Floor Statements

Mr. Speaker, first, both personally and on behalf of my constituents in Orange County, let me offer my condolences to Mrs. Reagan and the Reagan family. I, like so many of my colleagues, probably would not be standing here today if it were not for Ronald Reagan.

He was an inspiration for a whole generation of young Americans, and his message of limited government and unlimited freedom, as well as his boundless optimism about America's future, motivated me and so many others to get involved in the affairs of our Nation. I first met Ronald Reagan as a student in California. That experience led me to become involved in the Youth For Reagan movement.

Over the years, I was privileged to meet him many more times. It was one of the most memorable meetings in 1986. I was visiting the White House as a State senator on the day that President Reagan ordered the bombing of Libya because of their open support for international terrorism. The President told me what a difficult decision it was, but how the future of our Nation and the safety of our citizens depended on firm action.

President Reagan was never afraid to take a stand, never afraid to do what was right, even if it was not popular at the moment.

In 1964 Ronald Reagan spoke these words to a generation of Americans: ``You and I have a rendezvous with destiny. Will we preserve for our children this, the last best hope of man on earth, or will we sentence them to take the last step into a thousand years of darkness?''

President Reagan understood the evil of communism. He knew the Cold War would end. He knew that there would be winners and there would be losers. Thanks to his resolve, freedom won. Thanks to his resolve, millions of people were set free.

President Reagan also understood that free markets go hand in hand with individual liberties. In 1981 he said:

``We who live in free market societies believe that growth, prosperity and ultimately human fulfillment are created from the bottom up, not the government down. Only when the human spirit is allowed to invent and create, only when individuals are given a personal stake in deciding economic policies and benefiting from their success, only then can societies remain economically alive, dynamic, progressive and free.''

At his second inauguration, speaking inside the rotunda of this Capitol building, President Reagan said:

``Our Nation is poised for greatness. We must do what we know is right, and do it with all our might. Let history say of us, these were golden years, when the American revolution was reborn, when freedom gained new life and America reached for her best.''

Throughout his career, Ronald Reagan was always helping America reach for her best. He inspired us with his spirit, with his optimism; and he led us with his commitment to principle and unwavering resolve. America and the rest of the world are better, safer, and freer places today because of Ronald Reagan. We will miss him dearly.

Mr. Speaker, I thank the gentleman for yielding me time.

I would like to begin by seconding the remarks by the ranking member of

the Committee on International Relations, the gentleman from California (Mr. Lantos). I believe, as he does, that the killing in western Sudan demands the world's attention. This resolution of which we are co- sponsors condemns Sudan's government for attacks against civilians in the Darfur region. As explained, the numbers here are very grim. Because the government's Scorched Earth policies have killed tens of thousands of people, have displaced as of today over one million human beings, many of them forced into neighboring Chad, hundreds of villages have been burned to the ground, those irrigation systems have been destroyed, and government-backed militias have committed widespread rapes; but beyond that, beyond that the victims of these rapes are often branded on the forehead, which is a rather unique proof of the intent of ethnic cleansing that is going on in these communities.

Denied access to this region by the government, I think we can only imagine the full extent of this relentless campaign which has the look of genocide against the people of Darfur. I believe the administration deserves credit for its sustained commitment to bringing peace to Sudan. Congress has backed its effort, including the Sudan Peace Act. The Subcommittee on Africa, which I chair, has closely followed negotiations between Khartoum and the SPLM.

But after several years, it is less and less likely that those negotiations will succeed. The administration's Sudan Peace Act, the report on that peace act of last month noted that, the bottom line, these talks had become stagnant. We need to keep in mind too that any agreement reached would face major challenges being implemented. Africa has seen many failed peace agreements. So Khartoum's true colors, I am afraid, are being shown in Darfur. At this point, for my part I would have little faith in any peace agreements it signs.

If we remain engaged in this peace process, though, Darfur must not be discounted. Darfur must be addressed. Last month, the Subcommittee on Africa held a hearing looking back on the Rwandan genocide. During the run-up to the killing of a million people, the United States and others were dulled to its warning signs because of the commitment to a doomed peace process. And I am afraid that that may be part of what we are witnessing here.

In Rwanda, like in Sudan today, the government denied its support for militias carrying out ethnic cleansing. It was very familiar to these, very close akin to this same circumstance we face here. Khartoum should know that peace agreement or not, there will be no normal relations with the United States as long as it is committing atrocities in Darfur. The administration brought Darfur to the world's attention at the United Nations Commission on Human Rights' annual session in Geneva. That its proposal to censure the Sudanese Government was widely rejected is yet more evidence that the commission is a very troubled institution. It also makes it harder to believe that other countries have much of a commitment to peace in Sudan.

Moving ahead, our assumption on Sudan that the international community will provide material support and be an honest broker if a peace agreement is signed should be rethought. I support this resolution; I urge its passage. And I would also like to commend the gentleman from Virginia (Mr. Wolf) for his dedication to this issue.

Mr. Speaker, there really is a medical liability crisis in this country. Americans realize there is an urgent problem, but I think many are unsure of how to solve that problem.

In my view, they need to look no farther than California for an answer as to what to do about this medical liability crisis, because in the early 1970s in California we faced a medical liability crisis very similar to the one that is spreading across the Nation now; and at that time, Governor Jerry Brown teamed up with members in the State Senate and members in the State Assembly and passed the Medical Injury Compensation Reform Act, which is referred to as MICRA.

As health care costs hammer our citizens and limit the jobs available, it is imperative that the Nation follow California's example and bring structure and stability to the medical liability system.

I say that because Californians enjoy a very secure competitive liability system. MICRA limited noneconomic damages to those injured, while ensuring full compensation for lost wages and for medical costs. Doctors have the benefit of some of the lowest medical liability premiums in the Nation. Since MICRA was enacted, medical liability premiums across this Nation have increased by 750 percent. In California, the increase is less than half that number, less than half the Nation's average. That means that we are doing something right, and let me give my colleagues some other facts.

Disputes in California are settled 26 percent faster, and health care costs are 6 percent lower. That saves the patients in our State $6 billion per year, and I think it speaks volumes as to our system's capabilities.

Yesterday, the House passed H.R. 4280, and by doing so we took the California model, and we applied it to the entire Nation. This is about commonsense reform, reform we know will work because we have tried it.

Health care costs have skyrocketed over the last decade. Advanced medical technology, advanced therapy, increased use of prescription drugs, all of these paired with inadequate cost containment have led to runaway prices; but, Mr. Speaker, I do not think we want to stand for this. I do not think my colleagues want to stand for this. It is not acceptable to stand by and watch our constituents unfairly carry the burden of a lacking system.

Systems like MICRA allow for patients to recover from their health care costs. State hospital associations estimate that every hour of care requires an hour of paperwork. One hour of doctor-to-patient care surely does not require the cost of that hour plus an additional hour of an administrator filling out forms. It is inefficient, it is clumsy; and thankfully we will no longer stand for it because by a 30-plus margin we have moved in a strong, bipartisan way to take our country towards medical liability improvement.

Employers, large and small, have struggled to keep their businesses up to the phenomenal speeds set by racing costs.

Finally, we have introduced a way for businesses to provide health coverage because they care about their employees, without compromising the integrity of their businesses and products that they produce.

Mr. Speaker, I thank my colleagues for passing this much-needed legislation to preserve access to quality health care costs, not just for Californians, but now for all Americans. We passed this legislation yesterday, the bill is currently pending in the Senate. It is my hope that the Senate will act expeditiously so that we can get this legislation to the President's desk quickly.

Mr. Speaker, I thank the gentleman for yielding me this time.

I have been trying for some years now to push this concept, a bill that I introduced a number of years ago. With the knowledge that we have got, I do not know, maybe 37 million Americans who do have access to these flexible spending accounts, and I think many of us here probably know someone who does, maybe a spouse, if he or she is employed in the private sector, but the problem is that over half of these individuals do not utilize their access to FSAs because of this use-it-or-lose-it provision that we are trying to eliminate through this measure here today. And as we know, currently, the employer and the employee can set aside money before taxes into this flexible spending account and then that money can be used just like cash to pay for out-of-pocket medical expenses and insurance copayments and doctors' visits and even child care. The downside is that if they do not spend their money at the end of the year, they lose it, and it goes back to their employer.

I originally introduced this bill as a consequence of a conversation I had 4 years ago with my wife, who came home with yet another pair of glasses, and Marie said she purchased them not because she needed them necessarily. She liked them, but she said she did not want to lose the money in her FSA and her employer said that if she does not spend it, this money will revert back to the company.

So the rules governing FSAs force workers who have put in money to match the money put in by their employer to scurry around at the end of the year and wastefully spend their health care dollars, just so they do not have to forfeit it.

I do not know how many of you have seen the TV ads that run each December talking up medical procedures, reminding people to spend their unused FSA dollars. Now, that is a wasteful procedure. What is worse here is over half of the employees who are eligible do not sign up in the first place because they do not want to lose their

money. So this use-it-or-lose-it is the worst type of economic incentive. It discourages savings and, instead, encourages frivolous, needless spending.

So this initiative that I have introduced and has been picked up by the committee will allow workers to roll over up to $500 of their own money back into their FSA at the end of the year, or, as mentioned, put it into a recently created Health Savings Account. I think it is a commonsense solution that will give peace of mind and let employees save for future expenses.

I encourage the Senate to take immediate action on this important legislation. We have pushed this for some years. We need to get it through the process, because FSAs are a commonsense, free market approach that allows people to take more control over their health care dollars. The use-it-or-lose-it provision must go.

Mr. Chairman, I thank the gentleman for yielding me this time, and I rise today to bring some more facts to the debate over industrial loan companies.

ILCs are well regulated, both at the State and Federal levels. They have played an important part in our country's financial system for over 100 years. I have a letter from the chairman, Donald Powell, of the Federal Deposit Insurance Corporation, and I will provide it for the Record, but I also thought I would just read some of the observations that Chairman Powell makes about ILCs.

Chairman Powell says that industrial loan companies and industrial banks have existed since the early 1900s, and overall it is the FDIC's view that ILC charters pose no greater safety and soundness risk than other charter types. As with any other insured institution, ILCs are subject to examinations and other supervisory activities. The FDIC's authority to pursue formal or informal enforcement actions against an ILC is the same as the FDIC authority with respect to any other State nonmember bank, with limited exceptions. In short, the FDIC does not believe that there are any compelling safety and soundness reasons to impose constraints on this charter type that are not imposed on other charter types.

Chairman Powell of the FDIC goes on to say that the FDIC and the State chartering authorities directly supervise insured ILCs, which must comply with the FDIC's rules and regulations, including those requirements for capital standards, safe and sound operations, and consumer compliance and community reinvestment. Further, as he says, the FDIC has the authority to examine any affiliate of an ILC, including its parent company, as may be necessary, to determine the relationship between the ILC and the affiliate, and to determine the effect of such relationship on the ILC.

I thought I would bring those facts to light. I know that some competitors of ILCs worry because they do not want more competition in the banking marketplace, but we all know that competition is good for consumers, it is good for businesses, and it is good for our economy as a whole. And since I have heard other companies make the argument that ILCs are not safe and sound, I wanted to respond by saying that ILCs are heavily regulated financial institutions, ILCs are regulated by the FDIC and by State banking regulators in every State in which they operate, and I think we should judge ILCs on the facts.

To that end, Mr. Chairman, I submit the letter of Chairman Donald Powell for the Record herewith:

Federal Deposit

Insurance Corporation,

Washington, DC, April 30, 2003.

Hon. Edward R. Royce,

House of Representatives,

Washington, DC.

Dear Congressman Royce: Thank you for your recent letter

concerning industrial loan companies. We are closely

monitoring the recent attention that industrial loan

companies are receiving and appreciate your questions.

Industrial loan companies and industrial banks

(collectively, ILCs) have existed since the early 1900s.

States with existing insured ILCs include California,

Colorado, Indiana, Minnesota, Nevada, and Utah. There are 51

insured ILCs, with the vast majority operated from Utah (24)

and California (17). The charters are unique in that, as long

as they meet certain criteria (typically, not accepting

demand deposits), they are not considered ``banks'' under the

Bank Holding Company Act. As a result, an ILC's parent

company is not subject to supervision by the Federal Reserve.

Just as is true of unitary thrift holding companies and

parent companies of limited-purpose credit card banks,

the parent companies of ILCs include a diverse group of

financial and commercial firms.

Overall, it is the FDIC's view that ILC charters pose no

greater safety and soundness risk than other charter types.

As with any other insured institution, ILCs are subject to

examinations and other supervisory activities. The FDIC's

authority to pursue formal or informal enforcement actions

against an ILC is the same as the FDIC's authority with

respect to any other state nonmember bank, with limited

exceptions. Those exceptions pertain to cross-guaranty

authority and golden parachute payments, and legislative

changes to eliminate those exceptions are being pursued in

H.R. 1375, the proposed Financial Services Regulatory Relief

Act of 2003. In short, the FDIC does not believe there are

compelling safety and soundness reasons to impose constraints

on this charter type that are not imposed on other charter

types.

The risk posed by any insured depository institution

depends on the appropriateness of the business plan and

model, management's competency in administering the

institution's affairs, and the quality and implementation of

risk management programs. Similar to institutions with other

charter types, an ILC's capital adequacy and overall safety

and soundness is driven by the composition and stability of

its lending, investing and funding activities and the

competence of management.

The FDIC and the state chartering authorities directly

supervise insured ILCs, which must comply with the FDIC's

Rules and Regulations, including, but not limited to, those

requirements for capital standards, safe and sound

operations, and consumer compliance and community

reinvestment. ILCs also are subject to Sections 23A and 23B

of the Federal Reserve Act, which restrict or limit

transactions with a bank's affiliates and the Federal Reserve

Board's Regulation O, which governs credit to insiders and

their related interests. Further, the FDIC has the authority

to examine any affiliate of an ILC, including its parent

company, as may be necessary to determine the relationship

between the ILC and the affiliate and to determine the effect

of such relationship on the ILC.

Answers to your specific questions are enclosed. If you

would like additional information, please do not hesitate to

contact me or Alice Goodman, Director of our Office of

Legislative Affairs, at (202) 898-8730.

Sincerely,

Donald E. Powell,

Chairman.

Enclosure.

Response of the Federal Deposit Insurance Corporation's Division of Supervision and Consumer Protection to Questions Concerning Industrial

Loan Companies

In what banking activities are these institutions engaged? Do

they have the authority to provide services that may not

be offered by full-service commercial banks?

Generally, the authority of industrial loan companies and

industrial banks (collectively, ILCs) to engage in activities

is determined by the laws of the chartering state. The

authority granted to an ILC may vary from one state to

another and may be different from the authority granted to

commercial banks. Except for offering demand deposits, an ILC

generally may engage in all types of consumer and commercial

lending activities and all other banking activities

permissible for banks in general.

Core ILC functions are traditional financial activities

that can generally be engaged in by institutions of all

charter types. The exception would be institutions organized

and chartered as limited-purpose institutions, which

generally focus on credit card or trust activities.

Existing ILCs can generally be grouped according to one of

four broadly defined business models:

Institutions that are operated as community-focused

institutions, including stand-alone institutions and those

serving a community niche within a larger organization. These

institutions often provide credit to consumers and small- to

medium-sized businesses. In addition to retail deposits (many

ILCs offer NOW accounts), funding sources may include

commercial and wholesale deposits, as well as borrowings.

Institutions that operate within a larger corporate

organization may also obtain funding through the parent

organization.

Independent institutions that focus on specialty lending

programs, including leasing, factoring, and real estate

activities. Funding sources for this relatively small number

of institutions may include retail and commercial deposits,

wholesale deposits, and borrowings.

Institutions that are embedded in organizations whose

activities are predominantly financial in nature, or within

the financial services units of larger corporate

organizations. These institutions may serve a particular

lending, funding, or processing function within the

organization. Lending strategies can carry greatly, but,

within a specific institutions, are often focused on a

limited range of products, such as credit cards, real estate

mortgages, or commercial loans. Corporate strategies play a

larger role in determing funding strategies in these cases,

with some institutions periodically selling some or all

outstanding loans to the parent organization. Parent

assessments of funding options across all business units

frequently determine the specific tactics at the ILC level. A

few institutions restrict themselves to facilitating

corporate access to the payment system or supporting cash

management functions, such as administering escrowed funds.

Institutions that directly support the parent

organizations' distinctly commercial activities. These

institutions largely finance retail purchases of parent

company products, ranging from general merchandise to

automobiles, truck stop activities, fuel for rental car

operations, and heating and air conditioning installations.

Loan products might include credit cards, lines of credit,

and term loans. Funding is generally limited to wholesale or

money center operations, borrowings, or other options from

within the parent organization.

From a federal law perspective, one of the primary

differences between an ILC charter and other depository

institution charters is that certain ILCs have a

grandfathered exemption from the requirements and

restrictions of the Bank Holding Company Act (BHCA).

Generally, an LIC can maintain its exemption so long as it

meets at least one of the following conditions: (1) the

institution does not accept demand deposits, (2) the

institution's total assets are less than $100,000,000, or (3)

control of the institution has not been acquired by any

company after August 10, 1987.

How does the FDIC go about regulating ILCs? What authority

does the FDIC have to examine ILC parent companies? Does

the FDIC feel it has the tools necessary to adequately

and comprehensively regulate ILCs and their relationship

to their owners?

The FDIC regulates ILCs in the same manner as other state

nonmember institutions. ILCs are subject to the FDIC's safety

and soundness regulations (with two exceptions discussed

below), as well as federal consumer protection regulations.

Like all insured depository institutions, ILCs receive

regular examinations, during which compliance with the

regulations is reviewed and overall performance and condition

are analyzed. For FDIC-insured, state-chartered institutions

that are not members of the Federal Reserve System, the FDIC

and/or the state authority will conduct the examination. The

FDIC has agreements with most states to conduct examinations

under alternating schedules, although in the case of a

troubled institution, the FDIC and the estate authority

generally conduct joint or concurrent examinations.

Transactions with affiliates are reviewed during each

examination. An ILC's transactions with its affiliates are

restricted by Sections 23A and 23B of the Federal Reserve

Act, which are made applicable to state nonmember banks in

general by section 18(j) of the FDI Act, 12 U.S.C.

Sec. 1828(j). Section 23A essentially limits the total amount

of loans to affiliates and limits other transactions between

a bank and its affiliates. These restrictions also apply to

loans to third parties to pay debts to or purchase goods and

services from an affiliate. Section 23B generally prohibits

any transaction with an affiliate on terms or conditions less

favorable to the bank than a transaction with an unrelated

third party.

While the FDIC does not have statutory authority to

supervise the parent companies of ILCs, the FDIC does have

the authority, in examining any insured depository

institution, to examine any affiliate of the institution

(under 12 U.S.C. Sec. 1820(b)(4)), including its parent

company, as may be necessary to determine the relationship

between the institution and the affiliate and to determine

the effect of such relationship on the institution. In the

case of a parent subject to the reporting requirements of

another regulatory body covered under the Gramm-Leach-

Bliley Act of 1999, such as the Securities and Exchange

Commission or a state insurance commissioner, the FDIC has

agreements in place to share information with the

functional regulator.

In determining whether to grant deposit insurance to an

ILC, the FDIC must consider the same statutory factors of

section 6 of the FDI Act, 12 U.S.C. Sec. 1816, that it

considers for all other applications for deposit insurance.

These factors are:

The financial history and condition of the depository

institution;

The adequacy of its capital structure;

Its future earnings prospects;

The general character and fitness of its management;

The risk presented by such depository institution to the

deposit insurance fund;

The convenience and needs of the community to be served by

the depository institution; and

Whether its corporate powers are consistent with the

purposes of the Act.

The FDIC has determined that there are two limitations in

our authority regarding ILCs as compared to other

institutions. These two limitations would be addressed by

remedies included in the Financial Services Regulatory Relief

Act of 2003, as proposed. These are:

Amendment to clarify the FDIC's cross-guarantee authority:

As part of the Federal Financial Institutions Reform,

Recovery, and Enforcement Act of 1989 (FIRREA), Congress

established a system that generally permits the FDIC to

assess liability across commonly controlled institutions for

FDIC losses caused by the default of one of the institutions.

Currently, cross-guarantee liability is limited to insured

depository institutions that are commonly controlled as

defined in the statute. The definition of ``commonly

controlled'' limits liability to insured

depository institutions that are controlled by the same

depository institution holding company, i.e., either a bank

holding company or a savings and loan holding company. Since

the parent company of an ILC is neither a bank holding

company nor a savings and loan holding company, ILCs that are

owned by the same parent company would not be ``commonly

controlled.'' As a result, cross-guarantee liability may not

attach to ILCs that are owned by the same parent company. The

Financial Services regulatory Relief Act of 2003 contains

language that would enhance the FDIC's efforts to protect the

deposit insurance funds by establishing parity with other

charter types. This discretionary authority would extend only

against an insured depository institution under common

control with the defaulting institution.

Amendment to clarify the FDIC's Golden Parachute

authority: As part of H.R. 1375, there also is an amendment

to section 18(k) of the FDI Act, 12 U.S.C. Sec. 1828(k), to

clarify that the FDIC could prohibit or limit a nonbank

holding company's golden parachute payment or indemnification

payment. In 1990 Congress authorized the FDIC to prohibit or

limit prepayment of salaries or any liabilities or legal

expenses of an institution-affiliated party by an insured

depository institution or a depository institution holding

company. Such payments are prohibited if they are made in

contemplation of the insolvency of such institution or

holding company or if they prevent the proper application of

assets to creditors or create a preference for creditors of

the institution. Due to the existing statutory definition of

a depository institution holding company, it is not clear

that the FDIC is authorized to prohibit these types of

payments made by nonbank holding companies (such as ILC

parent companies).

What differences, if any, exist between the manner in which

the FDIC regulates industrial loan banks compared with

commercial banks?

As indicated above, the FDIC regulates ILCs in the same

manner as all other state nonmember institutions.

In your view, would ILCs pose a greater risk to the safety

and soundness of the banking system than traditional

banks if both received enhanced de novo interstate

branching authority?

We do not believe that ILCs would pose a greater risk to

the safety and soundness of the banking system than

traditional banks if both received enhanced de novo

interstate branching authority. As described above, insured

ILCs are subject to the same Federal supervisory regime that

applies to other insured institutions. ILC transactions with

their parent companies are subject to the same restrictions

that apply to transactions between other insured institutions

and their parent companies.

Can you comment generally on the capital adequacy and safety

and soundness record of the ILCs and compare these to the

performance of commercial banks?

ILCs currently have an examination rating distribution

that is similar to the insured banking universe. Similar to

institutions with other charter types, an ILC's capital

adequacy and overall safety and soundness is driven by the

composition and stability of its lending, investing and

funding activities as well as competence of management.

For troubled ILCs, several common issues have generally

been evident, each reflecting faulty strategic or tactical

decisions rather than issues of permissible activities,

commercial affiliations, or the regulatory regime over the

larger corporate organization:

Poorly conceived lending strategies, characterized by

concentrations in relatively higher-risk loan problems,

economic sectors, or borrowers, have resulted in an excessive

volume of poor quality credits.

Less than satisfactory internal processes have hampered

institutions' ability to identify and respond to changing

circumstances, including deterioration in credit quality,

which have thwarted timely corrective actions or collection

efforts.

Reliance on potentially volatile funds management

strategies, including wholesale deposit solicitations,

borrowings, and large-scale loan sales, have placed

additional strain on the institutions' earnings performance

and liquidity posture.

If any institution is identified as troubled, the FDIC

modifies its supervisory strategy. In addition, these

institutions are generally subject to formal and informal

enforcement actions. As a rule, the FDIC's supervisory

strategies and specific actions are coordinated with those

of the chartering state authority. Further, in those

situations in which the parent organization controls

multiple insured institutions, the FDIC also coordinates

with the other state authorities or primary federal

regulators to ensure that a comprehensive strategy is

implemented.

Given the concerns some observers have raised about the

ILCs' ability to affiliate with a commercial entity, it is

important to note that the current group of troubled ILCs

have problems that are not unique to the ILC charter, nor do

the troubled ILCs have a history of unusual influence from

parent companies or affiliates. As described above, the

issues facing the troubled institutions are not dissimilar to

those encountered under all charter types, including those in

a traditional bank holding company framework.

Can you describe the regulatory framework that addresses

safety and soundness concerns, or potential conflicts of

interest, that may arise from the relationship of ILCs to

their parent companies?

In general, the regulatory framework used to address safety

and soundness concerns and potential conflicts of interest

regarding an ILC and its parent is the same as that

applicable to any insured state bank. For example, with

regard to safety and soundness, section 8 of the FDI Act, 12

U.S.C. Sec. 1818, generally provides the FDIC with the

authority to (i) terminate or suspend the insurance of an ILC

for unsafe or unsound practices or unsafe or unsound

condition, and (ii) order the ILC to cease and desist from

engaging in an unsafe or unsound practice, or from the

violation of any law, rule, regulation, written condition

imposed in connection with the granting of any application,

or any written agreement with the FDIC.

We do not believe that the potential for conflicts of

interest is any greater for ILCs than for other FDIC-insured

institutions operating in a holding company structure. For

example, an ILC and its parent company are subject to the

tying restrictions of section 106 of the Bank Holding Company

Act Amendments of 1970 to the same extent as if the ILC were

a ``bank'' and the parent company were a ``bank holding

company.'' Generally, the tying restrictions provide that a

bank may not extend credit, sell or lease property, or

furnish any service, or fix or vary the consideration for any

of the foregoing based upon any of five specific conditions.

Those conditions include, for example, that the customer

obtain some additional credit, property or service from the

holding company or an affiliate.

In order to ensure sufficient autonomy and insulation of

the bank from the parent, the state authority or the FDIC

typically imposes some or all of the following controls:

Executive ILC management is onsite at the ILC, as opposed

to the sometimes distant location of the parent and

affiliates;

The ILC Board of Directors consists of local

representatives who are capable of providing strong oversight

over the operations of the bank and establishing prudent

policies and procedures;

Lending files, credit documentation and ILC policies are

maintained at the institution and not the parent;

Lending policies and authorities are established and

enforced by the ILC;

The bank's policies, processes and activities are

consistent with regulatory laws, regulations, policy

statements and other regulatory guidance;

Definitive bank-level business plans are established and

followed by the bank;

All transactions with the parent or affiliate pass the

strictest arms-length scrutiny; and

Sufficient resources are available at the ILC to carry out

ILC activities.

With the above-noted prudential factors in place and

experienced bankers at the helm of ILCs, we have not noted

problems or issues unique to the ILC charter.

Mr. Speaker, I thank the gentleman from Illinois (Chairman Hyde) for yielding me this time.

This resolution rightly highlights the vast crimes against humanity committed by Saddam Hussein's regime. And as we have heard today, as many as 270 mass graves have been found so far, containing the bodies of 400,000 Iraqis. Four hundred thousand.

I remember photos my father, a U.S. serviceman, took when U.S. forces overran the death camp in Dachau, Germany in the closing days of World War II. People executed in pits, by the thousands. I never thought I would see photos like those photos again.

In the days and weeks following Saddam's overthrow, we learned more about another dictator's evil, and here is one account from the L.A. Times: ``The executions took place two or three times on most days. Each time between 100 and 150 blindfolded people, their hands and sometimes feet bound, were led into pits about 10 feet deep. Gunmen then fired into the pit, often for several minutes . . . A bulldozer then pushed dirt over the bodies, sometimes burying or crushing people who had survived the volley and were trying to climb out.'' Four hundred thousand people.

In two trips to Iraq, I have had the chance to talk to tortured Iraqis. Some ask, Why act in Iraq and not the other countries suffering through human rights nightmares? I would respond that just because we do not act in all cases of gross human rights abuses does not mean we should not act in any cases. Moreover, in Iraq's case, our ability to act effectively is greater because our vital national security interests are on the line. Our interest in seeing a reformed Middle East will keep us committed to building a free Iraq. So let us forget that argument. It obscures the nightmare that was Saddam's Iraq and it belittles our closing of his torture chambers.

Madam Speaker, I thank the gentleman from Iowa (Mr. Leach) for yielding me the time, and I am only going to take maybe a minute here to say that I am a cosponsor of this resolution, but I think most of the resolutions that we deal with here in this Chamber that come to this floor rightly focus on what is wrong throughout the world, whether it is the authoritarian regime of Robert Mugabe in Zimbabwe or Kim Jong Il in North Korea. In this context, I think it is proper for the House to recognize positive developments, and in this case, that positive development is the vibrant democracy that is India.

India adopted that Constitution on January 26 of 1950 that formalized her identity as a parliamentary democracy, and the framers of India's constitution were greatly influenced by our Founding Fathers. I had an opportunity to talk to one of those framers, and he made the point that many of the same freedoms that are enshrined in our Constitution are enshrined in theirs for a reason.

So today, yes, India's the world's largest democracy and that is an impressive distinction. It is an incredible commitment when we think of 600 million people going and filing their ballots in a democratic election, but the other point I think that we are focused on tonight is the fact that it is India's growth as a world power that is creating a chance for peace and for stability in south Asia.

Last month, members of the Committee on International Relations had a chance to meet with India's foreign minister to discuss the growing bilateral relationship in the areas of space and of science, and I think this resolution signals Congress' interest in furthering this important relationship.

I would also be remiss if, in closing, I did not mention the growing contribution of the Indian American community here in the United States. I have always been impressed with, when working with that community, their energy, their enthusiasm and indeed their dedication to education. Their upward social mobility through education is unmatched, and I think that that particular community possesses some of our most effective future leaders in this country.

So, with that said, I urge passage of this resolution, and I thank the gentleman for yielding me the time.

Mr. Speaker, whereas, over the last thirty years, Stanley E. Sprague has represented Orange County in a variety of forms on major water issues.

Whereas, Mr. Sprague joined the Municipal Water District of Orange County in 1972.

Whereas, Mr. Sprague has served as General Manager of the Municipal Water District of Orange County since 1983.

Whereas, the Municipal Water District of Orange County is a wholesale water agency charged with providing imported water to its thirty member agencies.

Whereas, in his role as General Manager of Municipal Water District of Orange County, Mr. Sprague's primary responsibility has been to assure that the present and future water needs of its member agencies are met.

Whereas, the Municipal Water District of Orange County is the second largest member agency of the Metropolitan Water District of Southern California, serving imported water to 2.3 million residents in roughly 80 percent of Orange County, one-third of whom rely solely on imported water.

Whereas, Mr. Sprague has been instrumental in forming partnerships to increase water use efficiency in Orange County.

Whereas, Mr. Sprague has taken a primary role in focusing the CALFED efforts towards meeting Southern California's supply reliability and water quality needs.

Whereas, Mr. Sprague has been involved in providing expert testimony on a myriad of water issues at both the State and Federal level.

Therefore, I join with the entire Orange County Congressional delegation in acknowledging the vital role that Stanley E. Sprague has played in Orange County's water supply, and wish him well upon his retirement from the Municipal Water District of Orange County.

Mr. Speaker, I move to suspend the rules and agree to the resolution (H. Res. 157) expressing the sense of the House of Representatives regarding several individuals who are being held as prisoners of conscience by the Chinese Government for their involvement in efforts to end the Chinese occupation of Tibet.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on the resolution under consideration.

Mr. Speaker, I yield myself such time as I may consume.

I would like to begin by commending my colleague, the gentleman from New Mexico (Mr. Udall), for sponsoring this resolution; and this resolution expresses the sense of the House of Representatives regarding individuals being held as prisoners of conscience by the Chinese Government for their involvement in efforts to end the Chinese occupation of Tibet. It calls for the Chinese Government to release all its prisoners of conscience.

Mr. Speaker, this resolution notes that the United States Department of State and international human rights organizations have documented continuing and widespread human rights violations committed by the Chinese Government throughout China and throughout Tibet. This resolution specifically highlights the plight of imprisoned Tibetan nun Phuntsog Nyidron who was arrested along with five other nuns back in 1989 for peacefully demonstrating against China's occupation of Tibet. She was beaten and she was tortured for her peaceful protest, and further, her prison sentence was extended when she and 13 other nuns secretly recorded and smuggled out of Drapchi prison songs of Tibetan independence.

Her continued defiance of the Chinese Government earned her one of the longest reported prison sentences of any female Tibetan political prisoner, and, Mr. Speaker, she continues to languish in prison. What is more, she is hardly alone.

This resolution notes that the Chinese Government has detained hundreds of Tibetan nuns and hundreds of monks and laypersons as prisoners of conscience for one crime, and that is speaking out against the Chinese government's occupation.

Mr. Speaker, the United States House of Representatives has a long tradition of being a voice for the voiceless. The United States House of Representatives has a long tradition of being a champion for the oppressed, and, Mr. Speaker, this body has a long tradition of leading the charge for human rights, and I encourage my colleagues to support this H. Res. 157.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 5 minutes to the gentleman from New Mexico (Mr. Udall), the author of this resolution.

(Mr. UDALL of New Mexico asked and was given permission to revise and extend his remarks.)

Mr. Speaker, in closing, I yield myself such time as I may consume, and I would make the observation that Tibet has been under Beijing rule since 1949, when it was invaded and at that time incorporated into China. In 1959, the Dalai Lama fled in exile to India, and he fled with tens of thousands of his followers.

The Dalai Lama has shed daylight over the years on many human rights violations. More than 1 million Tibetans have died under the Chinese occupation as a result of torture and as a result of starvation and as a result of execution.

No nation is exempt from the demands of human dignity. I should note that this House has a notable record when it comes to Tibet. The cochairmen of the Human Rights Caucus, the gentleman from Virginia (Mr. Wolf) and the gentleman from California (Mr. Lantos), have been instrumental in this effort. Last year, the Dalai Lama gave the keynote address to the Human Rights Caucus to recognize the 20th anniversary of our Human Rights Caucus here.

The People's Republic of China has yet to demonstrate its willingness to abide by internationally accepted norms of freedom in terms of freedom of belief, or freedom of expression, or freedom of association. China is still holding hundreds of political prisoners

of conscience for peaceful protests against the Chinese occupation.

Seventeen years of additional sentence for singing a Tibetan song in prison is truly draconian, but it is not atypical of the treatment of those who try to keep their culture alive or those who try to keep their religion alive; nor are the tortures catalogued here today by the gentleman from New Mexico (Mr. Udall), nor are those tortures atypical of what we have heard in committee about the condition that goes on in those prisons. That is why this resolution is so important.

The human rights violations, the arbitrary arrests, the detention without public trial of Tibetans who peacefully express their political or religious views must come to an end, and I urge my colleagues to support this resolution.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, will the gentleman yield?

In point of fact, Mr. Speaker, I would be happy to respond that China invaded Tibet in 1949 and subjugated its people. So for the government of Beijing to now say this is an internal matter, first there are two points here: First of all, they are claiming it is an internal matter because they subjugated an indigenous people in Tibet and then systematically killed over a million Tibetans and then moved people from mainland China into the Tibetan communities in order to try to erase a culture.

Secondarily, even if this was action taking place in Beijing itself, we would be speaking out. Why? Because there are certain fundamental standards of human rights when it comes to freedom of religion and freedom of speech. And when we have things as egregious as a young woman who is a nun, who is tortured and sent to prison for an additional 17 years for singing a cultural song about Tibetan heritage, that is so outrageous that the international community would speak out regardless of what country that crime against humanity occurred in. And this is truly criminal activity.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I move to suspend the rules and concur in the Senate amendments to the bill (H.R. 2264) to authorize appropriations for fiscal years 2004 and 2005 to carry out the Congo Basin Forest Partnership (CBFP) program, and for other purposes.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on concurring in the Senate amendments to H.R. 2264.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, H.R. 2264 authorizes the Congo Basin Forest Partnership. This legislation is authored by the gentleman from Florida (Mr. Shaw) and by myself. There are several additional cochairmen present here. There are four of us as Members of this House who launched the Bipartisan International Conservation Caucus late last year: myself, the gentleman from Florida (Mr. Shaw), the gentleman from New Mexico (Mr. Udall), and the gentleman from Tennessee (Mr. Turner).

This bill passed the House unanimously last October. It was amended over in the Senate, and the Senate cut authorization from 2 years to 1 year. Although that is unfortunate, the bill is back from the Senate, and it is time to send this bill to the President's desk.

Let me give Members some observations on this measure. The tropical forests of Central Africa's Congo Basin are a key resource to an estimated 20 million people. These forests play a critical role in sustaining the environment of Africa. The Congo Basin contains the most diverse grouping of plants and animals in all of Africa, including rare and endangered species. These plants and animals are invaluable for many reasons, including their genetic and biochemical information. This information from these species could spark technical advances in medicine, in agriculture, and in industry that would benefit people throughout the world. But this is all threatened, and it is threatened because the Congo Basin forests are, under growing pressures, being clear-cut.

I thought I would just for a moment show the location of these forests in Africa: Gabon, Republic of Congo, Democratic Republic of Congo, Equatorial Guinea, Central African Republic, Cameroon, this area in Africa.

Ten years ago, the forests throughout this area were virtually untouched. Today logging operations are shrinking these forests at such a rate that one estimate has the logging taking out Congo Basin forest areas at a rate of twice the size of the State of Rhode Island every year. It is estimated continent-wide that Africa has lost at least 10 percent of its forested area in the last generation. Meanwhile, construction of logging roads is putting intense hunting pressure on the wildlife that exists there. At current levels, most species of apes, like the mountain gorilla and the Eastern lowland gorilla, seen here, as well as the chimpanzee that exists in the Congo Basin, and the white rhino are threatened with extinction. In addition, the large antelope and elephants will disappear from the Congo Basin if action is not taken.

One of the actions that we have urged on the Subcommittee on Africa is the creation of a national parks system in this area of Africa. In 2002, Secretary of State Powell launched the Congo Basin Partnership. He made the announcement in Johannesburg. He traveled to Gabon, and he traveled through the rainforests at that time. The partnership focuses on 11 key landscapes that exist in these six countries. It aims to support a network of national parks, protected areas and well-managed forestry concessions. The partnership is working to combat illegal logging and poaching and other unsustainable practices, and to give local populations an economic stake in the preservation of the forests, including through the development of ecotourism which has great developmental potential for Africans. In fact, the second largest source of foreign exchange right now in Africa is ecotourism. So this is a true partnership with European and other countries making financial contributions into it.

I should recognize the country of Gabon for its dramatic move towards conserving Congo Basin forests. In 1992, President Omar Bongo announced the creation of 13 national parks. Previously, Gabon had no national park system. Since this legislation passed the House last October, President Joseph Kabila of the Democratic Republic of Congo has announced his intention to increase protected area coverage to 15 percent of that vast country which has long been attacked for its natural resources. There are militia that have plundered natural resources in that country.

How vast is the Democratic Republic of Congo; it is as large as the country of the United States east of the Mississippi River. So when national park systems are being set up that are 15 percent of that territory, Members can understand how vast it is going to be.

Across the river is the Republic of Congo, and they have begun an experiment of privately run forests aimed at better managing forest assets. So there is a real African buy-in to this partnership, with six African countries setting up this vast national forest system. The Subcommittee on Africa that I chair held a hearing on the initiative last year. Testifying before us was world-renowned ecologist Michael Faye. Michael has traversed many of Africa's forests, especially in the Congo Basin, and he has had several 400-day treks. Many have read about these walks across Africa in the National Geographic.

This legislation supports conservation efforts by him and others. Conservation is not easy. What Americans take for granted, Yosemite and Yellowstone and our park system, that took great foresight and political commitment to make that a reality. Over 100 years ago we led the world here in the United States, and it will be a major challenge to establish and maintain effective regimes to control logging and hunting in the Congo Basin. But with the partnership, the United States is bringing its unique experience and talents to these efforts. In fact, through the partnership, the U.S. National Park Service plans to bring park managers and rangers from Gabon and other countries to the United States to train in our great national parks. That is one of many efforts that will be undertaken under this legislation.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield such time as he may consume to the gentleman from Florida (Mr. Shaw).

Mr. Speaker, I yield myself such time as I may consume.

In closing, Mr. Speaker, I would point out that unfortunately Africa is not the only continent under attack. Increasingly, we are seeing the link between resource exploitation, human rights abuses, conflict and corruption. A report by Global Witness last year details how the ruling military junta in Burma is using logging concessions to help maintain its grip on power. In Burma's environmentally damaging resource diplomacy, Chinese logging

companies are granted concessions to large sections of Burmese virgin forest in exchange for political loyalty and material support. In light of this sort of activity, the Congo Basin Forest Partnership and similar initiatives are all that much more important. I urge my colleagues to support this initiative.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I rise today to mourn the loss and honor the life of Mr. Alfredo B. Lagmay, Sr.

Mr. Lagmay was truly one of America's heroes. Mr. Lagmay came to this country from his native Philippines in 1918. He later went on to serve in our armed forces, where he was a prisoner of war (POW), a survivor of the Death March of Bataan, and a veteran of World War II and the Korean War.

After his distinguished 31-year career in the United States Military where he was awarded the Bronze Star, Mr. Lagmay moved with his family to Orange County. Mr. Lagmay was a valued member of the community and served as an inspiration to all.

Mr. Speaker, I ask my colleagues to join me in paying tribute to Alfredo Lagmay. I am exceedingly proud to honor him for his courageous service to our country and for the honorable life he led as a husband, father, grandfather, and great-grandfather.

Mr. Speaker, I rise in support as a cosponsor of this legislation. Of course, the focus here is to spotlight the Unified Buddhist Church of Vietnam and the treatment that it has been receiving at the hands of the government of North Vietnam, that Communist government that now, for over 20 years, for 20 years have been trying to suppress the Buddhist Church, and that church has simply been fighting to practice their religion peacefully.

The difficulties commenced in 1981 when the government declared the Buddhist Church, and this is the Unified Buddhist Church of Vietnam, they declared it illegal. They confiscated the temples of the Buddhist Church. They began persecuting the clergy if that clergy did not join up with Communist organizations, stated-sponsored Buddhist organizations.

When I visited Vietnam, I saw firsthand the Communist Party's harassment of those Vietnamese citizens who decided to peacefully set forth dissenting political views, dissenting religious views. I met with several of them who were under house arrest. In particular, the Venerable Thich Quang Do and the Venerable Le Quang Liem. The reason they were under house arrest was simply because they were protesting a rewrite of the holy books, of the Buddhist holy books, holy works. The Communist Party had attempted to slash 80 or 90 percent of those works, and instead resubstitute and rewrite a culture that goes back thousands and thousands of years. And, of course, the laity and the leadership of the church took great umbrage at this and simply asked that they be allowed to practice their religion.

Well, in June of this year when the Vietnamese government ended the detention order against Thich Quang Do, we were all quite hopeful. However, our hopes were quickly dashed when last month the Buddhist Church's meetings were disrupted and the travel of monks was restricted and, again, some were arrested.

Today we are here to say as the United States Congress that we are not satisfied with the state of human rights in Vietnam and that the United States has a strong interest in promoting respect for individual rights

around the world. The U.S. must be a strong advocate of human rights, particularly when basic freedoms are being wantonly abused as they are in Vietnam.

We must continue to shine a light on Vietnam. I urge the passage of this resolution. I thank the gentleman for yielding me time.

Mr. Speaker, I thank the gentlewoman for yielding me this time.

Mr. Speaker, I support this bill commending the participation of Afghan women in that society. But let me share with the Members that I had an opportunity to travel in Afghanistan, and there is a small orphanage that I have supported. I have been a board member for a number of years on this particular board for this school that attempts to teach orphans in Afghanistan. And I wanted to see about the work that they were conducting. So when I was there, I actually had an opportunity to talk not only to the students, several of whom spoke English, but also with the teachers.

One of the teachers showed me, by the way, the scars on his legs and arms. He was caught by the former regime. He was not teaching jihad. He was teaching mathematics. He was teaching science. And that was considered verboten. That was forbidden by that government. And as a consequence, he was tortured for that. But the school continued its work clandestinely, and today that work continues. And I asked the young students there what they intended to be when they grew up, and we got different answers from different students. But one young woman stood up and she said, ``When I grow up, I want to go to the University of Kabul because I am going to be a physician.''

And I asked her, ``Why do you want to become a doctor?''

She said, ``I want to become a doctor because I want to help my people.''

We forget that two thirds of the physicians in Afghanistan before the Taliban, two thirds of physicians, were women. But, in fact, when that society was hijacked by the Taliban and that brutal regime began the process of excluding women not only from education but from the workforce and from riding a bus or from visiting a doctor, we forget just how brutal that regime was.

I have got a great deal of respect for what the new government is trying to do. The new Afghan government has established a Ministry of Women's Affairs dedicated to improving women's rights, but in the meantime the reality continues, that at the hands of regional warlords and brigands and religious fanatics, women are still beaten and they are still raped and they are still abducted.

However, as this is happening, women are playing a role in the political reconstruction of Afghanistan. Seven women are members of the constitutional drafting commission. That is 20 percent of the commission. Under the released draft constitution, Afghanistan's president can nominate

women to hold up to 50 percent of the seats of the upper house of parliament.

For the first time in years, Afghans are hearing the voice of women on the air because the broadcasts of Radio Free Afghanistan air commentary from both the women in the Afghan ministries and the men and women that are interviewed on the streets, in the towns. And it is important to remember again that before 1978 women were very influential in this society. Not only were they two-thirds of teachers, as I mentioned, but they played a role throughout the society, throughout the workforce, and they must play a vital role in helping Afghanistan become a stable state.

There is so much work to be done, and there is so much more attention that we as a Congress, not just the administration, but we as a Congress need to pay to this problem.

But Afghanistan has made tremendous strides, at least in Kabul, in the liberation from the Taliban; and we have to remember that the Taliban is still rooted in parts of that country. And I ask my colleagues to support this resolution and to continue to focus in their own time and in their own ways on ideas of how we can expand some measure of progress beyond the capital into the regional areas of Afghanistan.

Mr. Speaker, this rule is important so that we can bring up the supplemental conference report tonight to fund our troops. The need is very urgent. This past weekend I had the privilege of traveling to Iraq where I led a Congressional delegation. And I say ``privileged'' because it was a privilege to spend time with our brave servicemen and women on the ground in Iraq who are doing a tremendous job under difficult conditions. They deserve our greatest support.

And, Mr. Speaker, that is what this bill does. It supports our servicemen and women with the resources that they need. And I would like to commend the gentleman from California (Mr. Lewis) and the ranking member, the gentleman from Pennsylvania (Mr. Murtha), and all the Members involved in working out this bill with the other body.

I would like to bring attention to one program in particular contained in this bill: The Commanders Emergency Response Program, which, fortunately, was agreed to by the conferees. Having seen this program at work on the ground in Iraq, I would like to report to my colleagues that it is effective and it is very efficient. This program allows our military commanders in Iraq to respond to urgent humanitarian relief and reconstruction needs. And with this program, we have repaired roads, water treatment facilities, police stations, and schools. We had an opportunity to see this work. And this is done hand in hand with Iraqi labor and it is done very cost effectively.

To date, the program has been carried out with the funds seized from Saddam's regime, including funds taken from overseas accounts and taken out of the walls of Saddam Hussein's palaces in some cases. And these funds are running out. And our troops are fighting to show the Iraqi people that their best future lies with democracy and with the rule of law. These projects give the Iraqi people hope for that future, emboldening them to fight the Baathists and emboldening them to fight the terrorists. And they also make our troops safer.

Our top commanders in the field see these projects as security for our troops. They see these projects as winning friends and weakening our enemies. One commander told me that this program was the most important ammunition he had. It is my hope that this program continues to be carried out in a streamlined and flexible way, taking the greatest advantage of the ingenuity of the Americans and Iraqis working together. It is not too much to say that this modest effort is a key to our success in Iraq.

And that is why, Mr. Speaker, I support this rule because of the urgency. And I support the next rule and the underlying bill to fund our troops which will come up before this body tonight.

Madam Speaker, I have no further requests for time, and I yield back the balance of my time.