probe because of his "partisanship," is cur­ ons dealer William Herrmann into the mix, truth" of the October Surprise story. rently helping with a PBS Frontline "inves­ though he is careful to point out that Cyrus Hasehemi-allegedly the Reagan tigation" of Sick's allegations. Herrmann only learned of the October Sur­ campaign's secret emissary to Khomeini in prise from Iranian procurement officer 1980, simultaneously pursued private Iran Nagashan. What he doesn't know, of course, arms deals of his own, with the acquiescence THE 50TH ANNIVERSARY OF VOICE is that Brenneke and his buddy Ignatiew of the Carter administration. If, as Sick and OF AMERICA opened lines to Naqashan in mid 1986. Nor others claim, such under-the-table trade does Sick seem aware that another of his caused the ayatollahs to stall a hostage re­ (Mr. REGULA asked and was given principal sources, Iranian exile Ahmed lease, then Carter's own hands-off policy to­ permission to address the House for 1 Heidari, was involved in a business venture ward Hashemi may have been as much to minute and to revise and extend his re­ (the attempted tank purchase) that included blame as any GOP counterplot. marks.) Ignatiew and Brenneke, as well as Razine. Jamshid Hashemi-one of the few key Mr. REGULA. Mr. Speaker, today "Most of these men did not know one an­ sources Sick interviewed himself, gave a dif­ marks the 50th anniversary of the other," Sick writes of his sources. "The ferent October Surprise story to extremist Voice of America, a voice of truth that chance that [they] are telling their versions Lyndon Larouche's aides in 1983, leaving un­ has resonated around the world for a of the truth is much higher than the chance clear if Reagan campaign chief William that they are all lying in concert." Casey was involved in earlier machinations period beginning 79 days after the Clearly, he has it wrong. Far from being to delay a hostage release. Jamshid has also entry of the United States into World disconnected, most of his sources spring equivocated about his own role, denying to War II to the crumbling of the Iron from a group of international arms mer­ Sick that he participated in a Paris plotters' Curtain and the blossoming of freedom chants and wannabes who got stung by U.S. meeting in 1980, while refusing to clarify this for millions of oppressed people. Customs and by an undercover informant issue with Kilian. We must hope that the future actions named Cyrus Hashemi in April 1986. To rule Abol Hassan Bani-Sadr-Iran's exiled presi­ of this body will allow the Voice of out collusion among them requires consider­ dent, denied to Barbara Honegger in 1988 America to continue to be the founda­ able charity, particularly since the October that he had any firsthand knowledge of the Surprise story indicts one member of the October Surprise conspiracy. Later, after tion for a voice of truth, a voice of White House crowd-George Bush-who they feeding him background to improve his ideals, a voice of human rights, a voice felt had caught them out. What's more, since memory, she cited him as a prime source for of freedom, a voice of economic growth Brenneke's records show that none of his her own conspiracy theories. to improve the quality of life for all contacts had any original knowledge of the Hushang Lavi-U.S.-Iranian arms dealer people, a voice of peace, and that the October Surprise, the real likelihood is that told a Playboy interviewer four years ago Voice of America continues to be a they improvised. that he knew nothing of a Reagan campaign beacon light that shines as an example But if Sick misses this point, he also seems effort in October 1980 to block a pre-election of goodness to all people. oblivious to the simple dictates of candor. hostage release. The Playboy story itself­ Last September, the Voice exposed Brenneke one of the first on the October Surprise­ as a fraud after discovering that his 1980 shortchanged this admission. Recently, Lavi 01210 credit card receipts placed him nowhere near has placed himself at the center of the Octo­ the Paris or Madrid sessions that he claimed ber Surprise and become a prime source for CONGRATULATIONS TO THE U.S. to have witnessed first-hand. Had this evi­ Gary Sick. NATIONAL WOMEN'S SOCCER dence surfaced at his perjury trial in 1990, his Oswald LeWinter-also known as "Mr. TEAM defense would have collapsed. So would the Razine," the most creative October Surprise credibility of at least five others-Razine, source, corroborated Brenneke, serviced both (Mr. WOLF asked and was given per­ Riconosciuto, Rupp, Russbacher, and Nor­ Sick and Honegger's research, and has tested mission to address the House for 1 thro~who all claimed to have seen Kilian's skepticism and found it wanting. minute and to revise and extend his re­ Brenneke in Europe in the fall of 1980. Yet Even though Kilian knew of self-serving marks.) Sick suggests in his book that Brenneke's changes in Razine's story and of an FBI re­ Mr. WOLF. Mr. Speaker, on February whereabouts had no bearing on the accuracy port linking Razine to "false leads," the 6 we commemorated "National Women of his charges. journalist has continued to quote him to Where Brenneke was, he says, "was not an others, and even urged him to testify "as a and Girls in Sports Day" and in keep­ issue in the trial. Brenneke had been accused moral obligation" at Brenneke's perjury ing with that special day, I want to of falsely stating that William Casey, Donald trial. bring to my colleagues' attention the Gregg and possibly George Bush were in Ari Ben-Menashe-allegedly an ex-Israeli tremendous achievement of the U.S. Paris on that particular weekend. * * * Al­ intelligence agent, shared friends and busi­ Women's Soccer Team in winning the though this case received virtually no atten­ ness interests with Brenneke in the mid world championship title last Novem­ tion in the national media, it marked the 1980s. Sick has relied on Ben-Menashe and ber 30 defeating Norway 2-1, in the first and only time that the U.S. Govern­ another business associate of his to buttress games played in China. ment had systematically and authoritatively his own October Surprise theories, even attempted to refute the allegations of an Oc­ while claiming in his book "most of these President Bush honored the squad re­ tober Surprise * * * To my surprise and to men did not know each other . . . " cently when they met with him at the the surprise of almost everyone who followed William Herrmann, Hamid Nagashan, White House. It was a well deserved the trial closely, the failed." Ahmed Heidari, Nicholas Ignatiew-all honor. These women are great role With this kind of intellectual flexibility, prominent October Surprise sources, came models for today's young people par­ the daisy chain should long outlive the ear­ together in various weapons deals in the mid ticipating in high schools and ever-ex­ nest souls and pretenders who created it. 1980s in which Brenneke played a peripheral panding soccer leagues around our Na­ role. Sick discounts collusion among them, tion. And worldwide, they are tremen­ THE LINEUP-EARNEST SOULS AND PRETEND­ again in the belief that they share no com­ ERS: THE MAKERS OF THE OCTOBER SUR­ mon ground. dous examples of the great American PRISE Martin Kilian-Washington correspondent competitive sports spirit. Gary Sick-in researching his October Sur­ for Der Spiegel and Sick's closest collabo­ I am especially pleased to share this prise book interviewed only half of the rator, has nurtured October Surprise tremendous achievement with my col­ sources he cites for crucial conE60 minutes. With the U.S. Women's Soccer nomic growth packages is "high politi­ Mr. GONZALEZ. Mr. Speaker, this Team's world title, we now have an cal theater." special order is another in a series of event that is more than just an average Now, the chairman makes a very special orders related to the Banking soccer story. It was U.S. soccer's shin­ valid point. The Democrats have put on Committee's investigation of the At­ ing moment-a unique performance flop after flop in their quest for the lanta branch of the Banca Nazionale without equal in American soccer his­ White House, receiving terrible reviews del Lavoro [BNL]. Today I will show tory. I was pleased to be a cosponsor of from the American people. So now they how the State Department continually Congresswoman SNOWE's resolution have come up with their new musical pressured the Export-Import Bank to which the House passed to commemo­ melodrama, "The Phantom of the Tax approve loans to Iraq despite the fact rate "National Women and Girls in Cut." that Iraq was not creditworthy. Sports Day." It is a fitting time on Their script is full of political cli­ BNL was the second largest bank which to make special note of our ches. The music is discordant. The cur­ participant in the Eximbank program country's first international soccer rent star, charismatic Paul Tsongas. for Iraq. Eximbank insured 51 BNL fi­ championship on any level. wants a total rewrite, and. as usual, nanced transactions which aggregated This commemoration might also be a there is no public rush to the box of­ $47 million in value. good time to promote the inclusion of fice. Over the years, top levels of the ad­ women's soccer as a gold medal sport Who could believe a script that asks ministration, including President at the 1996 Olympics, which this Nation us to believe that economic salvation Bush, repeatedly intervened with the will host in Atlanta. It was dismaying is gained by doling out 4 bits a day to Eximbank in order to assist Iraq. Dur­ to read recent news reports that wom­ each member of a family of four? ing the entire United States-Iraq rela­ en's soccer may be pushed back to the I have often wondered what critics tionship, the State Department and year 2000 Olympics. I am sure the many meant when they referred to "the thea­ other agencies pressured the Eximbank thousands of soccer players and fans in ter of the absurd." Now we know. It is to disregard its charter in order to pro­ northern Virginia and around the coun­ the Democrats in pursuit of an eco­ vide credit assistance to Iraq. try would agree that women's soccer nomic policy. The policy toward Iraq is by far the should get its opportunity to compete The Democratic "Phantom of the most tragic foreign policy episode of in 1996. Women's soccer competition in Tax Cut" ought to close out of town. the Bush and Reagan administrations. the Atlanta Games would provide a Mr. Speaker. It is not high political Whether that policy was to use Iraq to continuing opportunity to encourage theater. It is low political farce, get­ stop Iran, or later, to eject Saddam more participation in girls' soccer by ting less funny every moment. Hussein, or to bring about regional sta­ promoting the U.S. women's national bility-it is a policy that ended in war team and improving youth programs in and the loss of many precious lives­ COMMITTEE ON RULES AN- and with no long-term goal achieved­ our States. I hope my colleagues will NOUNCEMENT REGARDING SUB­ join in recognizing the world champion yet it remains a story that is largely MISSION OF AMENDMENTS TO untold. U.S. Women's Soccer Team and in pro­ H.R. 3844, HAITIAN REFUGEE moting a women's soccer gold medal in The Iraqi invasion of Kuwait had a fi­ PROTECTION ACT OF 1992 nancial cost to the United States tax­ 1996. (Mr. MOAKLEY asked and was given payer because Iraq has now defaulted permission to address the House for 1 on $2 billion in loans guaranteed by the COMMUNICATION FROM HON. minute.) Agriculture Department and the Ex­ LINDSAY THOMAS, MEMBER OF Mr. MOAKLEY. Mr. Speaker, the port-Import Bank on letters of credit CONGRESS Committee on Rules is planning on to Iraq financed through the agency meeting on Tuesday, February 25, 1992, Banca Nazionale del Lavora in Atlanta. The SPEAKER pro tempore laid be­ on H.R. 3844, the Haitian Refugee Pro­ The following will illustrate how the fore the House the following commu­ tection Act of 1992. In order to provide Export-Import Bank was cajoled into nication from Hon. LINDSA y THOMAS, for an orderly process in the consider­ granting credit for Iraq even though Member of Congress: ation of this matter, the Committee on the 'financial experts at the bank re­ HOUSE OF REPRESENTATIVES, Rules is requesting that Members sub­ peatedly warned that extensions of Washington, DC, February 20, 1992. mit 55 copies of their amendments to credit to Iraq did not offer a reasonable Hon. THOMAS s. FOLEY, the bill, together with a brief expla­ assurance of repayment. In fact, Iraq The Speaker of the House of Representatives, H- later defaulted on its Eximbank com­ 204, The Capitol, Washington, DC. nation of the amendment, to the com­ DEAR MR. SPEAKER: This is to notify you mittee office at H-312, the Capitol, by mitments. pursuant to Rule L (50) of the Rules of the 12 p.m., Tuesday, February 25, 1992. -INTRODUCTION House that I have been served with a sub­ Copies of the text of the bill are On June 15, 1990, Assistant Secretary poena issued by the Ware County Superior available at the Judiciary Committee of State John Kelly explained in con­ Court in the State of Georgia. at 2138 Rayburn and at the Office of gressional testimony the latest goals of After consultation with the General Coun­ Legislative Counsel. In considering the the administration policy toward Iraq. sel to the Clerk, I will make the determina­ tions required by the Rule. submitted amendments, the Commit­ There were: First, maintaining the sup­ Sincerely, tee on Rules will understand if the ply of oil from Iraq: second, maintain­ LINDSAY THOMAS, amendments are not drafted in proper ing stability in the entire Gulf and its Member of Cnnaress. form due to the lack of availability of oil supply; third, ensuring Iraq's mod- February 24, 1992 CONGRESSIONAL RECORD-HOUSE 3171 eration in the Middle East peace proc­ met this criteria. It took interventions This decision was based upon the Ex­ ess; fourth, preventing the prolifera­ and constant pressure, often from high port-Import Bank Act requirement tion of missiles and nuclear, chemical, level State Department policymakers that there be a "reasonable assurance biological, weapons, and fifth, promot­ and even President Bush, to permit of repayment." ing the improvement of Iraq's human Iraq to utilize Eximbank programs. Over the next 7 years the State De­ rights record. Both the administration and Iraq saw partment and the White House would the Eximbank program as vital to their D 1220 pressure the Eximbank repeatedly to interests. For the United States, it pro­ gain access to guaranteed financing for The most important event early in moted United States technology sales, Iraqi projects. United States-Iraq relations was the and supposedly added stability to the The most prominent of these projects Reagan administration's removal of region by permitting the administra­ was an Iraqi oil pipeline with an outlet Iraq from the list of nations supporting tion to use the program to modify the at the Red Sea Port of Aqaba, Jordan. terrorism in 1982. By removing Iraq actions of Iraq. This contract alone was worth $1 bil­ from this list, the administration For Iraq, an Eximbank program lion for its contractor, Bechtel, the granted Saddam Hussein instant access would allow access to United States California engineering conglomerate. to United States agriculture assistance high technology goods, but most im­ Secretary of State George Shultz and and opened the door for Iraqi participa­ portantly, it would send a signal to Bechtel had a longstanding business re­ tion in Eximbank programs as well as other nations that the strongest coun­ lationship. As a matter of fact, Sec­ making sophisticated United States try in the world, the United States, retary Shultz came from Bechtel, and technology available to the Iraqi mili­ considered Iraq creditworthy. That he came back from Bechtel. He worked tary. would have the effect of opening up at Bechtel prior to becoming Secretary Starting in 1983 Iraq exploited its new sources of credit which in turn of State and, as I say and repeat, he newfound status by using CCC backed could be used by Iraq to sustain itself during the tough economic times went back immediately upon leaving credit to purchase $365 million in Unit­ the State Department. ed States supposedly agriculture prod­ brought on by its war with Iran. Under the Eximbank program, Amer­ Other high officials in the Reagan ad­ ucts. By 1990 the amount of United ministration involved in this project States Government guaranteed sales of ican exporters were insured against the risk of nonpayment by Iraqi purchasers including President Bush, the current supposedly agriculture products to Iraq under a short-term facility-that Deputy Secretary of State, Lawrence had grown to over $1 billion annually. means that the guarantee was usually Eagleburger, former Attorney General This policy not only fed the people of good for only 1 year. From the incep­ Ed Meese, former NSC Director Robert Iraq, which is fine and well, but it fed tion of the program in 1984 until March McFarlane, and former CIA Director the armies that Mr. Saddam Hussein 1986 when Iraq was suspended from the William Casey. At various times, every had been raising and had enabled him program, Iraq used the program to buy one of them contacted the Eximbank to wage war and prepare for additional United States agricultural products, to obtain financing for the Aqaba pipe­ war, and it helped to keep him in pesticides, small motors for air-condi­ line project. These officials all had one power. tioners, medical supplies, oil equip­ thing in common-they saw Eximbank It also assisted U.S. agricultural pro­ ment, and heavy machinery. The Iraqi financing as crucial to United States­ ducers who were down on their luck military also utilized the Eximbank Iraq relations. due to the farm crisis experienced dur­ program by purchasing 250 armored To illustrate that point consider the ing the first half of the 1980's. The U.S. ambulances and portable communica­ following: was not alone in pursuing this policy. tions equipment. A December 21, 1983, telex from the A lot of the credits that were fun­ While most of the transactions were U.S. interest section in Baghdad to the neled in the name of the agency in At­ relatively small, the largest trans­ Secretary of State says: lanta, B&L, actually went through, action approved by Eximbank was the We should give serious thought to offering roughly speaking, a syndication proc­ Aqaba oil pipeline project. Eximbank Eximbank credits. * * * New U.S. credits in ess, the Morgan Bank in Pennsylvania, guaranteed $484 million of the $1 billion combination with our CCC credits would which in turn went through multiple project led by the giant firm Bechtel. demonstrate U.S. confidence in the Iraqi other banks in Germany, France, an.d For unknown reasons this project was economy. other countries. But the total exposure never consummated, but later in this In a December 22, 1983, memo to Mr. by the time of the invasion in Kuwait presentation I will reveal that this was Lawrence Eagleburger, the State De­ in August of 1990 of Iraq to 10 major the first time then Vice President Bush partment's Richard W. Murphy says: Western creditors was over $12 billion. intervened at the Eximbank to win ap­ The U.S./Iraq political relationship could While Iraq's removal from the terror­ proval for an Iraqi project. be advanced by Exim financing which has ist list instantly opened the door for In March 1986, Eximbank suspended previously not been possible for political rea­ Iraq from its programs because of con­ sons. * * * Viewed in combination with CCC the sale of Government guaranteed ag­ credits already granted Iraq, an Exim ges­ ricultural exports to Iraq, the ability tinual payment problems. This suspen­ sion was effective until the Exim Board ture would go far to show our support for to utilize Eximbank programs was Iraq in a practical, neutral context. * * * more difficult. of Directors reopened for business with Iraq in July 1987. From July 1987 to Au­ In a letter to William M. Draper III, The Eximbank relationship with then Chairman of Eximbank, Lawrence Iraq, which began in 1984, has a long gust 2, 1990, the Kuwaiti invasion, Eximbank provided financial assist­ Eagleburger states: and checkered history. Eximbank I would like to bring to your attention the opened up for business not long after ance for 187 United States export trans­ actions totaling $267 million. important role Exim can play in furthering President Reagan removed Iraq from The chronology of the Eximbank de­ long range political and economic interests the list of nations supporting terror­ cisions to finance the Aqaba pipeline of the United States by being receptive to fi­ ism. There was no relationship prior to are extremely interesting and at the nancing American sales to and projects in that time because the Eximbank char­ Iraq. From the political standpoint, Exim fi­ same time, in retrospect, quite trou­ nancing would show U.S. interest in the ter prohibited the Bank for dealing bling. with terrorist nations. Iraqi economy in a practical, neutral con­ On March 16, 1983, the Secretary of text. This evidence of our interest in increas­ The Export-Import Bank Act states the Department of State, George ing commercial relations also will bring po­ that all transactions supported by the Shultz, received a memo explaining the litical benefits. Bank shall and I quote from the char­ Eximbank position regarding Iraq. The D 1230 ter, "* * * in the judgment of the same memo read, and I quote: Board of Directors, offer reasonable as­ Eximbank is discouraging the new inquir­ Mr. Speaker, at this time I would surances of repayment. * * *" But dur­ ies from U.S. exporters regarding Iraq be­ like to say that some documents that I ing the 1980's Iraq rarely, if evpr_ t.rnlv cause of the war's effect on Iraq's economy. have accumulated in support of what I 3172 CONGRESSIONAL RECORD-HOUSE February 24, 1992 am saying, instead of interspersing Previously I had reported that this later because of some independent dis­ them I will offer them at the end of B&L was instrumental in this financ­ covery they made somewhere, some­ this special order today for the ing, because as I said a little bit ear­ how, but which actually is repetitious RECORD. lier, these banks anymore than in the to what we have been placing in the These documents reveal that in 1983 case of Iran and the hostages, at the RECORD for my colleagues to have for then Under Secretary of State for Po­ bottom of all that is banking. Every­ more than 1112 years. litical Affairs, Lawrence Eagleburger thing that happens around the world Another fact I have previously re­ wrote to Export-Import Bank Chair­ and ever has happened, at the bottom vealed was that B&L was a client of man Draper urging the Export-Import of it is financing or banking. Just as in Kissinger Associates during the time Bank to open its program to Iraq, as I the cause of the Shah where one of our when Mr. Eagleburger and Mr. Scow­ have just stated. big banks in the United States had a croft, who is now the National Security In 1989, Mr. Eagleburger wrote the $10 billion exposure, and that is what Adviser, were directors of Kissinger As­ Treasury Department to express his the hostage taking was all about. What sociates. support for the $1 billion CCC Program people do not recognize is when the The beauty of this game is that these for Iraq. Remember, that $1 billion is hostages were released, the same day fellows can wear all kinds of hats and guaranteed by the taxpayers. They are that President Reagan took his oath of then they can come and wield all kinds going to have to shell that out. office on January 20, 1979, an official at of power. Then they can go back and Previously, I had reported that Mr. the Federal Reserve Bank in New York pick up that other hat that they had Eagleburger was the Director of the pressed a button and released about $3 temporarily not used. Yugoslavian LBS Bank just prior to his billion in London to Iran and then they Now, they are not elected. People confirmation as Deputy Secretary of released the hostages. So all of that is have no control over them, only State. I have already brought this out at this point in the background. It is through the President. on two occasions. I offered the docu­ not directly connected, other than the What would happen if we were to mentation. fact that it is the pattern that has ex­ have anything like that happen on a Mr. Eagleburger was instrumental in isted and against which activity that congressional level? Man, you would be getting LBS established in the United would be contrary to our national pol­ hearing the biggest ruckus ever. States. I wonder where that bank is icy is possible to happen without any What has not been revealed to date is now, the Yugoslavian. regulatory oversight on our part. Nei­ the following: Mr. Eagleburger who was I also reported that B&L was instru­ ther the Federal Reserve Board nor an active participant in United States mental in getting LBS established in these agency banks which are char­ policy toward Iran was involved in han­ the United States in that B&L was the tered by the States, the Atlanta Agen­ dling of the B&L scandal at the State largest source of funds for LBS, the cy of the Banca Nationale is a Georgia Department in 1989 to 1990. The com­ Yugoslavian Bank, and this comes State-chartered institution. mittee has also learned that B&L pro­ back to what I said awhile ago. Now, how in the world, as they found vided millions in credit to a firm called Something I will say now parentheti­ out in the stinkeroo that resulted from the Impex Overseas Corp. in New York. cally by way of explanation. When we these deals, can that State be equipped Impex, also a Yugoslavian firm, was in­ talk about these foreign entities, bank­ to adequately monitor and oversee that strumental in getting the Yugo auto­ ing entities doing business in the Unit­ entity? If the Federal Reserve Board mobile into the United States. Mr. ed States, there seems to be no percep­ cannot do it in the case of the parent Eagleburger was also a key figure in tion even among our monetary leaders bank in New York, how in the world the introduction of the Yugo into the that we are not dealing like we do with can a State regulatory commissiQn do United States. He is also a board mem­ an American banking system, a private it? ber of the Yugo Bank. So now he system. Almost every one of these So this is why we amended the law. I makes policy. He is the Deputy Sec­ banks are government owned. The had been advocating changes in the retary of State. He is not a lowly as­ B&L, for instance, is literally owned by international banking law, which inci­ sistant somewhere down the line. the Italian Government. Therefore, the dentally we first passed in 1978 as a re­ As National Security Director, Mr. Yugoslavian Bank from which Mr. sult of the hearings that I caused to Scowcroft is instrumental in carrying Eagleburger was on its Board and in­ bring about in San Antonio, TX. There out United States policy toward Iraq, tervening in the United States in be­ was not any law then. In 1978 we got a of course. half to help to get set up, dovetailing little law, but never adequate. We had I had reported earlier that Henry Kis­ with the fact that its financial nexus some amendments that strengthened singer was on the International Advi­ or background would be the B&L, a for­ it. My contention is that they are inad­ sory Board of B&L in Rome. eign-based entity owned by another equate, yes, and this is why we are A new revelation regarding Mr. government. going into it, because we have a legis­ Scowcroft is that while working under These are facts that are not factored lative purpose. We are not bringing out Mr. Kissinger and Kissinger Associates, in. The reason we are going into this, details in order that we can inten­ Mr. Scowcroft twice briefed the B&L and have for over l112 years, is that it tionally or with any kind of planned International Advisory Board for a fee. has everything to do with the fact that approach try to reveal somebody's em­ This Board meets in Rome. in our country we are the only country barrassment. We are here to show the of any consequence of any industrial sorry role and the breakdown that our D 1240 size that does not have any kind of reg­ regulatory system has been undergoing Mr. Kissinger also derived a fee. ulatory protection that will protect for decades in our country. Every time he sat and met, he would the public interest. After the war, after 1945, this whole get no less than $10,000. So, it was not We know we have over $800 billion of thing changed. We were no longer the a pro bono thing. He was an adviser of this kind of money in this country. still pretty much provincial country the Italian Government-owned bank, What we do not know is who knows we were. not a private bank like we are accus­ where it is going and how it is handled And at this point there is such a tre­ tomed to seeing in the United States. and how it is leveraged. Only a small mendous exposure to the national in­ BNL loaned over $4 billion in loans to chunk of that is highly leveragable terest that it behooves us to keep talk­ Iraq, $2 billion to the secret Iraqi mili­ from drug money laundering to such ing about it. It is not making any news tary procurement network. Also, BNL things as the procurement of sophisti­ stories. The newspapers have not was by far the largest bank participant cated weaponry and technology for picked up on this at any time, and we in United States credit programs for other countries that today may be off are not doing it for that reason. We are Iraq, financing over a billion dollars in that list, but tomorrow, who knows, as not issuing releases. We have had news­ the United States export guarantees to in the case of Iraq. papers that have picked up months Iraq. February 24, 1992 CONGRESSIONAL RECORD-HOUSE 3173 In fact, it was because of the BNL mittee on Banking, Finance and Urban repeating the error, believe it or not, scandal that the United States with­ Affairs, taking the time that he has this time in the case of Iran. There is held $5 million in CCC credit for Iraq in today to attempt to inform the Amer­ good reason and some evidence to show 1990. ican public about what I see as a very that here lately we have been sort of The BNL scandal also brought about serious problem. helping Iran to obtain quite a heavy the cutting off of the prime source of Mr. Speaker, I would observe that procurement of armament and weap­ funding to the Iraqi procurement net­ the newspapers across this country just onry. work. this weekend carried headlines raising What is the purpose? What does Iran Now, how did I come across this? questions about what President Bush want it for? That is a good question. That is very interesting, and his administration were doing in But at this time what I have seen, About 2 years ago, a little better the days and months preceding the that which I have seen in the news­ than 2 years ago, I believe it was, in Iraqi invasion of Kuwait. papers, has been pretty much tracking the Wall Street Journal, I picked up a The Kansas City Star. the paper that what we have been bringing out, par­ little, small item saying that $2 billion I read coming back from my district ticularly within the last year. worth of letters of credit had been is­ this weekend, carried a front-page We placed in the record, showing sued through an Atlanta bank to Iraq. story outlining a very, very troubling clearly that the Export-Import Bank Well, one thing that caught my at­ record of what I would have to call ap­ had been pressured. The CIA did do its tention was $2 billion? A bank in At­ peasement. job, but it was neutralized by higher lanta? What was this all about? I would just observe that I think it is orders. So, it took a long time before I could important for the appropriate commit­ Mr. Speaker, I yield further to the find out what it was and that it was a tees of this Congress and for the appro­ gentleman. Mr. SLATTERY. I just think the gen­ branch and what not. In the meanwhile priate press groups around the country tleman should be commended for bring­ other things happened unknown to me to really ask some very important, fun­ ing this whole matter to the attention that were focusing on the fact that a damental questions: Who was really ad­ of the American public and our col­ scandal was brewing, that there had vancing this policy of appeasement leagues here on the floor of the House. been a lot of cheating, lying, conniv­ with Iraq prior to the war? Who were As far as I am concerned, there are ing, and cooking of the books at this these people? Was it President Bush? some very fundamental questions that agency. Was it then-Vice President Bush in have been raised by the gentleman and And the question was: Did the bank years past? Was .it other aides in the also raised by press accounts all across headquarters in New York or in Rome White House? Or was it all of the the country. know? To this day they have an inves­ above? tigating committee of the senate, that These stories raise questions about 0 1250 is the Italian senate in Rome, Chair­ other agencies of the Government re­ These questions need to be answered, man Carta. sisting attempts, apparently coming and I think that the President of the It is funny how things work out in from the White House, to extend bil­ United States needs to explain to the life. I did not have the slightest notion lions of dollars in credit to Iraq. As far people of this country what he was that there were questions beginning to as I am concerned, this is a record that doing prior to the Iraqi invasion of Ku­ be raised about some of the mysterious is very troubling. wait, why he was so committed to this goings-on as far as the bookkeeping You know, I would observe to the policy of trying to appease Saddam was concerned with that agency. gentleman from Texas that the Presi­ Hussein, and that is about the only But in the meanwhile the Italian dent and the team around him like to word that I can think of to accurately Government has also been very con­ view themselves as experts in the area describe this policy, and, if the gen­ cerned and started, about that time, of foreign policy. Well, when one reads tleman recalls, even a few days prior to because the Italian taxpayers were also the press accounts of their record prior the Iraqi invasion of Kuwait we had a exposed to about 2 billion dollars' to the Kuwaiti invasion, it raises ques­ vote here on the floor of the House to worth on these letters of credit. tions about just exactly how much did extend the export enhancement pro­ So, when we finally did go into it, it they know. Where was the CIA? Why gram to Iraq, and the administration's was an election year, 2 years ago, and could not the CIA tell them what was position just a few days prior to the in­ we had the first hearing. Unfortu­ going on with Saddam Hussein? vasion was we did not dare offend Sad­ nately, and understandably, it was Just last night, the television pro­ dam Hussein, for goodness sakes, and right on the eve of the election and we gram "60 Minutes" ran a very, very re­ this was a man who was committing could not get much interest, but we vealing and troubling review of Sad­ atrocities against the Kurds and his had the first hearing. dam Hussein's treatment of the Kurds. own people, and apparently the CIA It was very important because we It just seems to me that the intel­ had knowledge of this. found out that the Justice Department, ligence community should have been I just think there are some very basic the Attorney General, Mr. Thornburgh able to provide our President with this and important questions here that de­ was very, very incensed that we would kind of information. mands answers, so I commend the gen­ dare have hearings on this matter. I Mr. GONZALEZ. The CIA, let me say, tleman from Texas [Mr. GONZALEZ] for could not believe it until he sent me a our records show-and the gentleman bringing this issue to the floor of the letter. First, he wanted to meet with is a member of the Committee on House, and I just hope that the appro­ me privately. I said, "No, I don't do Banking, Finance and Urban Affairs­ priate committees seize this issue, that." I never did. I am not the com­ and he will recall that in fact, I think, bring before them the officials in this mittee. I am just the chairman of the he joined us and we voted, all of us, for Government that had knowledge of committee. almost 100 subpoenas for documents. these policies. I would like to know So, if we have any kind of business We have not been able to get all of who was promoting these policies that like that, it is going to be discussed as them. The Federal Reserve Board it­ were dead wrong, and I would like to a matter of policy with the member­ self, for instance, kind of stonewalled know who was opposing these policies ship of the committee. us, and the State Department. in the administration at the time. I Mr. Speaker, I yield to the gentleman But we had subpoenaed the docu­ think the American public has a right from Kansas. ments that actually there was no rea­ to know that basic information. Mr. SLATTERY. I thank the gen­ son why they would not be public and I commend the gentleman from tleman for yielding, and I want to rise certainly they should be available to Texas [Mr. GoNZALEZ] for his interest today to say that I really deeply appre­ the Committee on Banking of the U.S. in this. ciate the gentleman from Texas [Mr. House of Representatives. But the fact Mr. GONZALEZ. Mr. Speaker, I deep­ GoNZALEZ], the chairman of the Com- remains that we are in the process of ly appreciate the gentleman from Kan- 3174 CONGRESSIONAL RECORD-HOUSE February 24, 1992 sas [Mr. SLA'ITERY] who is a very dis­ Iraqi network, and then showing where ters at this point in the privity of your tinguished member of the Committee some of the money, based on the exten­ confidence with other distinguished on Banking, Finance and Urban Af­ sion of the letters of credit, had been Americans. But we think that at this fairs. He has not been on it too long, diverted for the procurement of such point, no matter what decision would but, by golly, he came on board as if he things as that somewhat publicized be made, it would be colored by the was a long-time veteran of the Com­ giant gun, the inventor of which was very fact that we gained profit just a mittee on Banking, Finance and Urban assassinated in Belgium in the midst of few years ago from our dealings and Affairs, and I deeply appreciate this. its almost, if not actually, delivery to stimulating dealings with this country Let me say in all fairness that the Iraq. Well, the funding came through now that suddenly is an enemy coun­ subcommittee that our distinguished these devious mechanisms, or network try." colleague, the gentleman from North we call it, that actually originated in But that does not happen nowadays. Carolina [Mr. ROSE] , heads has and had America. It used to be we would have men in our been looking into the agricultural, the Well, one thing that those offices that, even if they disagreed with credit commity, aspect of the exten­ mutterings and those suspicions did do the President, not any conflict of inter­ sion of the letters of credit, and I think was to cut off the prime source of fund­ est, but just said, "I just can't go along they did not have an easy time getting ing, but that funding was going on, as with this policy," and they would quit; information and documentation either. the gentlemen from Kansas [Mr. SLAT­ they would resign. They still do it in And as far as the CIA is concerned, as TERY] brought out, right up to the eve Europe and in Britain. Ministers still my colleagues know, we voted subpoe­ of the invasion of Kuwait on August 2, quit because they do not agree with the nas directed to the CIA to see if they and earlier I read the memorandum prime ministers or whoever. would provide us with some documents. from this official Kelly in which even So, anyway, that is just a little aside They have been cooperative to a cer­ as late as June he was urging the pro­ that makes me wonder. I do know that tain extent, but we have not bothered. curement for Iraq. There is no doubt we have the ample evidence here that, We did coordinate with the Intelligence that Mr. Eagleburger and Mr. Scow­ regardless of the importance of the Ex­ Committee, but I do know that our croft continued to work on the United port-Import Bank, that all these offi­ records show that in some of the meet­ States policy toward Iraq despite their cials, including then-Vice President ings in which they had interagencies, past ties to BNL. Bush, were urging that the Bank go including the CIA, discussing the Ex­ This seems to me that, if we reached into, the evidence clearly showed at port-Import Bank guarantees, the CIA a point in our country where we have the time, and all the leading financial was present. They did indicate their to have conflict of interest spelled out, individuals in Exim, were to the effect chief financial officer, as I said a while and this is what I have said about all that Iraq was not creditworthy. ago, was saying it is not creditworthy, the code of ethics and what not: I do and what I am doing, and I will say this not care what laws we write. The Con­ 0 1300 a little bit later, I am asking the GAO stitution says we have to be 25 years of To illustrate that point consider the to look into that and find if this evi­ age at least in order to offer our can­ following: dence does not show that the Export­ didacy for the U.S. House of Represent­ A February 21, 1984, Eximbank coun­ Import Bank violated its charter be­ atives. If we have to wait after we are try risk analysis states: cause their charter mandates that they 25 to come up here and learn what is In the staff's opinion, due to both unsatis­ not provide credit unless there is a ethical and what is not, it is too late. factory country economic conditions and the very, very positive assurance that the I do not know of any code that is not possibility of physical damage to new ability to repay is there, and they going to be evaded by those that want projects due to the ongoing war, there would knew it was not. to. But it seems to me in this case not be reasonable assurance of repayment for where we have high policymakers, the any medium-term and long-term trans­ Mr. SLATTERY. Well, again I thank actions. * * * the chairman of the Committee on case where we have men on August 3 Banking, Finance and Urban Affairs, sending an expeditionary force at the A November 28, 1984, telex from the gentleman from Texas [Mr. GON­ time of a quarter of a million Ameri­ Baghdad to the Secretary of State said: ZALEZ], for his interest, and I look for­ cans, and without the Congress even From a look at estimates of Iraqi eco­ ward to working with him as we try to raising a whimper-now I am on nomic statistics one would have to conclude that the Iraqi economy has suffered a serious find some answers to some very impor­ record-I wrote our leaders. I even decline. tant questions that the American pub­ urged that they call the Congress into lic has a fundamental right to, espe­ session to consider that matter in Au­ On April 15, 1984, Eximbank denied a cially during this election year when gust 1990. But of course, as my col­ request to support exports totaling $159 this President is going to be asking the leagues know, why look upon myself as million to Iraq. Eximbank reasoned American public to send him back to being a big, earthshaking official, but I that the transaction did not meet the the White House based in large part on do think that there are basic principles legislative requirement of reasonable his performance in the area of foreign involved in this case, the Constitution, assurance of repayment. affairs. where the Congress has a cons ti tu­ But the Eximbank decision to limit I would just observe, when we learn tional duty incumbent upon it. its exposure to Iraq for practical and more about how we got into this mess I have always said, and I say it now, legal reasons was not welcomed at the in Iraq, there may be a lot of people in and I will always say it despite what­ State Department. this country that conclude, as I have ever is done: In the case of conflict of A March 8, 1984 telex from Baghdad concluded, that some of these people do interest, my goodness, if we have the to the Secretary of State says: not know as much about foreign affairs highest policymakers suddenly decid­ Exim's apparent decision against financing as they would like for the American ing to tell the President that he has major projects in Iraq has t.he potential to got to go to war over a country that critically affect vital United States inter­ people to think, and again I thank the ests. gentleman. just before they took that office they Mr. GONZALEZ. Mr. Speaker, I say were working for an outfit promoting A March 25, 1984, telex from Sec­ to the gentleman, "We 're going to need the very, very ability and help that retary of State to Baghdad states: your help, Mr. SLATTERY, and I really this country had to have in order to do Exim is not approving medium and long appreciate your very kind words." what they were declaring war about, it term credits to Iraq because of doubts re­ What happened, as a result of the seems to me the least they could do garding repayments prospects. We have questions that began to arise soon urged Exim to reconsider this policy in gen­ would be to say, " Mr. President, de­ eral. * * * We are seeking directly and after there were some very serious spite our willingness and our ability, through the NSC to ensure that [one] deci­ problems arising because of an Ohio we want to advise you that we think sion does not prejudice future consideration plant that was being used as part. of the vou ought to get advice for other quar- of credits for the pipeline. February 24, 1992 CONGRESSIONAL RECORD-HOUSE 3175 Given the Eximbank's reticent posi­ their minds. The people I know and I For 18 months prior to the Board ap­ tion regarding Iraq, the State Depart­ met, from one end of the country to proving the new $200-million credit pro­ ment raised the stakes by getting then the other, want the truth. If they know gram, Iraq was suspended from Vice President Bush involved in the the truth they can judge the Eximbank programs for constant ar­ project. unpalatability and the unpopularity of rearage. At one time during this period The Vice President's staff asked the the political issue. But they are going Iraqi arrearage reached over 60 percent State Department to prepare a back­ to be above all grateful for being in­ of its outstanding commitments with ground paper for a phone call to formed and know the truth, so that the Eximbank. Eximbank Board Chairman William they can determine their basic duties Several times during 1986 and 1987, Draper concerning Exim financing of as freeborn American citizens, still the country risk analysis section of the the pipeline. with some vestige of our processes in­ Eximbank made the determination The memo states: volved, but which, I fear, unless we that Iraq did not offer a reasonable as­ Given the importance of these projects to work at it, are not self-perpetuating surance of repayment. The strongest our overall policies in the region, Deputy and will not be ensured for our poster­ analysis came in a May 5, 1987, memo Secretary Dam is calling (Eximbank Chair­ ity. to the Board. I would like to place that man) Mr. Draper to reiterate our foreign pol­ But if informed, and only on the icy interests. * * * We understand that Na­ memo in the RECORD along with the tional Security Advisor McFarlane may also basis of information, can that citizen other documents. call Draper. A call by the Vice President participating in his fundamental duty The memo, sent to the Board on May would be particularly useful in confirming exercise judgment and function, as the 5, 1987, states: the Administration support for these Constitution says we should, properly Eximbank should remain off-cover for all projects. * * * and knowledgeably. programs concerning Iraq. One of the talking points prepared This was not the last time the State There could be no mistaking the for the Vice President's call states: Department would recruit Vice Presi­ facts-Iraq was not creditworthy and Eximbank could play a crucial role in our dent Bush to assist Iraq with the that fact did not change between May efforts in the region. Early and favorable ac­ Eximbank. 5 and May 15. tion on applications would be clear and very CHRONOLOGY OF THE 1987 DECISION TO RE-OPEN Another example, is an April 17, 1987 welcome evidence of U.S. commitment to FOR BUSINESS IN IRAQ these objectives. analysis of Iraq's creditworthiness. At this time I would like to place in This analysis asserts that "* * * there Clearly, the highest levels of the ad­ the RECORD a February 26, 1987, memo would not be sufficient, Iraqi, earnings ministration placed tremendous impor­ that contains talking points and back­ to meet all principal repayments until tance on the Aqaba pipeline project. On ground for Vice President George 1990" and that, "Iraq's creditors will June 19, 1984, the Eximbank's Board Bush's phone call to Eximbank Chair­ reschedule debt payments for the fore­ met and not surprisingly approved a man John Bohn. The memo was pre­ seeable future." preliminary commitment of $484 mil­ pared by the State Department and it lion for the Aqaba pipeline for Bechtel. was related to the State Department's 01310 As a side note, the report read: desire to give Iraqi Ambassador Nizar That reminds me of what happened Under normal peaceful circumstances, this Hamdoon the news that the United after World War I. As a matter of fact, project would not be economically viable. States would make hundreds of mil­ I brought this out years ago in special Can you imagine that? Under normal lions of dollars of credit available via orders. I would bring this up. Nobody circumstances this project would not the Eximbank. would listen, but they are on the be viable. Oh, but it involves Bechtel. In short, the memo reveals that the record. How right after the war and by But Bechtel, as President Eisenhower State Department suggested that the the time we got to the famous Hoover said, is a mighty component of this Vice President call Eximbank's Chair­ moratorium on the payment of repara­ great industrial defense complex, man in order to urge him and his col­ tions from Germany to the Allies and which in effect has been determining leagues on the Eximbank Board to give the Allies' moratorium on the payment policy for our country, and particu­ favorable consideration to Iraq's re­ of their debts to us, which were never larly in the last two administrations. quest for an additional $200 million in collected, but these countries like Ger­ So wherein is the public protected? If short-term credit. The memo was also many and Japan, the Imperial Govern­ the Congress abjectly sits by and says, intended to point out the advantages ment of Japan. "Well, we can't bother too much with for United States policy of a quick In 1921, it floated, I forget how many it; after all, this is private enterprise." Exim decision to resume short-term in­ millions, about 20 million, which at Let me remind my colleagues, Hitler surance coverage to Iraq. that time was a lot of money in that had private enterprise until the day he On May 15, 1987, in a surprise move, kind of dollar at that time. Twenty died in that bunker in Germany. He did and against the advice of the million in 1921 would be like several not have free enterprise, but he had Eximbank professional staff, the billion today or more. private enterprise. Eximbank Board of Directors reversed What they did, they floated Japanese So let us talk clear from here on out, its policy and approved a new Imperial Government bonds in the Wall my colleagues. Because what is at $200,000,000 short-term credit program Street stock market. Germany did the stake at this time, and this is just a for Iraq. same thing. They borrowed. small little, little, little bit of the This is credit that has not been made Now, the banks at that time in our overall complex.ity of the crisis that good and for which under our laws and country could borrow from the Federal our country is perilously hanging on responsibilities the taxpayer must end Reserve at about 5 percent. So where the precipice. At stake is everything. up paying for. did they put all that money they were At stake is our economic and financial Could it be that a call from the Vice getting from the Fed? They were not freedom. Not just the leadership, but President could sway the Eximbank loaning it out any more than they are the freedom of our country and our Board into reversing its policy on Iraq? today. They were putting it in the children and grandchildren, as well as Given the very severe doubts about stock market where they would get what is involved inextricably, the Iraq's financial condition it is hard to yields of 12 percent. Pretty good. There vaunted American standard of living. draw any other conclusion. In order to was a 7 percent spread. This is what is at stake. We are much better understand the Board's decision, But what happened was that then as closer to the brink and the precipice I will provide ample evidence that now, it was a highly speculative and than wants to be acknowledged. If peo­ Iraq's precarious financial condition controlled manipulation. ple in power are afraid to tell the truth indicated that it did not offer a reason­ So the Japanese Imperial bonds, like to the people because it is not that able assurance of repayment as called these repayment schedules, they were they feel acceptable, let me disabuse for in the Eximbank charter. to mature in 20 years in 1941. Well, that !J[J-050 0 -96 Vol. 138 (Pt. 3) 10 3176 CONGRESSIONAL RECORD-HOUSE February 24, 1992 is when they bombed Pearl Harbor. So leaning in the direction of granting the $200 GAO REPORT we have learned nothing. We are like million for Iraq. At this time I would like to say that the old Bourbon Kings. Even though we The State Department had won the I will write to Comptroller General are a democracy, we are no different. war to get Eximbank coverage for Iraq: Charles Bowsher requesting that GAO We learned nothing and we forget noth­ On May 17, 1987 Ambassador Newton investigate whether or not the ing. stated that Eximbank's decision: Eximbank Board's decision to reopen Right now, as I said earlier to the Contained the best economic news we have for business in Iraq was in violation of gentleman from Kansas [Mr. SLAT­ received in a long time. Despite . the its charter. There appears to be ample TERY], we are in the process of repeat­ limitations * * * Exim's decision will help evidence to indicate that despite re­ ing the mistake not with Iraq again us politically and help American business de­ velop its foothold in the Iraqi market. peated warnings that extensions of this time but with Iran. We will bring credit to Iraq did not offer reasonable out some documentation. The State Department's actions in assurance of repayment, the Eximbank Fortunately, I do not think it in­ 1987 were not an isolated incident. The Board approved the Iraqi program any­ volves any of our entities that have ju­ days between the 1987 Board decision way. risdictional potential for us on the and the Iraqi invasion of Kuwait pro­ During the 1980's Iraq rarely, if ever, Committee on Banking, Finance and duced much of the same for the truly met the reasonable assurance of Urban Affairs. Eximbank-Iraq relationship. While repayment criteria. In retrospect, it That some amtlysis goes on to say: Iraq's financial position did not change took constant pressure from the State Eight of the 12 major (countries) were "off­ materially during this period, the Department and interventions from cover" for medium- and long-term business State Department continued to pres­ high level Reagan and Bush policy in Iraq and six were "off-cover" for short­ sure the Eximbank to extend its pro­ makers to get Eximbank to permit Iraq term business. Most member countries re­ gram with Iraq. This strong support for to utilize its ~rograms to achieve pol­ ported delinquencies. Iraq occurred despite Iraq's use of poi­ icy objectives that were shifting, mud­ In fact, by January 1, 1987, just son gas to exterminate thousan.ds of Kurdish people and extensive evidence dled, and ultimately that worked months before the Board's decision, against our own national interest. Iraq had defaulted on a total of $240 that Saddam Hussein had stepped up Mr. Speaker, I include for the million in loans to various major West­ efforts to build weapons of· mass de­ RECORD the materials to which I ern governments. Delinquent loans in­ struction. Working to change the Eximbank referred. creased from $70 million at yearend U.S. DEPARTMENT OF STATE, 1985 to $730 million at yearend 1986. policy on Iraq in 1987 was not the last Washington, DC, December 22, 1983. Not surprisingly, in the months fol­ time. the State Department worked To: P-Mr. Eagleburger. lowing the Board's approval, Iraq again with Mr. Bush to permit Iraq to con­ From: NEA-Richard W. Murphy for became delinquent on its previous ex­ tinue utilizing Eximbank programs. Subject: Exim Bank Financing for Iraq. posure to Eximbank. On top of that, in THE EXIMBANK WAIVER ISSUE a July 2, 1987 memo to the Exim Board, On January 17, 1990, President Bush Whether to sign a letter to Exim President it was revealed that the Treasury De­ issued a determination waiving the leg­ Draper recommending· that Exim approve fi­ partment had concerns over Iraqi cred­ islative prohibition on Eximbank fi­ nancing for Iraq. itworthiness. nancing for Iraq. Just 2 months earlier, ESSENTIAL FACTORS Now comes .the Treasury. Remember, Congress had passed sanctions legisla­ Exim currently opposes loans to Iraq be­ we heard the State Department inter- · tion specifically singling out Iraq for cause it considers that loans to Iraq lack a vening, the Vice President. Now we its atrocious human rights record. reasonable expectation of repayment. Exim have the Treasury. The State Department was working points to Iraq's recent rescheuuling of com­ on the Iraqi waiver even before the mercial contract payments, large transfers The State Department recruited oth­ from Gulf governments, decreased oil pro­ ers besides Vice President Bush to help Congress passed the legislation on No­ vembei:. 21, 1989. At the time the atro­ duction and the drop in Iraqi reserves to sup­ it sway the Eximbank Board. A com­ port its view. In addition, Exim is concerned munication from Ambassador Newton cious Iraqi human rights record was about the threat of war damage. to the Secretary of State says: well known, but what was kept for Exim has virtually no exposure in Iraq be­ most of the Congress was the degree to We know you are doing all you can on this cause, until' recently, Exim was precluded and assume appropriate economic offices which Iraq·was building up its military from doing business with Iraq in light of that have been mobilized to help get Exim to re- arsenal even though its war· with Iran country's involvement with terrorists. .. sume cover. had long ago ended. Recent analysis of Iraq's economic situa­ At the time of the sanctions debate tion indicates that the crisis situation which As another example consider an April prevailed during the early part of 1983 has 28, 1987 cable from the Secretary of the State Department had extensive knowledge .of Iraq's efforts to develop been alleviated somewhat ·through imposi­ State Shultz to the United States Am­ tion of an austerity program which included additional chemical, biologieal, and cutbacks in development projects and major bassador i:h Iraq, in which the Sec­ nuclear weapons along with the mis­ retary states: cuts in imports. As a consequence, Iraq's es­ siles to deliver those weapons. In addi­ timated net foreign assets for 1983 are $11 bil­ It . may be that arguments from State, tion, the State Department was aware Commerce, and Agriculture and . elsewhere lion although the current account balance is-$9 billion for the year. In addition, Iraq have made themselves felt. that Iraq had a secret military pro­ curement network operating in Europe has been successful in obtaining supplier Remember, this is our Secretary of and even in the United' States. Had the credits and deferred payments for ongoing State, but he also could be the Sec­ Congress been fully informed aboµt projects. Current payments on these cl'ebts retary for Bechtel. these issues, the waiver authority are being met. If present policies and exter­ The strategy of getting Vice Presi­ nal financing are sustained, the current ac­ probably would not have been made count should be roughly in balance, but fur­ dent Bush involved in the Eximbank available to the President. issue paid off handsomely. Reflecting ther rescheduling is a possibility. At this time I would like to place in Iraq's financial condition will remain de­ upon the Eximbank Board meeting the RECORD a memorandum prepared pendent on petroleum export earnings and where the Iraq credits were discussed by the State Department that illus­ aid from the Gulf states. Iraq is determined in detail, agency documents remark: trates their thinking about Iraq sanc­ to achieve alternative outlets for its petro­ The Exim staff presented an economic tion,s. The memo ·continues t o express leum exports in addition to the pipeline forecast in keeping with their recommenda­ the sentiment that the State Depart-. through Turkey (capacity 750 ,000 bid) . Iraq tion against ex.tending new credit to Iraq. ment could use the $200 million expects to increase its oil export capacity However, Eximbank Board members asked a through Turkey to just over 1 million bid in number of questions which seemed to imply Eximbank program as an incentive for the spring of 1984 with a possible additional an interest in doing business in moderating Saddam Hussein's behav­ 50% increase in exports by the end of 1984. Iraq. * * * several key Board members,• in­ ior. Obviously, that thinking was Cash transfers from the Gulf states to Iraq, cluding Eximbank President Bohn wflrP. flawed. at least $30 billion since the start of the war, February 24, 1992 CONGRESSIONAL RECORD-HOUSE 3177 have been and will continue to be important Iraqi economy in practical, neutral context. decision to give preference to Exim-insured to Iraq. For the Gulf States, there appears to It could provide some incentive for Iraq to debts, and its long-term potential, we believe be no alternative to a continuation of this comply with our urgings that it show re­ that Exim should give favorable consider­ aid flow because of their dependence upon straint in the war. This evidence of our in­ ation to resuming short-term credit insur­ Iraq to resist export of the Iranian revolu­ terest in increasing commercial relations ance for Iraq. The Exim Board plans to meet tion. also will bring political benefits, as well as soon to decide the issue. There is the possibility, on the political balance-of-trade and employment benefits to We recommend that, before meeting with side, that internal frustrations resulting our economy. Hamdoon, you telephone Exim Chairman from economic deprivation and a seemingly Sincerely, Bohn to point out the advantages for U.S. endless war may produce problems for the LAWRENCE S. EAGLEBURGER. policy of a quick Exim decision to resume government. On the military front, Iraq has short-term insurance cover to Iraq. As ap­ suffered limited setbacks on the northern U.S. DEPARTMENT OF STATE, propriate, you could then review the results front. It is uncertain how long the status quo Washington, DC, February 26, 1987. of your call to Bohn during your conversa­ can be maintained by Iraq in its confronta­ MEMORANDUM FOR MR. DONALD P. GREGG, THE tion with Hamdoon. tion with a much more populous Iran as long WHITE HOUSE 2. LICENSING FOR HIGH-TECH U.S. EXPORTS TO as Iran exports three times as much oil as Subject: The Vice President's March 2 Meet­ IRAQ Iraq. , ing with Iraqi Ambassador Nizar Commerce licenses for some high-tech U.S. DISCUSSION Hamdoon. exports to Iraq have been held up for ex­ The U.S./Iraq political relationship could The Department forwards herewith addi­ tended periods because of DOD concerns, pu­ be advanced by Exim financing which had tional background material which may be tatively about the risk of diversion to the previously not been possible for political rea­ useful for the Vice President's March 2 meet­ Soviet bloc. From the Iraq perspective, the sons. EJ!:im financing would benefit U.S. ing with Iraqi Ambassador Hamdoon. This long delays appear to be capricious. We agree manufacturers and workers and could serve material, supplementing the memorandum with that assessment. marginally to bolster the Iraq economy by of February 14 on the same subject, covers Licensing procedures are under inter­ freeing resources for use elsewhere in the issues which Hamdoon may raise during the agency review at present, and we may be country. Most importantly, Exim financing meeting. able to give the Iraqis and other interested would signal our belief in the future viability Since Hamdoon is planning to introduce trading partners more complete guidance of the Iraqi economy and secure a U.S. foot­ the issue of Exim credit insurance for Iraq, soon. In the meantime, we can point to hold in a potentially large export market. the Department strongly recommends that, progress on a few specific cases: After exten­ Viewed in combination with CCC credits al­ before meeting with Hamdoon, the Vice sive discussions with State and DOD, Com­ ready granted Iraq, an Exim gesture would President telephone Exim Chairman Bohn to merce has issued long-pending licenses for go far to show our support for Iraq in a prac­ discuss the issue. We believe the Vice Presi­ two high-priority scientific projects, includ­ tical, neutral context. This would be espe­ dent should emphasize to Bohn the advan­ ing one at the Iraqi Space and Astronomical cially important in the absence of other sub­ tages for U.S. regional policy of resuming Research Center. stantial U.S. gestures, to ease the military short-term credit insurance for Iraq. Rec­ pressures of the war, and would provide some ommended talking points for that call to TALKING POINTS FOR THE VICE PRESIDENT'S incentive for Iraq to comply with our Chairman Bohn are attached. CALL TO JOHN BOIIN (EXIM CREDIT INSUR­ urgings that it show restraint in widening MELVYN LEVITSKY, ANCE FOR IRAQ) Executive Secretary. the war. EXIM CREDITS FOR IRAQ Although Iraq's economy is confronted with significant problems, we are guardedly MEETING WITH IRAQ AMBASSADOR NIZAR Iraqi Ambassador Hamdoon is calling on optimistic regarding Iraq's ability to man­ HAMDOON, MARCH 2, 1987 me soon, and I expect him to raise the issue age these problems through 1984. (Issues to be Raised (if Introduced by of short-term Exim credit insurance for Iraq. Hamdoon)) I would like to be as responsive as possible. RECOMMENDATION 1. EXPORT-IMPORT BANK CREDIT INSURANCE FOR I understand that the Iraqis have resolved That you sign the letter attached at Tab 1 IRAQ some outstanding arrearages to Exim, and recommending that Exim consider financing In September 1985 Exim offered Iraq a Con­ that the Exim Board will decide soon wheth­ for Iraq. Our Interests Section endorses this tinuing Guarantee Agreement (CGA), which er to resume short-term credit insurance for recommendation. (Baghdad 3134 attached). would have supplemented the short-term Iraq. I urge you and your colleagues on the credit already available to Iraq with $50 mil­ Board to give that favorable consideration. U.S. DEPARTMENT OF STATE, lion in medium-term credit insurance. The As you know, there are major U.S. policy Washington, DC, December 24, 1983. Iraqis unceremoniously turned down Exim's considerations at work on this issue. Iraq Hon. WILLIAM H. DRAPER III, offer of a CGA, professing to be insulted by has apparently contained the latest Iranian President and Chairman, Export-Import Bank the small amount of money called for in the offensive, and we are taking advantage of of the United States, Washington, DC. agreement. that to try to put some life into peace ef­ DEAR BILL: I would like to bring to your Shortly thereafter, the plunge in oil prices forts. Exim's support for continued trade attention the important role EXIM can play seriously set back Iraq's financial situation. with Iraq would be a powerful, timely sig­ in furthering long range political and eco­ During 1986 the Iraqis missed payments on nal-both to Iraq and to the Gulf Arab nomic interests of the United States by loans from several Western governments, as states-of U.S. interest in stability in the being receptive to financing American sales well as on letters of credit to suppliers from Gulf. to and projects in Iraq. a number of countries. Although in the near term Iraq will con­ I understand that there were legal con­ Among the unpaid L/Cs in 1986 were several tinue to face financial stress because of the straints on EXIM financing for sales to Iraq insured by Exim. Under those circumstances, war, Iraq's prospects for the medium- to arising from Iraq's links to international Exim stepped back from its offer of a CGA long-term are good, considering the coun­ terrorists. Recently, the President of Iraq for medium-term credits, and stopped ap­ try's vast oil reserves. Now is the time to announced the termination of all assistance proving short-term credit insurance for Iraq begin building a solid trade relationship with to the principal terrorist group of concern, as well. Iraq for the future. among others. Iraq then expelled this group In the fall of 1986, Iraq's Rafidain Bank and its leader. The terrorism issue, there­ began singling out Exim-insured L/Cs for re­ U.S. DEPARTMENT OF STATE, fore, should no longer be an impediment to payment, and we understand that Rafidain Washington, DC, November 8, 1989. EXIM financing for U.S. sales to Iraq. has now paid all overdue L/Cs insured by To: The Acting Secretary. Although we cannot know when the heavy Exim. Moreover, by means of improved in­ Subject: Letter to Treasury Deputy Sec­ burden of war will be lifted from the Iraqi ternal procedures and bilateral debt resched­ retary Robson on a CCC Program for economy, the threat of economic crisis has uling arrangements with creditors in third Iraq. receded. A strict austerity program, supplier countries, the Iraqis have begun to regain In our conversation earlier today, Depart­ credits, foreign government project financ­ some measure of control over;their financial ment of the Treasury Deputy Secretary John ing, and continued financial assistance from situation. Their short-term financial situa­ Robson asked that you send him a letter out­ the Gulf states should continue to sustain tion is still difficult, but-with their great lining the policy reasons for which State the oil export capacity by 30% to one million long-term potential based on vast oil re­ strongly backed USDA's proposal for a full, bid in the spring of 1984, and has plans well serves-they should be able to manage in the billion-dollar program of Commodity Credit advanced for an additional 50% increase in short term, with an eye to reconstruction Corporation (CCC) credit guarantees, with its oil exports by the end of 1984. when the war winds down. safeguards, for Iraq. Attached is a letter for From the political standpoint, EXIM fi­ Considering Iraq's success in continuing your signature that outlines those policy nancing would show U.S. interest. in the the latest Iranian offensive, its clear policy considerations. It essentially follows the 3178 CONGRESSIONAL RECORD-HOUSE February 24, 1992 talking points provided for your telephone Reality: Because its debt has a short matu­ cause Baghdad believes that we too will conversation with Mr. Robson. rity structure, Iraq cannot pay all its debt eventually commit to larger and larger pro­ RECOMMENDATION service. Moreover, Iraq has an attitude prob­ grams of long-term credit. lem regarding foreign debt. Iraq only fully Myth #10: Iraq is no less creditworthy than That you sign the attached letter to Dep­ other heavily-indebted countries where uty Secretary Robson. repays creditors who offer large new loans. If creditors don't offer new loans, Iraq simply Eximbank is open. Attachment-Proposed letter to Deputy Reality: Creditworthiness has two compo­ Secretary Robson. fails to pay, and demands bilateral resched­ uling arrangements involving oil barter. nents, ability and willingness. In the long run, Iraq may have greater ability to repay U.S. DEPARTMENT OF STATE, This strategy permits Iraq to secure project financing, as well as pure BOP assistance. than many countries. However, Iraq has Washington, DC, November 8, 1989. demonstrated a clear unwillingness to adopt Hon. JOHN E. RoBSON, Myth #4: Iraq hit rock-bottom in 1986; since then, Iraq's finances have already got­ normal debtor-creditor relations. Iraq is Deputy Secretary of the Treasury, Washington, more aptly compared to Peru (which pays DC. ten a lot better. Reality: The oil price collapse (and Iranian when it wants to), than to Yugoslavia (which DEAR JOHN: Further to our discussion, on makes a valiant effort) or Argentina (which foreign policy grounds we support the De­ military victories) of 1986 took the Iraqis by surprise; for a time, they weren't even an­ at least pays lip service to the IMF and the partment of Agriculture's proposal for a full, Paris Club). billion-dollar program of Commodity Credit swering communications from creditors. Corporation GSM-102 export credit guaran­ Today, they are better organized, but within an Iraqi context. Iraq has become more so­ IRAQ COUNTRY REVIEW UPDATE tees in FY 90, with adequate safeguards, for (October 10, 1989, Eximbank Country Review) Iraq. phisticated in its calls for bilateral In addition to the near-term benefits for reschedulings, and in its cultivation of po- · Since our April and June 1989 Country Re­ agricultural sales, the CCC program is im­ tential creditors (such as Exim). views, Iraq's ability and willingness to repay portant to our efforts to improve and expand Myth #5: Iraq's financial problems are tem­ foreign obligations appears not to have our relationship with Iraq, as ordered by the porary; when the next oil pipeline opens up, changed appreciably. Unable to service all of President in NDS-26. Iraq is a major power things will get better. it debts, Iraq only pays creditors who it be­ in a part of the world which is of vital impor­ Reality: Pipeline capacity has more than lieves are willing to increase their exposure tance to the United States. Our ability to in­ tripled since 1984, without significant effect continuously. Recent events confirm this fluence Iraqi behavior in areas from Lebanon on total oil revenues. Weak oil prices, caused analysis. to the Middle East peace process to missile in part by Iraq's larger output, offset volume ECGD-once Iraq's "most favored" credi­ proliferation is enhanced by expanded trade. increases. In the long run, oil revenues will tor-has suspended its S600 million 1989 pro­ Also, to realize Iraq's enormous potential as depend on Iraq's ability to influence OPEC tocol because of major arrearages. Iraq was a market for U.S. goods and services, we decisionmaking, to the detriment of mod­ to repay over S400 million in 1989, but per­ must not permit our displacement as a major erates like Saudi Arabia. Iraqi attempts to mitted arrears because ECGD refused to con­ increase oil export vol um es may lead to sider a large increase in its program. trading partner. Because of arrears this year, CCC's Sl bil­ With regard to the real concerns which lower world oil prices and thus dampen arise from the investigation into the oper­ Iraq's own oil revenues. lion program has occasionally been. sus­ Myth #6: The end of the war with Iran, and pended. Iraq permits arrears to CCC in spite ations of the Atlanta branch of the Banco of the program's size and attractive terms. Nationale de Lavoro, we have received from thus of Iraq's financial problems, is just the Government of Iraq a pledge of coopera­ around the corner. Because of their concerns about Iraqi finan­ Reality: The "cease-fire" does not guaran­ cial behavior, the Fed and Treasury want tion. Our intention is to hold Iraq to this CCC to scale back this program. commitment and to work with the Depart­ tee an effective peace accord. Even if the war Other export credit agencies- COFACE, ment of Agriculture to ensure that the prob­ with Iran should formally "end", Iraq is not likely to ignore the continuing threats posed MIT!, and SACE-are off-cover or suspended lems with the program in the past are fully for medium- and long-term credits. Only resolved in a new program. The safeguards by Iran and the Kurds, and will not dras­ HERMES has a medium-term program, but proposed by USDA, including disbursement tically reduce military spending. Further­ more, Iraq will undertake a costly recon­ it is smaller than Exim's short-term pro­ of the CCC guarantees in tranches, buttress gram. Like Exim, most agencies now operate the program and merit our backing. struction, at the expense of debt repayment. To sustain the benefits of playing one credi­ only on a revolving basis-providing cover I appreciate your support in this connec­ only as Iraq makes payments. tion. tor off the next, Iraq will avoid a multilat­ The BNL incident-which may have in­ Sincerely. eral Paris Club rescheduling, and continue to volved criminal behavior by both BNL and LAWRENCE S. EAGLEBURGER, use default as a device to secure continued Iraqi officials-raises additional doubts Acting Secretary. financial assistance. about the nature of Iraq's financial behavior. Myth #7: Closer ties between the U.S. and Iraq does not wish to repay already-dis­ MYTHOLOGY ABOUT IRAQ Iraq will ensure Exim repayment, even if bursed L/Cs unless disbursements are made Myth #1: Iraq is one of the largest markets other creditors are not being paid. on promised L/Cs, even those issued illegally. for U.S. exports in the developing world. Reality: Relations between Iraq and the In spite of growing international pressure, Reality: The myth of the Iraqi market is U.S. are not guaranteed to be warm, because Iraq continues to refuse to undertake a·mul­ based on two or three years of huge imports the principal U.S. interest in the region is tilateral rescheduling exercise through the around 1980. The Iraqi market was not not in supporting Iraq's objectives (a peace Paris Club. Paris Club reschedulings would among the largest before that, nor is it now. settlement which favors Iraqi border claims, force Iraq to treat creditors equally, and Iraq in 1987 was the 28th largest importer (of and an end to the Kurdish threat), but in would require international scrutiny of civilian goods) among non-OECD countries. ending the Gulf War. Even if the U.S. offered Iraq's economic situation and priorities. U.S. An end to the war alone does not imply a fi­ political and material support to Baghdad, policy requires multilateral reschedulings nancial bonanza for Iraq. The conditions ex­ Exim repayment is still not guaranteed. Iraq (see attached NAC policy). isting in 1981-simultaneous 4 mb/d produc­ does not fully repay countries (such as The BNL incident has revealed the extent tion and S30 per barrel oil- will not return. France, Italy, Japan, or Turkey) which have of Iraqi efforts to attract Western financial Any dramatic increase in imports depends on been important to Iraq's military or eco­ support for Iraq's military industrialization the uncertain prospect of substantially high­ nomic effort, because Iraq believes these program. Iraq is pursuing technologically ad­ er oil revenues and the willingness of credi­ creditors have already received a paycheck vanced, import-substituting, dual civilian­ tors (such as Exim) to finance the creation of in the form of greater access to the Iraqi military industrialization, possibly in viola­ a larger Iraqi market. market. Iraq will view Exim credits as some­ tion of Western export restrictions. Myth #2: Because of its vast oil reserves, thing the U.S. does in its own self-interest Iraq's oil revenues cannot cover Iraq's am­ Iraq must be a highly creditworthy country. not in Iraq's. ' bitious industrialization plans. Even before Reality: Large oil reserves do not imply Myth #9: Iraq pays CCC; the Iraqis believe the recent completion of a second Saudi high oil revenues. Oil revenues depend on oil we're all one government so they'll repay us, pipeline, Iraq had ample pipeline capacity; export capacity and oil prices. In spite of too. however, its OPEC quota permits no room valiant efforts to boost oil export capacity, Reality: Iraq pays CCC, and two other ex­ for additional oil exports. Any Iraqi attempt Iraq's oil revenues remain at half their level port credit agencies, because they have been at overproduction risks retaliation by other of the early 1980s. Neither oil export capac­ offering consecutively larger programs of OPEC members and a revenue-offsetting ity, nor oil prices, are guaranteed to work in new medium-term credit. Nizar Hamdoon price collapse. Iraq's favor in the future. and other sophisticated observers of the Iraq continues to cajole export agencies Myth #3: Iraq is perfectly willing to repay American scene know that Exim and CCC do through offers of lucrative contracts to ex­ creditors; it just does not have the ability to not speak with the same voice. If Exim be­ porters, friendly visits, and promises of fa­ repay right now. comes a " favored creditor", it is only be- vored creditor status. February 24, 1992 CONGRESSIONAL RECORD-HOUSE 3179 MEMORANDUM TO THE BOARD OF DIRECTORS, cover in December after two months of sig­ the sale of satellite and computer tech­ MAY 4, 1987 nificant (and clearly non-technical) arrear­ nology to China. They based this relax­ COUNTRY LIMITATION SCHEDULE ages. So far. the suspension has not resulted ing, lifting of sanctions, on China's RECOMMENDATION: IRAQ in any catch-up payments by Baghdad. word that they would abide and sign Background and Country Summary The French Finance Ministry has been ap­ proached to reschedule interest payments the Missile Control Technology Re­ Eximbank has been "Off Cover" for all falling due on already twice rescheduled gime. transactions since March 1986 when it ended debts. The French recently conducted a poll This is a blow to the reformers in FCIA insurance coverage under letters of of export credit agencies to explore methods China because once again, without credit from Bank Rafidain and the Central of negotiating payment from the Iraqis. much evidence, the administration has Bank of Iraq because Bank Rafidain became However, COFACE is very nearly at the delinquent. At the highest point these ar­ sided with the hardline regime in point of saying "enough is enough", and China. rears amounted to just over $5 million. Some going off cover even for short-term credit. claims were paid. Commencing in late 1986, This spring Li Peng, the current Pre­ the Iraqi Government made payments on the Other creditors-EFIC of Australia (pre­ mier and China's preeminent hardliner, delinquencies and brought the payments cur­ viously a favored creditor), EDC of Canada, HERMES of West Germany, OeKB of Aus­ the man who ordered the massacre of rent by February 18, 1987. Rafidain's letters tria, and Japan's Marubeni, Mitsubishi, and Tiananmen Square in June 1989, will of credit became over due again on March 17, Sumitomo trading houses-also report sig­ face a Party Congress which is rumored 1987, but subsequent payments of $1.9 million nificant new arrearages under previous bilat­ to be antagonistic to his hardline eco­ brought the account current on April 13, eral rescheduling agreements. 1987. A payment due April 21, 1987 was made nomic and political policies. Li's vul­ As for the U.S., payments under nerability signifies a deeper debate on time; the next payment is due May 14, Eximbank's short term insurance facility are 1987. within the ruling circle of Chinese The Board conducted an interagency re­ now current, after technical arrearages early leaders over what path to take in the view of Iraq on April 24, 1987. The discussion last fall. Payments due CCC are also current, after a more recent arrearage (which brought aftermath of the Tiananmen Square indicated that, for the first time, it now ap­ crackdown and negative world reaction pears possible for Iran to win the 7-year old a short suspension of CCC cover). No doubt, war. Over the shortterm, the current situa­ the Iraqis anticipate that Eximbank will ap­ to it. tion, chiefly a stalemate with Iran making prove a large medium-term program in early The U.S. Senate is about to take a periodic probes and occasional advances, is 1989 (assuming an improvement in the politi­ landmark vote. When Senators vote on likely to continue. But over the medium­ cal climate), and do not want to spoil the at­ legislation to condition the removal of term, a slow wearing-down of Iraq's defenses mosphere, even through technical arrear­ China's most-favored-nation status on and morale could result in an Iranian vic­ ages. improvement in human rights, trade, tory. No predictions were given concerning With export credit agencies off cover for medium-term projection-related credit, Iraq and weapons nonproliferation, as I the future of the existing Government in mentioned earlier. They will have an Iraq or what could be expected in the post­ has approached commercial banks and in­ war period. vestment banks. Banks are reportedly con­ opportunity to strengthen the reform­ Economic conditions in the country have sidering extending credits secured by Iraqi ers within the Chinese Government at steadily worsened since the start of the war. oil export receipts placed in overseas escrow a time when the succession is increas­ Foreign exchange reserves are essentially ex­ accounts (a la the new Venezuelan debt pack­ ingly under question. hausted. Payments on external debt have age). The banks are fully aware of Iraq's se­ It is a landmark time, Mr. Speaker, been rescheduled bilaterally each year since vere payments problems vis-a-vis official creditors, and will seek concrete legal mech­ because as we have heard people say 1983. Berne Union members report payment from time to time, why all the fuss delays have increased from $70 million as of anisms to ensure that they become Iraq's December 31, 1985 to $730 million as of De­ new favored creditors. about what is going on in China? These cember 31, 1986; unrecovered claims in­ Iraq's payments problems-related to its people are very old. They will die and creased from $238 million as of September 30, low, uncertain oil revenues- are likely to then everything will be OK. continue. In the heady days following the 1986 to $314 million as of December 31, 1986. 0 1320 Eight of the major Berne Union members are cease-fire, Iraq was convinced that oil prices Off Cover for medium-term transactions and would immediately rise to $18 per barrel, and Perhaps if the succession vote pro­ six are also Off Cover for short-term as well. boasted of plans for renewed exports of 4 mil­ ceeds to the reformers right now, the All members have tight restrictions or re­ lion barrels per day. Since then, reality has premier is a hardliner, and as he moves duced cover if they are open. set in. Oil prices plunged to $11-12 per barrel, around the world, with the reaction Our balance-of-payments projections, even forcing Baghdad to come to terms with its which the United States gives to his under the optimistic assumption that Iraq fellow OPEC members and accept an output would export more than 3 million barrels of quota of 2.6 million barrels per day. Plans to policies, he is strengthened in China. oil per day after 1989, indicate that Iraq will rebuild the destroyed Gulf oil terminals-a In May 1990, China's Communist be unable to service scheduled debt repay­ prerequisite to significantly higher oil out­ Party General Secretary Chan Su Man ments over the next 5 years and will require put-have been suspended. said that the West's reaction to continuing reschedulings. This forecast and Tiananmen Square was much ado a detailed economic analysis are attached. about nothing. Can you imagine that? Eximbank Exposure MOST-FAVORED-NATION STATUS Not only did he say that, he said it was Eximbank current exposure in Iraq, all FOR CHINA an old Chinese proverb. short-term, is $4.3 million with maturities The SPEAKER pro tempore. Under a Since that statement the Chinese falling due under letters of credit through previous order of the House, the gentle­ Government has ignored repeated con­ December 12, 1987. woman from California [Ms. PELOSI] is gressional and administration requests Recommendation recognized for 60 minutes. for the release of political prisoners. Eximbank should remain Off Cover for all Ms. PELOSI. Mr. Speaker, I just To be sure, the Chinese Government programs concerning Iraq. has dribbled out a prisoner or two Prepared by: Charles Hammond, Finan­ wanted to come to the floor to talk cial Economist, Country Risk Analysis. about a landmark vote that the Con­ whenever it needed to curry Western Approved by: Thomas A. Forbord, Vice gress of the United States is facing, favor. For every prisoner released, President for County Risk Analysis. and that is the vote to condition the however, the Chinese Government has renewal of most-favored-nation status subjected another to trail and sentenc­ EXPORT-IMPORT BANK OF THE UNITED STATES, to China on condition of improvement ing. There has also been no overall re­ COUNTRY RISK ANALYSIS DIVISION, JANUARY of human rights, trade practices and duction in the level of political repres- 23, 1989 weapons nonproliferation. The Senate sion in China since June 1989. · ALERT REPORT-IRAQI PAYMENTS SITUATION tomorrow will have an opportunity to At the same time, China has enjoyed FURTHER DETERIORATES vote on this legislation. increasing benefits from its trade rela­ Iraq's payments situation has further dete­ riorated, according to recent reports from The reason I rushed to the floor this tionship with the United States. Chi­ Embassy Baghdad, the CIA, and others. afternoon to talk about this is because na's trade surplus with United States is ECGD of the United Kingdom, once Iraq's the administration on Friday, as Mem­ growing annually and has totaled near­ paramount "favored creditor", suspfmded all bers are aware, lifted the sanctions on ly $30 billion since the Tiananmen 3180 CONGRESSIONAL RECORD-HOUSE February 24, 1992 Square massacre. This year alone it is rules for trade with China, a trade rela­ because of geography but also because $12.5 billion for 1991. Those figures were tionship that benefits China far more. of our proximity to Silicon Valley and just released. It is a large and growing ANNOUNCEMENT BY THE SPEAKER PRO TEMPORE Lawrence Livermore Lab, which are trade deficit. The SPEAKER pro tempore (Mr. important sites for visits of these trade Given the tremendous potential that VENTO). The Chair will remind the delegations. trade with the United States offers it is Member that the remarks in debate It is for this reason precisely that likely that the Chinese Government may not include characterizations of this administration's action is so ques­ will make some concessions in order to Senate action or inaction or adjura­ tionable. China sees its future tied to preserve its MFN status. This situation tions to Senate actions. its acquiring and utilizing advanced, gives the United States leverage, but The gentlewoman I think should talk sophisticated technology. For one we must use that leverage. about future Senate actions. These are thing, it will enable them to upgrade Against the backdrop ·of the leader­ the rules of the House and I know .the their weapons arsenal and increase ship succession, the upcoming Senate gentlewoman has tried to subscribe to their West weapons export program, vote on whether to condition the fur­ . that. I would just remind the other again gaining for them more hard cur­ ther extension of MFN trade status for Members and the gentlewoman of the rency added to their hard currency China takes on major significance. A rules. from their trade surplus with the Unit­ strong Senate vote would bolster the Ms. PELOSI. Mr. Speaker, all that I ed States. Again, we directly and indi­ argument of reformers within the Chi­ am saying about the Senate also ap­ rectly are strengthening this hardline nese Government that weapons sales to plies to the House on our override vote regime who can do whatever they want the Middle East and political repres­ should the President veto the legisla­ because they have the hard currency to sion at home have become too costly in tion. back them up. terms of economic relations with the A trade relationship that benefits So while we know of pending sales United States. China far more than it benefits the and rumors of sales to the Middle East, Conversely, a weak partisan Senate United States. Each of us, whether in sales to Iran, to Syria, to Libya, we vote would reassure Li Peng and other our vote in the House of Representa­ know of transfer of technology to Alge­ hardliners that China's policies of the tives, or whatever body we serve in the ria, potential missile sales to Pakistan, past 2¥2 years have not significantly af­ Congress, has an opportunity to answer one would have to wonder why the ad­ fected China's international relation­ to history for . our vote. Each of us has ministration saw fit in the dark of ships. to decide whether to contribute to re­ night on Friday, after everyone was Given the current regime sales of ad­ form or to bolster the current policies gone, to issue a press release at the vanced weapon technology to countries of repression and weapons prolifera­ State Department, not in the Presi­ such as Iran, any United States policy tion. Each of us will have to weigh the dent's name, and I do not blame him statement that encourages this political price of voting against the ad­ for disassociating himself with the ac­ hardliner appeal would jeopardize glob­ ministration if the administration tion and not being proud of it, to lift al security. For despite its calculated chooses to veto this legislation, and the sanction. assurances to American diplomats weighing that against our own obliga­ It is a very dangerous action. It sup­ about adherence to international weap­ tion to discourage another generation ports the hardliners in terms of the ons nonproliferation treaties, there is of political tyranny and international succession. It supports the hardliners evidence that the Chinese Government recklessness. in terms of what comes next in terms is continuing to fuel a dangerous arms The China vote in the House and in of nuclear proliferation. It supports the race among developing countries that the Senate and the President's signa­ hardliners in their repression at home. could have devastating implications ture or veto is really a vote about But let us say for a moment that the for United States policy in the Middle America. Let us hope that principle Members would support the adminis­ East and elsewhere. has not yet been overtaken by policies tration's action. If in fact the adminis­ It is not coincidental that Li has just and that bravery and the love of free­ tration takes China at its word and returned home from a Western trip de­ dom have not become mere slogans. China is worthy of that confidence, signed to bolster his lagging image. He I say this particularly, as I said, Mr. then that argues eyen more strongly had also sought publicly to portray President, in my opening remarks, in for passage of the MFN legislation in himself in a more reformist light. De­ light of the administration's lifting of both Houses, and a signature by the spite his recent calls for economic re­ the sanctions on sale of satellite and President, and if not an override in forms, however, Li continues to be as­ computer technology to China. And as both Houses, because if China indeed is sociated with the political crackdown I say, this all should be taken in light worthy of the confidence the adminis­ and economic tightening that he or­ of the succession. tration has placed in it, it will have no chestrated after June 1989, and which There are two things that the United trouble meeting the conditions of the continues today. · States has that China needs des­ legislation before the Congress of the Unfortunately, the President's Janu­ perately and will do almost anything United States at this time. ary 31st meeting in New York with Li to get. One is hard currency, and the 0 1330 Peng may bolster Li's position in the Chinese have been very successful in succession. For while the administra­ their unfair trade practices to achieve Again, as I say, it is at this critical tion tried to downplay the significance enormous trade surpluses with the time in Chinese history in preparation of the meeting, the Chinese premier United States, $6 billion in 1989, $9 bil­ for this spring's party conference. So I undoubtedly benefited domestically lion in 1990, $12.5 billion in 1991, a large appeal to my colleagues and the entire from this having a private discussion and growing deficit, second only to our Congress and to the President of the with the leader of the free world. trade deficit with Japan, and growing, United States to make a judgment Cloaked in his newly acquired re­ as I said. about this legislation and hold it up to spectability, Li Peng will augment his So the results in hard currency, this standard that it makes the world appeal for a continuation of his · which gives this regime a certain inde­ safer by conditioning renewal of MFN hardline policies by stressing his ac­ pendence that they have, this hard cur­ on nonproliferation of missiles and ceptance by the world community and rency makes them strong. other technology, that is, makes the his fitness as an international states­ The other thing we have that they trade fairer by conditioning MFN on man. want and need desperately is tech­ improvement in our trade relationship The Senate will therefore send an im­ nology. In the district I represent, San by being fairer to American workers, portant message at a critical time to Francisco is a destination point for by having China abide by our trade the people of China. S~nators will have many trade delegations from China. It treaties and makes the political cli­ an opportunity to set American ground is a very popular destination, not only mate freer by saying to the regime in February 24, 1992 CONGRESSIONAL RECORD-HOUSE 3181 Beijing that MFN which is special for that committee had examined and payments in OCS areas, pursuant to 43 U.S.C. the United States to give to a central­ found truly enrolled a bill of the House 1339(b); to the Committee on Interior and In­ ized economy will be granted if those of the following title, which was there­ sular Affairs. 2857. A letter from the Deputy Associate prisoners who were arrested in the upon signed by the Speaker: Director for Collection and Disbursement, events surrounding the Tiananmen H.R. 3866. An act to provide for the des­ Department of the Interior, transmitting no­ Square massacre are released. ignation of the Flower Garden Banks Na­ tice of proposed refunds of excess royalty Freer, fairer, safer, that is what the tional Marine Sanctuary. payments in OCS areas, pursuant to 43 U.S.C. future is about. That is what this legis­ 1339(b); to the Committee on Interior and In­ lation is about. We will all have to an­ sular Affairs. swer for this vote. I do not think it will ADJOURNMENT 2858. A letter from the Deputy Associate be good enough to say, I voted with the Ms. PELOSI. Mr. Sp_eaker, I move Director for Collection and Disbursement, Department of the Interior, transmitting no­ President on it. We all have to have the that the House do now adjourn. The motion was agreed to; accord­ tice of proposed refunds of excess royalty reasons why we would not want to sup­ payments in OCS areas, pursuant to 43 U.S.C. port a reasonable achievable doable ingly (at 1 o'clock and 31 minutes 1339(b); to the Committee on Interior and In­ legislation when we have the oppor­ p.m.), the House adjourned until to­ sular Affairs. tunity to do so. morrow, Tuesday, February 25, 1992, at 2859. A letter from the Deputy Associate With that, Mr. Speaker, I yield back 12 noon. Director for Collection and Disbursement, the balance of my time. Department of the Interior, transmitting no­ tice of proposed refunds of excess royalty EXECUTIVE COMMUNICATIONS, payments in OCS areas, pursuant to 43 U.S.C. SPECIAL ORDERS GRANTED ETC. 1339(b); to the Committee on Interior and In­ sular Affairs. By unanimous consent, permission to Under clause 2 of rule XXIV, execu­ 2860. A letter from the Deputy Associate address the House, following the legis­ tive communications were taken from for Collection and Disbursement, Depart­ lative program and any special orders the Speaker's table and referred as fol­ ment of the Interior, transmitting notice of heretofore entered, was granted to: lows: proposed refunds of excess royalty payments (The following Members (at the re­ 2848. A letter from the Assistant Legal Ad­ in OCS areas, pursuant to 43 U.S.C. 1339(b); quest of Mr. GONZALEZ) to revise and viser for Treaty Affairs, Department of to the Committee on Interior and Insular Af­ extend their remarks and include ex­ State, transmitting the text of an agreement fairs. 2861. A letter from the President and CEO, traneous material:) in which the American Institute in Taiwan is Little League Baseball, Inc., transmitting Mr. ANNUNZIO, for 5 minutes, today. a party, pursuant to 22 U.S.C. 3311(a); to the Committee on Foreign Affairs. the organization's annual report for the fis­ Mr. DORGAN of North Dakota, for 60 cal year ending September 30, 1991, pursuant minutes, today. 2849. A letter from the Assistant Adminis­ trator for Legislative Affairs, Agency for to 36 U.S.C. 1084(b); to the Committee on the Mr. BRUCE, for 5 minutes, on Feb­ Judiciary. 'International Development, transmitting a 2862. A letter from the Chairman, Merit ruary 25. report on its activities under the Freedom of Mr. HOAGLAND, ~or 30 minutes, on Systems Protection Board, transmitting the Information Act for calendar year 1991, pur­ 13th annual report on the activities of the February 25. suant to 5 U.S.C. 552(d); to the Committee on Mr. LIPINSKI, for 60 minutes each day, Board during fiscal year 1991, pursuant to 5 Government Operations. U.S.C. 1209(b); to the Committee on Post Of­ on February 25 and 26. 2850. A letter from' the Director, ACTION fice and Civil Service. Mrs. COLLINS of Illinois, for 60 min­ Agency, transmitting a report on its activi­ 2863. A letter from the Secretary, Depart­ utes each day, on March 3 and 4. ties under the Freedom of Information Act ment of Commerce, transmitting the 1991 an­ (The following Member (at her own for calendar year 1991, pursuant to 5 U,S.C. nual report of the Visiting Committee on Ad­ request) to revise and extend her re­ 552(d); to the Committee on Government Op­ vanced Technology of the National Institute marks and include extraneous mate­ erations. of Standards and Technology, pursuant to 2851. A letter from the Chairman, Federal Public Law 100-418, section 5131(b) (102 Stat. rial:) Deposit Insurance Corporation, transmitting Ms. PELOSI, for 60 minutes, today. 1443); to the Committee on Science, Space, a report on its activities under the Freedom and Technology. of Information Act for calendar year 1991, 2864. A letter from the Secretary of Labor, pursuant to 5 U.S.C. 552(d); to the Committee EXTENSION OF REMARKS transmitting the 17th annual report of the on Government Operations. · ' Pension Benefit Guaranty Corporation cov­ By unanimous consent, permission to 2852. A letter from the Chairman, Federal ering fiscal year 1991, which includes the revise and extend remarks was granted Deposit Insurartce Corporation, transmitting Corporation's financial statements as of Sep­ to: a copy of the annual report in compliance tember 30, 1991, pursuant to 29 U.S.C. 1308; (The following , Members (at . the re­ with the Government in the Sunshine Act jointly, to the Committees on Education and quest of Mr. WOLF) and to include ex­ during calendar year 1991, pursuant to 5 Labor and Ways and Means. traneous matter:) U.S.C. 552b(j);' to the Committee on Govern­ Mr. GUNDERSON. ment Operations. Mr. GREEN of New York. 2853. A letter from the President, James REPORTS OF COMMITTEES ON PUB­ Madison Memorial Fellowship Foundation, LIC BILLS AND RESOLUTIONS Mr. GINGRICH. transmitting the annual report under the (The following Members (at the re­ Federal Managers' Financial Integrity Act Under clause 2 of rule XIII, reports of quest of Mr. GONZALEZ) and to include for fiscal year 1991, pursuant to 31 U.S.C. committees were delivered to the Clerk extraneous matter:) 3512(c)(3); to the Committee on Government for printing and reference to the proper Mr. ANDERSON in 10 instances. Operations. calendar, as follows: Mr. GONZALEZ in 10 instances. 2854. A letter from the Chief Administra­ [Submitted February 21, 1992] Mr. BROWN in 10 instances. tive Officer, Postal Rate Commission, trans­ Mr. ANNUNZIO in six instances. mitting a report on its activities under the Mr. ASPIN: Committee on Armed Services. H.R. 1558. A bill to amend the Panama Canal Mr. PENNY. Freedom of Information Act for calendar year 1991, pursuant to 5 U.S.C. 552(d); to the Act of 1979 to provide for a Chairman of the Mr. REED. Board of the Panama Canal Commission, and Mr. MAZZO LI. Committee on Government Operations. 2855. A letter from the Secretary, Postal for other purposes; with amendments (Rept. Mr. VENTO. Rate Commission, transmitting a copy of the 102-428, Pt. 2). Referred to the Committee of Mr. F ALEO MA v AEGA in four instances. annual report in compliance with the Gov­ the Whole House on the State of the Union. Mr. F ASCELL in three instances. ernment in the Sunshine Act during the cal­ [Submitted February 24, 1992] Mr. HAMILTON. endar year 1991, pursuant to 5 U.S.C. 552b(j); Mr. MILLER of California: Committee on Mr. BORSKI in two instances. to the Committee on Government Oper­ Interior and Insular Affairs. H.R. 3519. A bill ations. to authorize the establishment of the 2856. A letter from the Deputy Associate Steamtown National Historic Site; with an ENROLLED BILL SIGNED Director for Collection and Disbursement, amendment (Rept. 102-434). Referred to the Mr. ROSE, from the Committee on Department of the Interior, transmitting no­ Committee of the Whole House on the State House Administration, reported that tice of proposed refunds of excess royalty of the Union. 3182 CONGRESSIONAL RECORD-HOUSE February 24, 1992 PUBLIC BILLS AND RESOLUTIONS H.R. 371: Mr. SKEEN. H.R. 3992: Ms. SLAUGHTER, Mr. FROST, Mr. H.R. 430: Mr. SAXTON. MAZZOLI, Mr. MFUME, Mr. LEVIN of Michigan, Under clause 5 of rule X and clause 4 H.R. 710: Mr. PETERSON of Minnesota and and Mrs. LOWEY of New York. of rule XXII, public bills and resolu­ Mr. lNHOFE. H.R. 4050: Mr. UPTON. tions were introduced and severally re­ H.R. 815: Mr. RICHARDSON. H.R. 4058: Mr. MARLENEE and Mr. HERGER. ferred as follows: H.R. 843: Mr. KOLTER. H.R. 967: Ms. KAPTUR. H.R. 4073: Mrs. PATTERSON, Mr. OLIN, and By Mr. ARMEY (for himself, Mr. H.R. 1124: Mr. SPENCE, Mr. PAYNE of New Mrs. KENNELLY. DELAY, Mr. DANNEMEYER, Mr. Jersey, Mr. DYMALLY, Mr. MANTON, Mr. MUR­ H.R. 4089: Mr. SPENCE, Mr. BERMAN, Mr. ROHRABACHER, and Mr. CRANE): PHY, and Mr. POSHARD. RAY, Mr. BREWSTER, Mrs. BOXER, Mr. H.R. 4288. A bill to repeal the part IV of H.R. 1156: Mr. RoEMER. DEFAZIO, and Mr. LAGOMARSINO. title m of the Communications Act of 1934, H.R. 1161: Mr. SAVAGE. H.R. 4172: Mr. JONES of North Carolina. relating to assistance for public tele­ H.R. 1288: Ms. KAPTUR and Mr. FLAKE. H.R. 4175: Mrs. MINK, Mr. ALEXANDER, Mr. communications; to the Committee on En­ H.R. 1414: Mr. EWING and Mr. ALLEN. COLEMAN of Texas, Mr. FRANK of Massachu­ ergy and Commerce. H.R. 1456: Mrs. MEYERS of Kansas. setts, Mr. MCNULTY, Mr. MURPHY, Mr. ROY­ By Mr. F ALEOMAV AEGA: H.R. 1497: Mr. Goss. BAL, Mr. DYMALLY, Mr. BUSTAMANTE, Mr. H.R. 4289. A bill to amend the Agricultural H.R. 1820: Mr. HOAGLAND and Mr. FRANK of JONES of North Carolina, Mr. MANTON, Mr. Act of 1949 to make American Samoa eligible Massachusetts. MAZZOLI, Mr. OLVER, Mr. BLACKWELL, Mr. for emergency livestock feed assistance; to H.R. 1987: Mr. APPLEGATE, Mr. MILLER of PAYNE of New Jersey, Mr. TOWNS, and Mr. the Committee on Agriculture. California, Mr. LOWERY of California, Mr. LEHMAN of Florida. H.R. 4290. A bill to amend section 325 of the VENTO, Mr. WEISS, Mr. STARK, Mr. WAXMAN, H.R. 4194: Mr. CAMP, Mr. HUNTER, Mr. WIL­ Immigration and Nationality Act to provide Mr. WILSON, Mr. GoRDON, Mr. ANNUNZIO, Mr. SON, Mr. ANNUNZIO, Mr. MURTHA, Ms. KAP­ that residence within the outlying posses­ FLAKE, Mr. LEVINE of California, Mr. FOGLI­ TUR, Mr. HALL of Ohio, Mr. KILDEE, and Mr. sions of the United States shall be counted ETTA, Mr. RAHALL, and Mr. PASTOR. POSHARD. as residence within a State or district of H.R. 2410: Mr. ARMEY, Mr. Goss, and Mr. service for purposes of the residency require­ DUNCAN. H.R. 4202: Mr. RIGGS and Mr. McMILLAN of ment for naturalization; to the Committee H.R. 2565: Mr. WOLPE, Mrs. LOWEY of New North Carolina. on the Judiciary. York, Mr. MORAN, Mr. FLAKE, Mr. OLIN, and H.R. 4206: Mr. GUARINI and Mr. DAVIS. By Mr. FOGLIETTA: Mr. SCHEUER. H.R. 4220: Mr. JACOBS, Ms. KAPTUR, Mr. H.R. 4291. A bill to amend the Shipping Act H.R. 2569: Mr. ZIMMER. PORTER Mr. APPLEGATE, and Mr. KILDEE. of 1984 to establish requirements for the ap­ H.R. 2595: Mr. SANTORUM. H.R. 4229: Mr. MRAZEK. proval by the Federal Maritime Commission H.R. 2879: Mr. POSHARD and Mr. LIGHTFOOT. H.R. 4277: Mr. PENNY, Mrs. UNSOELD, Mr. DE of conference agreement amendments that H.R. 3051: Mr. FEIGHAN and Mr. FROST. LUGO, Mr. TRAXLER, Mrs. MINK, Mr. VOLK­ terminate service to a port, to ensure consid­ H.R. 3071: Mr. GALLEGLY, Mr. THOMAS of MER, and Mr. DEFAZIO. eration of the public interest with respect to Georgia, and Mr. JAMES. H.J. Res. 240: Mr. RAVENEL and Mr. SEN­ those agreements and amendments, and for H.R. 3137: Mr. BERMAN and Mr. SANTORUM. SENBRENNER. other purposes; to the Committee on Mer­ H.R. 3217: Mr. SANTORUM. H.R. 3373: Mr. KOSTMAYER, Mr. LEHMAN of H.J. Res. 334: Mr. FRANKS of Connecticut. chant Marine and Fisheries. Florida, and Mr. FEIGHAN. H.J. Res. 411: Mr. SMITH of Iowa, Mr. MAR­ By Mr. LEACH: H.R. 3542: Mr. SABO, Mr. PETERSON of Min­ TINEZ, Mr. KANJORSKI, Mr. HUGHES, and Mr. H.R. 4292. A bill to provide for 50,000 addi­ nesota, and Mr. FOGLIETTA. MURPHY. tional immigrant visas for certain nations of H.R. 3553: Mr. FALEOMAVAEGA. H. Con. Res. 92: Mr. RIGGS. the previous Soviet Union who are involved H.R. 3612: Mr. PANETTA, Mr. ATKINS, and H. Con. Res. 180: Mr. TRAFICANT, Mrs. in nuclear weapons research, development, Mr. BONIOR. LOWEY of New York, Mr. FAZIO, Mr. PEASE, or production or who have other advanced H.R. 3636: Mr. SKAGGS, Mr. JONES of Geor­ Mr. ATKINS, and Mr. LANTOS. scientific or technical knowledge that could gia, and Mr. MCMILLEN of Maryland. H. Con. Res. 224: Mr. ATKINS. be useful to enterprises in the United States; H.R. 3844: Mrs. UNSOELD, Mr. BLACKWELL, to the Committee on the Judiciary. H. Con. Res. 232: Mr. GILMAN. Mr. COSTELLO, Mr. SOLARZ, Mrs. KENNELLY, H. Con. Res. 246: Mr. LANTOS, Mr. BOUCHER, By Mr. LOWERY of California: and Mr. ABERCROMBIE. H.R. 4293. A bill to provide an extension of Mrs. COLLINS of Illinois, Mr. RAY, Mr. YATES, H.R. 3850: Mr. HARRIS, Mr. OWENS of Utah, and Mr. MCHUGH. time for the payment of Federal income tax Mr. PICKETT, Mr. CHANDLER, Mr. LOWERY of on the nonexcluded portion of the combat California, Mr. QUILLEN, Mr. STUMP, Mr. H. Con. Res. 256: Mr. MFUME, Mr. ANNUN­ pay of members of the Armed Forces of the WYLIE, Mr. CARPER, Mr. JENKINS, Mr. ZIO, Mr. ROSE, Mr. BORSKI, Mr. SHAYS, Mr. United States serving in the Persian Gulf LAROCCO, and Mr. MCCLOSKEY. MANTON, Mrs. SCHROEDER, Ms. PELOSI, Mr. conflict; to the Committee on Ways and H.R. 3857: Mr. JONES of North Carolina. COSTELLO, Mr. TRAFICANT, and Mr. LEVINE of Means. H.R. 3861: Mr. FROST and Mr. VENTO. California. H.R. 3887: Mr. JOHNSON of South Dakota. H. Res. 272: Mr. FROST, Mr. MCMILLEN of H.R. 3943: Mr. HOUGHTON, Mr. RAMSTAD, Maryland, Mr. MCNULTY, Mr. ERDREICH, Mr. ADDITIONAL SPONSORS and Mr. SPRATT. MARTINEZ, Mr. SKEEN, Mr. BILIRAKIS, and Mr. Under clause 4 of rule XXII, sponsors H.R. 3989: Ms. SLAUGHTER, Mr. FROST, Mr. WALSH. MAZZOLI, Mr. MFUME, Mr. LEVIN of Michigan, H. Res. 359: Mr. BERMAN, Mr. LAFALCE, Mr. were added to public bills and resolu­ and Mrs. LOWEY of New York. SKEEN, Mr. JONES of North Carolina, Mr. tions as follows: H.R. 3990: Mrs. SCHROEDER, Mr. ATKINS, and HORTON, Mr. CARDIN, Mr. PAXON, and Mr. H.R. 20: Mr. SHUSTER and Mr. ATKINS. Mr. FOGLIETTA. WALSH.